PHILADELPHIA, - eResearchTechnology, Inc. (ERT), (Nasdaq: ERES), a leading provider of centralized ECG, eClinical technology, ePRO and other services to the biopharmaceutical, medical device, and related industries, announced today results for the first quarter of 2009. Unless otherwise noted, all comparative numbers refer to changes from the same period a year ago.
Highlights of the first quarter were:
Quarterly net revenue was $23.8 million for the first quarter of 2009 compared to $33.7 million a year ago.
Gross margin percentage was 50.4% in the first quarter of 2009 compared to 52.5% a year ago.
Operating income margin percentage was 14.0% in the first quarter of 2009 compared to 25.2% a year ago.
ERT's tax rate was 40.1% in the first quarter of 2009 compared to 35.6% a year ago.
Net income was $2.1 million for the first quarter of 2009 compared to $5.7 million a year ago.
Diluted net income per share was $0.04 in the first quarter of 2009 compared to $0.11 a year ago.
New bookings were $31.2 million in the first quarter of 2009 compared to $50.1 million a year ago.
Total expenses were $20.4 million in the first quarter of 2009, compared to $25.2 million a year ago.
Cash flow from operations in the first quarter of 2009 was $9.1 million, compared to $7.6 million a year ago.
Cash, cash equivalents and investments totaled $65.6 million at March 31, 2009 compared to $66.4 million at December 31, 2008.
ERT purchased 1,965,452 shares of its common stock at an average price of $5.05 under its approved stock repurchase program in the first quarter of 2009 at a total cost of $10.0 million.
Backlog was $157.0 million as of March 31, 2009 compared to $151.4 million a year ago. The annualized cancellation rate was 22.4% in the first quarter of 2009 compared to 19.3% in the fourth quarter of 2008 and 15.6% in the first quarter of 2008.
"The results for this quarter were in line with our expectations, as given by our guidance in February," commented Dr. Michael McKelvey, President and CEO of ERT. "The first quarter was marked by a significant decline in revenue, in large part due to a sharp reduction in Thorough QT revenue. This reflects the ability of companies to delay the running of Thorough QT trials until later in the drug development cycle, though current regulatory guidance ultimately requires that they be performed. Routine revenue (Phase I through Phase IV trials) was also impacted as a result of the larger percentage of our past business being booked in Phase III trials, which are longer-term trials and thus take longer to turn into revenue, as well as a slower rate of spending by our pharmaceutical and biotechnology clients. The latter reflects the current difficult economic environment and the uncertainty seen in pharmaceutical sponsors' spending. Despite the revenue decline, our gross margin percentage remained above 50%. We continue to be pleased with our strong operational performance and with the results of our discussions with key pharmaceutical and biotechnology companies on strategic outsourcing relationships."
"We made good progress on our strategic priorities in the first quarter," continued Dr. McKelvey. "We continue to be successful in winning new and expanded exclusive or near-exclusive long-term enterprise partnerships with large clients, which should positively impact our future levels of new booking activity. We successfully launched two significant efforts aimed at expanding industry penetration of centralized ECGs by focusing on how centralization of ECGs can reduce our clients' costs. We began to see the results of our new marketing programs in increased market awareness. Despite the difficult economic and financial environment we feel that the fundamentals of our industry remain strong and that we are successfully positioning ourselves for additional growth in the future."
2009 Guidance
The Company issued guidance for the second quarter of 2009 and for the full year 2009. For the quarter ending June 30, 2009, management anticipates net revenues of between $23.0 million and $26.0 million and diluted net income per share between $0.03 and $0.06. ERT expects full year 2009 net revenues of between $100.0 million and $115.0 million with diluted net income per share of between $0.20 and $0.35.
Conference Call
Dr. McKelvey and Keith Schneck, the Company's Chief Financial Officer, will hold a conference call to discuss these results. The conference call will take place at 5:00 PM EDT on April 30, 2009. For the conference call, interested participants should dial 1-800-901-5241 when calling within the United States or 1-617-786-2963 when calling internationally. Please use pass code 33830510. There will be a playback available as well. To listen to the playback, please call 1-888-286-8010 when calling within the United States or 1-617-801-6888 when calling internationally. Please use pass code 52329119 for the replay.
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