United States
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2009
 or
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File No. 001-11182
 BIOCLINICA, INC.
  Delaware
    
    11-2872047(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)826 Newtown-Yardley Road, Newtown, Pennsylvania
    
    18940-1721
  (267) 757-3000
  
   þ o
  o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ
  Class
    
    Number of SharesCommon Stock, $0.00025 par value
    
    
    14,392,145




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATION.Item 1. Financial Statements (Unaudited)
    
    
    1CONSOLIDATED BALANCE SHEETS
as of September 30, 2009 and December 31, 2008
    
    
    2CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended September 30, 2009 and 2008
    
    
    3CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months Ended September 30, 2009 and 2008
    
    
    4CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2009 and 2008
    
    
    5NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Forward Looking Statements
    
    
    19Overview
    
    
    19Recent Accounting Pronouncements
    
    
    22Results of Operations
    
    
    24Business Segments
    
    
    29Liquidity and Capital Resources
    
    
    30Changes to Critical Accounting Policies and Estimates
    
    
    32Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    33PART II. OTHER INFORMATION.Item 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    42Item 3. Defaults Upon Senior Securities
    
    
    42Item 4. Submission of Matters to a Vote of Security Holders
    
    
    42Item 5. Other Information
    
    
    42Item 6. Exhibits
    
    
    42SIGNATURES
    
    
    44
  - i -




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##### 



PART I. FINANCIAL INFORMATION .
 
 Item 1. Financial Statements.
     -1-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,(in thousands, except share data)
    
    2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    13,060
    
    
    $
    14,265Accounts receivable, net
    
    
    11,218
    
    
    
    11,982Prepaid expenses and other current assets
    
    
    1,565
    
    
    
    2,315Assets held for sale
    
    
    
    
    
    
    500Deferred income taxes
    
    
    3,802
    
    
    
    3,084Total current assets
    
    
    29,645
    
    
    
    32,146Property and equipment, net
    
    
    7,681
    
    
    
    7,022Intangibles, net
    
    
    2,114
    
    
    
    2,058Goodwill
    
    
    33,296
    
    
    
    27,391Other assets
    
    
    471
    
    
    
    591Total assets
    
    $
    73,207
    
    
    $
    69,208LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    2,630
    
    
    $
    3,832Accrued expenses and other current liabilities
    
    
    6,292
    
    
    
    5,236Deferred revenue
    
    
    13,701
    
    
    
    15,106Current maturities of capital lease obligations
    
    
    22
    
    
    
    54Total current liabilities
    
    
    22,645
    
    
    
    24,228Long-term capital lease obligations
    
    
    53
    
    
    
    65Deferred income tax
    
    
    1,035
    
    
    
    927Other liabilities
    
    
    2,151
    
    
    
    576Total liabilities
    
    
    25,884
    
    
    
    25,796Stockholders equity:Preferred stock  $0.00025 par value; authorized 3,000,000 shares,
issued and outstanding 0 shares at September 30, 2009 and December 31,
2008
    
    
    
    
    
    
    Common stock  $0.00025 par value; authorized 36,000,000 shares, issued
and outstanding 14,392,145 shares at September 30, 2009 and 14,341,403
shares at December 31, 2008
    
    
    4
    
    
    
    4Additional paid-in capital
    
    
    42,864
    
    
    
    42,270Contingent consideration
    
    
    1,309
    
    
    
    Retained earnings
    
    
    3,096
    
    
    
    1,080Accumulated other comprehensive income
    
    
    50
    
    
    
    58Total stockholders equity
    
    
    47,323
    
    
    
    43,412Total liabilities and stockholders equity
    
    $
    73,207
    
    
    $
    69,208
  -2-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the Three Months EndedSeptember 30,(in thousands, except per share data)
    
    2009
    
    
    2008Service revenues
    
    $
    14,146
    
    
    $
    15,093Reimbursement revenues
    
    
    4,227
    
    
    
    3,048Total revenues
    
    
    18,373
    
    
    
    18,141Cost and expenses:Cost of service revenues
    
    
    8,937
    
    
    
    8,513Cost of reimbursement revenues
    
    
    4,227
    
    
    
    3,048Sales and marketing expenses
    
    
    1,617
    
    
    
    2,120General and administrative expenses
    
    
    1,759
    
    
    
    1,962Amortization of intangible assets related to acquisitions
    
    
    113
    
    
    
    212Restructuring charges
    
    
    
    
    
    
    Mergers and acquisitions related expenses
    
    
    560Total cost and expenses
    
    
    17,213
    
    
    
    15,855Income from continuing operations before interest and taxes
    
    
    1,160
    
    
    
    2,286Interest income
    
    
    5
    
    
    
    98Interest expense
    
    
    (1
    )
    
    
    (1
    )Income tax provision
    
    
    (463
    )
    
    
    (856
    )Income from continuing operation, net of taxes
    
    $
    701
    
    
    $
    1,527Loss from discontinued operations, net of taxes
    
    
    
    
    
    
    (451
    )Net income
    
    $
    701
    
    
    $
    1,076Basic earnings per share:Income from continuing operations
    
    $
    0.05
    
    
    $
    0.11Loss from discontinued operations
    
    
    
    
    
    
    (0.03
    )Net income
    
    $
    0.05
    
    
    $
    0.08Diluted earnings per share:Income from continuing operations
    
    $
    0.05
    
    
    $
    0.10Loss from discontinued operations
    
    
    
    
    
    
    (0.03
    )Net income
    
    $
    0.05
    
    
    $
    0.07Weighted average shares used to calculate earnings per share:Basic
    
    
    14,367
    
    
    
    14,334Diluted
    
    
    15,146
    
    
    
    15,173
  -3-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the Nine Months EndedSeptember 30,(in thousands, except per share data)
    
    2009
    
    
    2008Service revenues
    
    $
    42,542
    
    
    $
    41,225Reimbursement revenues
    
    
    9,964
    
    
    
    10,198Total revenues
    
    
    52,506
    
    
    
    51,423Cost and expenses:Cost of service revenues
    
    
    26,606
    
    
    
    23,451Cost of reimbursement revenues
    
    
    9,964
    
    
    
    10,198Sales and marketing expenses
    
    
    5,939
    
    
    
    5,817General and administrative expenses
    
    
    5,543
    
    
    
    5,401Amortization of intangible assets related to acquisitions
    
    
    344
    
    
    
    369Restructuring charges
    
    
    466
    
    
    
    Mergers and acquisitions related expenses
    
    
    560Total cost and expenses
    
    
    49,422
    
    
    
    45,236Income from continuing operations before interest and taxes
    
    
    3,084
    
    
    
    6,187Interest income
    
    
    37
    
    
    
    352Interest expense
    
    
    (6
    )
    
    
    (4
    )Income tax provision
    
    
    (1,099
    )
    
    
    (2,409
    )Income from continuing operation, net of taxes
    
    $
    2,016
    
    
    $
    4,126Loss from discontinued operations, net of taxes
    
    
    
    
    
    
    (1,165
    )Net income
    
    $
    2,016
    
    
    $
    2,961Basic earnings per share:Income from continuing operations
    
    $
    0.14
    
    
    $
    0.30Loss from discontinued operations
    
    
    
    
    
    
    (0.08
    )Net income
    
    $
    0.14
    
    
    $
    0.22Diluted earnings per share:Income from continuing operations
    
    $
    0.13
    
    
    $
    0.29Loss from discontinued operations
    
    
    
    
    
    
    (0.09
    )Net income
    
    $
    0.13
    
    
    $
    0.20Weighted average shares used to calculate earnings per share:Basic
    
    
    14,346
    
    
    
    13,554Diluted
    
    
    15,161
    
    
    
    14,461
  -4-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Nine Months EndedSeptember 30,(in thousands)
    
    2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    2,016
    
    
    $
    2,961Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition:Depreciation and amortization
    
    
    2,109
    
    
    
    2,347(Provision) benefit for deferred income taxes
    
    
    (820
    )
    
    
    240Bad debt expense (recovery)
    
    
    84
    
    
    
    (29
    )Stock based compensation expense
    
    
    599
    
    
    
    538Loss from discontinued operations
    
    
    
    
    
    
    1,165Changes in operating assets and liabilities, net of acquisitions:Decrease (increase) in accounts receivable
    
    
    1,573
    
    
    
    (1,364
    )Decrease in prepaid expenses and other current assets
    
    
    748
    
    
    
    68Decrease in other assets
    
    
    119
    
    
    
    53(Decrease) increase in accounts payable
    
    
    (1,204
    )
    
    
    1,402Increase in accrued expenses and other current
liabilities
    
    
    133
    
    
    
    515Decrease in deferred revenue
    
    
    (1,407
    )
    
    
    (1,133
    )Decrease in other liabilities
    
    
    (80
    )
    
    
    (39
    )Decrease in net assets held for sale
    
    
    
    
    
    
    506Cash provided by activities from continuing operations
    
    $
    3,870
    
    
    $
    7,230Cash used by discontinued operations
    
    
    
    
    
    
    (1,671
    )Net cash provided by operating activities
    
    $
    3,870
    
    
    $
    5,559Cash flows from investing activities:Purchases of property and equipment
    
    
    (2,435
    )
    
    
    (2,120
    )Net cash received for sale of assets of discontinued operations
    
    
    500
    
    
    
    Net cash paid for acquisitions
    
    
    (3,144
    )
    
    
    (8,129
    )Net cash used in investing activities from continuing operations
    
    $
    (5,079
    )
    
    $
    (10,249
    )Purchase of plant, property, equipment for discontinued operations
    
    
    
    
    
    
    (240
    )Net cash used in investing activities
    
    $
    (5,079
    )
    
    $
    (10,489
    )Cash flows from financing activities:Payments under equipment lease obligations
    
    
    (43
    )
    
    
    (135
    )Excess tax benefit related to stock options
    
    
    
    
    
    
    77Proceeds from exercise of stock options
    
    
    27
    
    
    
    381Net cash (used in) provided by financing activities from continuing operations
    
    $
    (16
    )
    
    $
    323Effect of exchange rate changes on cash
    
    
    20
    
    
    
    (55
    )Net decrease in cash and cash equivalents
    
    $
    (1,205
    )
    
    $
    (4,662
    )Cash and cash equivalents at beginning of period
    
    $
    14,265
    
    
    $
    17,915Cash and cash equivalents at end of period
    
    $
    13,060
    
    
    $
    13,253
 -5-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Nine Months EndedSeptember 30,(in thousands)
    
    2009
    
    
    2008Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    6
    
    
    $
    2Cash paid during the period for income taxes
    
    $
    185
    
    
    $
    908Schedule of non cash investing and financing activities:Increase in property, plant and equipment
acquisitions in accounts payable
    
    $
    0
    
    
    $
    195Acquired businesses:Accounts receivable
    
    $
    934
    
    
    $
    4,926Prepaid and other current assets
    
    
    55
    
    
    
    258Property and equipment
    
    
    
    
    
    
    741Other assets
    
    
    
    
    
    
    37Intangible assets and goodwill
    
    
    2,248
    
    
    
    23,712Current liabilities assumed
    
    
    (93
    )
    
    
    (1,124
    )Other liabilities assumed
    
    
    
    
    
    
    (4,474
    )Common stock issued
    
    
    
    
    
    
    (15,947
    )Cash paid for acquired businesses, net of cash
acquired for the nine months ended September 30,
2009 and 2008 of $0 and $418
    
    $
    3,144
    
    
    $
    8,129STATEMENT OF COMPREHENSIVE INCOME:Net income
    
    $
    2,016
    
    
    $
    2,959Equity adjustment from foreign currency translation
    
    
    (8
    )
    
    
    (49
    )Total comprehensive income
    
    $
    2,008
    
    
    $
    2,910
  -6-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1
 Interim Financial Statements
 Basis of Presentation.
       Acquisitions.
   -7-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Functional Currency.
  Note 2  Restructuring charges
   -8-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3  Stockholders Equity Rollforward
  Accumul-ated OtherAdditional
    
    
    
    
    
    
    
    
    
    
    Compre-
    
    
    Stock-Common Stock
    
    
    Paid-in
    
    
    Contingent
    
    
    Retained
    
    
    hensive
    
    
    holders(in thousands)
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Consideration
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance at December 31,
2008
    
    
    14,341
    
    
    $
    4
    
    
    $
    42,270
    
    
    $
    0
    
    
    $
    1,080
    
    
    $
    58
    
    
    $
    43,412Stock options exercised
    
    
    36
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27Restricted shares issued
    
    
    15
    
    
    
    
    
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31
    )Stock based compensation
    
    
    
    
    
    
    
    
    
    
    598
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    598Equity adjustment from
foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    (8
    )Common stock
consideration for
acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,309
    
    
    
    
    
    
    
    
    
    
    
    1,309Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,016
    
    
    
    
    
    
    
    2,016Balance at September
30, 2009
    
    
    14,392
    
    
    $
    4
    
    
    $
    42,864
    
    
    $
    1,309
    
    
    $
    3,096
    
    
    $
    50
    
    
    $
    47,323
 Note 4  Earnings Per Share
  -9-




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BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Nine Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income  basic and diluted
    
    $
    2,016
    
    
    $
    2,961
    
    
    $
    701
    
    
    $
    1,076Denominator  basic:Weighted average number of common shares
used for basic EPS
    
    
    14,346
    
    
    
    13,554
    
    
    
    14,367
    
    
    
    14,334Basic income per common share
    
    $
    0.14
    
    
    $
    0.22
    
    
    $
    0.05
    
    
    $
    0.08Denominator  diluted:Weighted average number of common shares
used in dilutive EPS
    
    
    14,346
    
    
    
    13,554
    
    
    
    14,367
    
    
    
    14,334Common share equivalents
of outstanding stock options
    
    
    420
    
    
    
    719
    
    
    
    383
    
    
    
    652Common share equivalents of
unrecognized compensation
expense
    
    
    395
    
    
    
    188
    
    
    
    396
    
    
    
    187Weighted average number of
dilutive common equity shares
    
    
    15,161
    
    
    
    14,461
    
    
    
    15,146
    
    
    
    15,173Diluted income per common share
    
    $
    0.13
    
    
    $
    0.20
    
    
    $
    0.05
    
    
    $
    0.07
  -10-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 5  Commitments and Contingencies
  Note 6  Accounts Receivable and Allowance for Doubtful Accounts
  (in thousands)
    
    September 30, 2009
    
    
    December 31, 2008Billed trade accounts receivable
    
    $
    10,054
    
    
    $
    10,091Unbilled trade accounts receivable
    
    
    1,156
    
    
    
    1,863Other
    
    
    8
    
    
    
    28Total net receivables
    
    $
    11,218
    
    
    $
    11,982Allowance Rollforward (in thousands):Balance at January 1, 2009
    
    $
    11Additions
    
    
    95Write offs and Recoveries
    
    
    (106
    )Balance at September 30, 2009
    
    $
    0
 Note 7  Income Taxes
   -11-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     Income Taxes
  Note 8  Acquisitions
 2009 Acquisitions:
 Segment Reporting Intangibles  Goodwill and Other
   -12-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 CardioNow
    
    
    TourtellotteCash
    
    $
    1,000
    
    
    $
    2,100Estimated earnout payments:
    
    
    Contingent consideration to be settled in cash
    
    
    
    
    
    
    2,700Contingent consideration to be settled in stock
    
    
    
    
    
    
    1,300Working capital adjustment
    
    
    
    
    
    
    94Total purchase price
    
    $
    1,000
    
    
    $
    6,194
  CardioNow
    
    
    TourtellotteAccounts Receivable
    
    
    
    
    
    $
    934Other Assets
    
    
    
    
    
    
    55Other Liabilities
    
    
    
    
    
    
    (93
    )Customer Relationships
    
    
    
    
    
    
    400Goodwill, including Workforce
    
    $
    1,000
    
    
    
    4,900Total Fair Value of Purchase Price
    
    $
    1,000
    
    
    $
    6,196
 Fair Value Measurements
  2008 Acquisition:
  -13-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    -14-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (in thousands)Net Working Capital
    
    $
    701Fixed Assets
    
    
    721Other Assets
    
    
    46Other Liabilities
    
    
    (175
    )Deferred Tax Liability
    
    
    (854
    )Software
    
    
    552Trademark
    
    
    48Customer Backlog
    
    
    730Customer Relationships
    
    
    665Non-Compete Agreements
    
    
    138Goodwill, including Workforce
    
    
    21,366Total Purchase Price
    
    $
    23,938
  Pro Forma Results.
 Nine MonthsEnded September(in thousands)
    
    30, 2008Total revenue
    
    $
    56,134Income from continuing operations before interest and taxes
    
    
    3,638Income from continuing operations, net of taxes
    
    
    2,453Basic earnings per share:Income from continuing operations
    
    $
    0.17Diluted earnings per share:Income from continuing operations
    
    $
    0.16
 -15-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Other:
  Note 9  Discontinued Operations and Assets Held for Sale
   -16-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Nine Months EndedSeptember 30, 2008Service revenues
    
    $
    262Costs and expenses
    
    
    2,108Loss from impairment
    
    
    Pretax loss
    
    
    (1,846
    )Benefit from income taxes
    
    
    680Net loss from discontinued operations
    
    $
    (1,166
    )
  Current Assets
    
    
    27Fixed Assets
    
    
    1,257Net Assets
    
    $
    1,284
  -17-




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##### 



BIOCLINICA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 10  Intangible Assets
  September 30,
    
    
    Estimated(in thousands)
    
    2009
    
    
    Useful LifeAmortized intangible assets:Technology
    
    $
    843
    
    
    5 yearsTrademarks
    
    
    48
    
    
    5 yearsCustomer backlog and customer relationships
    
    
    2,012
    
    
    
    3 to 7 yearsNon-competition agreement
    
    
    349
    
    
    
    2 to 3 years3,252Accumulated amortization
    
    
    (1,138
    )$
    2,114Unamortized intangible assets:Goodwill
    
    $
    33,296
  Fiscal years ending2009
    
    $
    1462010
    
    
    5562011
    
    
    5122012
    
    
    4242013
    
    
    227Thereafter
    
    
    249$
    2,114
 Note 11  Subsequent Events
  -18-




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##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
   Managements
Discussion and Analysis of Financial Condition and Results of Operations  Critical Accounting
Policies, Estimates and Risks
 
 Forward Looking Statements
  
 Overview
   -19-




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##### 



-20-




---



##### 



-21-




---



##### 



Recent Accounting Pronouncements
 Generally Accepted Accounting
Principles
 Subsequent Events
 Interim Reporting
  Business Combinations
 -22-




---



##### 



, Intangibles  Goodwill and Other
 -23-




---



##### 



Results of Operations  Consolidated Results
 Three Months Ended September 30, 2009 and 2008
 Three
    
    
    
    
    
    ThreeMonths
    
    
    
    
    
    MonthsEnded
    
    
    
    
    
    EndedSeptember 30,
    
    % of Total
    
    September 30,
    
    % of Total(in thousands)
    
    2009
    
    Revenue
    
    2008
    
    Revenue
    
    $ Change
    
    % ChangeService revenues
    
    $
    14,146
    
    
    
    77.0
    %
    
    $
    15,093
    
    
    
    83.2
    %
    
    $
    (947
    )
    
    
    (6.3
    )%Reimbursement
revenues
    
    
    4,227
    
    
    
    23.0
    %
    
    
    3,048
    
    
    
    16.8
    %
    
    
    1,179
    
    
    
    38.7
    %Total revenues
    
    
    18,373
    
    
    
    100.0
    %
    
    
    18,141
    
    
    
    100.0
    %
    
    
    232
    
    
    
    1.3
    %Cost and expenses:Cost of service revenue
    
    
    8,937
    
    
    
    48.6
    %
    
    
    8,513
    
    
    
    46.9
    %
    
    
    424
    
    
    
    5.0
    %Cost of reimbursement
revenue
    
    
    4,227
    
    
    
    23.0
    %
    
    
    3,048
    
    
    
    16.8
    %
    
    
    1,179
    
    
    
    38.7
    %Sales and marketing
expenses
    
    
    1,617
    
    
    
    8.8
    %
    
    
    2,120
    
    
    
    11.7
    %
    
    
    (503
    )
    
    
    (23.7
    )%General and administrative
expenses
    
    
    1,759
    
    
    
    9.6
    %
    
    
    1,962
    
    
    
    10.8
    %
    
    
    (203
    )
    
    
    (10.3
    )%Amortization of intangible
assets related to
acquisitions
    
    
    113
    
    
    
    0.6
    %
    
    
    212
    
    
    
    1.2
    %
    
    
    (99
    )
    
    
    (46.7
    )%Restructuring Cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mergers and acquisitions
related expenses
    
    
    560
    
    
    
    3.0
    %
    
    
    
    
    
    
    
    
    
    
    560
    
    
    
    100.0
    %Total cost and expenses
    
    
    17,213
    
    
    
    93.6
    %
    
    
    15,855
    
    
    
    87.4
    %
    
    
    1,358
    
    
    
    8.6
    %Income from continuing
operations before interest
and taxes
    
    
    1,160
    
    
    
    6.4
    %
    
    
    2,286
    
    
    
    12.6
    %
    
    
    (1,126
    )
    
    
    (49.3
    )%Interest income
    
    
    5
    
    
    
    0.0
    %
    
    
    98
    
    
    
    0.5
    %
    
    
    (93
    )
    
    
    (94.9
    )%Interest expense
    
    
    (1
    )
    
    
    0.0
    %
    
    
    (1
    )
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %Income tax provision
    
    
    (463
    )
    
    
    (2.5
    )%
    
    
    (856
    )
    
    
    (4.7
    )%
    
    
    393
    
    
    
    (45.9
    )%Income from continuing
operations, net of taxes
    
    
    701
    
    
    
    3.9
    %
    
    
    1,527
    
    
    
    8.4
    %
    
    
    (826
    )
    
    
    (54.1
    )%Loss from discontinued
operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    (451
    )
    
    
    (2.5
    )%
    
    
    451
    
    
    
    (100.0
    )%Net income
    
    $
    701
    
    
    
    3.9
    %
    
    $
    1,076
    
    
    
    5.9
    %
    
    $
    (375
    )
    
    
    (34.9
    )%
    -24-




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##### 



-25-




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##### 



-26-




---



##### 



Nine Months Ended September 30, 2009 and 2008
 NineNine Months
    
    
    
    
    
    MonthsEnded
    
    
    
    
    
    EndedSeptember 30,
    
    % of Total
    
    September 30,
    
    % of Total(in thousands)
    
    2009
    
    Revenue
    
    2008
    
    Revenue
    
    $ Change
    
    % ChangeService revenues
    
    $
    42,542
    
    
    
    81.0
    %
    
    $
    41,225
    
    
    
    80.2
    %
    
    $
    1,317
    
    
    
    3.2
    %Reimbursement
revenues
    
    
    9,964
    
    
    
    19.0
    %
    
    
    10,198
    
    
    
    19.8
    %
    
    
    (234
    )
    
    
    (2.3
    )%Total revenues
    
    
    52,506
    
    
    
    100.0
    %
    
    
    51,423
    
    
    
    100.0
    %
    
    
    1,083
    
    
    
    2.1
    %Cost and expenses:Cost of service revenue
    
    
    26,606
    
    
    
    50.7
    %
    
    
    23,451
    
    
    
    45.6
    %
    
    
    3,155
    
    
    
    13.5
    %Cost of reimbursement
revenue
    
    
    9,964
    
    
    
    19.0
    %
    
    
    10,198
    
    
    
    19.8
    %
    
    
    (234
    )
    
    
    (2.3
    )%Sales and marketing
expenses
    
    
    5,939
    
    
    
    11.3
    %
    
    
    5,817
    
    
    
    11.3
    %
    
    
    122
    
    
    
    2.1
    %General and administrative
expenses
    
    
    5,543
    
    
    
    10.6
    %
    
    
    5,401
    
    
    
    10.5
    %
    
    
    142
    
    
    
    2.6
    %Amortization of intangible
assets related to
acquisitions
    
    
    344
    
    
    
    0.7
    %
    
    
    369
    
    
    
    0.7
    %
    
    
    (25
    )
    
    
    (6.8
    )%Restructuring Charges
    
    
    466
    
    
    
    0.9
    %
    
    
    
    
    
    
    0.0
    %
    
    
    466
    
    
    
    100.0
    %Mergers and acquisitions
related expenses
    
    
    560
    
    
    
    1.1
    %
    
    
    
    
    
    
    0.0
    %
    
    
    560
    
    
    
    100.0
    %Total cost and expenses
    
    
    49,422
    
    
    
    94.3
    %
    
    
    45,236
    
    
    
    87.9
    %
    
    
    4,186
    
    
    
    9.3
    %Income from continuing
operations before
interest and taxes
    
    
    3,084
    
    
    
    5.7
    %
    
    
    6,187
    
    
    
    12.1
    %
    
    
    (3,103
    )
    
    
    (50.2
    )%Interest income
    
    
    37
    
    
    
    0.1
    %
    
    
    352
    
    
    
    0.7
    %
    
    
    (315
    )
    
    
    (89.5
    )%Interest expense
    
    
    (6
    )
    
    
    0.0
    %
    
    
    (4
    )
    
    
    0.0
    %
    
    
    (2
    )
    
    
    50.0
    %Income tax provision
    
    
    (1,099
    )
    
    
    (2.1
    )%
    
    
    (2,409
    )
    
    
    (4.7
    )%
    
    
    1,310
    
    
    
    (54.4
    )%Income from continuing
operations, net of taxes
    
    
    2,016
    
    
    
    3.7
    %
    
    
    4,126
    
    
    
    8.1
    %
    
    
    (2,110
    )
    
    
    (51.1
    )%Loss from discontinued
operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    (1,165
    )
    
    
    (2.3
    )%
    
    
    1,165
    
    
    
    (100.0
    )%Net income
    
    
    2,016
    
    
    
    3.7
    %
    
    $
    2,961
    
    
    
    5.8
    %
    
    $
    (945
    )
    
    
    (31.9
    )%
    -27-




---



##### 



-28-




---



##### 



Business Segments and Geographic Information
    -29-




---



##### 



Liquidity and Capital Resources
  Statement of Cash Flow for the nine months ended September 30, 2009 compared to September 30, 2008
 Nine Months
    
    Nine MonthsEnded
    
    EndedSeptember 30,
    
    September 30,(in thousands)
    
    2009
    
    2008Net cash provided by activities from continuing operations
    
    $
    3,870
    
    
    $
    5,559Net cash used in investing activities from continuing operations
    
    $
    (5,079
    )
    
    $
    (10,489
    )Net cash provided by financing activities from continuing
operations
    
    $
    (16
    )
    
    $
    323
      -30-




---



##### 



Payments Due By PeriodLess than 1
    
    
    
    
    
    
    
    
    
    More than(in thousands)
    
    Total
    
    year
    
    1-3 years
    
    3-5 years
    
    5 yearsContractual obligationsCapital lease obligations
    
    $
    75
    
    
    $
    71
    
    
    $
    4
    
    
    $
    
    
    
    $
    Facility rent operating
leases
    
    $
    15,739
    
    
    $
    2,679
    
    
    $
    3,691
    
    
    $
    3,255
    
    
    $
    6,114Employment agreements
    
    $
    1,469
    
    
    $
    630
    
    
    $
    839
    
    
    $
    
    
    
    $
    Total contractual cash
obligations
    
    $
    17,283
    
    
    $
    3,380
    
    
    $
    4,483
    
    
    $
    3,255
    
    
    $
    6,114
    
    
    our ability to gain new client contracts;
    
    project cancellations;
    
    the variability of the timing of payments on existing client contracts; and
    
    other changes in our operating assets and liabilities.
   -31-




---



##### 



Changes to Critical Accounting Policies and Estimates
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 Interest Rate Risk
  Foreign Currency Risk
    -32-




---



##### 



Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures.
 Changes in internal control over financial reporting
 -33-




---



##### 



PART II. OTHER INFORMATION .
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  Risks Related to Our Company and Business
 We may incur financial losses because contracts may be delayed or terminated or reduced in scope
for reasons beyond our control.
  
    
    unexpected or undesired clinical results;
    
    the clients decision to terminate the development of a particular product or to end a
particular study;
    
    insufficient patient enrollment in a study;
    
    insufficient investigator recruitment;
    
    failure to perform our obligations under the contract; or
    
    the failure of products to satisfy safety requirements.
    The current economic downturn may adversely impact our ability to raise capital.
 -34-




---



##### 



We depend on a small number of industries and clients for all of our business, and the loss of one
such significant client could cause revenues to drop quickly and unexpectedly.
  
    
    our clients businesses experience financial problems or are affected by a general
economic downturn;
    
    consolidation in the pharmaceutical, biotechnology or medical device industries leads to
a smaller client base for us; or
    
    clients reduce their research and development expenditures.
  Our contracted/committed backlog may not be indicative of future results.
  
    
    the variable size and duration of the projects (some are performed over several years);
    
    the loss or delay of projects;
    
    the change in the scope of work during the course of a project; and
    
    the cancellation of such contracts by our clients.
  We made two acquisitions in the third quarter of 2009 and may engage in future acquisitions, which
may be expensive and time consuming, and from which we may not realize anticipated benefits.
  -35-




---



##### 



Loss of key personnel, or failure to attract and retain additional personnel, may cause the success
and growth of our business to suffer.
  Our revenues, earnings and operating costs are exposed to exchange rate fluctuations.
  Our investments may be exposed to credit risk.
  We may be required to record additional significant charges to earnings if our goodwill becomes
impaired.
  -36-




---



##### 



Risks Related to Our Industry
 Our failure to compete effectively in our industry could cause our revenues to decline.
  
    
    consultative and clinical trials design capabilities;
    
    reputation for on-time quality performance;
    
    expertise and experience in specific therapeutic areas;
    
    the scope of service offerings;
    
    strength in various geographic markets;
    
    the price of services;
    
    ability to acquire, process, analyze and report data in a time-saving and accurate
manner;
    
    ability to manage large-scale clinical trials both domestically and internationally;
    
    our size; and
    
    the service and product offerings of our competitors.
   Changes in outsourcing trends in the pharmaceutical and biotechnology industries could adversely
affect our operating results and growth rate.
   -37-




---



##### 



Consolidation among our customers could cause us to lose customers, decrease the market for our
products and result in a reduction of our revenues.
  The current economic downturn coupled with the current regulatory environment could have a negative
impact on the pharmaceutical, biotechnology and medical device industries.
  Failure to comply with existing regulations could result in increased costs to complete clinical
trials.
  Changes in governmental regulation could decrease the need for the services we provide, which would
negatively affect our future business opportunities.
  -38-




---



##### 



If governmental agencies do not accept the data and analyses generated by our services, the need
for our services would be eliminated or substantially reduced.
  We may be exposed to liability claims as a result of our involvement in clinical trials.
  -39-




---



##### 



Risks Related to Our Common Stock
 Your percentage ownership and voting power and the price of our common stock may decrease as a
result of events that increase the number of our outstanding shares.
  Common stock outstanding
    
    
    14,392Common stock issuable upon:Exercise of options which are outstanding
    
    
    1,875Exercise of options which have not been granted
    
    
    745Restricted stock units outstanding
    
    
    173Total common stock outstanding assuming exercise or conversion of
all of the above
    
    
    17,185
  Shares of our common stock eligible for public sale may have a negative impact on its market price.
   There are a limited number of stockholders who have significant control over our common stock,
allowing them to have significant influence over the outcome of all matters submitted to our
stockholders for approval, which may conflict with our interests and the interests of our other
stockholders.
  -40-




---



##### 



Because we do not intend to pay dividends, stockholders will benefit from an investment in our
common stock only if it appreciates in value.
  Trading in our common stock may be volatile, which may result in substantial declines in its market
price.
  
    
    operating results;
    
    analysts reports;
    
    market conditions in the industry;
    
    changes in governmental regulations; and
    
    changes in general conditions in the economy or the financial markets.
   Certain provisions of our charter and Delaware law could make a takeover difficult and may prevent
or frustrate attempts by our stockholders to replace or remove our management team.
  -41-




---



##### 



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 3.1
    
    Certificate of Amendment to the Restated
Certificate of Incorporation, filed with the Secretary of State of the
State of Delaware on July 8, 2009 (incorporated by reference to Exhibit
3.1 of the Companys current report on Form 8-K filed on July 8, 2009).3.2
    
    Certificate of Designation of Series A Junior
Participating Preferred Stock of BioClinica, Inc., dated July 20, 2009
(incorporated by reference to Exhibit 3.1 of the Companys current
report on Form 8-K filed on July 20, 2009).4.1
    
    Rights Agreement, dated as of July 20, 2009,
between BioClinica, Inc. and Computershare Trust Company, N.A.
(incorporated by reference to Exhibit 4.1 of the Companys current
report on Form 8-K filed on July 20, 2009).10.1
    
    Asset Purchase Agreement, dated as of September
15, 2009, by and among BioClinica, Inc., BioClinica Acquisition, Inc.,
and Tourtellotte Solutions, Inc. (incorporated by reference to Exhibit
10.1 of the
 -42-




---



##### 



Companys current report on Form 8-K filed on September 18,
2009).31.1
    
    Certification of principal executive officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).31.2
    
    Certification of principal financial and
accounting officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith).32.1
    
    Certification of principal executive officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
1350 (furnished herewith).32.2
    
    Certification of principal financial and
accounting officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. 1350 (furnished herewith).
 -43-




---



##### 



BIOCLINICA, INC.DATE: November 6, 2009
    
    By:
    
    /s/ Mark L. Weinstein

Mark L. Weinstein, President and Chief ExecutiveOfficer (Principal Executive Officer)DATE: November 6, 2009
    
    By:
    
    /s/ Ted I. Kaminer

Ted I. Kaminer, Executive Vice President of Financeand Administration and Chief Financial Officer(Principal Financial and Accounting Officer)
 -44-