##### Table of Contents



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 June 30, 2010
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transitional period from  to
 Commission file number: 0-29100
 eResearchTechnology, Inc.
  Delaware
    
    22-3264604(State or other jurisdiction of incorporation 
or organization)
    
    (I.R.S. Employer Identification No.)1818 Market StreetPhiladelphia, PA
    
    19103(Address of principal executive offices)
    
    (Zip code)
  (Registrants telephone number, including area code)
 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
 Yes o No þ




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##### 



INDEX
 PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets-December 31, 2009 and June 30, 2010 (unaudited)
    
    
    3Consolidated Statements of Operations (unaudited)Three and six months
Ended June 30, 2009 and 2010
    
    
    4Consolidated Statements of Cash Flows (unaudited)Six months
Ended June 30, 2009 and 2010
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6-20Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21-33Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4. Controls and Procedures
    
    
    34Part II. Other InformationItem 1A Risk Factors
    
    
    35-45Item 6. Exhibits
    
    
    46Signatures
    
    
    47Exhibit Index
    
    
    48Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



Part 1. Financial Information
 
 Item 1. Financial Statements
  
 
 December 31, 2009
    
    
    June 30, 2010AssetsCurrent Assets:Cash and cash equivalents
    
    $
    68,979
    
    
    $
    22,504Short-term investments
    
    
    9,782
    
    
    
    50Investment in marketable securities
    
    
    1,026
    
    
    
    972Accounts receivable, less allowance for doubtful accounts of
$548 and $507, respectively
    
    
    16,579
    
    
    
    31,670Inventory
    
    
    
    
    
    
    3,160Prepaid income taxes
    
    
    2,698
    
    
    
    3,022Prepaid expenses and other
    
    
    3,308
    
    
    
    6,498Deferred income taxes
    
    
    1,649
    
    
    
    1,670Total current assets
    
    
    104,021
    
    
    
    69,546Property and equipment, net
    
    
    24,205
    
    
    
    38,261Goodwill
    
    
    34,676
    
    
    
    71,990Intangible assets
    
    
    1,607
    
    
    
    21,717Other assets
    
    
    352
    
    
    
    337Total assets
    
    $
    164,861
    
    
    $
    201,851Liabilities and Stockholders EquityCurrent Liabilities:Accounts payable
    
    $
    3,007
    
    
    $
    6,843Accrued expenses
    
    
    5,990
    
    
    
    13,055Income taxes payable
    
    
    346
    
    
    
    Deferred revenues
    
    
    11,728
    
    
    
    12,174Total current liabilities
    
    
    21,071
    
    
    
    32,072Deferred rent
    
    
    2,357
    
    
    
    2,241Deferred income taxes
    
    
    2,502
    
    
    
    2,765Long-term debt
    
    
    
    
    
    
    23,000Other liabilities
    
    
    1,259
    
    
    
    2,256Total liabilities
    
    
    27,189
    
    
    
    62,334Commitments and contingenciesStockholders Equity:Preferred stock  $10.00 par value, 500,000 shares authorized,
none issued and outstanding
    
    
    
    
    
    
    Common stock  $.01 par value, 175,000,000 shares authorized,
60,189,235 and 60,444,045 shares issued, respectively
    
    
    602
    
    
    
    604Additional paid-in capital
    
    
    97,367
    
    
    
    99,051Accumulated other comprehensive loss
    
    
    (1,580
    )
    
    
    (3,999
    )Retained earnings
    
    
    121,166
    
    
    
    123,744Treasury stock, 11,589,603 shares at cost
    
    
    (79,883
    )
    
    
    (79,883
    )Total stockholders equity
    
    
    137,672
    
    
    
    139,517Total liabilities and stockholders equity
    
    $
    164,861
    
    
    $
    201,851
   3




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2010
    
    
    2009
    
    
    2010Net revenues:Services
    
    $
    16,215
    
    
    $
    18,697
    
    
    $
    32,323
    
    
    $
    33,532Site support
    
    
    6,878
    
    
    
    10,399
    
    
    
    13,138
    
    
    
    17,432EDC licenses and services
    
    
    1,083
    
    
    
    
    
    
    
    2,501
    
    
    
    Total net revenues
    
    
    24,176
    
    
    
    29,096
    
    
    
    47,962
    
    
    
    50,964Costs of revenues:Cost of services
    
    
    7,671
    
    
    
    8,325
    
    
    
    15,364
    
    
    
    15,636Cost of site support
    
    
    3,470
    
    
    
    4,957
    
    
    
    7,105
    
    
    
    7,756Cost of EDC licenses and services
    
    
    397
    
    
    
    
    
    
    
    863
    
    
    
    Total costs of revenues
    
    
    11,538
    
    
    
    13,282
    
    
    
    23,332
    
    
    
    23,392Gross margin
    
    
    12,638
    
    
    
    15,814
    
    
    
    24,630
    
    
    
    27,572Operating expenses:Selling and marketing
    
    
    3,274
    
    
    
    3,941
    
    
    
    6,700
    
    
    
    7,349General and administrative
    
    
    3,527
    
    
    
    9,753
    
    
    
    7,604
    
    
    
    14,498Research and development
    
    
    993
    
    
    
    1,069
    
    
    
    2,142
    
    
    
    1,927Total operating expenses
    
    
    7,794
    
    
    
    14,763
    
    
    
    16,446
    
    
    
    23,774Operating income
    
    
    4,844
    
    
    
    1,051
    
    
    
    8,184
    
    
    
    3,798Other (expense) income, net
    
    
    (409
    )
    
    
    396
    
    
    
    (293
    )
    
    
    496Income before income taxes
    
    
    4,435
    
    
    
    1,447
    
    
    
    7,891
    
    
    
    4,294Income tax provision
    
    
    1,887
    
    
    
    621
    
    
    
    3,273
    
    
    
    1,716Net income
    
    $
    2,548
    
    
    $
    826
    
    
    $
    4,618
    
    
    $
    2,578Net income per share:Basic
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    0.09
    
    
    $
    0.05Diluted
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    0.09
    
    
    $
    0.05Shares used in computing net income per share:Basic
    
    
    48,866
    
    
    
    48,831
    
    
    
    49,872
    
    
    
    48,753Diluted
    
    
    49,175
    
    
    
    49,383
    
    
    
    50,169
    
    
    
    49,114
   4




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##### Table of Contents



Six Months Ended June 30,2009
    
    
    2010Operating activities:Net income
    
    $
    4,618
    
    
    $
    2,578Adjustments to reconcile net income to net cash
provided by operating activities:Gain on sale of EDC operations
    
    
    (530
    )
    
    
    Depreciation and amortization
    
    
    6,620
    
    
    
    6,307Cost of sales of equipment
    
    
    26
    
    
    
    4Provision for uncollectible accounts
    
    
    210
    
    
    
    Share-based compensation
    
    
    1,515
    
    
    
    1,425Deferred income taxes
    
    
    1,421
    
    
    
    216Changes in operating assets and liabilities:Accounts receivable
    
    
    11,987
    
    
    
    (1,722
    )Inventory
    
    
    
    
    
    
    (436
    )Prepaid expenses and other
    
    
    (1,277
    )
    
    
    (925
    )Accounts payable
    
    
    683
    
    
    
    1,227Accrued expenses
    
    
    (3,447
    )
    
    
    4,925Income taxes
    
    
    (4,602
    )
    
    
    (1,120
    )Deferred revenues
    
    
    1,829
    
    
    
    102Deferred rent
    
    
    (3
    )
    
    
    (204
    )Net cash provided by operating activities
    
    
    19,050
    
    
    
    12,377Investing activities:Purchases of property and equipment
    
    
    (2,520
    )
    
    
    (8,773
    )Purchases of investments
    
    
    
    
    
    
    (999
    )Proceeds from sales of investments
    
    
    
    
    
    
    10,731Payment related to sale of EDC operations
    
    
    (1,150
    )
    
    
    Payments for acquisitions
    
    
    (655
    )
    
    
    (80,475
    )Net cash used in investing activities
    
    
    (4,325
    )
    
    
    (79,516
    )Financing activities:Proceeds from long-term debt
    
    
    
    
    
    
    23,000Repayment of capital lease obligations
    
    
    (43
    )
    
    
    Proceeds from exercise of stock options
    
    
    72
    
    
    
    205Stock option income tax benefit
    
    
    62
    
    
    
    12Repurchase of common stock for treasury
    
    
    (14,038
    )
    
    
    Net cash (used in) provided by financing
activities
    
    
    (13,947
    )
    
    
    23,217Effect of exchange rate changes on cash
    
    
    1,575
    
    
    
    (2,553
    )Net increase (decrease) in cash and cash equivalents
    
    
    2,353
    
    
    
    (46,475
    )Cash and cash equivalents, beginning of period
    
    
    66,376
    
    
    
    68,979Cash and cash equivalents, end of period
    
    $
    68,729
    
    
    $
    22,504
   5




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##### Table of Contents



eResearchTechnology, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements  (unaudited)
 Note 1. Basis of Presentation
 ®
 Note 2. Summary of Significant Accounting Policies
 Principles of Consolidation
 ®
 Use of Estimates
  Revenue Recognition
       6




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Business Combinations
      Concentration of Credit Risk and Significant Clients
   Cash and Cash Equivalents
   7




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##### Table of Contents



Short-term Investments and Investments in Marketable Securities
   December 31, 2009Gross
    
    
    GrossUnrealized
    
    
    UnrealizedAmortized cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueMunicipal securities
    
    $
    6,764
    
    
    $
    
    
    
    $
    (2
    )
    
    $
    6,762Corporate debt securities
    
    
    1,769
    
    
    
    1
    
    
    
    
    
    
    
    1,770Bonds of government sponsored agencies
    
    
    1,250
    
    
    
    
    
    
    
    
    
    
    
    1,250Total short-term investments as of December 31, 2009
    
    $
    9,783
    
    
    $
    1
    
    
    $
    (2
    )
    
    $
    9,782
 June 30, 2010Gross
    
    
    GrossUnrealized
    
    
    UnrealizedAmortized cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueMunicipal securities
    
    $
    50
    
    
    $
    
    
    
    $
    
    
    
    $
    50Total short-term investments as of June 30, 2010
    
    $
    50
    
    
    $
    
    
    
    $
    
    
    
    $
    50
 Property and Equipment
      8




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##### Table of Contents



Goodwill
   Long-lived Assets
  Software Development Costs
  Share-Based Compensation
 Accounting for Share-Based Compensation
  Valuation Assumptions for Options Granted
  2009
    
    
    2010Risk-free interest rate
    
    
    1.34
    %
    
    
    2.44
    %Expected life
    
    3.5 years
    
    3.8 yearsExpected volatility
    
    
    63.98
    %
    
    
    61.73
    %
   9




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##### Table of Contents



Equity Incentive Plans
     RemainingWeighted
    
    
    Contractual
    
    
    IntrinsicAverage
    
    
    Term
    
    
    ValueShare Options
    
    Shares
    
    
    Exercise Price
    
    
    (in years)
    
    
    (in thousands)Outstanding as of January 1, 2010
    
    
    4,406,606
    
    
    $
    9.62Granted
    
    
    877,930
    
    
    
    6.46Exercised
    
    
    (51,031
    )
    
    
    4.03Cancelled/forfeited
    
    
    (44,837
    )
    
    
    8.58Outstanding as of June 30, 2010
    
    
    5,188,668
    
    
    $
    9.15
    
    
    
    4.7
    
    
    $
    7,153Options exercisable or expected to vest at June 30, 2010
    
    
    4,724,358
    
    
    $
    9.36
    
    
    
    4.6
    
    
    $
    6,531Options exercisable at June 30, 2010
    
    
    3,095,675
    
    
    $
    10.74
    
    
    
    3.9
    
    
    $
    3,285
 WeightedAverageGrant DateRestricted Stock
    
    Shares
    
    
    Fair ValueOutstanding as of January 1, 2010
    
    
    
    
    
    $
    Granted
    
    
    203,779
    
    
    
    6.22Exercised
    
    
    
    
    
    
    Cancelled/forfeited
    
    
    
    
    
    
    Outstanding as of June 30, 2010
    
    
    203,779
    
    
    $
    6.22
  10




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##### Table of Contents



Tax Effect Related to Share-based Compensation Expense
  Note 3. Fair Value of Financial Instruments
   Level 1
    
    Unadjusted quoted prices in active markets for identical assets or liabilitiesLevel 2
    
    Unadjusted quoted prices in active markets for similar assets or liabilities, or
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
Inputs other than quoted prices that are observable for the asset or liabilityLevel 3
    
    Unobservable inputs for the asset or liability
  11




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##### Table of Contents



Fair Value Measurements at December 31, 2009Quoted Prices
    
    
    
    
    
    
    Significantin Active Markets
    
    
    Significant Other
    
    
    Unobservablefor Identical Assets
    
    
    Observable Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents
    
    $
    68,979
    
    
    $
    68,979
    
    
    $
    
    
    
    $
    Municipal securities
    
    
    6,762
    
    
    
    6,712
    
    
    
    
    
    
    
    50Corporate debt securities
    
    
    1,770
    
    
    
    1,770
    
    
    
    
    
    
    
    Bonds of government
sponsored agencies
    
    
    1,250
    
    
    
    1,250
    
    
    
    
    
    
    
    Marketable securities
    
    
    1,026
    
    
    
    
    
    
    
    1,026
    
    
    
    Total
    
    $
    79,787
    
    
    $
    78,711
    
    
    $
    1,026
    
    
    $
    50Fair Value Measurements at June 30, 2010Quoted Prices
    
    
    
    
    
    
    Significantin Active Markets
    
    
    Significant Other
    
    
    Unobservablefor Identical Assets
    
    
    Observable Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents
    
    $
    22,504
    
    
    $
    22,504
    
    
    $
    
    
    
    $
    Municipal securities
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    50Marketable securities
    
    
    972
    
    
    
    
    
    
    
    972
    
    
    
    Total
    
    $
    23,526
    
    
    $
    22,504
    
    
    $
    972
    
    
    $
    50
  Note 4. Business Combinations
 Research Services (RS)
 ®
  12




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##### Table of Contents



Fair value of assets acquired:Cash
    
    $
    149Accounts receivable
    
    
    12,943Inventory
    
    
    2,598Other current assets
    
    
    1,454Property and equipment, net
    
    
    11,179Goodwill, including workforce
    
    
    37,160Other intangible assets, net
    
    
    21,085Other assets
    
    
    407Liabilities assumed:Accrued and other liabilities
    
    
    (3,257
    )Deferred revenue
    
    
    (515
    )Net assets acquired
    
    $
    83,203
 Pro Forma Results
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2010
    
    
    2009
    
    
    2010(Unaudited, in thousands except per share amounts)Revenue
    
    $
    37,555
    
    
    $
    41,037
    
    
    $
    68,152
    
    
    $
    79,304Operating income
    
    
    5,342
    
    
    
    6,306
    
    
    
    7,267
    
    
    
    8,534Net income
    
    
    2,581
    
    
    
    3,777
    
    
    
    3,651
    
    
    
    5,861Basic net income per share
    
    $
    0.05
    
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    0.12Diluted net income per share
    
    $
    0.05
    
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    0.12
 Covance Cardiac Safety Services, Inc. (CCSS)
  LeaseLiabilityBalance at December 31, 2009
    
    
    1,758Adjustments to previous estimates
    
    
    593Cash payments
    
    
    (248
    )Balance at June 30, 2010
    
    $
    2,103
  13




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Note 5. Inventory
  June 30, 2010(Unaudited, inthousands)Raw materials
    
    $
    1,095Work in process
    
    
    406Finished goods
    
    
    1,659Inventory
    
    $
    3,160
 Note 6. Intangible Assets
  RS
    
    June 30, 2010EstimatedAccumulated
    
    
    Net Book
    
    
    
    
    
    
    Useful LifeDescription
    
    Gross Value
    
    
    Amortization
    
    
    Value
    
    
    
    
    
    
    (in years)Backlog
    
    $
    12,518
    
    
    $
    654
    
    
    $
    11,864
    *
    
    
    

    
    
    
    4Technology
    
    
    8,248
    
    
    
    86
    
    
    
    8,162
    
    
    
    
    
    
    
    8Covenants not-to-compete
    
    
    319
    
    
    
    7
    
    
    
    312
    
    
    
    
    
    
    
    4Total
    
    $
    21,085
    
    
    $
    747
    
    
    $
    20,338
 
 *
    
    The backlog is being amortized over four years on an accelerated basis.   Amortization ofYears ending December 31,
    
    Intangible Assets2010
    
    $
    5,2312011
    
    
    6,6192012
    
    
    3,2022013
    
    
    1,4462014
    
    
    1,064Thereafter
    
    
    3,523Total
    
    $
    21,085
 CCSS
    
    December 31, 2009EstimatedAccumulated
    
    
    Net Book
    
    
    
    
    
    
    Useful LifeDescription
    
    Gross Value
    
    
    Amortization
    
    
    Value
    
    
    
    
    
    
    (in years)Backlog
    
    $
    1,900
    
    
    $
    1,643
    
    
    $
    257
    *
    
    
    

    
    
    
    3Customer Relationships
    
    
    1,700
    
    
    
    350
    
    
    $
    1,350
    
    
    
    
    
    
    
    10Technology
    
    
    400
    
    
    
    400
    
    
    $
    
    
    
    
    
    
    
    
    1Total
    
    $
    4,000
    
    
    $
    2,393
    
    
    $
    1,607
 June 30, 2010EstimatedAccumulated
    
    
    Net Book
    
    
    
    
    
    
    Useful LifeDescription
    
    Gross Value
    
    
    Amortization
    
    
    Value
    
    
    
    
    
    
    (in years)Backlog
    
    $
    1,900
    
    
    $
    1,787
    
    
    $
    113
    *
    
    
    

    
    
    
    3Customer Relationships
    
    
    1,700
    
    
    
    434
    
    
    $
    1,266
    
    
    
    
    
    
    
    10Technology
    
    
    400
    
    
    
    400
    
    
    $
    
    
    
    
    
    
    
    
    1Total
    
    $
    4,000
    
    
    $
    2,621
    
    
    $
    1,379
 
 *
    
    The backlog is being amortized over three years on an accelerated basis.  14




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Amortization ofYears ending December 31,
    
    Intangible Assets2010
    
    $
    2042011
    
    
    1702012
    
    
    1702013
    
    
    1702014
    
    
    170Thereafter
    
    
    495Total
    
    $
    1,379
 Note 7. Credit Agreement
    Note 8. Net Income per Common Share
   15




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Net
    
    
    
    
    
    
    Per ShareThree Months Ended June 30,
    
    Income
    
    
    Shares
    
    
    Amount2009Basic net income
    
    $
    2,548
    
    
    
    48,866
    
    
    $
    0.05Effect of dilutive shares
    
    
    
    
    
    
    309
    
    
    
    Diluted net income
    
    $
    2,548
    
    
    
    49,175
    
    
    $
    0.052010Basic net income
    
    $
    826
    
    
    
    48,831
    
    
    $
    0.02Effect of dilutive shares
    
    
    
    
    
    
    552
    
    
    
    Diluted net income
    
    $
    826
    
    
    
    49,383
    
    
    $
    0.02
 Net
    
    
    
    
    
    
    Per ShareSix Months Ended June 30,
    
    Income
    
    
    Shares
    
    
    Amount2009Basic net income
    
    $
    4,618
    
    
    
    49,872
    
    
    $
    0.09Effect of dilutive shares
    
    
    
    
    
    
    297
    
    
    
    Diluted net income
    
    $
    4,618
    
    
    
    50,169
    
    
    $
    0.092010Basic net income
    
    $
    2,578
    
    
    
    48,753
    
    
    $
    0.05Effect of dilutive shares
    
    
    
    
    
    
    361
    
    
    
    Diluted net income
    
    $
    2,578
    
    
    
    49,114
    
    
    $
    0.05
   16




---



##### Table of Contents



Note 9. Comprehensive Income (Loss)
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2010
    
    
    2009
    
    
    2010Net income
    
    $
    2,548
    
    
    $
    826
    
    
    $
    4,618
    
    
    $
    2,578Other comprehensive income (loss):Change in unrealized losses on marketable securities
    
    
    (219
    )
    
    
    (224
    )
    
    
    (219
    )
    
    
    (35
    )Currency translation adjustment
    
    
    2,078
    
    
    
    (1,407
    )
    
    
    1,846
    
    
    
    (2,384
    )Comprehensive income (loss), net of tax
    
    $
    4,407
    
    
    $
    (805
    )
    
    $
    6,245
    
    
    $
    159
 Note 10. Recent Accounting Pronouncements
    17




---



##### Table of Contents



Note 11. Income Taxes
    Note 12. Related Party Transactions
   18




---



##### Table of Contents



Note 13. Commitments and Contingencies
   Note 14. Operating Segments / Geographic Information
   Three Months Ended June 30, 2009NorthAmerica
    
    
    Europe
    
    
    TotalService revenues
    
    $
    13,717
    
    
    $
    2,498
    
    
    $
    16,215Site support revenues
    
    
    4,930
    
    
    
    1,948
    
    
    
    6,878EDC licenses and services revenues
    
    
    1,083
    
    
    
    
    
    
    
    1,083Net revenues from external customers
    
    $
    19,730
    
    
    $
    4,446
    
    
    $
    24,176Operating income
    
    $
    4,197
    
    
    $
    647
    
    
    $
    4,844Long-lived assets
    
    $
    22,240
    
    
    $
    3,169
    
    
    $
    25,409Total assets
    
    $
    139,648
    
    
    $
    19,482
    
    
    $
    159,130
 Three Months Ended June 30, 2010NorthAmerica
    
    
    Europe
    
    
    TotalService revenues
    
    $
    10,837
    
    
    $
    7,860
    
    
    $
    18,697Site support revenues
    
    
    4,950
    
    
    
    5,449
    
    
    
    10,399Net revenues from external customers
    
    $
    15,787
    
    
    $
    13,309
    
    
    $
    29,096Operating income
    
    $
    (2,444
    )
    
    $
    3,495
    
    
    $
    1,051Long-lived assets
    
    $
    22,130
    
    
    $
    16,131
    
    
    $
    38,261Total assets
    
    $
    144,569
    
    
    $
    57,282
    
    
    $
    201,851
  19




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##### Table of Contents



Six Months Ended June 30, 2009NorthAmerica
    
    
    Europe
    
    
    TotalService revenues
    
    $
    27,604
    
    
    
    4,719
    
    
    
    32,323Site support revenues
    
    
    9,373
    
    
    
    3,765
    
    
    
    13,138EDC licenses and services revenues
    
    
    2,501
    
    
    
    
    
    
    
    2,501Net revenues from external customers
    
    $
    39,478
    
    
    $
    8,484
    
    
    $
    47,962Operating income
    
    $
    7,182
    
    
    $
    1,002
    
    
    $
    8,184Long-lived assets
    
    $
    22,240
    
    
    $
    3,169
    
    
    $
    25,409Total assets
    
    $
    139,648
    
    
    $
    19,482
    
    
    $
    159,130
 Six Months Ended June 30, 2010NorthAmerica
    
    
    Europe
    
    
    TotalService revenues
    
    $
    20,781
    
    
    $
    12,751
    
    
    $
    33,532Site support revenues
    
    
    9,723
    
    
    
    7,709
    
    
    
    17,432Net revenues from external customers
    
    $
    30,504
    
    
    $
    20,460
    
    
    $
    50,964Operating income
    
    $
    (1,191
    )
    
    $
    4,989
    
    
    $
    3,798Long-lived assets
    
    $
    22,130
    
    
    $
    16,131
    
    
    $
    38,261Total assets
    
    $
    144,569
    
    
    $
    57,282
    
    
    $
    201,851
 Note 15. Stock Repurchase
   20




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Cautionary Statement for Forward-Looking Information
    Overview
 ® ®
   Acquisition of RS
    21




---



##### Table of Contents




    
    MasterScope® CT  a PC-based device platform for centralized spirometry/ pulmonary
function tests (PFT) and Cardiac Safety featuring fully customizable workflows that is 21
CFR 11 compliant.
 
    
    Flow/CorScreen® CT  a desktop-based device platform for centralized spirometry and ECG
featuring a built-in color printer that is customizable and 21 CFR 11 compliant.
 
    
    Asthma Monitor AM3®  an electronic lung function monitor with text-based diary
available in a broad range of languages.
 
    
    VIAPad®  a dedicated hand held ePRO device for capturing high quality patient reported
outcomes in a broad range of languages.
 
    
    VIAPen  an ePRO device which utilizes digital pen technology to capture quality of
life information
 
    
    VIAConnect®  an intelligent modem solution for transferring collected data from any
patients home to the data center, using an analog or wireless connection.
  
    
    Establishes us as one of the market leaders in respiratory core lab services in the
clinical trials market. The transaction provides us with a leadership position in an
attractive clinical end market and serves to diversify our revenue base.
 
    
    Provides us with a leading diagnostic device capability. RS is a leader in diagnostic
device manufacturing, having developed over 20 proprietary devices and supporting software
platforms for use in the clinical trials industry. This device manufacturing expertise
has expanded our technological capabilities, enables us to provide greater breadth of
services and technologies for clinical research, and will serve as a basis for development
of other healthcare solutions.
 
    
    Expands our revenue base in cardiac safety. RS has a significant, and growing,
business in cardiac safety services that will add to our current position in this market
 
    
    Provides scale for our ePRO business, as well as expands the depth and breadth of our
ePRO services. This transaction will establish us as one of the five largest providers in
the ePRO market. RSs offering is based on innovative hand-held devices. When combined
with our interactive voice response technology and our planned web-based technology, we
will be able to offer our customers a multi-modality approach for their ePRO solutions.
 
    
    Expands significantly our global footprint. RS employs more than 250 people, of whom
approximately 230 are in Germany. This increased local European presence will enable us
to bolster our already strong international presence, better serve our continental
European customers, and enable us to expand our relationships with other clients in
Europe.
 
    
    Accelerates our movement into healthcare solutions. RSs device manufacturing and
services capabilities provides us with a platform and experience for future growth in
healthcare delivery.
 Sale of EDC Assets
   22




---



##### Table of Contents



Products and Services
  Centralized Cardiac Safety Solutions
  ® ®
 Cardiac Safety Consulting
  Centralized Spirometry / Pulmonary Function Solutions
    23




---



##### Table of Contents



Electronic Patient Reported Outcomes (ePRO)
    Project Assurance
  Integrated Product Offering
  ®
 Revenues
      24




---



##### Table of Contents



Costs
     25




---



##### Table of Contents



Results of Operations
 Executive Overview
      26




---



##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2010
    
    
    2009
    
    
    2010Net revenues:Services
    
    
    67.1
    %
    
    
    64.3
    %
    
    
    67.4
    %
    
    
    65.8
    %Site support
    
    
    28.4
    %
    
    
    35.7
    %
    
    
    27.4
    %
    
    
    34.2
    %EDC licenses and services
    
    
    4.5
    %
    
    
    0.0
    %
    
    
    5.2
    %
    
    
    0.0
    %Total net revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of revenues:Cost of services
    
    
    31.7
    %
    
    
    28.6
    %
    
    
    32.0
    %
    
    
    30.7
    %Cost of site support
    
    
    14.4
    %
    
    
    17.0
    %
    
    
    14.8
    %
    
    
    15.2
    %Cost of EDC licenses and services
    
    
    1.6
    %
    
    
    0.0
    %
    
    
    1.8
    %
    
    
    0.0
    %Total costs of revenues
    
    
    47.7
    %
    
    
    45.6
    %
    
    
    48.6
    %
    
    
    45.9
    %Gross margin
    
    
    52.3
    %
    
    
    54.4
    %
    
    
    51.4
    %
    
    
    54.1
    %Operating expenses:Selling and marketing
    
    
    13.6
    %
    
    
    13.6
    %
    
    
    14.0
    %
    
    
    14.4
    %General and administrative
    
    
    14.6
    %
    
    
    33.5
    %
    
    
    15.8
    %
    
    
    28.4
    %Research and development
    
    
    4.1
    %
    
    
    3.7
    %
    
    
    4.5
    %
    
    
    3.8
    %Total operating expenses
    
    
    32.3
    %
    
    
    50.8
    %
    
    
    34.3
    %
    
    
    46.6
    %Operating income
    
    
    20.0
    %
    
    
    3.6
    %
    
    
    17.1
    %
    
    
    7.5
    %Other income (expense), net
    
    
    -1.7
    %
    
    
    1.4
    %
    
    
    -0.7
    %
    
    
    1.0
    %Income before income taxes
    
    
    18.3
    %
    
    
    5.0
    %
    
    
    16.4
    %
    
    
    8.5
    %Income tax provision
    
    
    7.8
    %
    
    
    2.2
    %
    
    
    6.8
    %
    
    
    3.4
    %Net income
    
    
    10.5
    %
    
    
    2.8
    %
    
    
    9.6
    %
    
    
    5.1
    %
  27




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Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2010.
  Three Months Ended June 30,2009
    
    
    2010
    
    
    Increase (Decrease)Services:Net revenues
    
    $
    16,215
    
    
    $
    18,697
    
    
    $
    2,482
    
    
    
    15.3
    %Costs of revenues
    
    
    7,671
    
    
    
    8,325
    
    
    
    654
    
    
    
    8.5
    %Gross margin
    
    $
    8,544
    
    
    $
    10,372
    
    
    $
    1,828
    
    
    
    21.4
    %Site support:Net revenues
    
    $
    6,878
    
    
    $
    10,399
    
    
    $
    3,521
    
    
    
    51.2
    %Costs of revenues
    
    
    3,470
    
    
    
    4,957
    
    
    
    1,487
    
    
    
    42.9
    %Gross margin
    
    $
    3,408
    
    
    $
    5,442
    
    
    $
    2,034
    
    
    
    59.7
    %EDC licenses and services:Net revenues
    
    $
    1,083
    
    
    $
    
    
    
    $
    (1,083
    )
    
    
    (100.0
    %)Costs of revenues
    
    
    397
    
    
    
    
    
    
    
    (397
    )
    
    
    (100.0
    %)Gross margin
    
    $
    686
    
    
    $
    
    
    
    $
    (686
    )
    
    
    (100.0
    %)TotalNet revenues
    
    $
    24,176
    
    
    $
    29,096
    
    
    $
    4,920
    
    
    
    20.4
    %Costs of revenues
    
    
    11,538
    
    
    
    13,282
    
    
    
    1,744
    
    
    
    15.1
    %Gross margin
    
    
    12,638
    
    
    
    15,814
    
    
    
    3,176
    
    
    
    25.1
    %Operating expenses:Selling and marketing
    
    
    3,274
    
    
    
    3,941
    
    
    
    667
    
    
    
    20.4
    %General and administrative
    
    
    3,527
    
    
    
    9,753
    
    
    
    6,226
    
    
    
    176.5
    %Research and development
    
    
    993
    
    
    
    1,069
    
    
    
    76
    
    
    
    7.7
    %Total operating expenses
    
    
    7,794
    
    
    
    14,763
    
    
    
    6,969
    
    
    
    89.4
    %Operating income
    
    
    4,844
    
    
    
    1,051
    
    
    
    (3,793
    )
    
    
    (78.3
    %)Other (expense) income, net
    
    
    (409
    )
    
    
    396
    
    
    
    805
    
    
    
    (196.8
    %)Income before income taxes
    
    
    4,435
    
    
    
    1,447
    
    
    
    (2,988
    )
    
    
    (67.4
    %)Income tax provision
    
    
    1,887
    
    
    
    621
    
    
    
    (1,266
    )
    
    
    (67.1
    %)Net income
    
    $
    2,548
    
    
    $
    826
    
    
    $
    (1,722
    )
    
    
    (67.6
    %)
  Three Months Ended June 30,
    
    
    Increase2009
    
    
    2010
    
    
    (Decrease)Cost of services
    
    
    47.3
    %
    
    
    44.5
    %
    
    
    (2.8
    %)Cost of site support
    
    
    50.5
    %
    
    
    47.7
    %
    
    
    (2.8
    %)Cost of EDC licenses and services
    
    
    36.7
    %
    
    
    N/A
    
    
    
    N/ATotal costs of revenues
    
    
    47.7
    %
    
    
    45.6
    %
    
    
    (2.1
    %)Operating expenses:Selling and marketing
    
    
    13.6
    %
    
    
    13.6
    %
    
    
    0.0
    %General and administrative
    
    
    14.6
    %
    
    
    33.5
    %
    
    
    18.9
    %Research and development
    
    
    4.1
    %
    
    
    3.7
    %
    
    
    (0.4
    %)
  28




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##### Table of Contents



Revenues
   Costs of Revenues
 ®
  Operating Expenses
       29




---



##### Table of Contents



Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2010.
  Six Months Ended June 30,2009
    
    
    2010
    
    
    Increase (Decrease)Services:Net revenues
    
    $
    32,323
    
    
    $
    33,532
    
    
    $
    1,209
    
    
    
    3.7
    %Costs of revenues
    
    
    15,364
    
    
    
    15,636
    
    
    
    272
    
    
    
    1.8
    %Gross margin
    
    $
    16,959
    
    
    $
    17,896
    
    
    $
    937
    
    
    
    5.5
    %Site support:Net revenues
    
    $
    13,138
    
    
    $
    17,432
    
    
    $
    4,294
    
    
    
    32.7
    %Costs of revenues
    
    
    7,105
    
    
    
    7,756
    
    
    
    651
    
    
    
    9.2
    %Gross margin
    
    $
    6,033
    
    
    $
    9,676
    
    
    $
    3,643
    
    
    
    60.4
    %EDC licenses and services:Net revenues
    
    $
    2,501
    
    
    $
    
    
    
    $
    (2,501
    )
    
    
    (100.0
    %)Costs of revenues
    
    
    863
    
    
    
    
    
    
    
    (863
    )
    
    
    (100.0
    %)Gross margin
    
    $
    1,638
    
    
    $
    
    
    
    $
    (1,638
    )
    
    
    (100.0
    %)TotalNet revenues
    
    $
    47,962
    
    
    $
    50,964
    
    
    $
    3,002
    
    
    
    6.3
    %Costs of revenues
    
    
    23,332
    
    
    
    23,392
    
    
    
    60
    
    
    
    0.3
    %Gross margin
    
    
    24,630
    
    
    
    27,572
    
    
    
    2,942
    
    
    
    11.9
    %Operating expenses:Selling and marketing
    
    
    6,700
    
    
    
    7,349
    
    
    
    649
    
    
    
    9.7
    %General and administrative
    
    
    7,604
    
    
    
    14,498
    
    
    
    6,894
    
    
    
    90.7
    %Research and development
    
    
    2,142
    
    
    
    1,927
    
    
    
    (215
    )
    
    
    (10.0
    %)Total operating expenses
    
    
    16,446
    
    
    
    23,774
    
    
    
    7,328
    
    
    
    44.6
    %Operating income
    
    
    8,184
    
    
    
    3,798
    
    
    
    (4,386
    )
    
    
    (53.6
    %)Other (expense) income, net
    
    
    (293
    )
    
    
    496
    
    
    
    789
    
    
    
    (269.3
    %)Income before income taxes
    
    
    7,891
    
    
    
    4,294
    
    
    
    (3,597
    )
    
    
    (45.6
    %)Income tax provision
    
    
    3,273
    
    
    
    1,716
    
    
    
    (1,557
    )
    
    
    (47.6
    %)Net income
    
    $
    4,618
    
    
    $
    2,578
    
    
    $
    (2,040
    )
    
    
    (44.2
    %)
  Six Months Ended June 30,
    
    
    Increase2009
    
    
    2010
    
    
    (Decrease)Cost of services
    
    
    47.5
    %
    
    
    46.6
    %
    
    
    (0.9
    %)Cost of site support
    
    
    54.1
    %
    
    
    44.5
    %
    
    
    (9.6
    %)Cost of EDC licenses and services
    
    
    34.5
    %
    
    
    N/A
    
    
    
    N/ATotal costs of revenues
    
    
    48.6
    %
    
    
    45.9
    %
    
    
    (2.7
    %)Operating expenses:Selling and marketing
    
    
    14.0
    %
    
    
    14.4
    %
    
    
    0.4
    %General and administrative
    
    
    15.8
    %
    
    
    28.4
    %
    
    
    12.6
    %Research and development
    
    
    4.5
    %
    
    
    3.8
    %
    
    
    (0.7
    %)
  30




---



##### Table of Contents



Revenues
   Costs of Revenues
 ®
  Operating Expenses
       31




---



##### Table of Contents



Liquidity and Capital Resources
         32




---



##### Table of Contents



Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
 Short-term debt
  Investments
   33




---



##### Table of Contents



Foreign Currency Risk
   
 Item 4. Controls and Procedures
   34




---



##### Table of Contents



Part II. Other Information
 
 Item 1A. Risk Factors
  Our future operating results are uncertain and may fluctuate. If we fail to meet the expectations
of securities analysts and investors, our stock price would likely decline.
  
    
    we generate a significant percentage of our revenues from a limited number of customers;
 
    
    our sales cycles can be lengthy and variable;
 
    
    Thorough QTc studies are typically of large volume and of short duration;
 
    
    sponsors and CROs may unexpectedly cancel, postpone or reduce the size of clinical
trials; and
 
    
    we have limited experience in forecasting RS revenue.
  If general economic conditions deteriorate or fail to improve, our operations may be affected
and/or we may be unable to secure future financing to make the necessary investments to grow our
business.
    35




---



##### Table of Contents



If general economic conditions deteriorate or fail to improve, potential customers may be unable to
get the necessary financing to conduct business and existing customers may fail to make timely
payments for products we have sold or services that we have performed, which could adversely affect
our ability to maintain or increase overall revenues and our overall financial position.
  We may acquire or make investments in companies or technologies that could cause disruption of our
business and loss of value or dilution to our stockholders.
  
    
    managing the risks and challenges of entering markets or types of businesses in which we
have limited or no direct experience, such as the respiratory services and device
manufacturing markets we entered as a result of the RS acquisition;
 
    
    difficulties in integrating the operations, technologies, products, existing contracts
and personnel of the target company and realizing the anticipated synergies of the combined
businesses;
 
    
    the price we pay, the expense that we incur or other resources that we devote may exceed
the value we eventually realize or the value we could have realized if we had allocated the
purchase price or other resources to another opportunity;
 
    
    potential loss of key employees, customers and strategic alliances from either our
current business or the target companys business;
 
    
    failure of a party to perform ancillary contractual obligations related to the
acquisition;
 
    
    the diversion of managements attention from other business concerns; and
 
    
    assumption of unanticipated problems or latent liabilities, such as problems with the
quality of the target companys products.
  Consolidation among our customers could cause us to lose customers, decrease the market for our
product and service solutions and result in a reduction of our revenues and profitability.
    36




---



##### Table of Contents



We depend entirely on the clinical trial market and a downturn in this market could cause our
revenues and profitability to decrease.
  We depend on the need for clinical trials in the area of pulmonary disease to continue and a
downturn in this specific therapeutic area could cause our revenues and profitability to decrease.
  Extensive governmental regulation of the clinical trial or device manufacturing processes could
require costly modifications to our technology, adversely affect prospective customers willingness
to use our product and service solutions and increase competition and reduce our market share.
    
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
    
    take a significant amount of time,
 
    
    require the expenditure of substantial resources,
 
    
    involve stringent clinical and pre-clinical testing,
 
    
    involve modifications, repairs or replacements of our products; and
 
    
    result in limitations on the proposed uses of our products.
   The FDA may recommend a different approach to measure drug effects on the QT interval of an ECG
which could make our systems and processes obsolete and adversely affect revenue and profitability.
The FDA may recommend different approaches to pulmonary function testing which may make our
current devices and processes obsolete and considerably decrease our revenues and profitability.
 ®
 We have customers from whom we derive substantial revenue and therefore the loss of even a few of
our customers could significantly reduce our revenues and profitability.
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Our failure to continue to expand our business or manage growth successfully could disrupt our
business operations, increase our costs and delay implementation of our business strategies.
  We may not be successful in competing against others providing similar product and service
solutions, which could reduce our revenues, profitability and market share.
  Our failure to establish and maintain partnerships and other strategic alliances may delay the
development of our product and service solutions, cause us to lose customers and prevent us from
growing our business, any of which could also cause our stock price to decline.
  We may incur liability as a result of providing consulting and diagnostic analysis and
interpretation services.
  Our business could be seriously harmed by our dependence on a limited number of suppliers.
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Interruptions or delays in service from our third-party providers could impair the delivery of
customer data and harm our business.
  The diagnostic equipment that we manufacture, acquire and lease could become obsolete due to
technological advance. We may not be able to provide the quantity of equipment needed to service
our customers. We may fail to obtain the necessary certifications for use of the equipment. Any
such development would reduce our revenues and profitability.
  Capacity constraint or system failures could result in the loss of or liability to customers, which
could reduce our revenues, increase our expenses and reduce profitability.
   
    
    medical device malfunctions;
 
    
    software or hardware malfunctions that interrupt operation of our applications or cause
loss of data integrity;
 
    
    power loss or telecommunications failures;
 
    
    overloaded systems;
 
    
    human error; and
 
    
    natural disasters.
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Rapidly changing technology may impair our ability to develop and market our solutions and cause us
to become less competitive.
  
    
    rapid technological change;
 
    
    changing customer needs;
 
    
    frequent new product introductions; and
 
    
    evolving industry standards.
  If clinical trial sponsors and CROs do not shift from their existing paper-based methods of
collecting and managing clinical trial data at investigator sites to an electronic system with
centralization, we may not achieve the market penetration necessary to grow the business at
expected levels.
  We depend on certain key executives. If we lose the services of any of these executives, our
operations could be disrupted, we could incur additional expenses and our ability to expand our
operations could be impeded, particularly if we are not able to recruit a suitable replacement in a
timely manner.
  If we are unable to protect our proprietary technology, including both software and devices, or
maintain our technological advantages, we may lose our intellectual property rights and become less
competitive.
 ® ®
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Goodwill is subject to impairment which could result in a significant expense.
  Third parties may claim that we infringe upon their intellectual property rights, which could
result in the loss of our rights, subject us to liability and divert management attention.
   
    
    stop using the challenged intellectual property or selling our product or product and
service solutions that incorporate it;
 
    
    obtain a license to use the challenged intellectual property or to sell product or
service solutions that incorporate it, which could be costly or unavailable; and
 
    
    redesign those product or service solutions that are based on or incorporate the
challenged intellectual property, which could be costly and time consuming or could
adversely affect the functionality and market acceptance of our products.
  Our international operations expose us to additional risks.
  
    
    government regulations;
 
    
    trade restrictions;
 
    
    burdensome foreign taxes;
 
    
    exchange rate controls and currency exchange rate fluctuations;
 
    
    political and economic instability;
 
    
    varying technology standards; and
 
    
    difficulties in staffing and managing foreign operations.
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Our revenue and earnings are exposed to exchange rate fluctuations, which has substantially
affected our operating results.
   Our effective income tax rate may fluctuate from quarter-to-quarter, which may affect our earnings
and earnings per share.
  
    
    the requirement to exclude from our quarterly worldwide effective income tax
calculations losses in jurisdictions where no tax benefit can be recognized;
 
    
    actual and projected full year pretax income;
 
    
    changes in tax laws in various taxing jurisdictions;
 
    
    audits by taxing authorities; and
 
    
    the establishment of valuation allowances against deferred tax assets if it is
determined that it is more likely than not that future tax benefits will not be realized.
  Our existing credit facility contains covenants that limit our flexibility and prevent us from
taking certain actions.
  
    
    incur liens or indebtedness;
 
    
    merge, consolidate or dispose of assets;
 
    
    make loans or investments;
 
    
    pay dividends or other distributions;
 
    
    engage in certain transactions with affiliates; and
 
    
    change our business or amend our organizational documents.
  
    
    nonpayment of principal, interest, fees or other amounts when due;
 
    
    breach of any representations or warranties;
 
    
    breach of any affirmative or negative covenants, subject to any applicable cure periods;
 
    
    default in respect of any indebtedness of us or any of our subsidiaries in an amount in
excess of $1.0 million;
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
    
    bankruptcy, insolvency or similar events involving us or any of our subsidiaries;
 
    
    entry of a judgment against us or any of our subsidiaries of at least $750,000;
 
    
    a change of control;
 
    
    certain adverse events under our ERISA plans or those of our subsidiaries; and
 
    
    the occurrence of any event that has or could reasonably be expected to have a material
adverse effect as define in the agreement.
  In the event we are unable to satisfy regulatory requirements relating to internal control over
financial reporting, or if these internal controls are not effective, our business and financial
results may suffer.
  In the course of conducting our business, we possess or could be deemed to possess personal medical
information in connection with the conduct of clinical trials. If we fail to keep this information
properly protected we could be subject to significant liability.
  The market price and trading volume of our common stock may be volatile, which could result in
substantial losses for investors purchasing shares in the public markets and subject us to
securities class action litigation. The current market price of our common stock may not be
indicative of future market prices and we may be unable to sustain or increase the value of an
investment in our common stock.
  
    
    changes in estimates of our financial results or recommendations by securities analysts;
 
    
    financial results that are below estimate of such results;
 
    
    changes in general economic, industry and market conditions;
 
    
    sales or transfers of large blocks of stock by existing investors;
 
    
    investors general perception of us;
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
    
    period-to-period fluctuations in our financial results or those of companies that are
perceived to be similar to us;
 
    
    changes in market valuations of similar companies;
 
    
    announcements by us or our competitors of significant products, contracts, acquisitions
or strategic alliances;
 
    
    future issuances of securities or the incurrence of debt by us, or other changes in our
capital structure;
 
    
    success of competitive products and technologies;
 
    
    the failure of any of our software products, services and hosted solutions to achieve or
maintain commercial success;
 
    
    regulatory developments in the United States and foreign countries;
 
    
    changes in industry analyst recommendations;
 
    
    additions or departures of key personnel; and
 
    
    litigation involving our company or our general industry or both.
  Sales of large blocks of our common stock could cause the market price of our common stock to drop
significantly, even if our business is doing well.
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Item 6. Exhibits
 31.1
    
    
    Certification of Chief Executive Officer.31.2
    
    
    Certification of Chief Financial Officer.32.1
    
    
    Statement of Chief Executive Officer Pursuant to Section 1350 of Title 18 of the United States Code.32.2
    
    
    Statement of Chief Financial Officer Pursuant to Section 1350 of Title 18 of the United States Code.
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eResearchTechnology, Inc.
(Registrant)Date: August 9, 2010
    By:
    /s/ Michael J. McKelveyMichael J. McKelveyPresident and Chief Executive Officer,
(Principal executive officer)Date: August 9, 2010
    By:
    /s/ Keith D. SchneckKeith D. SchneckExecutive Vice President, Chief Financial
Officer and Secretary
(Principal financial and accounting officer)  47




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EXHIBIT INDEX
 Exhibit No.
    
    Exhibit31.1
    
    
    Certification of Chief Executive Officer.31.2
    
    
    Certification of Chief Financial Officer.32.1
    
    
    Statement of Chief Executive Officer Pursuant to Section 1350 of Title 18 of the United States Code.32.2
    
    
    Statement of Chief Financial Officer Pursuant to Section 1350 of Title 18 of the United States Code.
  48