##### 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 March 31, 2011
 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
    
    (I.R.S. Employer Identification No.)or organization)
 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
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



INDEX
 PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets-December 31, 2010 and March 31, 2011 (unaudited)
    
    
    3Consolidated Statements of Operations (unaudited)Three months
ended March 31, 2010 and 2011
    
    
    4Consolidated Statements of Cash Flows (unaudited)Three months
ended March 31, 2010 and 2011
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6-17Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18-23Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24Part II. Other InformationItem 6. Exhibits
    
    
    25Signatures
    
    
    26Exhibit Index
    
    
    27Exhibit 10.48Exhibit 10.49Exhibit 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, 2010
    
    
    March 31, 2011AssetsCurrent Assets:Cash and cash equivalents
    
    $
    30,343
    
    
    $
    29,614Short-term investments
    
    
    50
    
    
    
    50Investment in marketable securities
    
    
    648
    
    
    
    1,053Accounts receivable, less allowance for doubtful accounts of
$515 and $547, respectively
    
    
    37,236
    
    
    
    37,179Inventory
    
    
    4,698
    
    
    
    6,804Prepaid income taxes
    
    
    1,988
    
    
    
    2,660Prepaid expenses and other
    
    
    4,393
    
    
    
    5,531Deferred income taxes
    
    
    3,431
    
    
    
    3,431Total current assets
    
    
    82,787
    
    
    
    86,322Property and equipment, net
    
    
    42,615
    
    
    
    45,760Goodwill
    
    
    71,637
    
    
    
    76,702Intangible assets
    
    
    17,187
    
    
    
    17,435Other assets
    
    
    609
    
    
    
    718Total assets
    
    $
    214,835
    
    
    $
    226,937Liabilities and Stockholders EquityCurrent Liabilities:Accounts payable
    
    $
    7,136
    
    
    $
    6,613Accrued expenses
    
    
    16,162
    
    
    
    12,971Deferred revenues
    
    
    11,670
    
    
    
    12,657Total current liabilities
    
    
    34,968
    
    
    
    32,241Deferred rent
    
    
    2,368
    
    
    
    2,405Deferred income taxes
    
    
    3,703
    
    
    
    3,888Long-term debt
    
    
    21,000
    
    
    
    21,000Other liabilities
    
    
    2,141
    
    
    
    2,235Total liabilities
    
    
    64,180
    
    
    
    61,769Commitments 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,
60,460,782 and 60,661,086 shares issued, respectively
    
    
    605
    
    
    
    607Additional paid-in capital
    
    
    100,441
    
    
    
    101,438Accumulated other comprehensive (loss) income
    
    
    (1,545
    )
    
    
    8,922Retained earnings
    
    
    131,037
    
    
    
    134,130Treasury stock, 11,589,603 and 11,596,966 shares at cost, respectively
    
    
    (79,883
    )
    
    
    (79,929
    )Total stockholders equity
    
    
    150,655
    
    
    
    165,168Total liabilities and stockholders equity
    
    $
    214,835
    
    
    $
    226,937
   3




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##### Table of Contents



Three Months Ended March 31,2010
    
    
    2011Net revenues:Services
    
    $
    14,835
    
    
    $
    23,977Site support
    
    
    7,033
    
    
    
    17,722Total net revenues
    
    
    21,868
    
    
    
    41,699Costs of revenues:Cost of services
    
    
    7,311
    
    
    
    13,156Cost of site support
    
    
    2,799
    
    
    
    10,123Total costs of revenues
    
    
    10,110
    
    
    
    23,279Gross margin
    
    
    11,758
    
    
    
    18,420Operating expenses:Selling and marketing
    
    
    3,408
    
    
    
    4,175General and administrative
    
    
    4,745
    
    
    
    7,508Research and development
    
    
    858
    
    
    
    1,383Total operating expenses
    
    
    9,011
    
    
    
    13,066Operating income
    
    
    2,747
    
    
    
    5,354Foreign exchange gains (losses)
    
    
    80
    
    
    
    (1,009
    )Other income (expense), net
    
    
    20
    
    
    
    (101
    )Income before income taxes
    
    
    2,847
    
    
    
    4,244Income tax provision
    
    
    1,095
    
    
    
    1,151Net income
    
    $
    1,752
    
    
    $
    3,093Net income per share:Basic
    
    $
    0.04
    
    
    $
    0.06Diluted
    
    $
    0.04
    
    
    $
    0.06Shares used in computing net income per share:Basic
    
    
    48,675
    
    
    
    48,896Diluted
    
    
    48,845
    
    
    
    49,251
   4




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Three Months Ended March 31,2010
    
    
    2011Operating activities:Net income
    
    $
    1,752
    
    
    $
    3,093Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    2,624
    
    
    
    5,988Cost of sales of equipment
    
    
    1
    
    
    
    3Share-based compensation
    
    
    605
    
    
    
    662Deferred income taxes
    
    
    (160
    )
    
    
    204Changes in operating assets and liabilities:Accounts receivable
    
    
    1,033
    
    
    
    1,030Inventory
    
    
    
    
    
    
    (1,412
    )Prepaid expenses and other
    
    
    (1,341
    )
    
    
    (1,363
    )Accounts payable
    
    
    539
    
    
    
    91Accrued expenses
    
    
    920
    
    
    
    (3,191
    )Income taxes
    
    
    (193
    )
    
    
    (736
    )Deferred revenues
    
    
    (368
    )
    
    
    803Deferred rent
    
    
    (145
    )
    
    
    (164
    )Net cash provided by operating activities
    
    
    5,267
    
    
    
    5,008Investing activities:Purchases of property and equipment
    
    
    (3,852
    )
    
    
    (7,254
    )Purchases of investments
    
    
    (999
    )
    
    
    Proceeds from sales of investments
    
    
    3,716
    
    
    
    Payments for acquisition
    
    
    (203
    )
    
    
    (117
    )Net cash used in investing activities
    
    
    (1,338
    )
    
    
    (7,371
    )Financing activities:Proceeds from exercise of stock options
    
    
    51
    
    
    
    309Stock option income tax benefit
    
    
    6
    
    
    
    11Repurchase of common stock for treasury
    
    
    
    
    
    
    (46
    )Net cash provided by financing activities
    
    
    57
    
    
    
    274Effect of exchange rate changes on cash
    
    
    (790
    )
    
    
    1,360Net increase (decrease) in cash and cash equivalents
    
    
    3,196
    
    
    
    (729
    )Cash and cash equivalents, beginning of period
    
    
    68,979
    
    
    
    30,343Cash and cash equivalents, end of period
    
    $
    72,175
    
    
    $
    29,614
   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 Customers
   Cash and Cash Equivalents
   7




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##### Table of Contents



Short-term Investments and Investments in Marketable Securities
  Inventory
  Property and Equipment
       Goodwill
   8




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##### Table of Contents



Long-lived Assets
  Software Development Costs
  Share-Based Compensation
 Accounting for Share-Based Compensation
  Valuation Assumptions for Options Granted
  2010
    
    
    2011Risk-free interest rate
    
    
    2.42
    %
    
    
    2.19
    %Expected dividend yield
    
    
    0.00
    %
    
    
    0.00
    %Expected life
    
    3.8 years
    
    4.2 yearsExpected volatility
    
    
    61.85
    %
    
    
    59.23
    %
  Equity Incentive Plans
    9




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##### Table of Contents



Weighted
    
    
    RemainingAverage
    
    
    Contractual
    
    
    IntrinsicShare Options
    
    Shares
    
    
    Exercise Price
    
    
    Term
    
    
    Value(in years)
    
    
    (in thousands)Outstanding as of January 1, 2011
    
    
    4,727,943
    
    
    $
    9.36Granted
    
    
    913,297
    
    
    
    6.44Exercised
    
    
    (100,629
    )
    
    
    3.08Cancelled/forfeited
    
    
    (252,662
    )
    
    
    9.17Outstanding as of March 31, 2011
    
    
    5,287,949
    
    
    $
    8.99
    
    
    
    4.5
    
    
    $
    3,496Options exercisable or expected to vest at March 31, 2011
    
    
    4,987,244
    
    
    $
    9.13
    
    
    
    4.4
    
    
    $
    3,278Options exercisable at March 31, 2011
    
    
    3,283,250
    
    
    $
    10.46
    
    
    
    3.5
    
    
    $
    2,039
 WeightedAverageGrant DateRestricted Stock
    
    Shares
    
    
    Fair ValueOutstanding as of January 1, 2011
    
    
    153,785
    
    
    $
    6.28Granted
    
    
    155,006
    
    
    
    6.46Vested
    
    
    (30,500
    )
    
    
    6.05Cancelled/forfeited
    
    
    
    
    
    
    Outstanding as of March 31, 2011
    
    
    278,291
    
    
    $
    6.40
    Tax Effect Related to Share-based Compensation Expense
   10




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##### Table of Contents



Note 3. Fair Value of Financial Instruments
   Level 1
    
    Unadjusted quoted prices in active markets for identical assets or liabilities
 Level 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 liability
 Level 3
    
    Unobservable inputs for the asset or liability
  Fair Value Measurements at December 31, 2010Quoted Prices
    
    
    
    
    
    
    Significantin Active Markets
    
    
    Significant Other
    
    
    Unobservablefor Identical Assets
    
    
    Observable Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents
    
    $
    30,343
    
    
    $
    30,343
    
    
    $
    
    
    
    $
    Municipal securities
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    50Marketable securities
    
    
    648
    
    
    
    
    
    
    
    648
    
    
    
    Total
    
    $
    31,041
    
    
    $
    30,343
    
    
    $
    648
    
    
    $
    50
 Fair Value Measurements at March 31, 2011Quoted Prices
    
    
    
    
    
    
    Significantin Active Markets
    
    
    Significant Other
    
    
    Unobservablefor Identical Assets
    
    
    Observable Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents
    
    $
    29,614
    
    
    $
    29,614
    
    
    $
    
    
    
    $
    Municipal securities
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    50Marketable securities
    
    
    1,053
    
    
    
    
    
    
    
    1,053
    
    
    
    Total
    
    $
    30,717
    
    
    $
    29,614
    
    
    $
    1,053
    
    
    $
    50
   11




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##### Table of Contents



Note 4. Business Combinations
 Research Services (RS)
  Pro Forma Results
  Three MonthsEnded March 31,2010(Unaudited, inthousands exceptper share amounts)Revenue
    
    $
    38,267Operating income
    
    
    2,228Net income
    
    
    2,084Basic net income per share
    
    $
    0.04Diluted net income per share
    
    $
    0.04
 Covance Cardiac Safety Services, Inc. (CCSS)
  LeaseLiabilityBalance at December 31, 2010
    
    $
    1,901Cash payments
    
    $
    (162
    )Balance at March 31, 2011
    
    $
    1,739
 Goodwill
  Balance at December 31, 2010
    
    
    71,637Currency translation adjustments
    
    
    5,065Balance at March 31, 2011
    
    $
    76,702
   12




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Note 5. Inventory
  December 31, 2010
    
    
    March 31, 2011Raw materials
    
    $
    2,196
    
    
    $
    3,483Work in process
    
    
    843
    
    
    
    1,260Finished goods
    
    
    1,659
    
    
    
    2,061$
    4,698
    
    
    $
    6,804
 Note 6. Intangible Assets
  December 31, 2010EstimatedAccumulated
    
    
    Net Book
    
    
    Useful Life (inDescription
    
    Gross Value
    
    
    Amortization
    
    
    Value
    
    
    years)CCSS:Backlog
    
    $
    1,900
    
    
    $
    1,900
    
    
    $
    
    *
    
    
    3Customer Relationships
    
    
    1,700
    
    
    
    524
    
    
    $
    1,176
    
    
    
    10Technology
    
    
    400
    
    
    
    400
    
    
    $
    
    
    
    
    1Total
    
    $
    4,000
    
    
    $
    2,824
    
    
    $
    1,176RS:Backlog
    
    $
    12,782
    
    
    $
    4,687
    
    
    $
    8,095
    *
    
    
    4Technology
    
    
    8,248
    
    
    
    602
    
    
    
    7,646
    
    
    
    8Covenants not-to-compete
    
    
    319
    
    
    
    49
    
    
    
    270
    
    
    
    4Total
    
    $
    21,349
    
    
    $
    5,338
    
    
    $
    16,011
 March 31, 2011EstimatedAccumulated
    
    
    Net Book
    
    
    Useful Life (inDescription
    
    Gross Value
    
    
    Amortization
    
    
    Value
    
    
    years)CCSS:Backlog
    
    $
    1,900
    
    
    $
    1,900
    
    
    $
    
    *
    
    
    3Customer Relationships
    
    
    1,700
    
    
    
    567
    
    
    $
    1,133
    
    
    
    10Technology
    
    
    400
    
    
    
    400
    
    
    $
    
    
    
    
    1Total
    
    $
    4,000
    
    
    $
    2,867
    
    
    $
    1,133RS:Backlog
    
    $
    13,865
    
    
    $
    6,255
    
    
    $
    7,610
    *
    
    
    4Technology
    
    
    9,296
    
    
    
    889
    
    
    
    8,407
    
    
    
    8Covenants not-to-compete
    
    
    356
    
    
    
    71
    
    
    
    285
    
    
    
    4Total
    
    $
    23,517
    
    
    $
    7,215
    
    
    $
    16,302
 
 *
    
    CCSS backlog was amortized over three years on an accelerated basis and RS backlog is being
amortized over four years on an accelerated basis.   13




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Amortization of Intangible AssetsYears ending December 31,
    
    CCSS
    
    
    RS
    
    
    Total2011
    
    $
    128
    
    
    $
    5,748
    
    
    $
    5,8762012
    
    
    170
    
    
    
    3,684
    
    
    
    3,8542013
    
    
    170
    
    
    
    1,651
    
    
    
    1,8212014
    
    
    170
    
    
    
    1,211
    
    
    
    1,3812015
    
    
    170
    
    
    
    1,173
    
    
    
    1,343Thereafter
    
    
    325
    
    
    
    2,835
    
    
    
    3,160Total
    
    $
    1,133
    
    
    $
    16,302
    
    
    $
    17,435
 Note 7. Credit Agreement
    Note 8. Net Income per Common Share
   Net
    
    
    
    
    
    
    Per ShareThree Months Ended March 31,
    
    Income
    
    
    Shares
    
    
    Amount2010Basic net income
    
    $
    1,752
    
    
    
    48,675
    
    
    $
    0.04Effect of dilutive shares
    
    
    
    
    
    
    170
    
    
    
    Diluted net income
    
    $
    1,752
    
    
    
    48,845
    
    
    $
    0.042011Basic net income
    
    $
    3,093
    
    
    
    48,896
    
    
    $
    0.06Effect of dilutive shares
    
    
    
    
    
    
    355
    
    
    
    Diluted net income
    
    $
    3,093
    
    
    
    49,251
    
    
    $
    0.06
   14




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##### Table of Contents



Note 9. Comprehensive Income
  Three Months Ended March 31,2010
    
    
    2011Net income
    
    $
    1,752
    
    
    $
    3,093Other comprehensive income (loss):Change in unrealized losses on marketable securities
    
    
    189
    
    
    
    405Currency translation adjustment
    
    
    (977
    )
    
    
    10,062Comprehensive income, net of tax
    
    $
    964
    
    
    $
    13,560
  Note 10. Recent Accounting Pronouncements
    Note 11. Income Taxes
    15




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Note 12. Related Party Transactions
  Note 13. Commitments and Contingencies
        Note 14. Operating Segments / Geographic Information
   16




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Three Months Ended March 31, 2010NorthAmerica
    
    
    UK
    
    
    Germany
    
    
    Eliminations
    
    
    TotalService revenues
    
    $
    9,944
    
    
    $
    4,891
    
    
    $
    
    
    
    $
    
    
    
    $
    14,835Site support revenues
    
    
    4,773
    
    
    
    2,260
    
    
    
    
    
    
    
    
    
    
    
    7,033Net revenues from external customers
    
    $
    14,717
    
    
    $
    7,151
    
    
    $
    
    
    
    $
    
    
    
    $
    21,868Operating income
    
    $
    750
    
    
    $
    1,997
    
    
    $
    
    
    
    $
    
    
    
    $
    2,747Long-lived assets
    
    $
    21,348
    
    
    $
    3,748
    
    
    $
    
    
    
    $
    
    
    
    $
    25,096Total assets
    
    $
    144,208
    
    
    $
    21,990
    
    
    $
    
    
    
    $
    
    
    
    $
    166,198
 Three Months Ended March 31, 2011NorthAmerica
    
    
    UK
    
    
    Germany
    
    
    Eliminations
    
    
    TotalService revenues
    
    $
    10,388
    
    
    $
    5,221
    
    
    $
    8,368
    
    
    $
    
    
    
    $
    23,977Site support revenues
    
    
    4,672
    
    
    
    2,474
    
    
    
    10,576
    
    
    
    
    
    
    
    17,722Net revenues from external customers
    
    
    15,060
    
    
    
    7,695
    
    
    
    18,944
    
    
    
    
    
    
    
    41,699Intersegment revenues
    
    
    6,214
    
    
    
    29
    
    
    
    
    
    
    
    (6,243
    )
    
    
    Total revenues
    
    $
    21,274
    
    
    $
    7,724
    
    
    $
    18,944
    
    
    $
    (6,243
    )
    
    $
    41,699Operating income
    
    $
    384
    
    
    $
    2,217
    
    
    $
    2,753
    
    
    $
    
    
    
    $
    5,354Long-lived assets
    
    $
    23,168
    
    
    $
    7,045
    
    
    $
    15,547
    
    
    $
    
    
    
    $
    45,760Total assets
    
    $
    98,286
    
    
    $
    18,564
    
    
    $
    110,087
    
    
    $
    
    
    
    $
    226,937
  17




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Cautionary Statement for Forward-Looking Information
  Overview
 ®
   Service Offerings
  Three Months Ended March 31,2010
    
    
    2011Net revenues:Services
    
    
    67.8
    %
    
    
    57.5
    %Site support
    
    
    32.2
    
    
    
    42.5Total net revenues
    
    
    100.0
    
    
    
    100.0
  Integrated Product Offering
   18




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##### Table of Contents



®
 Results of Operations
 Executive Overview
        19




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##### Table of Contents



Three Months Ended March 31,2010
    
    
    2011Net revenues:Services
    
    
    67.8
    %
    
    
    57.5
    %Site support
    
    
    32.2
    
    
    
    42.5Total net revenues
    
    
    100.0
    
    
    
    100.0Costs of revenues:Cost of services
    
    
    33.4
    
    
    
    31.6Cost of site support
    
    
    12.8
    
    
    
    24.3Total costs of revenues
    
    
    46.2
    
    
    
    55.9Gross margin:Gross margin services
    
    
    50.7
    
    
    
    45.1Gross margin site support
    
    
    60.2
    
    
    
    42.9Gross margin
    
    
    53.8
    
    
    
    44.1Operating expenses:Selling and marketing
    
    
    15.6
    
    
    
    10.0General and administrative
    
    
    21.7
    
    
    
    18.0Research and development
    
    
    3.9
    
    
    
    3.3Total operating expenses
    
    
    41.2
    
    
    
    31.3Operating income
    
    
    12.6
    
    
    
    12.8Foreign exchange gains (losses)
    
    
    0.4
    
    
    
    (2.4
    )Other income (expense), net
    
    
    
    
    
    
    (0.2
    )Income before income taxes
    
    
    13.0
    
    
    
    10.2Income tax provision
    
    
    5.0
    
    
    
    2.8Net income
    
    
    8.0
    %
    
    
    7.4
    %
  20




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##### Table of Contents



Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2011.
  Three Months Ended March 31,2010
    
    
    2011
    
    
    Increase (Decrease)Services:Net revenues
    
    $
    14,835
    
    
    $
    23,977
    
    
    $
    9,142
    
    
    
    61.6
    %Costs of revenues
    
    
    7,311
    
    
    
    13,156
    
    
    
    5,845
    
    
    
    79.9
    %Gross margin
    
    $
    7,524
    
    
    $
    10,821
    
    
    $
    3,297
    
    
    
    43.8
    %Site support:Net revenues
    
    $
    7,033
    
    
    $
    17,722
    
    
    $
    10,689
    
    
    
    152.0
    %Costs of revenues
    
    
    2,799
    
    
    
    10,123
    
    
    
    7,324
    
    
    
    261.7
    %Gross margin
    
    $
    4,234
    
    
    $
    7,599
    
    
    $
    3,365
    
    
    
    79.5
    %TotalNet revenues
    
    $
    21,868
    
    
    $
    41,699
    
    
    $
    19,831
    
    
    
    90.7
    %Costs of revenues
    
    
    10,110
    
    
    
    23,279
    
    
    
    13,169
    
    
    
    130.3
    %Gross margin
    
    
    11,758
    
    
    
    18,420
    
    
    
    6,662
    
    
    
    56.7
    %Operating expenses:Selling and marketing
    
    
    3,408
    
    
    
    4,175
    
    
    
    767
    
    
    
    22.5
    %General and administrative
    
    
    4,745
    
    
    
    7,508
    
    
    
    2,763
    
    
    
    58.2
    %Research and development
    
    
    858
    
    
    
    1,383
    
    
    
    525
    
    
    
    61.2
    %Total operating expenses
    
    
    9,011
    
    
    
    13,066
    
    
    
    4,055
    
    
    
    45.0
    %Operating income
    
    
    2,747
    
    
    
    5,354
    
    
    
    2,607
    
    
    
    94.9
    %Foreign exchange gains (losses)
    
    
    80
    
    
    
    (1,009
    )
    
    
    (1,089
    )
    
    
    N.M.Other income (expense), net
    
    
    20
    
    
    
    (101
    )
    
    
    (121
    )
    
    
    N.M.Income before income taxes
    
    
    2,847
    
    
    
    4,244
    
    
    
    1,397
    
    
    
    49.1
    %Income tax provision
    
    
    1,095
    
    
    
    1,151
    
    
    
    56
    
    
    
    5.1
    %Net income
    
    $
    1,752
    
    
    $
    3,093
    
    
    $
    1,341
    
    
    
    76.5
    %
   Three Months Ended March 31,
    
    
    Increase2010
    
    
    2011
    
    
    (Decrease)Cost of services
    
    
    49.3
    %
    
    
    54.9
    %
    
    
    5.6
    %Cost of site support
    
    
    39.8
    %
    
    
    57.1
    %
    
    
    17.3
    %Total costs of revenues
    
    
    46.2
    %
    
    
    55.8
    %
    
    
    9.6
    %Operating expenses:Selling and marketing
    
    
    15.6
    %
    
    
    10.0
    %
    
    
    (5.6
    %)General and administrative
    
    
    21.7
    %
    
    
    18.0
    %
    
    
    (3.7
    %)Research and development
    
    
    3.9
    %
    
    
    3.3
    %
    
    
    (0.6
    %)
  21




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##### Table of Contents



Revenues
   Costs of Revenues
   Operating Expenses
       Liquidity and Capital Resources
    22




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##### Table of Contents



Inflation
   23




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
 Long-term debt
  Investments
  Foreign Currency Risk
   
 Item 4.
    
    Controls and Procedures
   24




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##### Table of Contents



Part II. Other Information
 
 Item 6.
    
    Exhibits
 10.48
    
    
    Management Employment Agreement effective September 7, 2004 between Thomas P. Devine and
the Company.*10.49
    
    
    Amendment to Management Employment Agreement effective March 17, 2010 between Thomas
P. Devine and the Company.*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.
 
 *
    
    Management contract or compensatory plan or arrangement  25




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##### Table of Contents



eResearchTechnology, Inc.
(Registrant)Date:      May 6, 2011
    By:
    /s/ Jeffrey S. Litwin, MD, F.A.C.CJeffrey S. Litwin, MD, F.A.C.C.President and Chief Executive Officer,
(Principal executive officer)Date:      May 6, 2011
    By:
    /s/ Keith D. SchneckKeith D. SchneckExecutive Vice President, Chief Financial
Officer, Treasurer and Secretary

(Principal financial and accounting officer)  26




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    

    Exhibit10.48
    
    
    Management Employment Agreement effective September 7, 2004 between Thomas P. Devine and the
Company.*10.49
    
    
    Amendment to Management Employment Agreement effective March 17, 2010 between Thomas P.
Devine and the Company.*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.
 
 *
    
    Management contract or compensatory plan or arrangement  27