DATATRAK International, Inc. Reports First Quarter Results of 2017
CLEVELAND, May 4 /PRNewswire/ – DATATRAK International, Inc. (OTC Markets: DTRK), a leader in cloud-based technologies for the life sciences industry, today announced its operating results for the first quarter of 2017.
“The beginning of 2017 held some challenges for us as we geared up our sales and marketing team and prepared to transition our research and development focus from our initial CTMS delivery in November to additional CTMS modules. We knew the first quarter was going to be spent educating our team and the market on the value proposition of our CTMS 360 product over older, legacy offerings,” says Scott DeMell, Vice President of Sales for DATATRAK. “Our goal was to educate as many people as possible about CTMS 360, while sharing what our development goals are for the rest of the year. We anticipate the volume to increase even more as we begin to make announcements regarding our upcoming releases. There is a lot of positive response from potential clients about where we plan to go next. We have already seen an uptick in CTMS RFI requests, product demonstrations and webinar attendance, which we believe shows that we are meeting a need in the industry current solutions have not.”
“We released CTMS 360 in the fourth quarter of last year, and spent the first quarter of 2017 furthering the conversations about our CTMS product to potential clients,” says Jim Bob Ward, President and CEO of DATATRAK. “There is a substantial increase in the volume of product demonstrations we have given over the past three months, which are leading to opportunities for DATATRAK as the year moves on. The attention we are receiving from new clients is in part due to our increased marketing efforts, but also stems from the announcement we made about our new imaging and reporting solutions that we expect to be available in the near future.”
The Company’s revenue decreased $445,000, from $2,398,000 for the three months ended March 31, 2016 to $1,953,000 for the three months ended March 31, 2017. The decrease in revenue was due to the Company falling short of its sales goal during 2016. The sales department, which was depleted during the leadership transition, was focused on re-building processes and finding the right people to execute those processes during the previous year. Although that goal has largely been accomplished, it did not translate into the sales needed during 2016 to maintain previous levels of revenue in the current quarter. Direct costs decreased by 10% during the quarter ended March 31, 2017 compared to the quarter ended March 31, 2016 due to lower employee costs. The Company’s gross margin was 80% for the three months ended March 31, 2017 compared to 82% for the three months ended March 31, 2016. SG&A expenses decreased by $94,000, or 5%, for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. The largest decreases in SG&A expenses were seen in office rent, due to the sublease of the Chicago office and the assignment of the North Carolina office lease, and employee costs. The Company did see an increase in legal costs for the quarter due to the proposed settlement with the former CEO Laurence P. Birch, which is discussed in the press release dated April 5, 2017. As a result of the items discussed, DATATRAK had a loss from operations for the three months ended March 31, 2017 of ($274,000) compared to net income from operations of $138,000 for the three months ended March 31, 2016.
DATATRAK’s backlog at March 31, 2017 was $20.9 million compared to a backlog of $22.4 million at December 31, 2016, which is a 7% decrease. Backlog consists of future value from authorization letters to commence services, statements of work, technology and services agreements, change orders and other customer contracts, billed and unbilled.
All contracts are subject to possible delays or cancellation or can change in scope in a positive or negative direction. Therefore, current backlog is not necessarily indicative of the Company’s future quarterly or annual revenue. Historically, backlog has not always been an accurate predictor of the Company’s short-term revenue.
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About DATATRAK International, Inc.
DATATRAK International is a worldwide technology and services company delivering unified eClinical solutions and related services for the clinical trials industry. DATATRAK built its multi-component, comprehensive solution on a single, unified platform and expanded this concept to include services delivery via DATATRAK’s Clinical and Consulting Services group. The Company delivers a complete portfolio of software products designed to accelerate the reporting of clinical research data from sites to sponsors and ultimately regulatory authorities, faster and more efficiently than loosely integrated technologies. The DATATRAK ONE® software solution, deployed worldwide through an ASP or Enterprise Transfer offering, supports Preclinical and Phase I – Phase IV drug and device studies in multiple languages throughout the world. DATATRAK is located in Cleveland, Ohio and College Station, Texas. For more information, visit http://www.datatrak.com.
Except for the historical information contained in this press release, the statements made in this release are forward-looking statements. These forward-looking statements
are made based on management’s expectations, assumptions, estimates and current beliefs concerning the operations, future results and prospects of the Company and are subject to uncertainties and factors which are difficult to predict and, in many instances, are beyond the control of the Company, and which could cause actual results to differ materially from those contemplated in these forward-looking statements. All statements that address operating performance, events or developments that management anticipates will occur in the future, including statements related to future revenue, profits, expenses, cost reductions, cash management alternatives and working capital requirements, strategic alternatives, raising additional funds, income and earnings per share or statements expressing general opinion about future results, are forward-looking statements. For a list of certain factors that may cause actual results to differ materially from those contemplated in these forward looking statements, please see the Company’s report filed with the OTC Markets on March 2, 2017 announcing its results for the full-year period ended December 31, 2016. The Company undertakes no obligation to update publicly or revise any forward-looking statement whether as a result of new information, future events or otherwise.
DATATRAK International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
|March 31, 2017||December 31, 2016|
|Cash and cash equivalents||$2,394,958||$2,465,721|
|Certificate of deposit||301,547||301,316|
|Accounts receivable, net||821,958||682,252|
|Property & equipment, net||1,538,161||1,598,541|
|Accounts payable and other current liabilities||$2,805,683||$2,002,153|
|Other long-term liabilities||160,504||164,102|
|Total liabilities and shareholders’ deficit||$5,216.017||$5,242.826|