Datatrak International, Inc. Reports First Quarter Results of 2019

Financial Highlights:

Datatrak achieved its fourth consecutive quarter of profitability and saw an increase in revenue during the three months ended March 31, 2019.  Revenue for the first quarter of 2019 was $1,922,000 compared to $1,754,000 for the first quarter of 2018.  Direct costs remained flat, which allowed the Company’s gross profit margin to increase to 82% for the three months ended March 31, 2019 compared to 80% for the three months ended March 31, 2018.  SG&A expenses decreased by $153,000, or 11%, for the three months ended March 31, 2019 compared to the three months ended March 31, 2018.  The decrease in SG&A expenses was driven by lower employee expenses, due to open positions and a higher rate of software development capitalization, and lower legal costs.  However, director fees did increase for the three months ended March 31, 2019 compared to the three months ended March 31, 2018.  Depreciation and amortization also increased for the three months ended March 31, 2019 to $191,000 compared to $149,000 for the three months ended March 31, 2018, due to capitalized software development that was released into production.  As a result of the items discussed, Datatrak had income from operations for the three months ended March 31, 2019 of $165,000 compared to an operating loss of ($112,000) for the three months ended March 31, 2018.  The Company’s net income for the three months ended March 31, 2019 was $166,000 compared to a net loss of ($110,000) for the three months ended March 31, 2018.

Datatrak’s backlog at March 31, 2019 was $14.7 million compared to a backlog of $15.3 million at December 31, 2018, which is a 4% 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.

 

Executive Highlights:

In February, Datatrak issued a press release announcing its latest product: Image Data Adjudication.  Adjudication refers to blinded evaluations of a clinical event, such as an image or adverse event interpretation, to determine whether it meets protocol definitions, and to provide standardized endpoint outcomes for the purposes of statistical analysis. Clinical Endpoint Committees (CECs) have become a common component of clinical trials for both drug and device studies. Using third party software to capture these endpoints has also become a common and many times costly option.

“Combining remote image capture and endpoint adjudication within a centralized EDC system using one source code and database has been an ongoing industry goal for years,” said Jim Bob Ward, CEO and President at Datatrak. “Expanding our platform to include remote image capture and adjudication was just the next logical step to warehousing and managing CTMS, EDC, ePRO, eCOA and eConsent clinical data within our Enterprise Cloud.”

Image Data Adjudication was presented for the first time at the 2019 Summit for Clinical Ops Executives (SCOPE) this past February, in Orlando, Florida. Datatrak provided numerous product demonstrations and clearly touched on a critical need not being met until now. “We knew we were on to something important but we were surprised by the level of interest shown by the attendees,” said Scott DeMell, VP of Sales and Marketing at Datatrak. “Datatrak’s offering should reduce the cost and time lags associated with partial image adjudication that result from stand-alone adjudicator system integration. No more trial-by-trial web services and API programing “connectors” that require redundant databases exports, imports and revalidation that increase the potential risk to patient efficacy and data security from external exposure.”

 

Datatrak will present the products discussed, as well as the rest of their Enterprise Platform, at the Drug Information Association (DIA) event in San Diego, CA June 24-26 at booth 2623.

 

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About Datatrak International, Inc.

Datatrak International, Inc. is a software-as-a-service provider of enterprise cloud-based technologies for the life sciences industry.  Datatrak’s unified eClinical solutions and related services help improve cost and time efficiencies 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 Enterprise Cloud 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, release of new products, market share, 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 21, 2019 announcing its results for the full-year period ended December 31, 2018 and subsequent filings with the OTC Markets. 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.

 

Contacts:

Sales: Scott DeMell           

Scott.DeMell@datatrak.com

Employment Opportunities: Laura Stuebbe

Laura.Stuebbe@datatrak.com

Shareholders: Alex Tabatabai

investor@datatrak.com  

 

 

Datatrak International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet Data

 (Unaudited)

 

 

  March 31, 2019 December 31, 2018  
Cash and cash equivalents $2,148,271 $2,349,348  
Marketable securities 7,645 8,230  
Certificate of deposit 225,346 225,235  
Accounts receivable, net 936,262 838,389  
Operating right-of-use asset, net 2,055,174               —  
Property & equipment, net 1,389,492 1,408,827  
Other      404,162      447,483  
   Total assets $7,166,352 $5,277,512  
       
Accounts payable and other current liabilities $965,471 $1,101,254  
Deferred revenue 3,122,463 3,520,065  
Other long-term liabilities 2,279,747 151,359  
Shareholders’ equity     798,671     504,834  
   Total liabilities and shareholders’ equity $7,166,352 $5,277,512  
       
 

 

 

Datatrak International, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

 

  For the 3 Months Ended March 31,
                         2019                        2018
Revenue $1,922,108 $1,754,313
Direct costs     351,260     348,614
   Gross profit 1,570,848 1,405,699
     
Selling, general and administrative expenses 1,215,221 1,368,501
Depreciation and amortization     190,954     149,024
   Income (loss) from operations 164,673 (111,826)
     
Interest income 2,749 896
Interest expense          (349)          (395)
Other income (expense)          (672)         1,600
   Net income (loss) before tax provision $  166,401 $(109,725)
Tax provision              —               —
   Net income (loss) $  166,401 $(109,725)
     Net income (loss) per share:    
          Net income (loss) per share, basic $        0.07 $      (0.05)
          Weighted-average shares outstanding, basic  2,330,310  2,281,489
          Net income (loss) per share, diluted $        0.07  $      (0.05) 
          Weighted-average shares outstanding, diluted  2,365,112  2,281,489