CLEVELAND, March 21 /PRNewswire/ – DATATRAK International, Inc. (OTC Markets: DTRK), a software-as-a-service provider and innovation leader of cloud-based technologies for the life sciences industry, today announced its operating results for the fourth quarter and full year 2017.
DATATRAK achieved its second consecutive year of profitability under the new leadership that began in 2016. DATATRAK had operating income of $336,000 for the fourth quarter of 2017 compared to $186,000 for the fourth quarter of 2016. Net income for the fourth quarter of 2017 was $471,000, which included $135,000 of income tax benefit due to alternative minimum tax credits being made refundable under the Tax Cuts and Jobs Act of 2017, compared to $160,000 for the fourth quarter of 2016. The Company reduced its direct costs by 17% and its SG&A expenses by 19% for the three months ended December 31, 2017 compared to the three months ended December 31, 2016. The decline in direct costs was due to lower employee and clinical data management costs, while SG&A also saw a decline in employee costs as well as legal and consulting expenses. The decrease in employee costs was mainly driven by the change in stock compensation for the three months ended December 31, 2017 compared to the three months ended December 31, 2016, which included a significant stock grant. Year-over-year legal costs declined, as the new leadership promised, due to the settlement of litigation during 2017, while consulting decreased due to the end of a contract in the fourth quarter of 2017. The Company’s revenue decreased by $119,000 to $1,928,000 for the three months ended December 31, 2017 compared to $2,047,000 for the three months ended December 31, 2016. The sales volume in 2016 and 2017 did not support previous levels of revenue, leading to the decrease seen year-to-date. However, the Company did see an increase in revenue from the previous quarter. The Company’s gross profit margin was 83% for the three months ended December 31, 2017 compared to 80% for the three months ended December 31, 2016. The overall reduction in expenses minimized the decline in revenue.
DATATRAK’s full year revenue for 2017 was $7,524,000 compared to $8,983,000 for the full year of 2016. As stated above, recent sales volumes have not supported previous levels of revenue. A gross profit margin of 82% was achieved for both the years ended December 31, 2017 and 2016. SG&A expenses were $5,289,000 for the year ended December 31, 2017 compared to $6,042,000 for the year ended December 31, 2016. Reductions were seen in most expense categories, especially legal and consulting. Operating income and net income for 2017 totaled $210,000 and $218,000, respectively, compared to operating income of $1,083,000 and net income of $1,017,000 for 2016.
DATATRAK’s backlog at December 31, 2017 was $18.9 million compared to a backlog of $22.4 million at December 31, 2016, which is a 15% 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.
DATATRAK believes that sales leads have improved considerably due to the new leadership building a more experienced sales team along with new product offerings despite the fiscal year 2017 decline in revenue. The Company is committed to delivering collaborative innovations that reduce both the operating cost and the amount of time needed to bring products to market through DATATRAK’s Enterprise Cloud.
DATATRAK ended the year on a high note after growing the list of new Clinical Trial Management System (CTMS) and Electronic Data Capture (EDC) clients, with many more opportunities arising from expanding global markets. “We are excited that the adoption of the Company’s CTMS continues to grow,” says Scott DeMell, Vice President of Sales at DATATRAK. “With more organizations abandoning or avoiding the risk and delays from disparate systems integration, they are seeking out unified enterprise solutions like DATATRAK. Potential clients who are advancing their view of EDC study efficacy to the larger management and analysis of CTMS program performance also value DATATRAK’’s user-friendly and intuitive nature.”
Additionally, DATATRAK’s Product Development team completed putting the finishing touches on the new version of DATATRAK’s Enterprise Cloud Platform. The newly added features focus on addressing the collaboration needs of CTMS customers while also expanding their standards for Business Intelligence (BI) dashboard reporting options. EDC users are now enjoying an improved and more efficient medical coding process with the addition of the WHO Dictionary Coding Manager.
As DATATRAK looks further into 2018, the Company plans to turn to materializing aspects of its new mobile product strategy as it looks to finalize solutions that will address existing client and market demands for cost effective and scalable Electronic Patient Reported Outcomes (ePro), Electronic Consent (eConsent), and Electronic Clinical Outcome Assessments (eCOA) solutions. This strategy includes leveraging the Company’s EDC and CTMS with the growing acceptance of personal health devices, or “wearables,” to capture clinical trial information directly from patient devices.
“By all accounts, the eCOA market segment is one of the fastest growing in the Life Sciences industry,” says Jim Bob Ward, President and CEO of DATATRAK. “The market is expected to reach $2 billion dollars in the coming years, and we believe that the DATATRAK Enterprise Cloud is in a great position to capitalize on providing actionable information across all aspects of remote data collection, transformation and analytics.”
With the expectation to deliver a solution in the coming months, DATATRAK is focusing on market demands. “We want to make sure we fully understand users’ needs, and make sure we align our delivery with those expectations,” says Tim Lyons, Vice President of Product Development and Operations for DATATRAK. “As we look across the mobile health landscape and talk with our customers, we are gaining intelligence to better understand customer pain-points and deficits of other systems and keying in on areas where we can address those frustrations. Our offering will look to deliver an intuitive and user friendly solution to patients and sites while effectively leveraging the existing power of the DATATRAK Enterprise Cloud to convert that data into actionable information for our customers.”
When the modules are released, customers will be able to take data directly from the patient devices into DATATRAK’s Enterprise Cloud and to utilize all of the existing functionality, including data review tools, reports and analytics, so the data can be can be evaluated and analyzed. Providing clients a patient mobile solution approach can reduce time, risk and cost for clinical trial research and provide them with tools to manage and monitor their patients’ activity in real-time.
DATATRAK plans to provide more detailed announcements in the coming months.
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About DATATRAK International, Inc.
DATATRAK International 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 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 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.
Sales: Scott DeMell
Employment Opportunities: Laura Stuebbe
Shareholders: Alex Tabatabai
DATATRAK International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
|December 31, 2017||December 31, 2016|
|Cash and cash equivalents||$2,528,796||$2,465,721|
|Certificate of deposit||304,270||301,316|
|Accounts receivable, net||762,317||714,252|
|Property & equipment, net||1,493,610||1,598,541|
|Accounts payable and other current liabilities||$975,616||$2,002,153|
|Other long-term liabilities||155,865||164,102|
|Shareholders’ equity (deficit)||87,271||(1,995,781)|
|Total liabilities and shareholders’ equity (deficit)||$5,477,664||$5,274,826|
|For the 12 Months Ended December 31,|
|Selling, general and administrative expenses||5,288,729||6,042,427|
|Depreciation and amortization||634,970||253,467|
|Income from operations||210,330||1,082,754|
|Net income before tax provision||$ 83,132||$1,029,429|
|Net income||$ 217,819||$1,016,793|
|Net income per share:|
|Net income per share, basic||$ 0.11||$ 0.60|
|Weighted-average shares outstanding, basic||1,947,081||1,680,859|
|Net income per share, diluted||$ 0.11||$ 0.55|
|Weighted-average shares outstanding, diluted||2,000,223||1,833,869|