Datatrak International, Inc. Reports First Quarter Results for 2020
CLEVELAND, May 6, 2020 /NewMediaWire/ – Datatrak International, Inc. (OTC Markets: DTRK), a worldwide Software-as-a-Service (“SaaS”) provider and innovation leader of cloud-based technologies for the life sciences industry, today announced its operating results for the first quarter of 2020.
Datatrak was profitable for the first quarter of 2020. Revenue for the first quarter of 2020 was $1,951,000 compared to $1,922,000 for the first quarter of 2019. Direct costs decreased by $46,000 for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 due to less amortization related to software development efforts that have been placed into production, which was partially offset by higher employee costs. The Company’s gross profit margin was 75% for the three months ended March 31, 2020 compared to 72% for the three months ended March 31, 2019. SG&A expenses increased by $179,000 for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase in SG&A expenses was driven by higher employee expenses, due to salary adjustments and lower software capitalization, and consulting costs. However, travel and legal costs decreased for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. Depreciation and amortization was $4,000 and $5,000 for the three months ended March 31, 2020 and 2019, respectively. As a result of the items discussed, Datatrak had income from operations of $62,000 for the three months ended March 31, 2020 compared to $165,000 for the three months ended March 31, 2019. After other income of $4,000 for the three months ended March 31, 2020 and $1,000 for the three months ended March 31, 2019, the Company’s net income for the three months ended March 31, 2020 was $66,000 compared to $166,000 for the three months ended March 31, 2019.
Datatrak’s backlog at March 31, 2020 was $12.3 million compared to a backlog of $13.3 million at December 31, 2019. 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.
On March 20, 2020, Datatrak entered into a revolving line of credit (“2020 Line of Credit”) with KeyBank National Association. The 2020 Line of Credit provides for draws when requested by the Company’s officers of up to $500,000 to be used for business operations. Interest will accrue monthly on any outstanding balance at a rate equal to 1-Month LIBOR plus 2.25% or KeyBank’s Prime Rate plus 0.25%. The line of credit is to be repaid in monthly payments of all accrued unpaid interest due as of each payment date, beginning April 30, 2020, with all subsequent interest payments to be due on the same day of each month after that. The outstanding principal and accrued unpaid interest is due in one payment on March 31, 2021, the maturity date of the 2020 Line of Credit. There have been no draws under the 2020 Line of Credit to date.
The Company has evaluated subsequent events through May 6, 2020, the date its consolidated financial statements were available to be issued. While the Company has seen a delay in the signing of some new contracts due to the COVID-19 pandemic, it has not laid off and does not currently have plans to lay off any employees. Datatrak’s employees are all able to work remotely during quarantine, and the Company is continuing to deliver services according to terms of its contracts. The Company has been monitoring state and federal guidelines regarding the COVID-19 pandemic and will modify business operations as needed to comply with these guidelines for the safety of its employees and customers. As the COVID-19 pandemic is a developing situation, the Company cannot provide any assurance that the effects of the COVID-19 outbreak will not have an adverse effect on its business or results of operations going forward. In addition, the COVID-19 pandemic has caused a global economic downturn, and it is possible that it could cause a global recession, which could potentially materially impact the Company.
This past quarter has been an unprecedented one for the Life Science industry. Due to the rapid spread of the COVID-19 virus around the globe, companies have had to adapt to dramatic changes in how trials are conducted, while participating in a collective effort to find a vaccine. In March 2020, Datatrak announced it would waive its EDC software license fees for COVID-19 related research. “Now more than ever, we are seeing the need for complete eClinical platforms that offer a comprehensive solution from quick study startups and ease of data collection, to the analytical support to make sense of the massive amount of patient, lab, image and other data being collected hourly,” said Scott DeMell, VP Sales at Datatrak.
“Our clients are facing a new challenge, with employees working from home and the uncertainty about how or when patients will be able to visit their sites again, and they need to find ways to minimize disruptions with ongoing studies as well as upcoming clinical trials. The need for a unified solution that provides researchers with the ability to collect information directly from the patient in a virtual or hybrid style is more critical than ever. The Datatrak Enterprise Cloud’s ability to provide real-time access to clinical data from sites, core labs, and patients improves the clinical collaboration and provides better data for faster and more informed decisions,” added Jim Bob Ward, CEO at Datatrak.
“Our ability to centralize data and workflows minimizes the risk of workforce disruption for global trials. This is highlighted in our image capture product which unifies the image management with intelligent workflows from capture, storage, read, adjudication and archival for better visibility and faster access to the image data. We are seeing an increased need from our clients to help streamline their image acquisition, reduce image queries, automate workflow and combine the image data with their clinical data. This is all a part of our mission of helping our clients to get the right information, to those who need it, when they need it to make better informed decisions, faster.”
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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 or success 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 24, 2020 announcing its results for the full-year period ended December 31, 2019 and subsequent filings with the OTC Markets. Many such factors have been, and may further be, exacerbated by the COVID-19 pandemic. 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
(Unaudited and Not Reviewed)
|March 31, 2020||December 31, 2019|
|Cash and cash equivalents||$3,390,942||$3,990,549|
|Certificate of deposit||165,306||165,224|
|Accounts receivable, net||622,958||634,571|
|Operating right-of-use asset, net||1,769,934||1,845,460|
|Property & equipment, net||1,370,095||1,355,164|
|Accounts payable and other current liabilities||$1,121,582||$ 902,183|
|Other long-term liabilities||1,922,978||2,016,407|
|Total liabilities and shareholders’ equity||$7,932,327||$8,373,472|