Datatrak International, Inc. Reports Fourth Quarter and Full Year Results for 2018
Datatrak achieved its third consecutive year of profitability under the new leadership that began in 2016. Revenue for the fourth quarter of 2018 was $1,915,000 compared to $1,928,000 for the fourth quarter of 2017. Direct costs increased by $44,000 for the three months ended December 31, 2018 compared to the three months ended December 31, 2017 due to new employees hired during 2018. The Company’s gross profit margin was 80% for the three months ended December 31, 2018 compared to 83% for the three months ended December 31, 2017. An increase was also seen in SG&A costs for the comparable quarters. The increase was driven by office rent, travel, director fees and maintenance and licensing costs. As a result of the increase in costs, Datatrak had operating income of $21,000 for the fourth quarter of 2018 compared to $338,000 for the fourth quarter of 2017. Net income for the fourth quarter of 2018 was $20,000 compared to $473,000 for the fourth quarter of 2017, 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.
Datatrak’s full year revenue for 2018 was $7,447,000 compared to $7,524,000 for the full year of 2017. A gross profit margin of 81% was achieved for the year ended December 31, 2018 compared to 82% for the year ended December 31, 2017. SG&A expenses decreased $75,000 to $5,212,000 for the full year of 2018 compared to $5,287,000 for the full year of 2017. The majority of the decrease was legal expenses. The Company also saw a decrease in employee and consulting costs during the year ended December 31, 2018 compared to the year ended December 31, 2017. However, travel expenses increased, due to executive and sales personnel travel, as well as director fees, office rent and maintenance and licensing costs, for the year ended December 31, 2018 compared to the year ended December 31, 2017. Operating income and net income for 2018 totaled $161,000 and $162,000, respectively, compared to operating income of $212,000 and net income of $220,000 for 2017.
Datatrak’s backlog at December 31, 2018 was $15.3 million compared to a backlog of $18.9 million at December 31, 2017, which is a 19% 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.
With the addition of several new CTMS contracts signed in the fourth quarter Datatrak continues to experience a growing interest in the cloud based product. We believe much of this interest has been inspired by the soon to be released Business Intelligence product.
“In talking with clients and prospects in the US and Europe, and recently in Japan and China, we believe that there is a growing interest in Business Analytics to provide better insights into clinical trials,” said Scott DeMell, VP Sales and Marketing at Datatrak. “Standard performance metrics, data visualizations, and predictive analytics will be able to be applied to client data through our CTMS and EDC Dashboards. We have been discussing the Business Analytics product with our clients over the past year, and with the anticipated release of the product in 2019, we are expecting market interest, especially in the mid-size pharma market where competing products are simply too expensive to acquire and implement.”
Jim Bob Ward, Datatrak CEO, continued, “Rather than compiling our clients’ data and then reselling metrics back to them, all our clients’ analysis and reports will be proprietary to them and clients will be able to limit access to dashboards outside of EDC and CTMS within our platform. We believe that concern over data ownership, and concerns about being ‘locked in’ by their current vendor, are leading a number of companies to look to Datatrak as their platform of choice.”
Another trend that Datatrak identified in its client discussions was the need for an affordable imaging data capture and adjudication product. “Several of our CRO partners confirmed that clients, especially small to mid-size pharma and device companies, do not need all the ‘bells and whistles’ of larger imaging solutions, or the full services of a core lab,” said Scott DeMell, VP Sales and Marketing at Datatrak. “Instead, they are looking to bring in digital imaging and communications in medicine (DICOM) image data, remove protected health information (PHI), import critical data into the study eCRF, and utilize standard EDC edit checks and reporting. In addition, smart, embedded workflows are built in with the ability to add image adjudication workflows. Each workflow can be configured to each clients’ specific needs.”
Datatrak recently presented these products, as well as the rest of their Enterprise Platform, at the Summit for Clinical Ops Executives (SCOPE) event. They will be also be exhibiting 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 February 28, 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.
Sales: Scott DeMell
Employment Opportunities: Laura Stuebbe
Shareholders: Alex Tabatabai
Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
|December 31, 2018||December 31, 2017|
|Cash and cash equivalents||$2,349,348||$2,528,796|
|Certificate of deposit||225,235||304,270|
|Accounts receivable, net||838,389||761,544|
|Property & equipment, net||1,408,827||1,493,610|
|Accounts payable and other current liabilities||$1,101,254||$1,009,387|
|Other long-term liabilities||151,359||155,865|
|Total liabilities and shareholders’ equity||$5,277,512||$5,510,925|
Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
|For the 12 Months Ended December 31,|
|Selling, general and administrative expenses||5,211,668||5,286,852|
|Depreciation and amortization||681,011||634,970|
|Income from operations||160,725||212,207|
|Net income before tax provision||$ 161,575||$ 85,009|
|Net income||$ 161,575||$ 219,696|
|Net income per share:|
|Net income per share, basic||$ 0.07||$ 0.11|
|Weighted-average shares outstanding, basic||2,299,067||1,947,081|
|Net income per share, diluted||$ 0.07||$ 0.11|
|Weighted-average shares outstanding, diluted||2,334,868||2,000,223|