Datatrak International, Inc. Reports Fourth Quarter and Full Year Results for 2019
CLEVELAND, March 24 /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 fourth quarter and full year of 2019.
Datatrak achieved its fourth consecutive year and seventh consecutive quarter of profitability. Revenue for the fourth quarter of 2019 was $1,909,000 compared to $1,915,000 for the fourth quarter of 2018. Direct costs decreased by $48,000 for the three months ended December 31, 2019 compared to the three months ended December 31, 2018 due to lower employee costs, a higher capitalization of software development and less amortization related to software development efforts that have been placed into production. The Company’s gross profit margin was 73% for the three months ended December 31, 2019 compared to 71% for the three months ended December 31, 2018. SG&A costs decreased by $38,000 for the comparable quarters. The Company saw decreases in equipment and licensing costs, as well as employee expenses, legal and state taxes. These decreases were partially offset by higher consulting and travel costs. Depreciation and amortization was $5,000 for both the three months ended December 31, 2019 and 2018. As a result of the items discussed, Datatrak had income from operations for the three months ended December 31, 2019 of $102,000 compared to $21,000 for the three months ended December 31, 2018. After other income of $6,000 for the fourth quarter of 2019 compared to other expense of $(1,000) for the fourth quarter of 2018, the Company’s net income for the three months ended December 31, 2019 was $108,000 compared to $20,000 for the three months ended December 31, 2018.
Datatrak’s full year revenue for 2019 was $7,743,000 compared to $7,447,000 for the full year of 2018. Direct costs increased $149,000 for the year ended December 31, 2019 compared to the year ended December 31, 2018 due to new employees hired in the third quarter of 2018 and an increase in amortization related to software development efforts that have been placed into production. These increases were partially offset by higher software development capitalization. The Company’s gross margin was 72% for the both the years ended December 31, 2019 and 2018. SG&A expenses decreased by $67,000 for the year ended December 31, 2019 compared to the year ended December 31, 2018. The decrease in SG&A expenses was driven by lower employee expenses, due to open positions and higher software capitalization, legal costs and equipment and maintenance costs. However, consulting and director fees did increase for the year ended December 31, 2019 compared to the year ended December 31, 2018. Depreciation and amortization was $19,000 for the year ended December 31, 2019 and 2018. As a result of the items discussed, Datatrak had income from operations of $374,000 and $161,000 for the years ended December 31, 2019 and 2018, respectively. After other income of $13,000 for the year December 31, 2019 and $1,000 for the year ended December 31, 2018, the Company’s net income for the year ended December 31, 2019 was $387,000 compared to $162,000 for the year ended December 31, 2018.
Datatrak’s backlog at December 31, 2019 was $13.3 million compared to a backlog of $15.3 million at December 31, 2018, which is a 13% 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.
The Company has evaluated subsequent events through March 24, 2020, the date its consolidated financial statements were available to be issued. The Company has not, to date, seen any meaningful impact on its business from the recent COVID-19 outbreak. While the Company’s customers, or value resellers, may be located or have clients in affected areas, the Company is not currently aware of any disruption to trials or contracts. Datatrak’s employees are all able to work remotely in the event of quarantine, so the Company expects to continue to deliver services according to terms of its contracts. As this 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.
Throughout 2019, Datatrak continued to develop its Enterprise Cloud with a focus on reducing operational costs for its clients, and providing them with better alternatives to the integration and redundancy issues of other stand-alone systems.
“Our clients are looking for ways to make their trials more precise, more efficient, and more patient-centric than ever before. With the addition of Image Endpoint and Adverse Event Adjudication, and our Datatrak Direct mobile app, we are expanding our platform to provide more real-time access to clinical data from sites, core labs, and patients. Top that with the ability to collect any data source and to report and reuse that data for business intelligence, our clients now have the ability to use our enhanced reporting to better predict their trial performance, identify safety issues sooner, review their overall pipeline performance and research new products,” said Scott DeMell, VP of Sales at Datatrak. “By providing advanced technology that collects data directly from patients, we are also positioning our platform to support virtual trials.”
Also known as decentralized trials, remote trials, direct-to-patient trials, and hybrid trials, virtual trials incorporate patient-facing technologies, such as tablets, smartphone apps, or wearable sensors to help deliver a better overall patient experience.
“We believe one of the biggest challenges our clients face today is patient recruitment,” said Jim Bob Ward, CEO at Datatrak. “With virtual trial design, and patient-facing technologies like our Datatrak Direct, we encourage more patient interaction in the trial. Automated reminders, for example, keep patients informed and engaged, and should ultimately lead to improved recruitment and retention.”
The benefits that virtual trials deliver may also include using patient-facing technologies to help widen the pool of trial participants, increase retention, eliminate second-hand data sources, improved data quality and patient safety monitoring, as well as improved patient literacy of the study.
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 Washington, DC June 14-18 at booth #231.
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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 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.
Sales: Scott DeMell Employment Opportunities: Laura Stuebbe
Shareholders: Alex Tabatabai
Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
|December 31, 2019||December 31, 2018|
|Cash and cash equivalents||$3,990,549||$2,349,348|
|Certificate of deposit||165,224||225,235|
|Accounts receivable, net||634,571||838,389|
|Operating right-of-use asset, net||1,845,460||—|
|Property & equipment, net||1,355,164||1,408,827|
|Accounts payable and other current liabilities||$ 902,183||$1,101,254|
|Other long-term liabilities||2,016,407||151,359|
|Total liabilities and shareholders’ equity||$8,373,472||$5,277,512|
Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
|For the 3 Months Ended December 31,|
|Selling, general and administrative expenses||1,286,810||1,325,289|
|Depreciation and amortization||4,648||4,910|
|Income from operations||102,208||21,292|
|Other income (expense)||688||(2,080)|
|Net income before tax provision||$ 108,130||$ 19,658|
|Net income||$ 108,130||$ 19,658|
|Net income per share:|
|Net income per share, basic||$ 0.05||$ 0.01|
|Weighted-average shares outstanding, basic||2,358,667||2,313,292|
|Net income per share, diluted||$ 0.05||$ 0.01|
|Weighted-average shares outstanding, diluted||2,388,177||2,360,259|
|For the 12 Months Ended December 31,|
|Selling, general and administrative expenses||5,144,820||5,211,668|
|Depreciation and amortization||19,020||18,744|
|Income from operations||373,908||160,725|
|Other (expense) income||(1,446)||600|
|Net income before tax provision||$ 386,799||$ 161,575|
|Net income||$ 386,799||$ 161,575|
|Net income per share:|
|Net income per share, basic||$ 0.16||$ 0.07|
|Weighted-average shares outstanding, basic||2,346,372||2,299,067|
|Net income per share, diluted||$ 0.16||$ 0.07|
|Weighted-average shares outstanding, diluted||2,378,739||2,334,868|