DATATRAK Reports Third Quarter Results of 2017
CLEVELAND, Nov. 2, 2017 /PRNewswire/ -- DATATRAK International, Inc. (OTC Markets: DTRK), a leader in cloud-based technologies for the life sciences industry, today announced its operating results for the third quarter of 2017.
DATATRAK reduced its direct costs by 15% and its SG&A expenses by 1% for the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decline in direct expenses was due to lower employee costs, while SG&A saw a decline in legal expenses and consulting, as the third quarter of 2016 included a broker fee for the sublease of the Chicago office. The decline in legal and consulting were partially offset by increases in SG&A employee costs due to staffing levels and lower level of capitalized software development during the three months ended September 30, 2017 compared to three months ended September 30, 2016. The Company's revenue decreased by $400,000 to $1,737,000 for the three months ended September 30, 2017 compared to $2,137,000 for the three months ended September 30, 2016. The shortfall in 2016 sales and a slow start to sales in 2017 continue to impact the top line and did not support previous levels of revenue, leading to the decrease seen year-to-date. However, the Company did see an increase in sales near the end of the third quarter of 2017. The Company's gross profit margin was 81% for the three months ended September 30, 2017 compared to 82% for the three months ended September 30, 2016. The reduction in expenses helped to minimize the operating loss for the quarter, which totaled $5,000, compared to operating income of $429,000 for the third quarter of 2016.
On DATATRAK's balance sheet, there was a significant decrease in accounts payable and other current liabilities and a corresponding decrease in shareholders' deficit due to the conversion of the promissory note with Tabatabai Investment Partners, LP. On the maturity date of September 6, 2017, the Company and Tabatabai Investment Partners, LP signed a notice of conversion election that converted all of the outstanding principal and interest into 474,707 restricted Common Shares issued to Tabatabai Investment Partners, LP.
DATATRAK's backlog at September 30, 2017 was $20.7 million compared to a backlog of $22.4 million at December 31, 2016, which is a 7% 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.
"We have spent a lot of time analyzing the market to understand what is most important to eClinical users," says Scott DeMell, Vice President of Sales for DATATRAK. "We believe demand is growing for a complete, end-to-end solution that can support quick study startup for early phase and device trials, with the ability to easily scale to Phase II/III trials that call for more advanced reporting and edit check requirements."
DATATRAK is uniquely qualified to address this demand. The platform's ease of configuration enables clients to add the level of complexity needed to support any phase study or device trial. With DATATRAK ONE's intuitive user interface, CDASH form library, and modular design framework, sponsors and CROs have been able to design and deploy their early phase and device trials in weeks, or even days. Most notably, the Visual Architect design tool allows clients to use simple drag and drop technology, and leverage the design library of eCRF forms to build out new trials quickly, while reducing the client's dependence on technical resources.
"The market is clearly telling us that expediting the clinical trial execution process is critical to the success of all pharmaceutical, device and biologic companies. The need to move faster should not mean that these organizations have to settle for less functional technical solutions that end up increasing execution costs with manual work arounds. With DATATRAK ONE's EDC, Randomization & Trial Supply Management (RTSM), and CTMS 360 we believe we have provided a framework to operationalize trials more efficiently than any of our competitors," says Tim Lyons, Vice President of Operations and Development for DATATRAK. "We have spent much of the last 2-3 years focused on addressing the needs of Clinical Operations teams that had long been overlooked. As we look downstream, our product development efforts are focused on accelerating the database development side of the trial planning and setup process, so our customers can focus their time, effort and passion on developing their life saving products. As we move into 2018, you will see new feature additions that further support increased productivity and efficiency of our customers' resources while increasing the reusability of our customers' work product."
DATATRAK introduced Image Data Capture earlier this year, and is now working with several CRO, Pharmaceutical and Device clients to develop the next generation of features and functionality, such as enhanced workflows and notification capabilities.
Another initiative of DATATRAK moving forward is the focus on Business Intelligence. With more data being collected than ever before, transforming data into actionable information has been an industry challenge that DATATRAK is primed to solve.
"The current environment in the market offers systems that are retrofitted with custom integrations to export, import and revalidate data," says Jim Bob Ward, President and CEO of DATATRAK. "The redundant effort of integrating additional standalone systems over time will only increase risk, long term cost of ownership, opportunity costs, and delayed data access."
In contrast, the DATATRAK Enterprise Cloud offers a more advanced form of cloud computing that is designed to enhance operational efficiencies through platforms that enable users to function as teams, while unifying clinical research processes, such as EDC and CTMS.
"This optimization transforms day-to-day study data into actionable information and performance metrics," says Ward. "Since data is perishable, it is imperative to attain the data you need as quickly as possible."
DATATRAK plans to release these new solutions and updates over the coming quarters.
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About DATATRAK International, Inc.
DATATRAK International is a worldwide technology and services company delivering unified eClinical solutions and related services 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. 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.
DATATRAK International, Inc. and Subsidiaries Condensed Consolidated Balance Sheet Data (Unaudited) September 30, 2017 December 31, 2016 ------------------ ----------------- Cash and cash equivalents $1,315,688 $2,465,721 Marketable securities 8,580 - Certificate of deposit 303,356 301,316 Accounts receivable, net 2,282,393 682,252 Property & equipment, net 1,485,562 1,598,541 Other 301,944 194,996 ------- ------- Total assets $5,697,523 $5,242,826 ---------- ---------- Accounts payable and other current liabilities $1,027,154 $2,002,153 Deferred revenue 4,936,728 5,072,352 Other long-term liabilities 156,946 164,102 Shareholders' deficit (423,305) (1,995,781) -------- ---------- Total liabilities and shareholders' deficit $5,697,523 $5,242,826 ---------- ---------- DATATRAK International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) For the 3 Months Ended September 30, ------------------------------------ 2017 2016 ---- ---- Revenue $1,736,872 $2,136,506 Direct costs 333,172 391,228 ------- ------- Gross profit 1,403,700 1,745,278 Selling, general and administrative expenses 1,247,368 1,263,371 Depreciation and amortization 160,937 52,653 ------- ------ (Loss) income from operations (4,605) 429,254 Interest income 911 151 Interest expense (38,096) (15,901) Loss on asset disposal - (6,025) --- ------ Net (loss) income before tax provision $(41,790) $407,479 Tax provision - 8,802 --- ----- Net (loss) income $(41,790) $398,677 -------- -------- Net (loss) income per share: Net (loss) income per share, basic $(0.02) $0.23 ------ ----- Weighted-average shares outstanding, basic 1,924,778 1,718,932 --------- --------- Net (loss) income per share, diluted $(0.02) $0.22 ------ ----- Weighted-average shares outstanding, diluted 1,924,778 1,783,880 --------- ---------
SOURCE DATATRAK International, Inc.
Company Codes: OtherOTC:DTRK, OTC-PINK:DTRK