DATATRAK International, Inc. Reports First Quarter Results of 2013

DATATRAK International, Inc. Reports First Quarter Results of 2013

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DATATRAK International, Inc. Reports First Quarter Results of 2013

22% Increase in Revenue

35% Increase in Backlog - Highest in 7 Years

PR Newswire

CLEVELAND, May 15, 2013

CLEVELAND, May 15, 2013 /PRNewswire/ -- DATATRAK International, Inc. (OTCQX: DTRK), a leader in developing cloud-based, unified eClinical^® technologies and delivering related services for the clinical trials industry, today announced its operating results for the first quarter of 2013.

"The soundness of our strategy and strength of execution continue to be evidenced by our strong financial metrics, market-leading growth rates and industry recognition as a thought leader," stated Laurence P. Birch, DATATRAK's Chairman of the Board and CEO.  "As the macro-economic environment begins to improve and FDA drug approvals reach record levels, clients continue to search out the benefits provided by our global cloud-based solution – reduced friction costs, real-time access to data and a single source vendor."

"Additionally, we are beginning to see expansion of the clinical trial frontier – from a large scale focus on Big Data to a micro-focus on the patient," continued Birch.  "As demand for greater control of individual data fuels the digital health movement, DATATRAK is positioned to lead the charge in innovation with our Technology Driven Drug Development (TD3^™) initiative.  TD3^™ provides Life Science companies with our cost effective platform to evaluate the viability of their drug pipeline and reallocate focus and resources quickly in order to capitalize on new opportunities – all in a manner that enhances patient safety – from Concept to Cure^®."

Highlights for the first quarter 2013 include:

• First quarter revenues increased to $2.6 million – a 22% increase year-over-year



• Gross profit margin for the fiscal year remained stable at 81%



• Backlog at March 31, 2013 totaled approximately $18.8 million – a 35% year-over-year increase and the highest balance in 7 years



• Cash balance at March 31, 2013 of $2.9 million
  



• Continued Growth and Rebranding – Introduction of new trade symbol, DTRK



• Continued Industry Presence and Thought Leadership
  
  
  
  
  • 6^th Annual OneMed Forum – San Francisco
    
  
  
  
  • Biotech Showcase – San Francisco
    
  
  
  
  • 16^th Annual DIA CDM – Japan – Dr. Bill Gluck, Speaker
  
  
  
  • 25^th Annual DIA EuroMeeting – Amsterdam – Dr. Bill Gluck, Speaker
  
  
  
  • HIMSS 13^th Annual Conference and Exhibition – New Orleans
    
  
  
  
  • ACDM Conference – Berkshire, UK – Dr. Bill Gluck, Speaker
  
  
  
  • Webinar – Streamlining Mid-Study Changes with Technology
  
  
  
  

In other news, the Company announced that Mr. Craig Wigginton joined the Company as Chief Technology Officer, responsible for setting and executing the Company's technical vision with the software development and IT Operations teams.  

Mr. Wigginton brings more than 20 years of product development, software engineering and architecture experience, with recent success in healthcare supply chain management, medical and behavioral health management and telecommunications.  He is a graduate of the College of Engineering at Northeastern University in Boston, Massachusetts.

At the Annual Meeting of Shareholders held on May 14, 2013, the shareholders approved the election of new board member, Mr. Nicholas A. Loiacono, currently the Vice President and Treasurer of McKesson Corporation. Mr. Loiacono began his career in healthcare over 30 years ago with American Hospital Supply Corporation. He brings a wealth of experience in healthcare manufacturing and distribution, medical devices, clinical laboratory, home healthcare and healthcare information technologies.

Commenting on the additions of Messrs. Loiacono and Wigginton, CEO and Board Chairman, Laurence P. Birch said, "We welcome the industry expertise and talent that these two individuals bring to DATATRAK. Both will make an immediate impact in leading us through the next phase of growth, and I look forward to working with them."

In addition, shareholders approved the re-election of Mr. Laurence P. Birch and Mr. Timothy G. Biro to the Board of Directors, ratified the selection of BDO USA, LLP as DATATRAK's independent auditor for 2013 and approved a proposal to grant the Company's Board of Directors the authority to effect a reverse stock split of the Company's outstanding common shares, without par value. Immediately following the meeting, the Company implemented a one-for-twelve reverse split of the Company's common shares. The reverse split will become effective at the close of business on June 3, 2013, and thereafter the Company's common shares will begin trading on the OTCQX Markets on a split-adjusted basis. The Company encourages shareholders to refer to its proxy materials filed with the OTCQX Market on April 8, 2013 for more information about the reverse stock split.

Financial Highlights:

Revenue increased by 22% to $2.6 million in the first quarter of 2013 compared to $2.1 million in the first quarter of 2012 due to strong new contract sales which fueled backlog increases throughout 2012 and in the first quarter of 2013 as well.  Gross profit margin remained stable at 81% for the three months ended March 31, 2013 and March 31, 2012.  The Company's loss from operations for the three months ended March 31, 2013 was $(389,000) compared to $(515,000) for the corresponding period in the prior year.  The operating results for both years reflect the Company's planned strategic investments in Sales, Marketing and Software Development in order to position the business for future top-line growth and the accrual of management incentive plan awards and sales compensation awards.  While the protection of intellectual property continues into 2013, the associated costs were not as significant in the first quarter of 2013 compared to the first quarter of the prior year.  For the three months ended March 31, 2013, the Company recorded other income of $750,000.  DATATRAK received $750,000 from a third-party in connection with activities and arrangements associated with its marketing and re-branding initiative related to the Company's launch of its new ticker symbol, DTRK.

DATATRAK's backlog at March 31, 2013 was $18.8 million compared to a backlog of $17.8 million at December 31, 2012.  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.  The improvement in backlog from December 31, 2012 to March 31, 2013 was due to new contract sales, change orders and contract amendments. 

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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 Phase I - Phase IV drug and device studies in multiple languages throughout the world.  DATATRAK has offices located in Cleveland, Ohio; Bryan, Texas; and Cary (RTP), North Carolina. For more information, visit http://www.datatrak.net.

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 been a poor predictor of the Company's short-term revenue.

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.  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 OTCQX Market on March 15, 2013 announcing its results for the full-year period ending December 31, 2012. 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)
	March 31, 2013	December 31, 2012
Cash and cash equivalents	$2,943,079	$3,122,905
Accounts receivable, net	1,434,577	1,452,174
Property & equipment, net	104,141	93,797
Deferred tax assets	—	2,900
Other	297,272	410,221
Total assets	$4,779,069	$5,081,997
Accounts payable and other current liabilities	$1,324,216	$2,342,226
Deferred revenue	4,489,220	4,642,871
Deferred tax liabilities	—	2,900
Other long-term liabilities	26,454	12,126
Shareholders'  deficit	(1,060,821)	(1,918,126)
Total liabilities and shareholders' deficit	$4,779,069	$5,081,997

 

DATATRAK International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited)
	For the Three Months Ended March 31,
	2013	2012
Revenue	$2,582,477	$2,119,198
Direct costs	482,652	396,647
Gross profit	2,099,825	1,722,551
Selling, general and administrative expenses	2,467,012	2,199,002
Depreciation and amortization	21,930	38,826
Loss from operations	(389,117)	(515,277)
Interest income	93	132
Interest expense	(3,150)	(1,655)
Other income	750,000	—
Net income (loss)	$ 357,826	$(516,800)
Net income (loss) per share:
Net income (loss) per share, basic	$         0.02	$       (0.04)
Weighted-average shares outstanding, basic	15,608,592	14,714,947
Net income (loss) per share, diluted	$         0.02	$       (0.04)
Weighted-average shares outstanding, diluted	17,324,043	14,714,947

 

SOURCE DATATRAK International, Inc.