DATATRAK International, Inc. Reports Third Quarter Results of 2014

CLEVELAND, Nov. 12, 2014 /PRNewswire/ -- DATATRAK International, Inc. (OTCQX: DTRK), the leader in developing cloud-based, unified eClinical^® technologies and delivering related services for the clinical trials industry, today announced its operating results for the third quarter of 2014.

"DATATRAK saw tremendous growth in new contracts in the third quarter, resulting in unprecedented backlog expansion.  As clients continue to harness the power of our Unified Experience™, we continue to see new contract growth through all access points – direct sales to existing and new clients, deeper penetration into channel partners, expansion of our global footprint through reseller NTT DATA and competitive takeaways from expensive, incumbent providers,"  said Laurence P. Birch, DATATRAK Chairman and CEO. 

Birch continued, "The multi-million dollar extension of our strategic partnership with NTT DATA is the largest contract ever signed by DATATRAK – we will see an immediate, non-dilutive cash impact from this deal in the next quarter as a result of a non-refundable upfront payment, which will fuel accelerated investment in Research and Development expanding our functionality and Intellectual Property creation and protection and Sales and Marketing expenditures to accelerate our new contract growth.  The expanding NTT DATA relationship is a reflection of the strength of the partnership, the flexibility of the platform and the benefits of our unified eClinical solutions on a global landscape."

"I would also like to take this opportunity to address a topic at the forefront of our client discussions – data security.  Whether related to financial controls or network security, data breaches do occur in our industry.  DATATRAK takes all security very seriously and insists on high standards for internal controls throughout the entire organization.  Our commitment to protect patient data continues to be rewarded by new and existing clients' expanding partnerships as evidenced by this quarter's record breaking backlog," concluded Birch.

Highlights include:

• Second Consecutive Quarter with Record Breaking Backlog for September 30, 2014 with $25.2 million, a 21% increase over backlog at December 31, 2013 of $20.9 million
• YTD 2014 revenue of $8.20M increased 2% compared to YTD 2013 revenue of $8.05M
• Gross Profit Margin for the year remained strong at 80%
• Number of revenue-generating contracts increased 11% as of September 30, 2014 compared to September 30, 2013
• 98% of all 2014 new studies used more than one DATATRAK solution
• DATATRAK website transformed, resulting in 28% growth in total traffic and an increase in global visitors
• NTT DATA Expanded Technology Transfer Agreement through 2020, recognizing the ease of language translation and our intuitive user interface
• Risk Based Monitoring Webinar hosted by DATATRAK provided insight on optimizing EDC solutions to maximize benefits

Financial Highlights:
Revenue decreased by 11% to $2.69 million in the third quarter of 2014 compared to $3.02 million in the third quarter of 2013 due to timing impacts and the effect of deal flow and cancellations in previous quarters.  Direct costs increased by 11% over the third quarter of 2013 as a result of higher headcount to support DATATRAK's growing backlog.  Due to the lower revenue and higher direct costs for the quarter ended September 30, 2014, the Company's gross margin was 79% compared to 83% for the three months ended September 30, 2013.  The Company continues to focus on efficient, effective operations and controlled growth which allow the Company to incur necessary incremental costs while maintaining a stable gross margin.  SG&A expenses increased by $148,000, or 6%, to $2.51 million from $2.36 million for the three months ended September 30, 2014 and 2013, respectively.  The increase was due to higher employee and consulting costs, as well as legal costs associated with the protection of the Company's intellectual property portfolio.  As a result, the Company's loss from operations for the three months ended September 30, 2014 was $(397,000) compared to income from operations of $134,000 for the corresponding period in the prior year. DATATRAK will continue to invest in Sales, Marketing and Research and Development, introducing new DATATRAK ONE® solutions and feature enhancements while accelerating market share growth. 

DATATRAK's backlog at September 30, 2014 was $25.2 million compared to a backlog of $20.9 million at December 31, 2013. 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, 2013 to September 30, 2014 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 Preclinical and Phase I - Phase IV drug and device studies in multiple languages throughout the world. DATATRAK is located in Cleveland, Ohio; Bryan, Texas; Cary (RTP), North Carolina; Chicago, Illinois; and London, England.  For more information, visit http://www.datatrak.com.

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 14, 2014 announcing its results for the full-year period ended December 31, 2013. 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, 2014			December 31, 2013
Cash and cash equivalents	$1,876,199			$3,305,852
Accounts receivable, net	1,436,932			1,084,377
Property & equipment, net	306,999			190,799
Other	502,795			461,196
Total assets	$4,122,925			$5,042,224
Accounts payable and other current liabilities	$1,893,837			$1,855,061
Deferred revenue	3,998,626			4,425,167
Other long-term liabilities	20,270			29,775
Shareholders'  deficit	(1,789,808)			(1,267,779)
Total liabilities and shareholders' deficit	$4,122.925			$5,042.224
DATATRAK International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited)
		For the 3 Months Ended September 30,
		2014		2013
Revenue		$2,694,547		$3,015,987
Direct costs		567,107		511,464
Gross profit		2,127,440		2,504,523
Selling, general and administrative expenses		2,506,635		2,358,819
Depreciation and amortization		17,636		11,525
(Loss) income from operations		(396,831)		134,179
Interest income		236		63
Interest expense		(3,586)		(288)
Net (loss) income		$(400,181)		$  133,954
Net (loss) income per share:
Net (loss) income per share, basic		$     (0.28)		$        0.10
Weighted-average shares outstanding, basic		1,437,072		1,360,457
Net (loss) income per share, diluted		$     (0.28)		$        0.09
Weighted-average shares outstanding, diluted		1,437,072		1,463,602

 

 

SOURCE DATATRAK International, Inc.

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