Datatrak International, Inc. Reports Third Quarter Results of 2019
CLEVELAND, Nov. 6, 2019 /PRNewswire/ -- 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 third quarter of 2019.
Financial Highlights:
Datatrak achieved its sixth consecutive quarter of profitability and saw a continued increase in backlog during the nine months ended September 30, 2019. Revenue for the third quarter of 2019 was $2,028,000 compared to $1,847,000 for the third quarter of 2018. Direct costs increased $30,000 for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 due to new employees hired in the third quarter of 2018. The Company's gross profit margin was 81% for both the three months ended September 30, 2019 and 2018. Selling, general and administrative ("SG&A") expenses increased to $1,363,000 for the three months ended September 30, 2019 compared to $1,235,000 for the three months ended September 30, 2018 due to a rise in employee and consulting costs. Depreciation and amortization increased for the third quarter of 2019 to $210,000 compared to $173,000 for the third quarter of 2018, due to capitalized software development that was released into production. As a result of the items discussed, Datatrak had income from operations for the three months ended September 30, 2019 of $79,000 compared to $92,000 for the three months ended September 30, 2018. After other income of $3,000 for the third quarter of 2019, the Company's net income for the three months ended September 30, 2019 was $82,000 compared to $92,000 for the three months ended September 30, 2018.
Revenue increased for the nine months ended September 30, 2019 by $301,000, to $5,834,000 compared to $5,533,000 for the nine months ended September 30, 2018. Direct costs increased $93,000 for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018 due to new employees hired in the third quarter of 2018. The Company's gross margin was 81% for the nine months ended September 30, 2019 compared to a gross margin of 82% for the nine months ended September 30, 2018. SG&A expenses decreased by $28,000 for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018. The decrease in SG&A expenses was driven by lower employee expenses and legal costs, which were partially offset by higher consulting and director fees. Depreciation and amortization also increased for the nine months ended September 30, 2019 to $595,000 compared to $491,000 for the nine months ended September 30, 2018, due to capitalized software development that was released into production. As a result of the items discussed, Datatrak had income from operations of $272,000 and $139,000 for the nine months ended September 30, 2019 and 2018, respectively. After other income of $7,000 for the nine months ended September 30, 2019 and $3,000 for the nine months ended September 30, 2018, the Company's net income for the nine months ended September 30, 2019 was $279,000 compared to $142,000 for the nine months ended September 30, 2018.
Datatrak's backlog at September 30, 2019 was $16.7 million compared to a backlog of $15.3 million at December 31, 2018, which is a 9% increase. 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.
Executive Highlights:
Through tradeshows, exhibitions, and other client interactions, Datatrak continues to share its vision of the role the Enterprise Cloud plays in the growing importance of E-Clinical Cloud Platforms in Life Sciences.
Datatrak President and CEO, Jim Bob Ward, presented at several regional, national and international conferences on the topics of Predictive Analytics, ePRO and Wearable Devices, and Embedding Analytics in Cloud Platforms. "We believe our interactions at events like ACRP, SCDM, DIA and DIA China have shown a rapidly growing interest in our Enterprise Cloud platform and the value Cloud-based SaaS offers in reducing the operational costs of integrating redundant stand-alone systems," said Mr. Ward. "We will be continuing these discussions in the upcoming DIA Annual Meeting in Tokyo, Japan and beyond into 2020."
"The industry is reaching a new inflection point with leading imaging and safety company failures, platform acquisitions indicating a shift to health care, and an early roll-up of EDC companies unable to expand beyond point solutions into larger SaaS platforms. Sponsors are realizing the failure of a two vendor approach with large vendors unable to perform real-time reporting or basic study/version changes, and smaller vendors not able to grow into more complex later stage trials," said Scott DeMell, VP Sales at Datatrak. "As a result, we believe more companies are looking to integrated SaaS platforms like our Enterprise Cloud, which offer scalable technology at affordable prices."
Mr. Ward continued, "As innovators in Life Science technology, Datatrak continues to expand its offerings, due to the advantages offered by years of early platform development. In the past year, we introduced advances in our Risk Based Monitoring support and Image and ECG data capture, along with what we believe is the first Image Endpoint and Adverse Event Adjudication capabilities within EDC. We're now bringing Datatrak Direct to market, expanding our Enterprise Cloud with the ability to reach out and collect patient reported data directly from the patient and wearable devices. Our Sponsor clients are now looking at the future of clinical research using our platform to perform Virtual Trials. We anticipate that the new world of Virtual Trials will deliver business intelligence from real-time access to clinical data from sites, core labs, and patients, making it easier for remote entry and even for patients to participate and improve the quality of clinical research."
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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.
Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
(Unaudited)
September 30, 2019
December 31, 2018
---
Cash and cash equivalents $3,657,498 $2,349,348
Marketable securities 6,125 8,230
Certificate of deposit 165,140 225,235
Accounts receivable, net 657,257 838,389
Operating right-of-use asset, net 1,918,776
Property & equipment, net 1,356,395 1,408,827
Other 445,469 447,483
---
Total assets $8,206,660 $5,277,512
===
Accounts payable and other current liabilities $1,187,505 $1,101,254
Deferred revenue 3,920,872 3,520,065
Other long-term liabilities 2,103,818 151,359
Shareholders' equity 994,465 504,834
---
Total liabilities and shareholders' equity $8,206,660 $5,277,512
===
Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
For the 3 Months Ended
September 30,
2019 2018
---
Revenue $2,028,216 $1,846,940
Direct costs 376,211 346,257
---
Gross profit 1,652,005 1,500,683
Selling,
general and
administrative
expenses 1,362,971 1,235,386
Depreciation
and
amortization 210,394 173,428
---
Income from
operations 78,640 91,869
Interest
income 5,475 746
Interest
expense (1,371) (1,145)
Other income
(expense) (817) 80
---
Net income
before tax
provision $81,927 $91,550
Tax
provision -
---
Net income $81,927 $91,550
===
Net income per share:
Net income
per share,
basic $0.03 $0.04
===
Weighted-
average
shares
outstanding,
basic 2,352,213 2,304,195
===
Net income
per share,
diluted $0.03 $0.04
===
Weighted-
average
shares
outstanding,
diluted 2,374,335 2,336,975
===
Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
For the 9 Months Ended September 30,
2019 2018
---
Revenue $5,833,891 $5,532,593
Direct costs 1,109,078 1,015,983
---
Gross profit 4,724,813 4,516,610
Selling, general and administrative expenses 3,858,010 3,886,379
Depreciation and amortization 595,103 490,798
---
Income from operations 271,700 139,433
Interest income 12,043 2,388
Interest expense (2,940) (2,584)
Other income (expense) (2,134) 2,680
---
Net income before tax provision $278,669 $141,917
Tax provision -
---
Net income $278,669 $141,917
===
Net income per share:
Net income per share, basic $0.12 $0.06
===
Weighted-average shares outstanding, basic 2,342,229 2,294,274
===
Net income per share, diluted $0.12 $0.06
===
Weighted-average shares outstanding, diluted 2,372,946 2,330,302
===
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SOURCE Datatrak International, Inc.
