DATATRAK International, Inc. Announces Fourth Quarter and Full Year Results for 2011

CLEVELAND, March 15, 2012 /PRNewswire/ -- DATATRAK International, Inc. (OTCQX: DATA), a technology and services company focused on global eClinical solutions for the clinical trials industry, today announced its operating results for the fourth quarter and full year of 2011.  Highlights include year-over-year increases in revenue, clients, trials, and backlog – leading to the highest cash balance in three years.

"DATATRAK successfully executed its vision for 2011 – strategic investment to accelerate future growth," stated Laurence P. Birch, DATATRAK's Chairman of the Board and CEO.  "A non-dilutive cash infusion mid-year allowed us to continue to fund growth initiatives, which are already resulting in higher than expected new contracts in the first quarter of this year.  Due to our sound business model and industry leading margins, we saw strong performance indicators across the board in 2011 – upward trends in revenue, clients, trials, backlog and cash."

Birch continued, "In spite of significant study cancellations early in 2011, top-line growth remained at industry average.  Our investment in strategic initiatives resulted in the largest software release in company history.  The 2011 Q4 release included new products and an entrance into a new market for DATATRAK, the $1 billion CTMS market.  This expansion of our DATATRAK ONE™ platform is the beginning of the realization of the potential of our cloud based clinical research suite.  Interestingly to us, our competitors continue to re-brand their products to identify themselves with technologies that we have pioneered and expanded since our inception."  

Corporate Highlights:

• Revenue for the fourth quarter of 2011 of $1.8 million resulted in 2011 revenue of $7.9 million – a 7% increase over the prior year
• Gross profit margin remained steady for 2011 at 83%, despite increased headcount to support growth
• December 31, 2011 ending backlog of $11.6 million reflects continued year-over-year growth for the third consecutive year
• Cash balance of $2.3 million at December 31, 2011 increased 124% over the $1.0 million cash balance at December 31, 2010 – the highest cash balance in three years
• Continued sales pipeline expansion
  • New contract sales for 2011 outpaced 2010 new contract sales by 15% and 2009 new contract sales by 130%
  • Significant new client acquisitions in the fourth quarter of 2011, including our first CRO in India and a top-10 global CRO joining our Connect Partner Program™
  • 2011 reflected a 50% increase in the number of new clients and a 267% increase in the number of new CROs partners
• Deployed the first Chinese study with partner, Tigermed, translated to Simplified Chinese – opening many doors into the Chinese market
• Announced a multi-year enterprise agreement with a specialty biologics and vaccines biotech company
• Announced the signing of three studies with a new cardiovascular CRO
• Received CDISC Registered Solutions Provider Status for CDASH, LAB, ODM and STDM in the fourth quarter 2011
• Deployed DATATRAK's largest release of its cloud-based clinical research platform:
  • NEW uCTMS product – extends DATATRAK ONE™, the cloud-based clinical research platform, with a Clinical Trial Management System
  • NEW version of uIRT – empowers clients with control of randomization and inventory in the cloud
  • NEW version of uEDC – creates efficiencies in the data cleaning process through workflow

Reflecting on the current state of the clinical trial industry, Birch states, "The drug and device industries continue to face pressures related to patent cliffs, the lingering global recession, increased regulation and reduced research budgets.  That said, these challenges present a greenfield opportunity for DATATRAK.  Utilizing DATATRAK ONE™, the most powerful, user-friendly clinical research platform in the cloud, our clients can speed drugs to market faster, reduce risk and maintain a low TCO."  

Financial Highlights:

Due to study cancellations earlier in the year, revenue for the fourth quarter of 2011 decreased 8% to $1,854,000 compared to $2,015,000 in the same period of 2010.  The gross profit margin decreased from 85% for the three months ended December 31, 2010 to 81% for the three months ended December 31, 2011.  The Company's loss from operations for the three months ended December 31, 2011 was $(426,000) compared to income from operations of $23,000 for the corresponding period in the prior year.  The operating loss for the fourth quarter of 2011 reflects the Company's strategic investments in Sales, Marketing and Software Development to position the business for further growth, the additions to DATATRAK's Clinical and Consulting Services and the accrual of management incentive plan awards, as well as costs incurred to protect the Company's intellectual property for its customers and partners.

For the year ended December 31, 2011, revenue increased 7% to $7,926,000 compared to $7,391,000 in the same period of 2010.  Gross profit margin remained stable at 83% for the twelve months ended December 31, 2011 compared to 84% for the same time period of 2010.  For the year ended December 31, 2011, DATATRAK's loss from operations was $(1,244,000) compared to income from operations of $113,000 for the year ended December 31, 2010.  The operating loss for 2011 reflects the Company's strategic investments in Sales, Marketing and Software Development to position the business for further growth, the addition of DATATRAK's clinical and consulting services, the accrual of management incentive plan awards, as well as costs incurred to protect the Company's intellectual property for its customers and partners.

DATATRAK's backlog at December 31, 2011 was $11.6 million compared to a backlog of $11.2 million at December 31, 2010.  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.  Backlog at December 31, 2011 increased over December 31, 2010, despite several studies that were cancelled during the first half of 2011 due to reasons beyond DATATRAK's control.  Without these unforeseen study cancellations, backlog would have had a more significant increase for 2011 due to increased sales of the company's products and services.  New contract sales for 2011 outpaced 2010 new contract sales by 15%.

About DATATRAK International, Inc.

DATATRAK International is a worldwide technology and services company delivering 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 of the factors that may cause actual results to differ materially from those contemplated in these forward looking statements, please see the Company's quarterly report filed with the OTCQX Market announcing its results for the three-month period ended September 30, 2011 and for a list of additional factors, please see the Company's upcoming annual report for the period ended December 31, 2011.  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.

SOURCE DATATRAK International, Inc.