DATATRAK International, Inc. Reports Fourth Quarter and Full Year Results of 2015
CLEVELAND, April 8, 2016 /PRNewswire/ -- DATATRAK International, Inc. (OTCQX: DTRK), a leader in cloud-based, unified dClinical® technologies and related services for the clinical trials industry, today announced its operating results for the fourth quarter and full year 2015.
"The close of 2015 reflected a transition point for DATATRAK," stated Jim Bob Ward, DATATRAK's Interim CEO and President. "We are happy to report that the contested proxy election has come to resolution, the Board level litigation is resolved and the leadership transition is complete. Through my office visits, it is encouraging to see the level of dedication our employees demonstrate to the DATATRAK vision. We benefit from a deep bench of talent and the new Board and leadership aim to ensure a seamless transition for all DATATRAK stakeholders."
Ward continued, "We experienced headwinds in the fourth quarter resulting from weaker sales results than planned, coupled with significant study cancellations due to Sponsor level clinical or budget issues, and non-recurring non-operational spend; however, we do see an underlying strength in the business challenge that lies ahead. DATATRAK, with a history dating back to 1991, possesses a resilient installed client base we plan to leverage with encouraging leading growth indicators around new client acquisition - we now embark upon the next phase of the Company's evolution."
"Going into 2016, we plan to focus on client outreach, driving sales to create shareholder value and, of course, remaining steadfast in our commitment to technological innovation and growth with our deployment of UX CTMS 360 later this year," Ward concluded.
Financial Highlights:
The Company's revenue decreased 10% for the year ended December 31, 2015 compared to the year ended December 31, 2014. As stated previously, the decrease in revenue is due to a variety of factors, including a lengthening sales cycle, drug program sponsor delays, the extension of an enterprise license agreement, which required DATATRAK to recognize the new contract revenue over a longer period of time, affecting short-term revenue, and the tapering off of a significant long-term contract that has been completed. DATATRAK is evolving the focus of its sales model to enhance long-term stability through enterprise license agreements. The change in focus affects revenue growth in the short-term as evidenced by the decrease for the year ended December 31, 2015. Direct costs decreased by 6% during this same time period due to lower ISP costs and the outsourcing of some clinical data management work as we strategically phase out services that do not support our ongoing business model. The Company's gross margin was 79% for the year ended December 31, 2015 compared to 80% for the year ended December 31, 2014. SG&A expenses increased by $565,000, or 6%, for the year ended December 31, 2015 compared to the year ended December 31, 2014. The increase was primarily due to higher legal costs, including substantial year-over-year expenses related to patent defense, as well as increased rent expense due to the opening of the Chicago office and public company and investor relations expense due to the proxy contest. These cost increases were partially offset by the decline of employee costs, including bonus, recruitment and travel, due to lower headcount. As a result, DATATRAK's loss from operations for year ended December 31, 2015 was $(2,883,000) compared to a loss from operations of $(1,280,000) for the year ended December 31, 2014.
DATATRAK's backlog at December 31, 2015 was $26.7 million compared to a backlog of $26.0 million at December 31, 2014, which is a 3% 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 been a poor predictor of the Company's short-term revenue.
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About DATATRAK International, Inc.
DATATRAK International is a worldwide technology and services company delivering unified dClinical® 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 Chicago, Illinois; Cleveland, Ohio; Bryan, Texas; Cary (RTP), North Carolina; and Plymouth, Minnesota. 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. 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 13, 2015 announcing its results for the full-year period ended December 31, 2014. 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) |
||
| December 31, 2015 |
December 31, 2014 |
|
| Cash and cash equivalents |
$1,354,857 |
$3,510,499 |
| Certificate of deposit |
300,724 |
300,000 |
| Accounts receivable, net |
895,723 |
1,143,045 |
| Property & equipment, net |
920,118 |
508,895 |
| Other |
360,146 |
722,711 |
| Total assets |
$3,831,568 |
$6,185,150 |
| Accounts payable and other current liabilities |
$1,794,170 |
$1,900,258 |
| Deferred revenue |
6,177,423 |
6,170,711 |
| Other long-term liabilities |
37,647 |
67,701 |
| Shareholders' deficit |
(4,177,672) |
(1,953,520) |
| Total liabilities and shareholders' deficit |
$3,831.568 |
$6,185.150 |
| DATATRAK International, Inc. and Subsidiaries |
||
| Condensed Consolidated Statements of Operations |
||
| (Unaudited) |
||
| For the 3 Months Ended December 31, |
||
| 2015 |
2014 |
|
| Revenue |
$2,486,754 |
$2,815,068 |
| Direct costs |
438,816 |
549,309 |
| Gross profit |
2,047,938 |
2,265,759 |
| Selling, general and administrative expenses |
2,206,787 |
2,454,468 |
| Depreciation and amortization |
53,319 |
32,277 |
| Loss from operations |
(212,168) |
(220,986) |
| Interest income |
808 |
546 |
| Interest expense |
(3,133) |
(3,546) |
| Other expense |
(3,317) |
— |
| Net loss |
$(217,810) |
$(223,986) |
| Net loss per share: |
||
| Net loss per share, basic and diluted |
$ (0.14) |
$ (0.16) |
| Weighted-average shares outstanding, basic and diluted |
1,513,165 |
1,439,209 |
| For the 12 Months Ended December 31, |
||
| 2015 |
2014 |
|
| Revenue |
$9,959,704 |
$11,010,792 |
| Direct costs |
2,078,246 |
2,199,756 |
| Gross profit |
7,881,458 |
8,811,036 |
| Selling, general and administrative expenses |
10,574,731 |
10,009,461 |
| Depreciation and amortization |
189,863 |
81,796 |
| Loss from operations |
(2,883,136) |
(1,280,221) |
| Interest income |
2,325 |
1,405 |
| Interest expense |
(14,742) |
(14,018) |
| Other income |
(3,317) |
— |
| Net loss |
$ (2,898,870) |
$ (1,292,834) |
| Net loss per share: |
||
| Net loss per share, basic and diluted |
$ (1.93) |
$ (0.90) |
| Weighted-average shares outstanding, basic and diluted |
1,498,717 |
1,430,644 |
SOURCE DATATRAK International, Inc.
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