DATATRAK International, Inc. Announces 2009 Third Quarter and Nine Month Operating Results
CLEVELAND, Nov. 16 DATATRAK International, Inc. (OTCQX: DATA), a technology and services company focused on global eClinical solutions for the clinical trials industry, today reported its operating results for the third quarter and first nine months of 2009.
For the three months ended September 30, 2009, revenue decreased $813,000, or 34%, to $1,554,000 compared to $2,367,000 in the prior year third quarter. Compared to the prior year third quarter, combined direct cost and selling, general & administrative ("SG&A") expenses decreased approximately $1.8 million, or 49%. The Company reported a net loss of $(424,000), or $(0.03) per share on a basic and diluted basis, for the three months ending September 30, 2009 compared to a net loss of $(1,599,000), or $(0.12) per share on a basic and diluted basis, for the same time period of 2008. Last year's third quarter net loss of $(1,599,000) included a charge of $835,000 related to the Company's German subsidiary office closing and associated office and equipment leases. In addition, the Company's financial results for the prior year third quarter were negatively impacted by legal costs of approximately $234,000 associated with certain litigation which was favorably concluded in December 2008 resulting in the forgiveness of $3.0 million previously owed by DATATRAK. Direct costs decreased 18% to $465,000 from $568,000 in the third quarter of 2008. Gross profit margin for the three months ended September 30, 2009, was 70% compared to 76% in the third quarter of last year.
For the nine months ended September 30, 2009, DATATRAK's revenue decreased 18% to $5,471,000 compared to $6,704,000 for the first nine months of 2008. Year-to-date gross margin improved to 74% for the 2009 nine month period compared to 64% for the same time period of the prior year. For the nine months ended September 30, 2009, the Company reported a net loss of $(1,251,000), or $(0.09) per share on a basic and diluted basis, which includes $505,000 of severance expense. Net loss for the comparable nine month period of 2008 was $(19,831,000), or $(1.45) per share on a basic and diluted basis, which included asset impairment charges of $12,763,000 and severance expense of $652,000.
At September 30, 2009, backlog was $8,891,000 compared to $8,551,000 at June 30, 2009, $9,699,000 at March 31, 2009 and $11,400,000 at December 31, 2008. The September 30, 2009 backlog amount of $8,891,000 represents the first quarter-over-quarter increase in backlog since the first quarter of 2008.
During the third quarter of 2009 our cash balance declined $303,000 to $1.33 million at September 30, 2009 compared to $1.63 million as of June 30, 2009. The $303,000 cash decrease represents a 32% reduction in cash burn compared to the 2009 second quarter decrease of $446,000. Approximately 36% of the $303,000 cash decrease, or $109,000, is attributable to the payment of severance commitments primarily to former executive officers of the Company.
"We believe the increase in backlog is a very good indicator that clinical trial sponsors are ready to move forward with projects which were on hold earlier this year", stated Laurence P. Birch, Chairman of the Board of DATATRAK International, Inc. "In addition, we think the introduction of our DATATRAK ONE(TM) concept in August played a role in the increase in backlog as customers began to better understand our single platform solution compared to the patch-work technologies many of our competitors offer. We are now in the later stages of our stabilization plan which has put us in excellent position to capitalize on upcoming opportunities in the market."
Birch concluded, "The results are markedly different than a year ago, after adjusting for the severance charge, our year-to-date nine month net loss from operations was only $(738,000) compared to a loss of $(5,949,000) in the first nine months of 2008 after adjusting for severance and impairment charges."
The Company follows the Pink OTC Markets OTCQX Guidelines for Providing Adequate Current Information, the highest tier and most transparent level of disclosure available to the Company. The Company's 2009 third quarter report will be available later today at www.pinksheets.com under the symbol: DATA.
About DATATRAK International, Inc.
DATATRAK International, Inc. is a worldwide technology and services company focused on the provision of multi-component eClinical solutions and related services for the clinical trials industry. We operate under the concept of DATATRAK ONE(TM), which encompasses our unique, single platform technology. The singular architecture of our DATATRAK eClinical(TM) product suite has been embraced by clients around the globe for its ability to effectively manage clinical trials through a unified multi-component, comprehensive solution. The Company delivers a complete portfolio of software products that were created in order to accelerate clinical research data from investigative sites to clinical trial sponsors and ultimately the FDA, faster and more efficiently than manual methods or loosely integrated technologies. DATATRAK's eClinical(TM) software suite can be deployed worldwide through an ASP offering or in a licensed Enterprise Transfer model that fully empowers its clients. The DATATRAK software suite and its earlier versions have successfully supported hundreds of international clinical trials involving thousands of clinical research sites and encompassing tens of thousands of patients in 59 countries. DATATRAK International, Inc.'s product suite has been utilized in some aspect of the clinical development of 16 drugs and one medical device that have received regulatory approval from either the United States Food and Drug Administration or counterpart European bodies. DATATRAK International, Inc. has offices located in Cleveland, Ohio, and Bryan, Texas. Visit the DATATRAK International, Inc. web site at www.datatrak.net.
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 (including those specified below) which are difficult to predict and, in many instances, are beyond the control of the Company. Factors that may cause actual results to differ materially from those in the forward-looking statements include the limited operating history on which the Company's performance can be evaluated; the ability of the Company to continue to enhance its software products to meet customer and market needs; fluctuations in the Company's quarterly results; the viability of the Company's business strategy and its early stage of development; the timing of clinical trial sponsor decisions to conduct new clinical trials or cancel or delay ongoing trials; the Company's dependence on major customers; government regulation associated with clinical trials and the approval of new drugs; the ability of the Company to compete in the emerging EDC market; losses that potentially could be incurred from breaches of contracts or loss of customer data; the inability to protect intellectual property rights or the infringement upon other's intellectual property rights; the costs associated with maintaining and/or developing two product suites; and general economic conditions such as the rate of employment, inflation, interest rates and the condition of capital markets. This list of factors is not all-inclusive. In addition, the Company's success depends on the outcome of various strategic initiatives it has undertaken, all of which are based on assumptions made by the Company concerning trends in the clinical research market and the health care industry. 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, 2009 December 31, 2008 ------------------ ----------------- Cash and investments $1,328,876 $2,372,294 Restricted cash - current - 218,276 Accounts receivable, net 775,842 927,490 Property and equipment, net 496,100 785,549 Deferred tax asset 118,700 145,400 Other 338,017 198,131 ------- ------- Total assets $3,057,535 $4,647,140 ========== ========== Accounts payable and other current liabilities $1,646,400 $1,825,735 Deferred revenue - current 1,142,195 1,053,096 Long-term liabilities 1,160,145 1,446,923 Shareholders' equity (891,205) 321,386 --------- ------- Total liabilities and shareholders' equity $3,057,535 $4,647,140 ========== ==========
SOURCE DATATRAK International, Inc.
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