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 2009.
"With a more efficient, rationalized business model and renewed focus, DATATRAK continued to successfully execute initiatives to right-size the organization, remain customer centric and increase product expansion. These efforts have yielded improved financial results and laid the foundation for 2010," noted Laurence P. Birch, DATATRAK's Chairman of the Board.
Corporate Focus:
- Backlog increased from $8.6 million at June 30, 2009 to $9.5 million at December 31, 2009;
- Backlog increases in Q3 & Q4 represented the first quarter-over-quarter increases in backlog in almost two years
- Increased Sales and Marketing Team
- Introduction of DATATRAK ONE™ in August; unlike our competitors, which require integration between disparate systems, the DATATRAK eClinical™ product is the only system built on a single, unified platform and provides all the elements of a clinical trial in one easy-to-use online solution.
- DATATRAK continued to strengthen its CRO Connect program by welcoming five new partners into the program.
- DATATRAK continues to expand use of the DATATRAK eClinical™ product in the Japanese market through the relationship with NTT DATA.
- In March 2009, DATATRAK announced the return of Chris Wilke as Vice President of Research and Development. Mr. Wilke has provided visionary leadership in the areas of software and services delivery and was recently named DATATRAK's Chief Technology Officer.
- DATATRAK continued to maintain its position as the market's technology leader with two major software releases in March and December 2009. The significant investment in research and development allows for continued product expansion and embodies its commitment to its customers.
- Completed internationalization of modules including coding, randomization and enterprise platform management tools;
- Positioned eClinical for massive service provider adoption by adding an embedded online learning center and electronic training system into eClinical;
- Released the Clinical Process Manual allowing CROs and service providers to add new service delivery lines to their proposals when using DATATRAK eClinical™;
- Optimized our software to provide users market-leading performance for trials of all sizes.
- DATATRAK realigned its marketing efforts in 2009, which included attendance at several high profile trade shows and the release of a new website in August.
- The legacy DATATRAK EDC™ product platform was retired in December 2009 eliminating the ongoing need for testing and maintenance of a second product, thus dedicating all resources to the DATATRAK eClinical™ platform going forward.
- Reduced annual cost structure from $14 million in 2008 to $8 million in 2009.
- Management believes that as a result of the increase in backlog over the last six months of 2009, the expectation that backlog will continue to increase throughout 2010, anticipated revenue from trials already under contract and the reduction in its cost structure there no longer is substantial doubt about the Company continuing as a going concern. The Company's independent auditing firm expressed an unqualified opinion in their audit report issued for the year ended December 31, 2009.
Financial Focus:
Revenue for the fourth quarter of 2009 decreased 31% to $1,464,000 compared to $2,122,000 in the same period of 2008. Gross profit margin declined to 73% for the three months ended December 31, 2009 compared to 80% for the last three months of 2008. The decline in the Company's gross margin reflects the decrease in revenue, offset by a 10% reduction in direct costs.
DATATRAK's loss from operations in the fourth quarter of 2009 was $(655,000) compared to $(109,000) in the same quarter of the prior year. The 2009 fourth quarter loss from operations includes: (i) severance expense of $46,000, (ii) research and development expense of $280,000, and (iii) non-cash items of $326,000. The net loss in the fourth quarter of 2009 was $(657,000), while the net income for the same quarter of 2008 was $3,035,000, which reflects the forgiveness of a $3 million debt obligation during the quarter.
For the year ended December 31, 2009, revenue decreased 21% to $6,935,000 compared to $8,826,000 in the same period of 2008. Direct cost and selling, general and administrative expenses decreased a combined $5,119,000, or 39%, for full year 2009 compared to full year 2008. Gross profit margin improved to 74% for the twelve months ended December 31, 2009 compared to 68% for the same time period of 2008. The improvement in margin reflects the decrease in revenue coupled with a 37% reduction in direct cost.