DTRK DataTRAK International Inc (PK)

CLEVELAND, May 13, 2015 /PRNewswire/ -- DATATRAK International, Inc. (OTCQX: DTRK), a leader in cloud-based, unified eClinical^® technologies and related services for the clinical trials industry, today announced its operating results for the first quarter 2015.

First Quarter Highlights:

• Fourth consecutive quarter of record breaking backlog, ending the quarter (March 31, 2015) at $27.8 million, a 7% increase over backlog at the end of 2014
• New contract sales increased 35% year-over-year, the result of continued investments in the Sales and Marketing functions over the years to improve execution and drive new contracts
• Book-to-bill ratio of 2.6 at end of First Quarter 2015, up from Year End 2014, reflecting the continued transition to a longer more stable revenue stream by signing more Enterprise Agreements and large platform wins
• DATATRAK Chicago office opened in April 2015 expanding presence in leading life sciences market
• DATATRAK expertise featured at industry events in Japan and Belgium on topics of adopting time saving eSource data collection methodology and technology trends affecting clinical research
• DATATRAK challenged clinical research professionals to reconsider technology applications and simplify processes at key industry events for the period, including DIA Japan, Outsourcing in Clinical Trials, SCOPE Summit, and ACDM

Laurence P. Birch, Chairman and CEO, commented "Research professionals are recognizing that DATATRAK can simplify and simultaneously improve the management of data, including gaining critical insight to their research through our industry-leading reporting functionality.  Using DATATRAK products, clients have achieved time and cost savings, reporting efficiencies, and quality improvements that other companies promise but we deliver."

Birch went on to say, "The success we're seeing in new contract sales is a positive for the business overall. New clients often become our most dedicated partners, setting the stage for future revenue growth. Clients who choose our solutions often expand their usage after experiencing, first hand, the ease of use and unequaled data analysis tools for C Suite executives of our client companies.

We are excited that our strategy of developing long term, multi trial engagements is paying off in rapidly increasing backlog.  Though these agreements tend to slow short term revenue growth, they secure future revenue allowing our sales team to build new long term relationships, ultimately leading to accelerating revenue.  Our book to bill ratio has risen from 1.5 to 2.6 since 2011 providing a much more secure foundation for growing our business. 

Additionally, as we have successfully defended our patent with the USPTO, we have begun to see rising litigation costs as we continue to pursue our various claims against Medidata."

Birch concluded, "Complexities that are often viewed as a necessary evil in some solutions can be avoided. The reality is research professionals don't have to accept complicated mid-study changes and long wait times for reporting. We will continue to challenge the clinical research industry to rethink their software choices and look forward to showing them how much time and money they can save with DATATRAK."

Financial Highlights:

The Company's revenue decreased 7% for the three months ended March 31, 2015 compared to the three months ended March 31, 2014.  The decrease in revenue is due to 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 is nearing completion.  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 first quarter of 2015; however, it is establishing long-term stability as evidenced by the increase in backlog.  Direct costs increased by 10% during this same time period as a result of salary adjustments and efforts to support DATATRAK's clinical and consulting services business by hiring to scale to support the growth of the organization.  The Company's gross margin decreased to 77% for the first quarter of 2015 compared to 81% for the first quarter of 2014 due to lower revenue and higher direct costs, as mentioned above. SG&A expenses increased by $463,000, or 19%, to $2,898,000 from $2,435,000 for the three months ended March 31, 2015 and 2014, respectively. The increase was primarily due to higher legal costs, a substantial portion related to patent defense, and equipment expenses.  These increases were partially offset by a decline in consulting costs due to several initiatives that took place in 2014 to support sales, technical services and quality assurance.  As a result, DATATRAK's loss from operations for three months ended March 31, 2015 was $(1,015,000) compared to a loss from operations of $(287,000) for the corresponding period in 2014.

DATATRAK's backlog at March 31, 2015 was $27.8 million compared to a backlog of $26.0 million at December 31, 2014. 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. The improvement in backlog was due to new contract sales, in particular enterprise agreements, change orders and contract expansions.

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 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 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.

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SOURCE DATATRAK International, Inc.