Datatrak International, Inc. Reports Results for Third Quarter and First Nine Months of 2020

Cleveland, OH – (NewMediaWire) – November 10, 2020 – Datatrak International, Inc. (OTC Markets: DTRK), a worldwide Software-as-a-Service (“SaaS”) provider and innovation leader of cloud-based technologies for the life sciences industry, today announced its operating results for the third quarter and the first nine months of 2020. 

Financial Highlights:

Revenue for the third quarter of 2020 was $1,752,000 compared to $2,028,000 for the third quarter of 2019. Despite the overall decrease in revenue, the Company has seen a significant increase in the number of new contracts and new customers during 2020 compared to the last three years. Direct costs decreased by $92,000 to $490,000 for the three months ended September 30, 2020 compared to $582,000 for the three months ended September 30, 2019 due to less amortization related to software development efforts that have been placed into production.  The Company’s gross margin increased to 72% for the three months ended September 30, 2020 compared to 71% for the three months ended September 30, 2019.  Selling, general and administrative (“SG&A”) expenses decreased by $75,000 to $1,288,000 for the three months ended September 30, 2020 compared to $1,363,000 for the three months ended September 30, 2019.  The decrease in SG&A expenses was driven by lower employee expenses, due to personnel changes and partially offset by higher recruiting costs.  Depreciation and amortization was $2,000 and $5,000 for the three months ended September 30, 2020 and 2019, respectively.  As a result of the items discussed, Datatrak had a loss from operations for the three months ended September 30, 2020 of ($28,000) compared to income from operations of $79,000 for the three months ended September 30, 2019.  After other income of $1,000 for the three months ended September 30, 2020 and $3,000 for the three months ended September 30, 2019, the Company’s net loss for the three months ended September 30, 2020 was ($27,000) compared to net income of $82,000 for the three months ended September 30, 2019.

Revenue for the first nine months of 2020 was $5,448,000 compared to $5,834,000 for the first nine months of 2019.  Despite the overall decrease in revenue, the Company has seen a significant increase in the number of new contracts and new customers during 2020 compared to the last three years.  Direct costs decreased by $241,000 for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 due to less amortization related to software development efforts that have been placed into production, which was partially offset by higher ISP costs.  The Company’s gross margin increased to 73% for the nine months ended September 30, 2020 compared to 71% for the nine months ended September 30, 2019.  SG&A expenses increased by $137,000 for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.  The increase in SG&A expenses was driven by higher employee expenses, due to salary adjustments, commissions and employee recruitment, and consulting costs.  However, travel and advertising costs decreased for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 due to the COVID-19 pandemic.  Depreciation and amortization was $9,000 and $14,000 for the nine months ended September 30, 2020 and 2019, respectively.  As a result of the items discussed, Datatrak had a loss from operations for the nine months ended September 30, 2020 of ($5,000) compared to income from operations of $272,000 for the nine months ended September 30, 2019. After other income of $3,000 for the nine months ended September 30, 2020 and $7,000 for the nine months ended September 30, 2019, the Company’s net loss for the nine months ended September 30, 2020 was ($2,000) compared to net income of $279,000 for the nine months ended September 30, 2019.

Datatrak’s backlog at September 30, 2020 was $12 million compared to a backlog of $13.3 million at December 31, 2019.  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 not always been an accurate predictor of the Company’s short-term revenue.

The Company has been monitoring state and federal guidelines regarding the COVID-19 pandemic and will continue to modify business operations as needed to comply with these guidelines for the safety of its employees and customers.  As the COVID-19 pandemic is a continually evolving situation, the Company cannot provide any assurance that the effects of the COVID-19 pandemic will not have an adverse effect on its business or results of operations going forward.  In addition, the COVID-19 pandemic has caused a global economic recession, which could potentially materially impact the Company.

Executive Highlights:

“Datatrak is committed to carrying out our long-term vision of providing the life sciences industry with the next generation of SaaS platforms that bridge the eClinical service delivery gaps,” said Jim Bob Ward, CEO at Datatrak. “Our system supplies clients with a responsive and agile solution that minimizes workforce outages during today’s uncertain times brought on by the COVID-19 pandemic. With the depth of our products and the team-based collaboration functionality of the Datatrak Enterprise Cloud, our clients are benefiting from more effective ways to execute their trials within a challenging business environment.”     

“We continue to see an increase in new customers and contract opportunities in 2020 compared to the past three years,” said Scott DeMell, VP of Sales at Datatrak. “Both new and existing customers are recognizing that we provide the ability to streamline data collection and management from multiple sources within our unified platform, providing studies with enhanced data for faster and more informed clinical decisions.”

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See the Earnings Release on Datatrak’s website: https://bit.ly/36mKF4T

AboutDatatrakInternational, Inc.

Datatrak International, Inc. is a software-as-a-service provider of enterprise cloud-based technologies for the life sciences industry.  Datatrak’s unified eClinical solutions and related services help improve cost and time efficiencies 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 Enterprise Cloud 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 Cleveland, Ohio and College Station, Texas.  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. All statements that address operating performance, events or developments that management anticipates will occur in the future, including statements related to future revenue, profits, the impact of COVID-19, expenses, cost reductions, cash management alternatives and working capital requirements, release or success of new products, market share, strategic alternatives, raising additional funds, income and earnings per share or statements expressing general opinion about future results, are 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 OTC Markets on March 24, 2020 announcing its results for the full-year period ended December 31, 2019 and subsequent filings with the OTC Markets. Many such factors have been, and may further be, exacerbated by the COVID-19 pandemic.  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.

Contacts: 
Sales: Scott DeMell                             
Scott.DeMell@datatrak.com                

Employment Opportunities: Laura Stuebbe
Laura.Stuebbe@datatrak.com

Shareholders: Alex Tabatabai
investor@datatrak.com 

Datatrak International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
 (Unaudited and Not Reviewed)