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In a release dated March 16, the company stated:
- Revenue for the fourth quarter of 2008 increased 15 percent to $2,122,000 compared to $1,839,000 in the same period of 2007. Gross profit margin improved to 80 percent for the three months ended December 31, 2008 compared to 48 percent for the last three months of 2007. The improvement in the company's gross margin reflects the increase in revenue, coupled with a 55 percent reduction in direct costs.
- For the three months ended December 31, 2008, DataTrak's loss from operations was $(109,000) compared to $(2,632,000) in the fourth quarter of the prior year. Net income in the fourth quarter of 2008 was $3,035,000 and reflects the forgiveness of a $3 million debt obligation during the quarter. The net (loss) in the fourth quarter of 2007 was $(2,486,000).
- For the year ended December 31, 2008, revenue decreased 16 percent to $8,826,000 compared to $10,562,000 in the same period of 2007. Direct cost and selling, general and administrative expenses decreased a combined $4,668,000, or 26 percent, for full year 2008 compared to full year 2007. Gross profit margin improved to 68 percent for the twelve months ended December 31, 2008 compared to 57 percent for the same time period of 2007. The improvement in margin reflects the decrease in revenue coupled with a 38 percent reduction in direct cost.
- For the year ended December 31, 2008, DataTrak's loss from operations was $(19,473,000) compared to $(10,968,000) for the year ended December 31, 2007. The 2008 loss from operations of $(19,473,000) includes: (i) non-cash asset impairment charges of $12,788,000; (ii) severance expense of $775,000; and (iii) legal expense of $750,000 related to the ClickFind litigation. The 2007 full year loss from operations of $(10,968,000) included severance expense of $915,000. Net loss for the year ended December 31, 2008 was $(16,797,000) and reflects the forgiveness of a $3 million debt obligation during 2008. The net loss for the year ended December 31, 2007 was $(10,854,000).
"During the last 18 months, we made great strides to strengthen DataTrak's positioning through the reorganization of leadership, right-sizing of our business and renewed focus on our customers. We are pleased to say that many of these initiatives began to bear fruit in the fourth quarter, driving a 15 percent increase in revenues, while concurrently reducing direct costs by 55 percent and reporting a substantial improvement in our operating loss both sequentially and over the fourth quarter of 2007. While we realize there is still work ahead of us, we are encouraged by our progress to date," said Raymond J. Merk, Chief Financial Officer and Chief Operating Officer of DataTrak International.
"This past year was a game changer for DataTrak. We are pleased to note that in 2008 we completed the heavy-lifting stage of our reorganization efforts, which bolstered DataTrak's financial position, matching its cost structure with current backlog levels and anticipated revenues, as well as strengthening our management team," said Laurence P. Birch, Chairman of the Board and interim-Chief Executive Officer of the company. "Looking ahead, (we) will be focused solely on maximizing operational performance. At the heart of this shift will be re-establishing and strengthening our relationships with existing and potential clients with the goal of addressing their needs in electronic data collection. While the current economic climate has impacted the clinical trial industry, we are a leaner organization today than we have been historically, and believe we have the agility to navigate through this difficult environment. We are confident that the strength of our team and offering will enable us to capitalize on the large opportunity that exists for DataTrak once the market begins to recover."
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