Updated Wednesday, March 18, 2009.
MAYFIELD HEIGHTS, Ohio — DATATRAK International Inc., the Mayfield Heights, Ohio, company that makes software to manage clinical trials, lost more money and brought in less revenue in 2008 than in 2007.
Last year, the company also reorganized operations, cut costs, settled a lawsuit, lost a chief executive and appointed an interim CEO, according to its Monday earnings release.
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Now, its interim president since May 2008, Matt Delaney, is departing on April 12 “to pursue other opportunities,” the company said. Laurence Birch, DATATRAK’s chairman and interim chief executive, will also be the company’s interim president.
For the three months ended Dec. 31, DATATRAK earned $3 million, or 22 cents a diluted share, largely because a $3 million debt was forgiven during the quarter. The company lost $2.5 million, or 18 cents a diluted share, in the year-ago quarter.
DATATRAKÂ had revenues of $2.1 million in the fourth quarter, up 15 percent from $1.8 million a year ago. The company’s profit margin rose to 80 percent during the quarter from 48 percent a year ago. The increased margin came from higher revenues and a 55-percent reduction in direct costs.
For all of 2008, DATATRAK lost $16.8 million, or $1.23 a diluted share. That was worse than a loss of $10.9 million, or 82 cents a diluted share, in 2007.
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Much of lLast year’s loss came from lowering the value of assets by $12.8 million, and paying severance of $775,000 and legal expenses of $750,000, the company said.
Revenues fell 16 percent to $8.8 million last year from $10.6 million in 2007. Yet tThe company’s profit margin improved to 68 percent last year from 57 percent in 2007 because of the revenue fall and a 38-percent reduction in direct costs. Results in 2007 included severance expense of $915,000.
“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,” said Raymond Merk, the company’s chief financial and chief operating officer, in a written earnings statement.
“We are pleased to say that many of these initiatives began to bear fruit in the fourth quarter,” Merk said. “While we realize there is still work ahead of us, we are encouraged by our progress to date.”
Over the last 12 months, DATATRAK:
- Appointed Birch as chairman and interim chief executive, and gave CFO Merk the additional title of chief operating officer
- Signed its second global enterprise agreement — a three-year, $800,000 subscription license with a European pharmaceutical company
- Closed its German office and consolidated help desk services into its Mayfield Heights office
- Released a revision of its eClinical product suite
- Settled litigation with former shareholders of ClickFind Inc., which DATATRAK acquired in 2006, resulting in the forgiveness of the $3 million balloon payment
- Saw CEO Jeffrey Green retire
- Hired back Chris Wilke,  former vice president at ClickFind, as vice president of research.
Looking forward, Merk said DATATRAK’s operational trimming has left it “well-positioned to withstand the increasingly difficult operating environment,” though like most companies, its wellbeing is tied to customers that continue to buy.
Already this year, DATATRAK’s software reseller in Japan has sold eight clinical trials to four clients, Merk said. “This is just another example of the power of our software in a fragile world economy.”
Merk said his company may be able to raise more capital this year. But more importantly, “our improved performance, coupled with our virtually debt-free balance sheet, makes DATATRAK a much stronger company financially then it was twelve months ago,” he said.
DATATRAK shares rose less than a cent to just over 13 cents Monday on the NASDAQ Stock Market.
