US-based eClinical specialist Datatrak International saw its operating losses balloon to US$654,532 in the fourth quarter of 2009, reversing the more encouraging trend of the previous two quarters, when losses were sharply reduced.
The operating loss for the latest quarter was six times higher than the US$109,069 loss recorded in the final quarter of 2008, while revenues declined by 31.0% year on year to US$1.46 million and the gross margin shrank from 80% to 73%.
At the same time, Datatrak notched up for the second quarter running a sequential increase in backlog, which was up from US$8.6 million as of 30 June 2009 to US$9.5 million at 31 December 2009. The improved backlog in both Q3 and Q4 represented the first quarter-to-quarter growth in backlog for nearly two years, Datatrak noted.
The company also said it was in good shape for the year ahead. “With a more efficient, rationalised business model and renewed focus, Datatrak continued to successfully execute initiatives to right-size the organisation, remain customer-centric and increase product expansion,” commented chairman Laurence Birch. “These efforts have yielded improved financial results and laid the foundation for 2010.”
Given the increase in backlog over the last six months of 2009, the expectation that backlog will continue to grow throughout 2010, anticipated revenue from trials already under contract, and a reduction in Datatrak’s cost structure, “there no longer is substantial doubt about the company continuing as a going concern”, it stated.
The operating loss for Q4 2009 included severance expenses of US$46,000, non-cash items amounting to US$326,000, and research and development expenditure of US$280,000.
Datatrak’s continued investment in R&D “reflects our strong commitment to our customers”, it said. “The elimination of research and development-associated costs would have dramatically improved the bottom line in 2009, but we felt it was more important to remain true to the long-term goal by continuing our efforts to support the Datatrak One vision – a single unified platform is the solution this industry desires.”
In the full year, Datatrak ran up an operating loss of US$1.90 million, a substantial improvement on the US$19.47 million loss recorded in 2008. Revenues for 2009 were 21.4% lower year on year at US$6.94 million.
