Ken Nagy, CFA
Backlog at DATA grows to highest since 2008.
On August 10, 2011, , DATATRAK International, Inc., (DATA - Snapshot Report) a technology and service provider of electronic clinical trial technology solutions for the clinical trials industry, reported financial results for its fiscal 2011 second quarter, ended June 30, 2011.
A solid quarter resulted in a 13 percent year over year increase in sales, with revenue expanding to $2.121 million from $1.880 million for the three months ended June 30, 2010. The firm reported a net loss of $158,255, falling marginally from net income of $24,665 for the second quarter of 2010.
Although year over year gross margin fell slightly, the year over year decrease in net income was primarily the product of a $383,098 increase in selling, general and administrative expenses during the 2011 second quarter which was offset by higher revenues. That’s not surprising given the firm is ramping for significant top-line growth in 2012.
Gross margin fell slightly from 85.2% in the second quarter of 2010, to 84.3% for the three months ended June 30, 2011. This marginal decrease in gross margin was primarily due to higher headcount costs to support DATATRAK's Clinical and Consulting Services™ business. Still, the Company continued to show significant strength and improvement in milestones as evidenced by new contract sales, increased back log and working capital growth.
The fiscal 2011 second quarter proved promising for the Company with the addition of $4.4 million in new contract sales, representing the largest quarterly amount in over 5 years. Along the same lines, new sales for the first six months of 2011 increased by 39 percent over new sales for the comparable period of 2010.
Other promising accomplishments during the second quarter included DATATRAK receiving a 5-year, multi-million dollar extension to its existing NTT DATA Enterprise Agreement.
Furthermore, DATATRAK’S ending backlog as of June 30, 2011 increased to $11.7 million, its highest balance since 2008. This improvement translated to a 12 percent advance from the ending balance of $10.5 million at March 31, 2011.
The Company continued its positive cash flow from operations as well as strengthened its balance sheet with a significant improvement to working capital and a 130 percent increase in its year over year cash balance. DATATRAK’s cash balance as of June 30, 2011 increased $1.2 million year over year to $2.1 million from $0.9 million as of June 30, 2010.
Additionally, in an effort to continue to offer its clients cost, time and ease-of-use advantages in the market place, the firm expanded and re-branded products in its unified software suite, DATATRAK ONE™.
For a free copy of the full research report, please email firstname.lastname@example.org with DATA as the subject.
Follow Zacks Small Cap Research on Twitter at Twitter.com/ZacksSmallCap