Investors

Dynasil Corporation of America Reports Second Quarter Fiscal 2017 Gross Margin Improves 2%, Up to 38% from 36% in 2016

NEWTON, Mass., May 15, 2017 /PRNewswire/ -- Dynasil Corporation of America (NASDAQ: DYSL), a developer and manufacturer of optics and photonics products, optical detection and analysis technology and components for the homeland security, medical and industrial markets, today announced continued success in its efforts to improve gross profit margin in the Company's operating segments. 

"I am happy to report that both of our operating segments continued to be profitable both for the quarter and six months ended March 31, 2017, showing continued improvements in gross profit margin," said CEO Peter Sulick. "Our operating businesses are continuing to make strides in improving yields and productivity. For both the quarter and the six months, the Company realized a 2% overall improvement in margin despite an overall reduction in revenue from the prior year. The revenue reduction in these periods is the result of certain one-time revenue opportunities the Company was able to take advantage of in the first half of 2016, the effect of the devaluation in the British currency and a softening of revenue in project revenue at RMD.  Despite this, the Company's profitability was roughly equivalent to the prior year before the reversal of the deferred tax valuation."

Certain key metrics by segment for the current quarter and the same period last year are presented below:

Results of Operations for the Three Months Ended March 31, 2017


Optics

Contract
Research

Biomedical

Total

Revenue

$  5,281,000

$  4,804,000

$               -

$ 10,085,000

Gross profit

1,913,000

1,875,000

-

3,788,000

GM %

36%

39%

-

38%

Operating expenses

1,597,000

1,802,000

392,000

3,791,000

Operating income (loss)

$     316,000

$       73,000

$  (392,000)

$       (3,000)






Results of Operations for the Three Months Ended March 31, 2016


Optics

Contract
Research

Biomedical

Total

Revenue

$  6,428,000

$  4,868,000

$               -

$ 11,296,000

Gross profit

2,208,000

1,870,000

-

4,078,000

GM %

34%

38%

-

36%

Operating expenses

1,882,000

1,800,000

355,000

4,037,000

Operating income (loss)

$     326,000

$       70,000

$  (355,000)

$        41,000

"Our Optics segment revenue decreased $1.1 million in the second quarter of 2017 as compared to the same period last year. This decrease primarily resulted from initial system orders and a safety stock sale to a large U.K. customer in the second quarter of fiscal year 2016. The second quarter of fiscal year 2017 represented a more normalized shipping schedule for this customer," continued Mr. Sulick. "Our Contract Research segment revenue was essentially equal to that of the same three month period in 2016. The research revenue was somewhat lower, but offset in part by increased commercial product revenue for items originally developed by the research teams, including shipments of our CLYC scintillation crystals to Thermo Fisher Scientific for use in their RadEye SPRD-GN spectroscopic personal radiation detectors."

Dynasil's net income (loss) attributable to common stockholders was approximately ($0.1) million or ($0.00) per share for the quarter ended March 31, 2017 and approximately breakeven or ($0.00) per share for the quarter ended March 31, 2016.

Earnings attributable to common stockholders for the six months ended March 31, 2017 were $2.8 million or $0.16 per common share, largely as the result of a U.S. income tax benefit resulting from the deconsolidation for tax purposes of Xcede Technologies, Inc., the Company's tissue sealant technology development joint venture. Because of the previously discussed Xcede Technologies' transactions in November 2016, Dynasil's ownership percentage in Xcede decreased to less than 80% and Dynasil will no longer include Xcede in its consolidated federal tax return, which resulted in an income tax benefit in the amount of $2.7 million for the six months ended March 31, 2017.

Conference Call Information

Dynasil will host a conference call for investors and analysts at 5:00 p.m. ET today, Monday, May 15, 2017.  The call will be hosted by Chairman, CEO and President Peter Sulick and Chief Financial Officer Robert Bowdring.  Those who wish to listen to the conference call can go to the event page at or visit the Investor Information section of the Company's website at www.dynasil.com. The call also may be accessed by dialing (888) 346-2613 or (412) 902-4252.  For interested individuals unable to join the live conference call, a webcast replay will be available on the Company's website for one year.  

About Dynasil

Dynasil Corporation of America (NASDAQ: DYSL) develops and manufactures optics and photonics products, optical detection and analysis technology and components for the homeland security, medical and industrial markets.  Combining world-class expertise in research and materials science with extensive experience in manufacturing and product development, Dynasil is commercializing products including dual-mode radiation detection solutions for Homeland Security and commercial applications and sensors for non-destructive testing.  Dynasil has an impressive and growing portfolio of issued and pending U.S. patents.  The Company is based in Newton, MA, with additional operations in MA, MN, NY, NJ and the United Kingdom. More information about the Company is available at www.dynasil.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements regarding future events and our future results are based on current expectations, estimates, forecasts, and projections and the beliefs and assumptions of our management, including, without limitation, our expectations regarding results of operations and the strength of our intellectual property portfolio. These forward-looking statements may be identified by the use of words such as "plans", "intends," "may," "could," "expect," "estimate," "anticipate," "continue" or similar terms, though not all forward-looking statements contain such words. Actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements due to a number of important factors, including without limitation, our ability to develop and commercialize our products, including obtaining regulatory approvals, the size and growth of the potential markets for our products and our ability to serve those markets, the rate and degree of market acceptance of any of our products, general economic conditions, costs and availability of raw materials and management information systems, our ability to obtain and maintain intellectual property protection for our products, Xcede's ability to produce preclinical data sufficient to enable it to initiate clinical studies of its resorbable hemostatic patch, clinical results of Xcede's programs which may not support further development, competition, the loss of key management and technical personnel, our ability to obtain timely payment of our invoices to governmental customers, litigation, the effect of governmental regulatory developments, the availability of financing sources, our ability to deleverage our balance sheet, our ability to identify and execute on acquisition opportunities and integrate such acquisitions into our business, and seasonality, as well as the uncertainties set forth in the Company's Annual Report on Form 10-K and from time to time in the Company's other filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 


Dynasil Corporation of America and Subsidiaries




Consolidated Balance Sheets (Unaudited)








ASSETS

March 31, 2017


September 30, 2016

Current Assets




   Cash and cash equivalents

$                2,299,000


$                 2,607,000

   Accounts receivable, net

3,325,000


3,502,000

   Costs in excess of billings and unbilled receivables

880,000


1,208,000

   Inventories, net of reserves

3,965,000


3,726,000

   Prepaid expenses and other current assets

1,148,000


1,078,000

                     Total current assets

11,617,000


12,121,000





Property, Plant and Equipment, net

6,802,000


7,223,000

Other Assets




   Intangibles, net

1,057,000


1,067,000

   Deferred tax asset

2,649,000


-

   Goodwill

5,838,000


5,898,000

   Security deposits

13,000


60,000

                     Total other assets

9,557,000


7,025,000





                     Total Assets

$              27,976,000


$               26,369,000





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities




   Current portion of long-term debt

$                1,979,000


$                 2,477,000

   Capital lease obligations, current

100,000


105,000

   Convertible notes

-


3,085,000

   Accounts payable

1,205,000


1,627,000

   Deferred revenue

99,000


238,000

   Accrued expenses and other liabilities

2,335,000


2,955,000

                     Total current liabilities

5,718,000


10,487,000





Long-term Liabilities




   Long-term debt, net of current portion

1,384,000


736,000

   Capital lease obligations, net of current portion

123,000


173,000

   Deferred tax liability

246,000


263,000

   Other long-term liabilities

35,000


43,000

                    Total long-term liabilities

1,788,000


1,215,000





Stockholders' Equity




   Dynasil stockholders' equity

18,913,000


14,973,000

   Noncontrolling interest

1,557,000


(306,000)

                    Total stockholders' equity

20,470,000


14,667,000





Total Liabilities and Stockholders' Equity

$               27,976,000


$                26,369,000

 

 

 

Dynasil Corporation of America

Consolidated Statement of Operations and Comprehensive Income (Loss)

(Unaudited)





Three Months Ended


Six Months Ended




March 31,


March 31,




2017


2016


2017


2016

Net revenue


$ 10,085,000


$11,296,000


$19,228,000


$22,493,000

Cost of revenue


6,297,000


7,218,000


11,915,000


14,451,000

Gross profit


3,788,000


4,078,000


7,313,000


8,042,000

Operating expenses:










Sales and marketing


328,000


343,000


593,000


678,000


Research and development


335,000


277,000


531,000


565,000


General and administrative


3,128,000


3,417,000


6,115,000


6,600,000


Gain on sale of assets


-


-


-


(4,000)











Total operating expenses


3,791,000


4,037,000


7,239,000


7,839,000

Income (loss) from operations


(3,000)


41,000


74,000


203,000

Interest expense, net


45,000


77,000


112,000


136,000

Income (loss) before taxes


(48,000)


(36,000)


(38,000)


67,000

Income tax (credit)


71,000


33,000


(2,658,000)


68,000

Net income (loss)


(119,000)


(69,000)


2,620,000


(1,000)


Less: Net loss attributable to
noncontrolling interest


(64,000)


(38,000)


(133,000)


(76,000)

Net income (loss) attributable to
common stockholders


$      (55,000)


$    (31,000)


$ 2,753,000


$      75,000





















Net income (loss)


$    (119,000)


$    (69,000)


$ 2,620,000


$     (1,000)

Other comprehensive income (loss):










Foreign currency translation


65,000


(142,000)


(230,000)


(256,000)

Total comprehensive income (loss)


(54,000)


(211,000)


2,390,000


(257,000)


Less: comprehensive income (loss)
attributable to noncontrolling
interest


(64,000)


(38,000)


(133,000)


(76,000)

Total comprehensive income (loss)
attributable to common stockholders


$        10,000


$  (173,000)


$ 2,523,000


$ (181,000)











Basic net income (loss) per common
share


$          (0.00)


$        (0.00)


$          0.16


$          0.00

Diluted net income (loss) per common
share


$          (0.00)


$        (0.00)


$          0.16


$          0.00











Weighted average shares outstanding










Basic


16,886,628


16,636,950


16,847,679


16,594,074


Diluted


16,886,628


16,636,950


16,847,679


16,650,606

 

Contact:
Patty Kehe
Corporate Secretary
Dynasil Corporation of America
Phone: 617.668.6855
pkehe@dynasil.com

 

SOURCE Dynasil Corporation of America


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