Investors

Dynasil Corporation of America Reports Third Quarter Fiscal 2017 Results

NEWTON, Mass., Aug. 14, 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 it is continuing its efforts to improve gross profit margin in the Company's operating segments. 

"Our third quarter was particularly difficult across our core research and optics businesses," said Peter Sulick, Dynasil CEO. "While we have maintained operating profitability and margins, the combination of the loss in revenue from two large OEM customers, one a UK customer and the other a domestic customer, and a substantial delay in funding our approved government projects all hit us during the same quarter. The results of these revenue disruptions were a reduction of $1.0 million in Optics revenue for the quarter and a $0.6 million reduction in contract research revenue. Fortunately, all of this was timing-related and not due to any longer term systemic issues. Indications are that both large commercial customers are returning to prior order levels during the fourth quarter.

"We anticipate RMD returning to a normal operating posture during the fourth quarter. On the positive side, most delayed projects have now been funded and RMD had an excellent year for project awards," continued Mr. Sulick. "Consequently, as of today, RMD's project backlog and funded project levels are at one of the highest points in the past five years. This unusual swing was unanticipated and disruptive, but the situation at RMD is normalizing.

"One bright spot continues to be the RMD commercial revenue which should end the year at approximately three times the prior year level of $600,000.  RMD's CLYC dual mode scintillator is getting considerable market traction, particularly within the personalized radiation detector (PRD) market. We anticipate this business to continue to grow into 2018. In addition, RMD has a product pipeline which we anticipate coming on line serially over the next eighteen months, resulting in continued growth in RMD commercial revenue."

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 June 30, 2017


Optics

Contract
Research

Biomedical

Total

Revenue

$  4,837,000

$  3,999,000

$               -

$   8,836,000

Gross profit

1,655,000

1,709,000

-

3,364,000

GM %

34%

43%

-

38%

Operating expenses

1,619,000

1,640,000

377,000

3,636,000

Operating income (loss)

$      36,000

$       69,000

$  (377,000)

$   (272,000)











Results of Operations for the Three Months Ended June 30, 2016


Optics

Contract
Research

Biomedical

Total

Revenue

$  5,780,000

$  4,626,000

$               -

$ 10,406,000

Gross profit

2,012,000

1,915,000

-

3,927,000

GM %

35%

41%

-

38%

Operating expenses

1,604,000

1,601,000

396,000

3,601,000

Operating income (loss)

$     408,000

$     314,000

$  (396,000)

$      326,000

 

Dynasil's net income (loss) attributable to common stockholders was approximately ($0.2) million or ($0.01) per share for the quarter ended June 30, 2017, compared to net income of $0.3 million or $0.02 per share for the quarter ended June 30, 2016.

Earnings attributable to common stockholders for the nine months ended June 30, 2017 were $2.6 million or $0.15 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 nine months ended June 30, 2017.

Conference Call Information

Dynasil will host a conference call for investors and analysts at 5:00 p.m. ET today, Monday, August 14, 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

June 30, 2017


September 30, 2016

Current Assets




   Cash and cash equivalents

$               1,790,000


$                2,607,000

   Accounts receivable, net

3,404,000


3,502,000

   Costs in excess of billings and unbilled receivables

1,183,000


1,208,000

   Inventories, net of reserves

4,117,000


3,726,000

   Prepaid expenses and other current assets

1,133,000


1,078,000

                     Total current assets

11,627,000


12,121,000





Property, Plant and Equipment, net

6,815,000


7,223,000

Other Assets




   Intangibles, net

1,067,000


1,067,000

   Deferred tax asset

2,766,000


-

   Goodwill

5,894,000


5,898,000

   Security deposits

13,000


60,000

                     Total other assets

9,740,000


7,025,000





                     Total Assets

$             28,182,000


$               26,369,000





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities




   Current portion of long-term debt

$              1,994,000


$                 2,477,000

   Capital lease obligations, current

96,000


105,000

   Convertible notes and accrued interest

-


3,085,000

   Accounts payable

1,426,000


1,627,000

   Deferred revenue

109,000


238,000

   Accrued expenses and other liabilities

2,392,000


2,955,000

                     Total current liabilities

6,017,000


10,487,000





Long-term Liabilities




   Long-term debt, net of current portion

1,182,000


736,000

   Capital lease obligations, net of current portion

102,000


173,000

   Deferred tax liability

253,000


263,000

   Other long-term liabilities

37,000


43,000

                    Total long-term liabilities

1,574,000


1,215,000





Stockholders' Equity




   Dynasil stockholders' equity

19,093,000


14,973,000

   Noncontrolling interest

1,498,000


(306,000)

                    Total stockholders' equity

20,591,000


14,667,000





Total Liabilities and Stockholders' Equity

$             28,182,000


$               26,369,000





 

 

Dynasil Corporation of America

Consolidated Statement of Operations and Comprehensive Income (Loss)

(Unaudited)










Three Months Ended


Nine Months Ended




June 30,


June 30,




2017


2016


2017


2016

Net revenue


$      8,836,000


$    10,406,000


$    28,065,000


$    32,899,000

Cost of revenue


5,472,000


6,479,000


17,386,000


20,930,000

Gross profit


3,364,000


3,927,000


10,679,000


11,969,000

Operating expenses:










Sales and marketing


255,000


246,000


848,000


923,000


Research and development


176,000


196,000


707,000


761,000


General and administrative


3,205,000


3,159,000


9,321,000


9,759,000


(Gain) loss on sale of assets


-


-


-


(4,000)











Total operating expenses


3,636,000


3,601,000


10,876,000


11,439,000

Income (loss) from operations


(272,000)


326,000


(197,000)


530,000

Interest expense, net


53,000


78,000


164,000


215,000

Income (loss) before taxes


(325,000)


248,000


(361,000)


315,000

Income tax (credit)


(111,000)


32,000


(2,769,000)


101,000

Net income (loss)


(214,000)


216,000


2,408,000


214,000


Less: Net loss attributable to noncontrolling interest


(64,000)


(42,000)


(197,000)


(118,000)

Net income (loss) attributable to common stockholders


$        (150,000)


$         258,000


$      2,605,000


$         332,000





















Net income (loss)


$        (214,000)


$         216,000


$      2,408,000


$         214,000

Other comprehensive income (loss):










Foreign currency translation


212,000


(417,000)


(18,000)


(673,000)

Total comprehensive income (loss)


(2,000)


(201,000)


2,390,000


(459,000)


Less: comprehensive income (loss) attributable to










noncontrolling interest


(64,000)


(42,000)


(197,000)


(118,000)

Total comprehensive income (loss) attributable to









common stockholders


$           62,000


$        (159,000)


$      2,587,000


$        (341,000)











Basic net income (loss) per common share


$             (0.01)


$              0.02


$              0.15


$              0.02

Diluted net income (loss) per common share


$             (0.01)


$              0.02


$              0.15


$              0.02











Weighted average shares outstanding










Basic


16,945,744


16,698,205


16,879,864


16,628,279


Diluted


16,945,744


16,701,737


16,879,864


16,671,016

 

 

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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