NEWTON, Mass., Aug. 14, 2018 /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 consolidated revenue of
$10.5 million in the third quarter of
fiscal year 2018, a 19% increase over the same period in fiscal
year 2017.
"I am happy to report our Optics segment revenue showed a 27%
increase for the quarter as compared to the same period last year –
the third consecutive quarter of double-digit growth in Optics'
revenue," said CEO Peter Sulick.
"Our Research segment revenue increased 10% this quarter as
compared to the same quarter last year, largely due to an increase
in commercial revenue.
"Additionally, gross profit for the three months was 40% of
revenues, as compared to 38% of revenues for the three months ended
June 30, 2017. Our Optics segment
gross margin increased to 37% of revenues in the quarter ended
June 30, 2018, as compared to 34% of
revenues for the same period in 2017, as a direct result of the
increase in revenue and specific steps taken to improve gross
margin. Gross profit in the Contract Research segment remained
steady at 43% in the quarter ended June 30,
2018, compared to the same quarter in 2017."
For the nine months ended June 30,
2018, overall gross profit was $11.7
million, or 39% of sales, compared to $10.7 million, or 38% of sales for the nine
months ended June 30, 2017.
Gross profit for the Optics segment increased approximately
$0.9 million to $6.0 million for the nine months ended
June 30, 2018, compared to the gross
profit for the same period in fiscal year 2017.
"The significantly improved performance of our operating
companies is a further confirmation of our continuing strategy of
growing the commercial side of our company and our product revenue
within RMD, while maintaining our Contract Research revenue at a
steady level with a $30.0 million
backlog," continued Mr. Sulick. "We adopted this strategy four
years ago. We anticipate a number of products coming to
market for RMD over the next few years. While we do not anticipate
any one of these products being extremely significant for RMD, the
cumulative effect should be noticeably positive for RMD's
commercial revenue in the coming two to three years. This is
exciting for us, as it is confirmation that our contract research
business can supply product development opportunities for our
operating divisions, as well as for RMD."
Certain key metrics by segment for the current quarter and the
same quarter last year are presented below:
Results of
Operations for the Three Months Ended June 30, 2018
|
|
|
|
|
|
|
Optics
|
Contract
Research
|
Biomedical
|
Total
|
Revenue
|
$
|
6,159,000
|
$
|
4,383,000
|
$
|
-
|
$
|
10,542,000
|
Gross
profit
|
2,299,000
|
1,876,000
|
-
|
4,175,000
|
GM %
|
37%
|
43%
|
-
|
40%
|
Operating
expenses
|
1,721,000
|
1,760,000
|
84,000
|
3,565,000
|
Operating income
(loss)
|
$
|
578,000
|
$
|
116,000
|
$
|
(84,000)
|
$
|
610,000
|
|
|
|
|
|
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)
|
Net income attributable to common stockholders was approximately
$0.4 million or $0.02 per share for the quarter ended
June 30, 2018 and a net loss of
approximately ($0.2) million or
($0.01) per share for the quarter
ended June 30, 2017. Year to
date net income attributable to common stockholders was
approximately $0.9 million or
$0.05 per share for the nine months
ended June 30, 2018 and approximately
$2.6 million or $0.15 per share for the nine month period ended
June 30, 2017, largely as a result of
the release of the tax valuation allowance due to the federal tax
deconsolidation of Xcede from the Company in the first quarter of
fiscal year 2017.
During the quarter ended June 30,
2018, the Company completed its state PATH 2015 R&E Tax
Credit analysis which resulted in an additional $800,000 of tax credits, largely against future
state tax expenses. Due to the Company's state tax filing status
requiring Dynasil to continue to consolidate the Xcede losses for
state tax purposes, this credit had a full tax valuation reserve
applied to it and, accordingly, is not reflected in the statement
of operations for the quarter. The PATH 2015 R&E Tax Credit
totals approximately $2.1 million, of
which the Federal component of $1.3
million is reflected in the Statement of Operations for the
nine months ended June 30, 2018. This
$800,000 of additional state PATH
2015 R&E Tax Credit is available as an offset to future state
tax expenses.
Conference Call Information
Dynasil will host a
conference call for investors and analysts at 5:00 p.m. ET today, Tuesday, August 14, 2018. 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 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
The statements contained in this Quarterly Report on Form 10 Q
which are not historical facts, are 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, our compliance with
the financial covenants under our loan agreements with Middlesex
Savings Bank and Massachusetts Capital Resource Company the
commercialization of our technology, our development of new
technologies, the future prospects of Xcede's patch technology, the
adequacy of our current financing sources to fund our current
operations, our growth initiatives, governmental budgetary and
funding matters, our capital expenditures 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. The 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. These factors that could cause actual results to
differ from those anticipated or predicted include, 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, the ability of Xcede's Board of Directors to
successfully contest the assertions by CBI under the collaboration
arrangement and otherwise preserve value for its stockholders,
including the viability of modifying the Xcede patch to address the
shortcomings cited by CBI or selling or licensing Xcede's IP
assets, 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,
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, changing priorities or reductions in
government spending, litigation, the effect of governmental
regulatory developments, the availability of financing sources, our
ability to comply with our debt obligations, 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, filed on
December 20, 2017, including the risk
factors contained in Item 1A, 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,
2018
|
|
September 30,
2017
|
Current
Assets
|
|
|
|
Cash and
cash equivalents
|
$1,511,000
|
|
$
2,415,000
|
Accounts
receivable, net
|
3,766,000
|
|
3,407,000
|
Costs in
excess of billings and unbilled receivables
|
1,065,000
|
|
1,317,000
|
Inventories, net of reserves
|
4,457,000
|
|
4,326,000
|
Prepaid
expenses and other current assets
|
792,000
|
|
973,000
|
Total current assets
|
11,591,000
|
|
12,438,000
|
|
|
|
|
Property, Plant and
Equipment, net
|
7,960,000
|
|
7,032,000
|
Other
Assets
|
|
|
|
Intangibles, net
|
959,000
|
|
987,000
|
Deferred
tax asset
|
3,167,000
|
|
2,642,000
|
Goodwill
|
5,907,000
|
|
5,940,000
|
Security
deposits
|
58,000
|
|
58,000
|
Total other assets
|
10,091,000
|
|
9,627,000
|
|
|
|
|
Total Assets
|
$29,642,000
|
|
$
29,097,000
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current
portion of long-term debt
|
$1,933,000
|
|
$
2,007,000
|
Capital
lease obligations, current
|
52,000
|
|
91,000
|
Accounts
payable
|
1,924,000
|
|
2,380,000
|
Deferred
revenue
|
109,000
|
|
129,000
|
Accrued
expenses and other liabilities
|
2,652,000
|
|
2,667,000
|
Total current liabilities
|
6,670,000
|
|
7,274,000
|
|
|
|
|
Long-term
Liabilities
|
|
|
|
Long-term debt, net of current portion
|
1,090,000
|
|
1,045,000
|
Capital
lease obligations, net of current portion
|
62,000
|
|
81,000
|
Deferred
tax liability, net
|
230,000
|
|
234,000
|
Other
long-term liabilities
|
172,000
|
|
38,000
|
Total long-term liabilities
|
1,554,000
|
|
1,398,000
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Dynasil
stockholders' equity
|
20,074,000
|
|
18,971,000
|
Noncontrolling interest
|
1,344,000
|
|
1,454,000
|
Total stockholders' equity
|
21,418,000
|
|
20,425,000
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$29,642,000
|
|
$
29,097,000
|
|
|
|
|
Dynasil
Corporation of America
|
Consolidated
Statement of Operations and Comprehensive Income
(Loss)
|
(Unaudited)
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net
revenue
|
|
$10,542,000
|
|
$8,836,000
|
|
$29,985,000
|
|
$28,065,000
|
Cost of
revenue
|
|
6,367,000
|
|
5,472,000
|
|
18,326,000
|
|
17,386,000
|
Gross
profit
|
|
4,175,000
|
|
3,364,000
|
|
11,659,000
|
|
10,679,000
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
288,000
|
|
255,000
|
|
955,000
|
|
848,000
|
|
Research and
development
|
|
177,000
|
|
176,000
|
|
701,000
|
|
707,000
|
|
General and
administrative
|
|
3,100,000
|
|
3,205,000
|
|
9,519,000
|
|
9,321,000
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
3,565,000
|
|
3,636,000
|
|
11,175,000
|
|
10,876,000
|
Income (loss) from
operations
|
|
610,000
|
|
(272,000)
|
|
484,000
|
|
(197,000)
|
Interest expense,
net
|
|
44,000
|
|
53,000
|
|
132,000
|
|
164,000
|
Income (loss) before
taxes
|
|
566,000
|
|
(325,000)
|
|
352,000
|
|
(361,000)
|
Income tax
(benefit)
|
|
190,000
|
|
(111,000)
|
|
(404,000)
|
|
(2,769,000)
|
Net income
(loss)
|
|
376,000
|
|
(214,000)
|
|
756,000
|
|
2,408,000
|
|
Less: Net loss
attributable to noncontrolling
interest
|
|
(15,000)
|
|
(64,000)
|
|
(124,000)
|
|
(197,000)
|
Net income (loss)
attributable to common
stockholders
|
|
$
391,000
|
|
$
(150,000)
|
|
$
880,000
|
|
$
2,605,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
376,000
|
|
$
(214,000)
|
|
$
756,000
|
|
$
2,408,000
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
|
|
(384,000)
|
|
212,000
|
|
(127,000)
|
|
(18,000)
|
Total comprehensive
income (loss)
|
|
(8,000)
|
|
(2,000)
|
|
629,000
|
|
2,390,000
|
|
Less: comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
attributable to
noncontrolling interest
|
|
(15,000)
|
|
(64,000)
|
|
(124,000)
|
|
(197,000)
|
Total comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
attributable to
common stockholders
|
|
$
7,000
|
|
$
62,000
|
|
$
753,000
|
|
$
2,587,000
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per common share
|
|
$
0.02
|
|
$
(0.01)
|
|
$
0.05
|
|
$
0.15
|
Diluted net income
(loss) per common share
|
|
$
0.02
|
|
$
(0.01)
|
|
$
0.05
|
|
$
0.15
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
17,203,965
|
|
16,945,744
|
|
17,127,834
|
|
16,879,864
|
|
Diluted
|
|
17,221,199
|
|
16,945,744
|
|
17,147,228
|
|
16,879,864
|
Contact:
Patty
Kehe
Corporate Secretary
Dynasil Corporation of America
Phone: 617.668.6855
pkehe@dynasil.com
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SOURCE Dynasil Corporation of America