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Dynasil Corporation of America Reports Third Quarter Fiscal 2018 Revenue Increase of 19%

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Dynasil Corporation of America Reports Third Quarter Fiscal 2018 Revenue Increase of 19%

PR Newswire

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

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