NEWTON, Mass., Feb. 13, 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 earnings attributable to common
stockholders of $2.8 million or
$0.17 per common share for the first
quarter of the 2017 fiscal year, 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.
As previously announced, in November
2016, Dynasil committed to invest $1.2 million of cash into Xcede over the
following 18 months in exchange for Series B preferred stock of
Xcede. In connection with Dynasil's committed investment, all
$5.5 million of Xcede's convertible
notes and accrued interest were converted into shares of Series A
preferred stock of Xcede at a 20% discount to the price per share
of the Series B preferred, in accordance with the amended
provisions of the convertible notes. As of December 31, 2016, Dynasil Biomedical owned 59%
of the Xcede's outstanding common and preferred stock and, as a
result, Xcede's results remain included in the Company's
consolidated financial statements, but as the Company's overall
ownership percentage in Xcede decreased to less than 80%, beginning
in fiscal year 2017, Dynasil will no longer include Xcede in its
consolidated federal tax return. Therefore, Dynasil will no longer
be able to offset taxable income or share net operating losses
(NOLs) with Xcede. Furthermore, upon review of relevant tax
criteria for the new Dynasil federal consolidated group, Dynasil
determined that it is more likely than not that it will use its
existing federal net operating losses (NOLs), deferred tax assets
based upon its positive earnings history and expected future
profits. As a result, a portion of the deferred tax valuation
allowance has been reversed resulting in an income tax benefit in
the amount of $2.7 million for the
quarter ended December 31, 2016.
"In addition to the unusual tax circumstances described above, I
am happy to report that both of our operating segments were once
again profitable for the quarter and generated almost $460,000 of net income," said CEO Peter Sulick. "Including Xcede, which comprises
substantially all our Biomedical segment, we were profitable at the
net income line. I continue to be encouraged by the improvements in
gross profit margin in the Optics segment as we see the positive
results of the investments made to improve yields and
productivity. For the quarter, the Company realized a 4%
overall improvement in margin despite an overall reduction in
revenue from the prior year. The revenue reduction is the
result of certain one-time revenue opportunities the Company was
able to take advantage of in the first quarter 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 realized tax credit."
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 December 31,
2016
|
|
Optics
|
Contract
Research
|
Biomedical
|
Total
|
|
Revenue
|
$
4,405,000
|
$
4,738,000
|
$
-
|
$
9,143,000
|
|
Gross
profit
|
1,574,000
|
1,951,000
|
-
|
3,525,000
|
|
GM %
|
36%
|
41%
|
-
|
39%
|
|
Operating
expenses
|
1,328,000
|
1,740,000
|
381,000
|
3,449,000
|
|
Operating income
(loss)
|
$
246,000
|
$
211,000
|
$
(381,000)
|
$
76,000
|
|
|
|
|
|
|
|
|
|
|
|
Results of
Operations for the Three Months Ended December 31,
2015
|
|
Optics
|
Contract
Research
|
Biomedical
|
Total
|
|
Revenue
|
$
6,214,000
|
$
4,990,000
|
$
-
|
$
11,204,000
|
|
Gross
profit
|
2,110,000
|
1,855,000
|
-
|
3,965,000
|
|
GM %
|
34%
|
37%
|
-
|
35%
|
|
Operating
expenses
|
1,747,000
|
1,706,000
|
348,000
|
3,801,000
|
|
Operating income
(loss)
|
$
363,000
|
$
149,000
|
$
(348,000)
|
$
164,000
|
"Our Optics segment revenue decreased $1.8 million in the first quarter of 2017 as
compared to the same period last year. This decrease was largely
attributable to a one-time safety stock order to a large U.K.
customer in the first quarter of the prior year, fiscal year 2016.
The first quarter of fiscal year 2017 represents a more normalized
shipping schedule for the U.K. customer," continued Mr. Sulick.
"Our Contract Research segment revenues decreased approximately
$0.3 million or 5% primarily as a
result of lower billable hours within the current quarter. The
lower research revenue was somewhat offset by increased commercial
revenue, including shipments of our CLYC scintillation crystals to
Thermo Fisher Scientific for use in their RadEye SPRD-GN
spectroscopic personal radiation detectors."
Dynasil generated net income of $2.8
million, or $0.17 in basic
earnings per share, in the first quarter of 2017 compared with net
income of approximately $0.1 million
for the quarter ended December 31,
2015.
Conference Call Information
Dynasil will host a conference call for investors and analysts
at 5:00 p.m. ET tomorrow, Tuesday, February
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
|
December 31,
2016
|
|
September 30,
2016
|
|
Current
Assets
|
|
|
|
|
Cash and
cash equivalents
|
$
1,624,000
|
|
$
2,607,000
|
|
Accounts
receivable, net
|
3,835,000
|
|
3,502,000
|
|
Costs in
excess of billings and unbilled receivables
|
959,000
|
|
1,208,000
|
|
Inventories, net of reserves
|
3,916,000
|
|
3,726,000
|
|
Prepaid
expenses and other current assets
|
1,358,000
|
|
1,078,000
|
|
Total current assets
|
11,692,000
|
|
12,121,000
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
6,936,000
|
|
7,223,000
|
|
Other
Assets
|
|
|
|
|
Intangibles, net
|
1,033,000
|
|
1,067,000
|
|
Deferred
tax asset
|
2,726,000
|
|
-
|
|
Goodwill
|
5,822,000
|
|
5,898,000
|
|
Security
deposits
|
43,000
|
|
60,000
|
|
Total other assets
|
9,624,000
|
|
7,025,000
|
|
|
|
|
|
Total Assets
|
$
28,252,000
|
|
$
26,369,000
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Current
portion of long-term debt
|
$
1,950,000
|
|
$
2,477,000
|
|
Capital
lease obligations, current
|
103,000
|
|
105,000
|
|
Convertible notes
|
-
|
|
3,085,000
|
|
Accounts
payable
|
1,513,000
|
|
1,627,000
|
|
Deferred
revenue
|
240,000
|
|
238,000
|
|
Accrued
expenses and other liabilities
|
2,079,000
|
|
2,955,000
|
|
Total current liabilities
|
5,885,000
|
|
10,487,000
|
|
|
|
|
|
Long-term
Liabilities
|
|
|
|
|
Long-term debt, net of current portion
|
1,545,000
|
|
736,000
|
|
Capital
lease obligations, net of current portion
|
147,000
|
|
173,000
|
|
Deferred
tax liability
|
246,000
|
|
263,000
|
|
Other
long-term liabilities
|
39,000
|
|
43,000
|
|
Total long-term liabilities
|
1,977,000
|
|
1,215,000
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
Dynasil
stockholders' equity
|
18,794,000
|
|
14,973,000
|
|
Noncontrolling interest
|
1,596,000
|
|
(306,000)
|
|
Total stockholders' equity
|
20,390,000
|
|
14,667,000
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
28,252,000
|
|
$
26,369,000
|
|
Dynasil
Corporation of America
|
|
Consolidated
Statement of Operations and Comprehensive Income
(Loss)
|
|
(Unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
|
December
31,
|
|
|
|
2016
|
|
2015
|
|
Net
revenue
|
|
$
9,143,000
|
|
$
11,204,000
|
|
Cost of
revenue
|
|
5,618,000
|
|
7,239,000
|
|
Gross
profit
|
|
3,525,000
|
|
3,965,000
|
|
Operating
expenses:
|
|
|
|
|
|
Sales and
marketing
|
|
266,000
|
|
334,000
|
|
Research and
development
|
|
196,000
|
|
288,000
|
|
General and
administrative
|
|
2,987,000
|
|
3,183,000
|
|
Gain on sale of
assets
|
|
-
|
|
(4,000)
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
3,449,000
|
|
3,801,000
|
|
Income (loss) from
operations
|
|
76,000
|
|
164,000
|
|
Interest expense,
net
|
|
67,000
|
|
59,000
|
|
Income (loss) before
taxes
|
|
9,000
|
|
105,000
|
|
Income taxes
(benefit)
|
|
(2,730,000)
|
|
36,000
|
|
Net income
(loss)
|
|
2,739,000
|
|
69,000
|
|
Less: Net loss
attributable to noncontrolling interest
|
|
(69,000)
|
|
(37,000)
|
|
Net income (loss)
attributable to common stockholders
|
|
$
2,808,000
|
|
$
106,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
2,739,000
|
|
$
69,000
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
Foreign currency
translation
|
|
(295,000)
|
|
(114,000)
|
|
Total comprehensive
loss
|
|
$
2,444,000
|
|
$
(45,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per common share
|
|
$
0.17
|
|
$
0.01
|
|
Diluted net income
(loss) per common share
|
|
$
0.17
|
|
$
0.01
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
Basic
|
|
16,808,729
|
|
16,551,197
|
|
Diluted
|
|
16,808,729
|
|
16,578,634
|
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