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 net income
attributable to common stockholders of $1.8 million or $0.10 per
common share for the fiscal year ended September 30, 2018 and the
filing of its Annual Report on Form 10-K.
“For fiscal year 2018, we are reporting a 9% or
$3.4 million increase in net revenue over the prior year,” said CEO
Peter Sulick. “Our income from operations increased $0.7 million
from a loss from operations of ($0.6) million in fiscal year 2017
to income from operations of $0.2 million in fiscal year 2018,
showing our continued efforts to control spending while increasing
sales.”
Results of Operations for the Fiscal Year
Ended September 30, 2018
|
Optics |
Innovation
&Development* |
Biomedical |
Total |
Revenue |
$23,053,000 |
|
$17,628,000 |
|
|
$- |
|
$40,681,000 |
|
Gross profit |
|
7,667,000 |
|
|
7,569,000 |
|
|
- |
|
|
15,236,000 |
|
GM % |
|
33% |
|
|
43% |
|
|
- |
|
|
37% |
|
Operating expenses |
|
7,003,000 |
|
|
7,072,000 |
|
|
817,000 |
|
|
14,892,000 |
|
Gain on sale of assets |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Impairment of long-lived assets |
|
- |
|
|
- |
|
|
182,000 |
|
|
182,000 |
|
Operating income (loss) |
|
664,000 |
|
|
497,000 |
|
|
(999,000) |
|
|
162,000 |
|
*Formerly the Contract Research segment
Results of Operations for the Fiscal Year
Ended September 30, 2017
|
Optics |
Innovation
&Development* |
Biomedical |
Total |
Revenue |
$19,282,000 |
|
$18,002,000 |
|
|
$- |
|
$37,284,000 |
|
Gross profit |
|
6,562,000 |
|
|
7,336,000 |
|
|
- |
|
|
13,898,000 |
|
GM % |
|
34% |
|
|
41% |
|
|
- |
|
|
37% |
|
Operating expenses |
|
6,183,000 |
|
|
6,856,000 |
|
|
1,381,000 |
|
|
14,420,000 |
|
(Gain) loss on sale of assets |
|
- |
|
|
- |
|
|
60,000 |
|
|
60,000 |
|
Impairment of long-lived assets |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Operating income (loss) |
$379,000 |
|
$480,000 |
|
$(1,441,000) |
|
$(582,000) |
|
*Formerly the Contract Research segment
“The $3.4 million increase in revenue
resulted from a $3.8 million, or approximately 20%, increase in
revenue in our Optics segment, offset by a $0.4 million or 2%
decrease in revenue in our Innovation and Development segment. Our
Innovation and Development segment was renamed to emphasize the
exciting new technology that is being developed in this segment’s
business unit, RMD, particularly in the fields of material science,
radiation detection, digital imaging technology, magnetic imaging,
laser optics and photonics. The Innovation and Development
segment’s 2% decrease in revenue largely resulted from a reduction
of NIH funding and a delay in our commercial revenue orders.
“Our 20% revenue increase in the Optics segment
was the result of the efforts across all of our optics businesses,
as well as our new marketing team. While not overly impactful for
2018, marketing’s influence on our recently improved website
greatly facilitates our customers’ shopping experiences. Our
upcoming presence at the Photonics West trade show will showcase
the unified Dynasil marketing effort.
“Our increased operating expenses in the Optics
segment are reflective of marketing costs and an investment in both
personnel and process development for our new business initiatives
in the IR coatings and assembly areas. These investments are
expected to begin to bear fruit in 2019 and we anticipate continued
growth in this segment in the future. We are very optimistic about
these initiatives which we specifically identified as strategic
growth initiatives in 2017 and actively pursued during fiscal
2018.
“As announced last July, Xcede Technologies,
Inc., our majority-owned subsidiary, has halted clinical trial
preparations and curtailed its operations in response to a
termination notice received from Cook Biotech, Inc.,” added Mr.
Sulick. “One of our innovation teams at RMD is investigating
funding for continued development of the Xcede
Patch.”
Conference Call Information
Dynasil will host a conference call for
investors and analysts at 5:00 p.m. ET on December 26, 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 (toll
free) 1-866-688-3138 or (international callers) 1-574-990-2948. 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 DynasilDynasil Corporation of America
(NASDAQ: DYSL) develops and manufactures optics and photonics
products, optical detection and analysis technology and optical
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 selling and continuing to develop
products for dual-mode radiation detection solutions for 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, Massachusetts, with additional operations in Massachusetts,
New Jersey, New York 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, our compliance with the financial covenants under
our loan agreements with Middlesex Savings Bank and Massachusetts
Capital Resource Company, our expectations regarding results of
operations, the commercialization of our technology, including the
Xcede patch and our dual mode detectors, the success of efforts to
develop a successful Xcede Patch and to fund that development, our
development of new technologies including at Dynasil Biomedical,
the adequacy of our current financing sources to fund our current
operations, our growth initiatives, 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, 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 hemostatic patch, clinical results of Xcede’s
programs which may not support further development, the ability of
our RMD business unit to identify and pursue possible continued
development opportunities for the Xcede patch, which is not
assured, 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, 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 Sheet |
|
|
|
|
|
|
|
ASSETS |
September 30, 2018 |
|
September 30, 2017 |
Current Assets |
|
|
|
Cash and cash
equivalents |
$ |
2,327,000 |
|
$ |
2,415,000 |
Accounts
receivable, net |
|
4,069,000 |
|
|
3,407,000 |
Costs in
excess of billings and unbilled receivables |
|
1,215,000 |
|
|
1,317,000 |
Inventories, net of reserves |
|
4,106,000 |
|
|
4,326,000 |
Prepaid
expenses and other current assets |
|
664,000 |
|
|
973,000 |
Total
current assets |
|
12,381,000 |
|
|
12,438,000 |
|
|
|
|
Property, Plant and
Equipment, net |
|
8,098,000 |
|
|
7,032,000 |
Other Assets |
|
|
|
Intangibles, net |
|
755,000 |
|
|
987,000 |
Deferred
tax asset, net |
|
4,333,000 |
|
|
2,642,000 |
Goodwill |
|
5,900,000 |
|
|
5,940,000 |
Security
and other deposits |
|
65,000 |
|
|
58,000 |
Total
other assets |
|
11,053,000 |
|
|
9,627,000 |
|
|
|
|
Total Assets |
$ |
31,532,000 |
|
$ |
29,097,000 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
Liabilities |
|
|
|
Current
portion of long-term debt |
$ |
1,246,000 |
|
$ |
2,007,000 |
Capital
lease obligations, current |
|
40,000 |
|
|
91,000 |
Accounts
payable |
|
2,355,000 |
|
|
2,380,000 |
Deferred
revenue |
|
253,000 |
|
|
129,000 |
Accrued
expenses and other liabilities |
|
2,803,000 |
|
|
2,667,000 |
Total
current liabilities |
|
6,697,000 |
|
|
7,274,000 |
|
|
|
|
Long-term
Liabilities |
|
|
|
Long-term
debt, net of current portion |
|
2,075,000 |
|
|
1,045,000 |
Capital
lease obligations, net of current portion |
|
52,000 |
|
|
81,000 |
Deferred
tax liability |
|
205,000 |
|
|
234,000 |
Pension
and other long-term liabilities |
|
175,000 |
|
|
38,000 |
Total
long-term liabilities |
|
2,507,000 |
|
|
1,398,000 |
|
|
|
|
Stockholders'
Equity |
|
|
|
Dynasil
stockholders' equity |
|
21,029,000 |
|
|
18,971,000 |
Noncontrolling interest |
|
1,299,000 |
|
|
1,454,000 |
Total
stockholders' equity |
|
22,328,000 |
|
|
20,425,000 |
|
|
|
|
DYNASIL CORPORATION OF AMERICACONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
Net
revenue |
|
$ |
40,681,000 |
|
|
$ |
37,284,000 |
|
Cost of
revenue |
|
|
25,445,000 |
|
|
|
23,386,000 |
|
Gross
profit |
|
|
15,236,000 |
|
|
|
13,898,000 |
|
Operating
expenses: |
|
|
|
|
|
Sales and
marketing |
|
|
1,336,000 |
|
|
|
1,152,000 |
|
|
Research and
development |
|
|
823,000 |
|
|
|
903,000 |
|
|
General and
administrative |
|
|
12,733,000 |
|
|
|
12,365,000 |
|
|
(Gain) loss on sale of
assets |
|
|
- |
|
|
|
60,000 |
|
|
Impairment of
long-lived assets |
|
|
182,000 |
|
|
|
- |
|
|
|
|
|
|
|
Total
operating expenses |
|
|
15,074,000 |
|
|
|
14,480,000 |
|
Income
(loss) from operations |
|
|
162,000 |
|
|
|
(582,000 |
) |
Interest
expense, net |
|
|
180,000 |
|
|
|
212,000 |
|
Income
(loss) before taxes |
|
|
(18,000 |
) |
|
|
(794,000 |
) |
Income tax
(benefit) |
|
|
(1,608,000 |
) |
|
|
(2,741,000 |
) |
Net income
(loss) |
|
|
1,590,000 |
|
|
|
1,947,000 |
|
|
Less: Net income (loss)
attributable to noncontrolling interest |
|
|
(170,000 |
) |
|
|
(246,000 |
) |
Net income
(loss) attributable to common stockholders |
|
$ |
1,760,000 |
|
|
$ |
2,193,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
1,590,000 |
|
|
$ |
1,947,000 |
|
Other
comprehensive income (loss): |
|
|
|
|
|
Foreign currency
translation |
|
|
(161,000 |
) |
|
|
160,000 |
|
Total
comprehensive income (loss) |
|
|
1,429,000 |
|
|
|
2,107,000 |
|
|
Less: comprehensive
income (loss) attributable to |
|
|
|
|
|
noncontrolling
interest |
|
|
(170,000 |
) |
|
|
(246,000 |
) |
Total
comprehensive income (loss) attributable to |
|
|
|
|
common
stockholders |
|
$ |
1,599,000 |
|
|
$ |
2,353,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic net
income (loss) per common share |
|
$ |
0.10 |
|
|
$ |
0.13 |
|
Diluted net
income (loss) per common share |
|
$ |
0.10 |
|
|
$ |
0.13 |
|
|
|
|
|
|
|
Weighted
average shares outstanding |
|
|
|
|
|
Basic |
|
|
17,161,825 |
|
|
|
16,909,412 |
|
|
Diluted |
|
|
17,171,523 |
|
|
|
16,911,504 |
|
|
|
|
|
|
|
Contact: Patty Kehe Dynasil
Corporation of America Phone:
617.668.6855 pkehe@dynasil.com
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