Dynasil Corporation of America Reports Second Quarter Fiscal 2013 Financial Results Business Wire WATERTOWN, Mass. -- May 15, 2013 Dynasil Corporation of America (NASDAQ: DYSL), a leading developer of sensing, detection and analysis technology for homeland security, medical and industrial applications, today announced financial results for the fiscal 2013 second quarter ended March 31, 2013. Net revenue for the second quarter of fiscal 2013 declined $1.8 million to $10.5 million, compared with $12.3 million for the second quarter of fiscal 2012. Revenue declines in the Contract Research and Instruments segments in the quarter were partially offset by an increase in the Optics segment revenues. Gross profit for the second quarter of 2013 declined $300,000 to $4.8 million from $5.1 million for the same period in 2012 as gross margins increased to 46% in the quarter compared to 41% for the second quarter of fiscal 2012. “The improvement in our gross margin is a result of our focus on right-sizing the cost structure of our various businesses while we continue to conserve cash, work through our debt issues and strive to achieve profitability,” said Dynasil Chairman and Interim CEO Peter Sulick. “In addition, I am happy to report that exciting growth initiatives are underway, particularly in the Contract Research and Optics segments of the Company. We are all working hard to reduce our overhead expenses, improve our EBITDA performance and strengthen our technology portfolio.” Operating expenses for the current quarter include a non-cash impairment charge of $6,763,000 to write-down goodwill and other intangible assets associated with the Company’s Products business. As a result, total operating expenses for the three months ended March 31, 2013 were $12.0 million. Total operating expenses for the three months ended March 31, 2013 increased $6.3 million compared to the same period in 2012. The increase was a result of the $6.8 million impairment charge offset by reduced expenditures associated with the product refresh within the Instruments segment in 2012. Dynasil reported a net loss for the quarter of ($7.2 million) or ($0.49) per share, compared with net loss of ($585,000), or ($0.04) per share, for the quarter ended March 31, 2012. The impairment loss was $6.8 million of the total loss of $7.2 million. The Company was in default of certain financial covenants set forth in the terms of its outstanding indebtedness as of March 31, 2013, December 31, 2012 and September 30, 2012. The Company has accrued but not remitted interest payments for February and March 2013 to its subordinated lender. The Company has made all principal and interest payments due to its senior lender through May 15, 2013, the date of this filing. Management has provided a revised forecast to its lenders and is engaged in discussions with its senior lender to address the financial covenant situation. However, the Company cannot predict when or whether a resolution of this situation will be achieved. Business Outlook The Company has continued to seek regulatory approvals of its updated medical probe for cancer surgery product and approval is expected in the third quarter. The Company is currently evaluating preliminary test results received on its updated lead paint analyzer product while also evaluating strategic alternatives associated with the product. The Company continues to invest in efforts to support growth initiatives for its dual mode detector commercialization effort within Contract Research and development of certain biomedical technologies. These investments include technology development activities, capital equipment depreciation, development of intellectual property, and staff. The dual mode detector technology is beginning to produce revenue. The Company is currently delivering limited quantities of commercial grade crystals and packaged detectors, and is working to further improve the size and quality of this product. Also, at the current time, the Company is actively exploring commercialization opportunities in gamma cameras, sensors for nondestructive testing and radiation dosimeters based on technologies developed in the Contracts Research segment. However, there can be no assurance that these efforts will be successful. Additionally, the Company has prepared a separate business and financing plan for one of the biomedical technologies. The intention was to spin out the tissue sealant technology into an independent entity in which the Company would retain a substantial interest. This would accomplish both the elimination of some of the G&A support for these technologies as well as enable the Company to recruit additional expertise to help advance the technology. During the second quarter, the Company’s senior lender refused to release the intellectual property and related collateral in connection with the spin-out. As a result, the Company continued to fund this research through the second quarter; however, there can be no assurance that we will continue to fund this research or consummate this transaction at any future time. The Company has no conference calls scheduled at this time. About Dynasil Dynasil Corporation of America (NASDAQ: DYSL) develops and manufactures detection and analysis technology, precision instruments and optical components for the homeland security, medical and industrial markets. Combining world-class technology with expertise in research and materials science, Dynasil is commercializing products including dual-mode radiation detection solutions for Homeland Security and commercial applications, probes for medical imaging and sensors for non-destructive testing. The Company is building a relationship with the Mayo Clinic to develop early-stage opportunities such as advanced biomedical technologies. Dynasil has an impressive and growing portfolio of issued and pending U.S. patents. The Company is based in Watertown, Massachusetts, with additional operations in Mass., Minn., NY, NJ and the United Kingdom. More information about the Company is available at www.dynasil.com. Forward-looking Statements This news 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, the commercialization of our products including our dual mode detectors, the adequacy of our current financing sources to fund our current operations, our growth initiatives, our capital expenditures, regulatory approvals and the strength of our intellectual property portfolio. These forward-looking statements may be identified by the use of words such as “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 resolve our current default under our outstanding indebtedness, 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, our ability to address our material weaknesses in our internal controls, 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, 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 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 2012 Annual Report on Form 10-K, as amended on February 14, 2013, including the risk factors contained in Item 1a, the Company’s Quarterly Report on Form 10-Q filed on February 13, 2013 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 31-Mar 30-Sep 2013 2012 ASSETS (Unaudited) Current Assets Cash and cash equivalents $2,132,901 $3,414,880 Accounts receivable, net 4,389,394 5,475,142 Costs in excess of billings and unbilled 1,755,185 1,735,798 receivables Inventories, net of reserves 3,658,215 3,271,700 Deferred tax asset 126,187 126,187 Prepaid expenses and other current assets 1,426,916 1,334,649 Total current assets 13,488,798 15,358,356 Property, Plant and Equipment, net 4,738,147 4,984,150 Other Assets Intangibles, net 3,776,038 6,703,305 Goodwill 6,135,642 10,254,160 Deferred financing costs, net 139,843 165,457 Total other assets 10,051,523 17,122,922 Total Assets $28,278,468 $37,465,428 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $11,047,619 $11,984,492 Capital lease obligations, current 113,243 -0- Accounts payable 2,536,408 2,416,397 Deferred revenue 741,427 694,672 Accrued expenses and other liabilities 1,849,936 2,809,580 Total current liabilities 16,288,633 17,905,141 Long-term Liabilities Capital lease obligations, net of current 252,381 -0- portion Pension liability 342,848 345,443 Deferred tax liability 195,895 371,256 Total long-term liabilities 791,124 716,699 Stockholders' Equity 11,198,711 18,843,588 Total Liabilities and Stockholders' Equity $28,278,468 $37,465,428 Dynasil Corporation of America and Subsidiaries Consolidated Statement of Operations Three Months Ended Six Months Ended March 31, March 31, 2013 2012 2013 2012 Net revenue $10,484,530 $12,299,010 $21,037,805 $24,431,305 Cost of 5,692,958 7,214,667 11,619,367 14,220,014 revenue Gross profit 4,791,572 5,084,343 9,418,438 10,211,291 Operating expenses: Sales and marketing 486,544 451,961 966,422 844,762 expenses: Research and development 573,229 1,102,445 1,210,358 1,621,840 expenses General and administrative 4,216,741 4,129,653 7,917,887 8,158,077 expenses Impairment of goodwill and 6,763,072 -0- 6,763,072 -0- long-lived assets Total operating 12,039,586 5,684,059 16,857,739 10,624,679 expenses Loss from (7,248,014) (599,716) (7,439,301) (413,388) operations Interest 177,159 122,474 363,916 246,631 expense, net Loss before income tax (7,425,173) (722,190) (7,803,217) (660,019) benefit Income tax (183,443) (137,180) (182,145) (445,347) benefit Net loss ($7,241,730) ($585,010) ($7,621,072) ($214,672) Net loss ($7,241,730) ($585,010) ($7,621,072) ($214,672) Other comprehensive income (loss): Foreign currency (275,360) 138,552 (245,621) 78,192 translation Total comprehensive ($7,517,090) ($446,458) ($7,866,693) ($136,480) loss Basic net loss per common ($0.49) ($0.04) ($0.52) ($0.01) share Diluted net loss per ($0.49) ($0.04) ($0.52) ($0.01) common share Weighted average shares outstanding Basic 14,770,943 15,002,818 14,721,733 15,091,356 Diluted 14,770,943 15,002,818 14,721,733 15,091,356 Contact: Dynasil Corporation of America Patty Kehe Corporate Secretary Phone: (617) 668-6855 firstname.lastname@example.org
Dynasil Corporation of America Reports Second Quarter Fiscal 2013 Financial Results
Press spacebar to pause and continue. Press esc to stop.