Dynasil Corporation of America Reports Second Quarter Fiscal 2014 Financial Results

 Dynasil Corporation of America Reports Second Quarter Fiscal 2014 Financial

Company Regains Bank Compliance and Records Second Quarter of Profitability

PR Newswire

WATERTOWN, Mass., May 12, 2014

WATERTOWN, Mass., May 12, 2014 /PRNewswire/ -- Dynasil Corporation of America
(NASDAQ: DYSL), a developer and manufacturer of optical detection and
analysis technology and components for the homeland security, medical and
industrial markets, today announced financial results for the fiscal 2014
second quarter ended March 31, 2014.

Dynasil reported net income attributable to common stockholders for the
quarter of $272,000 or $0.02 per share, compared with a net loss of
($7,242,000), or ($0.49) per share, for the quarter ended March 31, 2013. Net
income for the six months ended March 31, 2014 is $1,729,000, or $0.11 per
share, as compared to a net loss of ($7,621,000), or ($0.52) per share, for
the comparable period in 2013.

"I am pleased to report that Dynasil had a second consecutive quarter of
profitability and, as previously reported, we recently closed on a new
revolving line of credit with Middlesex Savings Bank and have regained
compliance with the terms of our subordinated loan from Massachusetts Capital
Resource Company," said Dynasil Chairman and Interim CEO Peter Sulick.
"Additionally, with the improved operational performance within our Optics
Group and improvements in our Contract Research profitability we have largely
replaced the revenue lost as a result of the disposition of our Instruments

Net revenue for the second quarter of fiscal 2014 decreased slightly to $10.4
million, from $10.5 million in the second quarter of fiscal 2013. In this
quarter, the Optics segment's revenues increased approximately $900,000, or
21.8% over the same period in the prior year. This increase was offset by a
$1.0 million decrease in revenues from the now divested Instruments segment
which was sold during the first quarter of 2014.

Operating expenses for the three months ended March 31, 2014 were $3.9
million, a decrease of $8.1 million compared to the same period in 2013.
This decrease brings our operating expenses more in line with our traditional
experience, following a $6.8 million impairment charge in the quarter ended
March 31, 2013 to write-down the goodwill and long-lived assets of the
Company's Instruments segment. Additionally, the now disposed lead paint
detection and medical products businesses in the Instruments segment, incurred
substantial development costs associated with product refreshes during the
second quarter of 2013.

As a result, operating income for the quarter ended March 31, 2014, increased
to approximately $500,000 from a loss of ($7.2) million in the quarter ended
March 31, 2013.

On May 1, 2014, the Company entered into a three year revolving line of credit
arrangement with Middlesex Savings Bank. Upon the closing of the loan, the
Company repaid the approximately $1.8 million owed Santander Bank, N.A. and
the $600,000 of accrued interest due Massachusetts Capital Resource Company,
the subordinated lender. As a result, the Company is no longer in default of
any of its loan obligations and has reclassified the subordinated debt to a
long term liability based on its terms.

"Now that we have been successful in regaining compliance with our bank
covenants, the Company can pursue growth opportunities in the optics market,
as well as continuing to develop cutting-edge technologies within our Contract
Research segment," stated Mr. Sulick. "We are also happy to report that our
joint venture with Mayo Clinic, Xcede Technologies, has raised an additional
$250,000 from note holders to further fund it research efforts in tissue
sealant technology."

The Company has no conference calls scheduled at this time.

About Dynasil
Dynasil Corporation of America (NASDAQ: DYSL) develops and manufactures
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 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, our compliance with the financial covenants
under our loan agreements with Middlesex Savings Bank and Massachusetts
Capital Resource Company, Xcede obtaining financing from outside investors,
the commercialization of our products including our dual mode detectors, our
development of new technologies including at Dynasil Biomedical, our ability
to remediate the material weaknesses in our internal control over financial
reporting, 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 comply with the financial covenants 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
Annual Report on Form 10 K, filed on December 20, 2013, including the risk
factors contained in Item 1a, the Company's Quarterly Report on Form 10-Q
filed on February 12, 2014 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
Consolidated Balance Sheet
ASSETS                                     March 31, 2014   September 30, 2013
Current Assets
 Cash and cash equivalents               $         $       
                                           3,465,644        2,436,828
 Accounts receivable, net                2,781,759        3,657,320
 Costs in excess of billings and         1,917,012        1,537,318
unbilled receivables
 Inventories, net of reserves            2,979,550        3,140,244
 Prepaid expenses and other current      1,387,620        1,291,942
 Total current assets  12,531,585       12,063,652
Property, Plant and Equipment, net         4,670,360        4,773,779
Other Assets
 Intangibles, net                        1,321,561        3,484,583
 Goodwill                                6,272,228        6,240,983
 Deferred financing costs, net           37,739           114,229
 Total other assets    7,631,528        9,839,795
 Total Assets          $          $      
                                           24,833,473       26,677,226
Current Liabilities
 Current portion of long-term debt       $         $       
                                           1,976,769        9,819,048
 Capital lease obligations, current      128,979          124,383
 Accounts payable                        2,283,275        2,056,262
 Deferred revenue                        193,890          515,790
 Accrued expenses and other liabilities  3,482,572        2,846,850
 Total current         8,065,485        15,362,333
Long-term Liabilities
 Long-term debt, net of current portion  3,127,795        -
 Capital lease obligations, net of       163,116          232,173
current portion
 Convertible notes                       383,084          -
 Pension liability                       249,966          249,966
 Deferred tax liability                  179,927          186,866
 Total long-term        4,103,888        669,005
Stockholders' Equity
 Dynasil stockholders' equity            12,694,587       10,645,888
Noncontrolling interest                    (30,487)         -
 Total stockholders'    12,664,100       10,645,888
Total Liabilities and Stockholders' Equity $          $      
                                           24,833,473       26,677,226

Dynasil Corporation of America and Subsidiaries

Consolidated Statement of Operations and Comprehensive Income (Loss)

                     Three Months Ended            Six Months Ended
                     March 31,                     March 31,
                     2014           2013           2014           2013
Net revenue          $           $           $           $   
                     10,406,458    10,484,530    21,117,986    21,037,805
Cost of revenue      6,047,571      5,843,017      12,308,571     11,890,038
Gross profit         4,358,887      4,641,513      8,809,415      9,147,767
Operating expenses:
  Sales and          312,729        486,544        709,534        966,422
  Research and       378,379        573,229        724,577        1,210,358
  General and        3,200,552      4,066,682      6,480,546      7,647,216
  Impairment of
  goodwill and       -              6,763,072      -              6,763,072
  long-lived assets
Total operating      3,891,660      11,889,527     7,914,657      16,587,068
Gain on sale of      -              -              (1,186,686)    -
Income (loss) from   467,227        (7,248,014)    2,081,444      (7,439,301)
Interest expense,    209,330        177,159        422,107        363,916
Income (loss)        257,897        (7,425,173)    1,659,337      (7,803,217)
before taxes
Income tax (credit)  4,602          (183,443)      (39,441)       (182,145)
Net income (loss)    253,295        (7,241,730)    1,698,778      (7,621,072)
  Less: Net loss
  attributable to    (18,300)       -              (30,487)       -
Net income (loss)    $        $          $          $    
attributable to      271,595        (7,241,730)    1,729,265     (7,621,072)
common stockholders
Net income (loss)    $        $          $          $    
                     253,295        (7,241,730)    1,698,778     (7,621,072)
Other comprehensive
income (loss):
  Foreign currency   36,845         (275,360)      73,009         (245,621)
Total comprehensive  $        $          $          $    
income (loss)        290,140        (7,517,090)    1,771,787     (7,866,693)
Basic net income     $        $        $        $     
(loss) per common      0.02        (0.49)       0.11         (0.52)
Diluted net income   $        $        $        $     
(loss) per common      0.02        (0.49)       0.11         (0.52)
Weighted average
shares outstanding
  Basic              15,102,023     14,770,943     15,061,890     14,721,733
  Diluted            15,285,232     14,770,943     15,216,915     14,721,733

Patty Kehe
Corporate Secretary
Dynasil Corporation of America
Phone: (617) 668-6855

SOURCE Dynasil Corporation of America

Website: http://www.dynasil.com
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