Dynasil Corporation of America Reports Third Quarter Fiscal 2014 Financial Results

  Dynasil Corporation of America Reports Third Quarter Fiscal 2014 Financial

Company Reports Third Consecutive Quarter of Profitability

PR Newswire

WATERTOWN, Mass., Aug. 13, 2014

WATERTOWN, Mass., Aug. 13, 2014 /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 financial results
for the fiscal 2014 third quarter ended June 30, 2014.

Dynasil reported net income attributable to common stockholders for the
quarter of approximately $100,000 compared with a net loss of ($400,000), for
the quarter ended June 30, 2013. Net income for the nine months ended June
30, 2014 is $1.8 million, or $0.12 per share, as compared to a net loss of
($8.0 million), or ($0.54) per share, for the comparable period in 2013.

"In addition to being our third consecutive quarter of profitability, we
believe that Dynasil continued to take positive steps toward our future," said
Dynasil Chairman and Interim CEO Peter Sulick. "These steps included our new
revolving line of credit with Middlesex Savings Bank, our renewed compliance
with the terms of our subordinated loan from Massachusetts Capital Resource
Company and the acquisition of the assets of DichroTec Thin Films, LLC which
added substantial capacity to EMF, our specialized coatings business."

Net revenue for the third quarter of fiscal 2014 decreased to $10.6 million,
from $11.3 million in the third quarter of fiscal 2013. In this quarter, the
Optics segment's revenues increased approximately $1.3 million, or 33% over
the same period in the prior year. This increase was offset by a $1.5 million
decrease in revenues from the now divested lead paint and medical products
businesses which were sold during the first quarter of 2014 and by an
approximate $400,000 decrease in Contract Research revenues, caused by a
general slowdown in the timing of award grants and award funding.

Operating expenses for the three months ended June 30, 2014 were $3.8 million,
a decrease of $1.2 million compared to the same period in 2013. The decrease
in total operating expenses is primarily a result of the sale of the lead
paint and medical products businesses in the Instruments segment. In
addition, the Contract Research segment has reduced its operating expenses to
better align with its lower revenue level.

As a result, operating income for the quarter ended June 30, 2014, increased
to approximately $200,000 from a loss of ($200,000) in the quarter ended June
30, 2013.

"We are pleased that the operating income in each of Dynasil's four business
segments improved in the third quarter of 2014, as compared to the same period
in 2013," stated Mr. Sulick. "We are also happy to report that our Biomedical
segment's joint venture with Mayo Clinic, Xcede Technologies, has raised an
additional $400,000 from note holders to further fund its research efforts in
tissue sealant technology." 

Financial Results Webcast Information

Dynasil Corporation will host a webcast for investors and analysts at 5:00
p.m. ET on Wednesday, August 20, 2014. The webcast will be hosted by Chairman
and Interim CEO and President Peter Sulick and Chief Financial Officer Thomas
Leonard. Those who wish to listen to the webcast can register via the Webcast
link, visit the Investor Relations section of the Company's website at
www.dynasil.com or also dial (877) 870-4263. Please ask to be joined into the
Dynasil Corporation of America webcast. 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
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

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, 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, uncertainty
of the impact of the DichroTec acquisition, 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, 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                                     June 30, 2014    September 30, 2013
Current Assets
 Cash and cash equivalents               $         $       
                                           3,085,154        2,436,828
 Accounts receivable, net                3,282,400        3,657,320
 Costs in excess of billings and         1,468,741        1,537,318
unbilled receivables
 Inventories, net of reserves            2,941,358        3,140,244
 Prepaid expenses and other current      1,393,411        1,291,942
 Total current assets  12,171,064       12,063,652
Property, Plant and Equipment, net         6,592,839        4,773,779
Other Assets
 Intangibles, net                        1,333,513        3,484,583
 Goodwill                                6,332,396        6,240,983
 Deferred financing costs, net           41,804           114,229
 Total other assets    7,707,713        9,839,795
 Total Assets          $          $      
                                           26,471,616       26,677,226
Current Liabilities
 Current portion of long-term debt       $         $       
                                           2,437,742        9,819,048
 Capital lease obligations, current      128,979          124,383
 Accounts payable                        2,230,015        2,056,262
 Deferred revenue                        127,445          515,790
 Accrued expenses and other liabilities  2,652,362        2,846,850
 Total current         7,576,543        15,362,333
Long-term Liabilities
 Long-term debt, net of current portion  3,254,443        -
 Capital lease obligations, net of       131,269          232,173
current portion
 Convertible notes                       810,413          -
 Pension liability                       249,966          249,966
 Deferred tax liability                  179,369          186,866
 Total long-term        4,625,460        669,005
Stockholders' Equity
 Dynasil stockholders' equity            14,316,159       10,645,888
 Noncontrolling interest                 (46,546)         -
 Total stockholders'    14,269,613       10,645,888
Total Liabilities and Stockholders' Equity $          $      
                                           26,471,616       26,677,226

Dynasil Corporation of America and Subsidiaries
Consolidated Statement of Operations and Comprehensive Income (Loss)
                     Three Months Ended            Nine Months Ended
                     June 30,                      June 30,
                     2014           2013           2014           2013
Net revenue          $           $           $           $   
                     10,640,527    11,322,342    31,758,512    32,360,147
Cost of revenue      6,732,880      6,622,392      19,041,451     18,512,430
Gross profit         3,907,647      4,699,950      12,717,061     13,847,717
Operating expenses:
  Sales and          337,033        418,318        1,046,567      1,384,739
  Research and       300,296        499,732        1,024,873      1,710,090
  General and        3,144,132      3,997,407      9,624,678      11,644,624
  Impairment of
  goodwill and       -              -              -              6,763,072
  long-lived assets
Total operating      3,781,461      4,915,457      11,696,118     21,502,525
Gain on sale of      30,000         -              1,216,686      -
Income (loss) from   156,186        (215,507)      2,237,629      (7,654,808)
Interest expense,    145,797        181,773        567,904        545,690
Income (loss)        10,389         (397,280)      1,669,725      (8,200,498)
before taxes
Income tax (credit)  (47,719)       (30,920)       (87,160)       (213,065)
Net income (loss)    58,108         (366,360)      1,756,885      (7,987,433)
  Less: Net loss
  attributable to    (16,059)       -              (46,546)       -
Net income (loss)    $        $         $          $    
attributable to      74,167        (366,360)     1,803,431     (7,987,433)
common stockholders
Net income (loss)    $        $         $          $    
                     58,108        (366,360)     1,756,885     (7,987,433)
Other comprehensive
income (loss):
  Foreign currency   141,948        (45)           214,957        (245,666)
Total comprehensive  $        $         $          $    
income (loss)        200,056        (366,405)     1,971,842     (8,233,099)
Basic net income     $        $        $        $     
(loss) per common      0.00        (0.02)       0.12         (0.54)
Diluted net income   $        $        $        $     
(loss) per common      0.00        (0.02)       0.12         (0.54)
Weighted average
shares outstanding
  Basic              15,280,607     14,859,899     15,134,377     14,767,401
  Diluted            15,299,422     14,859,899     15,145,639     14,767,401

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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