SANTA MONICA, Calif., Feb. 15, 2012 /PRNewswire/ -- Derycz Scientific, Inc. (OTCBB: DYSC), a leader in information logistics solutions and a pioneer in facilitating the flow of information from content publishers to enterprise customers in life science and other research intensive industries, today reported financial and operating results for the second quarter of its fiscal year 2012 (quarter ended December 31, 2011).
- Fiscal year 2012 second quarter total revenue increased 42% to $12.1 million from $8.5 million in the fiscal year 2011 second quarter.
- Fiscal year 2012 second quarter revenues from US operations increased 5% to $9 million from $8.5 million in the fiscal year 2011 first quarter.
- Fiscal year 2012 second quarter revenues of $3.1 million from French subsidiary TAAG
- Strong improvements in gross margin and operating expenses going forward
- New, higher margin service offerings launched
Management Commentary
"We are very excited about our continued growth. Our customer list is growing, our core capabilities are improving and our geographic presence is expanding," said Peter Derycz, President and CEO. "Additionally, our product portfolio is also expanding as our new social, mobile and search tools come online. Article Galaxy™ is now live, as is Bibliogo™ which rapidly won the Software & Information Industry Association's "CODiE" award in the category of Best Online Science or Technology Service. The accolades keep coming in. We're honored and humbled, and wake up each day with the satisfaction of knowing that we're a valuable part of our customer's information workflows."
Alan Urban, Chief Financial Officer, added "As mentioned last quarter, we are now focusing on profitability and have already successfully completed numerous improvements in gross margin and operating expenses. We believe these changes will progress us towards profitability going forward."
Conference Call
Derycz Scientific management will host an investment-community conference call on Thursday, February 16, 2012 beginning at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss these results and answer questions. To participate in the call please dial (866) 516-3002 for domestic callers or +1 (253) 237-1159 for international callers, and enter passcode 53633126 when prompted.
The webcast will also be available from the Company's Web site at www.deryczscientific.com. Listening to the webcast requires Internet access and the Windows Media Player or other compatible streaming media player. A recorded replay will be available on the deryczscientific.com website for 60 days following the conclusion of the call.
The following financial information should be read in conjunction with the unaudited financial statements and accompanying notes thereto filed by the Company with the Securities and Exchange Commission on February 14, 2012 in its Quarterly Report on Form 10-Q for the period ended December 31, 2011. The Quarterly Report can be viewed at www.sec.gov.
Derycz Scientific, Inc. and Subsidiaries | ||||||
December 31, | June 30, | |||||
2011 | 2011 | |||||
(unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 3,341,661 | $ | 2,868,260 | ||
Accounts receivable: | ||||||
Trade receivables, net of allowance of $160,493 and $223,298 , respectively | 7,475,937 | 6,690,662 | ||||
Due from factor | 84,354 | 356,540 | ||||
Inventory | 591,522 | 759,507 | ||||
Prepaid expenses | 237,533 | 298,927 | ||||
Prepaid royalties | 459,423 | 1,245,872 | ||||
Other current assets | 1,007 | 18,320 | ||||
Total current assets | 12,191,437 | 12,238,088 | ||||
Property and equipment, net of accumulated depreciation of $1,228,628 and $724,004, respectively | 1,044,627 | 1,666,462 | ||||
Intangible Assets, net of accumulated amortization of $1,084,078 and $641,698 , respectively | 1,602,420 | 1,883,660 | ||||
Goodwill | 1,567,604 | 1,567,604 | ||||
Deposits and other assets | 265,328 | 308,721 | ||||
Total assets | $ | 16,671,416 | $ | 17,664,535 | ||
Liabilities and Stockholders' Equity | ||||||
Current Liabilities: | ||||||
Accounts payable and accrued expenses | $ | 10,537,646 | $ | 7,045,535 | ||
Capital lease obligation, current | 307,004 | 663,973 | ||||
Notes payable, current | 44,030 | 53,252 | ||||
Due to factor | 312,441 | 312,440 | ||||
Due to related parties | 4,519 | 71,902 | ||||
Line of credit | 774,464 | 1,436,233 | ||||
Deferred revenue | 252,240 | 158,240 | ||||
Total current liabilities | 12,232,344 | 9,741,575 | ||||
Notes payable, long term | 77,053 | 110,080 | ||||
Capital lease obligation, long term | 1,153,734 | 1,281,600 | ||||
Liability for estimated earnout | 359,338 | 359,338 | ||||
Deferred tax liability | 350,000 | 350,000 | ||||
Total liabilities | 14,172,469 | 11,842,593 | ||||
Commitments and contingencies (Note 8) | ||||||
Stockholders' Equity: | ||||||
Preferred stock; $0.001 par value; 20,000,000 shares authorized; no shares issued and | - | - | ||||
Common stock; $0.001 par value; 100,000,000 shares authorized; 17,069,437 and 16,822,509 | 17,069 | 16,823 | ||||
Accumulated other comprehensive income (loss) | 22,350 | (11,590) | ||||
Additional paid-in capital | 13,580,360 | 13,468,580 | ||||
Accumulated deficit | (11,120,832) | (7,651,871) | ||||
Total stockholders' equity | 2,498,947 | 5,821,942 | ||||
Total liabilities and stockholders' equity | $ | 16,671,416 | $ | 17,664,535 | ||
Derycz Scientific, Inc. and Subsidiaries | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
December 31, | December 31, | |||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||
Revenue | $ | 12,089,519 | $ | 8,514,233 | $ | 21,950,738 | $ | 14,530,890 | ||||
Cost of revenue | 10,310,259 | 7,944,794 | 18,699,001 | 13,144,602 | ||||||||
Gross profit | 1,779,260 | 569,439 | 3,251,737 | 1,386,288 | ||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative | 3,003,386 | 1,774,122 | 5,630,831 | 2,922,153 | ||||||||
Depreciation and amortization | 480,094 | 66,375 | 966,095 | 125,925 | ||||||||
Total operating expenses | 3,483,480 | 1,840,497 | 6,596,926 | 3,048,078 | ||||||||
Loss from operations | (1,704,220) | (1,271,058) | (3,345,189) | (1,661,790) | ||||||||
Currency gain (loss) | (242) | - | (1,707) | - | ||||||||
Other income | 16,827 | - | 19,082 | - | ||||||||
Interest expense | (71,319) | (33,508) | (123,013) | (48,658) | ||||||||
Interest income | 417 | 1,124 | 724 | 1,735 | ||||||||
Other expense | 771 | - | 771 | - | ||||||||
Loss before provision for income taxes | (1,757,766) | (1,303,442) | (3,449,332) | (1,708,713) | ||||||||
Provision for income taxes | (19,629) | - | (19,629) | - | ||||||||
Net loss | (1,777,395) | (1,303,442) | (3,468,961) | (1,708,713) | ||||||||
Other comprehensive income: Foreign currency translation | 14,337 | - | 33,940 | - | ||||||||
Comprehensive loss | $ | (1,763,058) | $ | (1,303,442) | $ | (3,435,021) | $ | (1,708,713) | ||||
Net loss per share: | ||||||||||||
Basic and diluted | $ | (0.10) | $ | (0.09) | $ | (0.20) | $ | (0.13) | ||||
Weighted average shares outstanding: | ||||||||||||
Basic and diluted | 17,069,437 | 14,157,760 | 17,022,467 | 13,584,643 | ||||||||
Derycz Scientific, Inc. and Subsidiaries | |||||||||||||||||||||
| Additional |
| Other | Total | |||||||||||||||||
Shares | Amount | Capital | Deficit | Income | Equity | ||||||||||||||||
Balance, July 1, 2011 | 16,822,509 | $ | 16,823 | $ | 13,468,580 | $ | (7,651,871) | $ | (11,590) | $ | 5,821,942 | ||||||||||
Fair value of options issued to | - | - | 84,438 | - | 84,438 | ||||||||||||||||
Common shares issued upon | 246,928 | 246 | (246) | - | - | ||||||||||||||||
Fair value of warrants issued for | - | - | 210,712 | - | 210,712 | ||||||||||||||||
Adjustment to fair value of | (447,838) | (447,838) | |||||||||||||||||||
Fair value of warrant extensions | - | - | 264,714 | - | 264,714 | ||||||||||||||||
Net loss for the period | (3,468,961) | (3,468,961) | |||||||||||||||||||
Foreign currency translation | 33,940 | 33,940 | |||||||||||||||||||
Balance, December 31, 2011 | 17,069,437 | $ | 17,069 | $ | 13,580,360 | $ | (11,120,832) | $ | 22,350 | $ | 2,498,947 | ||||||||||
Derycz Scientific, Inc. and Subsidiaries | |||||||
Six Months ended | |||||||
December 31, | |||||||
2011 | 2010 | ||||||
Cash flow from operating activities: | |||||||
Net loss | $ | (3,468,961) | $ | (1,708,713) | |||
Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 1,004,565 | 161,893 | |||||
Fair value of vested stock options | 84,438 | 47,475 | |||||
Fair value of warrants issued for services | (237,126) | 448,662 | |||||
Fair value of common shares issued for services | - | 17,648 | |||||
Fair value of warrant extensions | 264,714 | - | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (785,273) | (1,063,934) | |||||
Inventory | 167,985 | (2,687) | |||||
Due from factor | 272,186 | - | |||||
Prepaid expenses | 61,394 | (82,228) | |||||
Prepaid royalties | 786,449 | - | |||||
Other assets | 60,706 | 12,853 | |||||
Accounts payable and accrued expenses | 3,492,110 | 13,044 | |||||
Other current liabilities | 94,000 | (12,892) | |||||
Net cash provided by (used in) operating activities | 1,797,187 | (2,168,879) | |||||
Cash flow from investing activities: | |||||||
Purchase of property and equipment | (44,607) | (21,719) | |||||
Purchase of intangible assets | (161,140) | (98,998) | |||||
Acquisition of remaining interest in Pools Press | - | (120,000) | |||||
Net cash used in investing activities | (205,747) | (240,717) | |||||
Cash flow from financing activities: | |||||||
Issuance of shares upon exercise of warrants | - | 2,484,187 | |||||
Payment of notes payable | (42,249) | - | |||||
Payment of capital lease obligation | (484,835) | (16,864) | |||||
Payment of related parties | (67,383) | - | |||||
Advances (payments) under line of credit | (661,769) | 1,284,987 | |||||
Net cash provided by (used in) financing activities | (1,256,236) | 3,752,310 | |||||
Effect of exchange rate changes | 138,197 | - | |||||
Net increase in cash and cash equivalents | 473,401 | 1,342,714 | |||||
Cash and cash equivalents, beginning of period | 2,868,260 | 1,852,231 | |||||
Cash and cash equivalents, end of period | $ | 3,341,661 | $ | 3,194,945 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for income taxes | $ | 19,629 | $ | - | |||
Cash paid for interest | $ | 123,014 | $ | 33,508 | |||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Adjustment to additional paid in capital to reflect acquisition of remaining noncontrolling | $ | - | 34,904 | ||||
About Derycz Scientific®
Derycz Scientific, Inc. is an information logistics company. The company and its subsidiaries develop products, services and systems to facilitate the re-use of published content in a manner that helps organizations achieve their marketing, communication and research goals effectively and in compliance with copyright law and regulatory rules. Subsidiary companies include Reprints Desk, Inc., and Techniques Appliquees aux Arts Graphiques, S.p.A. (TAAG). For more information, please visit www.deryczscientific.com.
Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's success in technology and product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. The Company assumes no obligation to update the cautionary information in this release.
SOURCE Derycz Scientific, Inc.