Derycz Scientific, Inc. Reports Quarterly Revenue Growth of 62% to $6.2 Million

2nd Consecutive Quarter of Net Profits

SANTA MONICA, Calif., May 13 /PRNewswire-FirstCall/ -- Derycz Scientific, Inc. (OTC Bulletin Board: DYSC), a company that is pioneering a fresh way of facilitating the flow of information from content publishers to enterprise customers and their constituents, released its financial results for the quarter and nine months ended March 31, 2010.

Financial and Operational Highlights for the quarter and nine months ended March 31, 2010, include:

Quarterly revenues increased 62% to $6.2 million in 2010 from $3.8 million in the same period 2009;
Nine-month revenue rose 77.8% to almost $18.6 million for the period ended March 31, 2010, from $10.4 million for the same period prior year;
Quarterly EPS of $0.01 represents Derycz's second consecutive profitable quarter;
Nine-month income reached $22,000, or $0.00 per fully diluted share, for the period ended March 31, 2010, against a net loss of $244,000, or $0.02 per fully diluted share in the nine months ended March 31, 2009;
Derycz Scientific's subsidiary, Reprints Desk, named among "100 Companies That Matter Most in Knowledge Management" by KMWorld Magazine for the second consecutive year; and
Derycz Scientific was featured in Pharmaceutical Manufacturing and Genetic Engineering and in Biotechnology News in articles on streamlining the FDA approval process.

Peter Derycz, President and CEO of Derycz Scientific, commented: "We are very pleased with our second consecutive profitable quarter. Our revenue growth is very healthy, and we believe it will continue along this trajectory. The Reprints Desk subsidiary is doing well, and the Pools Press subsidiary is solidly performing in its niche. We anticipate that our fourth quarter results will continue along the current path of top- and bottom-line growth."

Quarterly Results of Operations

Our revenues increased 62% compared to the same period in 2009. We achieved revenue of $6,201,431 for the three months ended March 31, 2010, compared to revenue of $3,818,500 for the three months ended March 31, 2009.

Our general and administrative expenses increased 30% from $826,770 for the three months ended March 31, 2009 to $1,154,177 for the three months ended March 31, 2010. Pools' share of these expenses was approximately $52,000 for the 2010 period and $49,000 in the 2009 period. These expenses include Reprints' salary costs, which were $657,494 in the 2010 period and $499,099 in the 2009 period, an increase of $158,395 or 32%. Both our sales and marketing team and our information technology team have increased during the past year and we have added other additional employees as needed. We continue to attempt to contain the expansion of our workforce. However, because of the expansion of our sales volume and in order to continue to develop our computer system, we expect to add a small number of new employees in the next year.

We recorded net income of $123,640 for the three months ended March 31, 2009 compared to net income of $93,705 for the three months ended March 31, 2010.

Mr. Derycz said, "We are proud to report two consecutive quarters of profitability. This result is attributable to strong sales at Reprints during the 2010 period. We hope to continue to be modestly profitable for the remainder of the 2010 fiscal year."

Nine-Month Results of Operations

Our revenues increased significantly from the same period in 2009. We achieved revenue of $18,575,589 for the nine months ended March 31, 2010, compared to revenue of $10,448,179 for the nine months ended March 31, 2009, an increase of 78%.

Our general and administrative expenses increased 38% from $2,409,883 for the nine months ended March 31, 2009 to $3,333,872 for the nine months ended March 31, 2010. Pools' share of these expenses was approximately $174,000 in the 2009 period and $166,000 during the 2010 period. These expenses include Reprints' salary costs, which were $1,352,533 in the 2009 period and $1,911,565 in the 2010 period, an increase of $559,032 or 41%. These costs have increased at a slower rate than our revenues as we have tried to limit our hiring of new employees and to contain other costs.

As a result of the foregoing, Derycz recorded net income of $16,288 for the nine months ended March 31, 2010 compared to a net loss of $243,492 for the nine months ended March 31, 2009.

As of March 31, 2010, the Company had cash and cash equivalents of $2,248,767, compared to $1,854,093 as of March 31, 2009. This increase is primarily attributable to an increase in accounts payable of $1,020,733 and a decrease in prepaid royalties of $182,210, partially offset by an increase in accounts receivable of $638,611. The Company believes that its current cash resources will be sufficient to sustain current operations for at least one year.

About Derycz Scientific®

Derycz Scientific, Inc. (the "Company") develops companies, products, services and systems that 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. Its subsidiary companies include Reprints Desk and Pools Press. Reprints Desk offers a one-stop solution for reprints, ePrints and single articles, and has delivered millions of articles worldwide. Reprints Desk is an innovator in content retrieval and ePrint delivery and its services are designed to help make effective use of published articles in a copyright-compliant manner. Pools Press has excelled in the reprint market for over 30 years. It provides professionally printed articles from medical and technical journals; prints booklets, catalogs, pamphlets, direct mail pieces, newsletters, and all business stationery; and works with publishers who wish to outsource a portion of or all of their reprints business. For more information, go to www.deryczscientific.com

Forward-Looking Statements

As a cautionary note to investors, 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 technology and product development; the Company's ability to execute its business model and strategic plans; and all the risks and related information described from time to time in the Company's SEC filings, including the financial statements and related information contained in the Company's SEC Filing. The Company assumes no obligation to update the information in this release.

www.reprintsdesk.com

FINANCIAL TABLES TO FOLLOW

DERYCZ SCIENTIFIC, INC. Condensed Consolidated Statement of Operations (unaudited)
			Three Months Ended
			March 31,
			2010		2009


NET SALES		$	6,201,431	$	3,818,500

COST OF SALES			4,843,169		2,802,344

GROSS PROFIT			1,358,262		1,016,156


OPERATING EXPENSES:
	General and administrative		1,154,177		826,770
	Marketing and advertising		60,222		33,267
	Depreciation and amortization		52,523		58,517

TOTAL OPERATING EXPENSES			1,266,922		918,554

INCOME (LOSS) FROM OPERATIONS			91,340		97,602

Realized gain on marketable securities			-		60,833
Other income			6,101		-
Interest expense			(1,955)		(1,753)
Interest income			1,273		2,709

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTEREST			96,759		159,391

PROVISION FOR INCOME TAXES			(3,054)		(35,751)

INCOME (LOSS) BEFORE NONCONTROLLING INTEREST			93,705		123,640

NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST			4,456		(2,823)

NET INCOME (LOSS) ATTRIBUTABLE TO DERYCZ SCIENTIFIC, INC.		$	98,161	$	120,817

NET INCOME (LOSS) PER SHARE:
	BASIC AND DILUTED	$	0.01	$	0.01

WEIGHTED AVERAGE SHARES OUTSTANDING:
	BASIC AND DILUTED		12,961,830		12,961,830

DERYCZ SCIENTIFIC, INC. Condensed Consolidated Statement of Operations (unaudited)
			Nine Months Ended
			March 31,
			2010		2009


NET SALES		$	18,575,589	$	10,448,179

COST OF SALES			14,965,411		8,030,463

GROSS PROFIT			3,610,178		2,417,716


OPERATING EXPENSES:
	General and administrative		3,333,872		2,409,883
	Marketing and advertising		123,788		71,855
	Depreciation and amortization		151,017		190,416

TOTAL OPERATING EXPENSES			3,608,677		2,672,154

INCOME (LOSS) FROM OPERATIONS			1,501		(254,438)

Realized gain on marketable securities			-		33,668
Other income			19,361		-
Interest expense			(5,098)		(32,853)
Interest income			3,578		34,469

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTEREST			19,342		(219,154)

PROVISION FOR INCOME TAXES			(3,054)		(24,338)

INCOME (LOSS) BEFORE NONCONTROLLING INTEREST			16,288		(243,492)

NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST			5,914		(534)

NET INCOME (LOSS) ATTRIBUTABLE TO DERYCZ SCIENTIFIC, INC.		$	22,202	$	(244,026)

NET INCOME (LOSS) PER SHARE:
	BASIC AND DILUTED	$	0.00	$	(0.02)

WEIGHTED AVERAGE SHARES OUTSTANDING:
	BASIC AND DILUTED		12,961,830		12,939,607

DERYCZ SCIENTIFIC, INC. Condensed Consolidated Balance Sheets
			March 31,		June 30,
			2010		2009
			(unaudited)
ASSETS

CURRENT ASSETS
	Cash and cash equivalents	$	2,248,767	$	1,854,093
	Accounts receivable, net of allowance of $35,000		4,138,459		3,499,848
	Inventory		9,992		10,188
	Prepaid royalties		35,770		217,980
	Other current assets		81,735		37,890

TOTAL CURRENT ASSETS			6,514,723		5,619,999

PROPERTY AND EQUIPMENT, net of
	accumulated depreciation of $281,052 and $188,266		363,860		340,776

INTANGIBLE ASSETS
	Customer lists, net of accumulated amortization of $0 and $43,056		-		6,944
	Intellectual property licenses, net of amortization of $259,086 and $163,209		712,681		600,887

GOODWILL			223,385		223,385

TOTAL ASSETS		$	7,814,649	$	6,791,991

DERYCZ SCIENTIFIC, INC. Condensed Consolidated Balance Sheets (Continued)
				March 31,		June 30,
				2010		2009
				(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
	Accounts payable		$	4,057,348	$	3,036,615
	Capital lease obligation, current			33,008		17,861
	Income tax payable			3,054		3,659
	Other current liabilities			75,989		116,769
TOTAL CURRENT LIABILITIES				4,169,399		3,174,904

CAPITAL LEASE OBLIGATIONS				52,191		43,617

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
	Preferred stock; $0.001 par value; 20,000,000 shares
		authorized; no shares issued and outstanding
	Common stock; $0.001 par value; 100,000,000 shares
		authorized; 12,961,830 shares issued and outstanding		12,962		12,962
	Additional paid-in capital			5,453,524		5,450,223
	Accumulated deficit			(1,914,870)		(1,937,072)

TOTAL STOCKHOLDERS' EQUITY				3,551,616		3,526,113

NONCONTROLLING INTEREST				41,443		47,357

TOTAL EQUITY				3,593,059		3,573,470

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	7,814,649	$	6,791,991

SOURCE Derycz Scientific, Inc.