Derycz Scientific

SANTA MONICA, Calif., Feb. 16 /PRNewswire-FirstCall/ -- Derycz Scientific (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, announced its second quarter and half-year financial results for fiscal year 2010.

Highlights for the quarter and six months ended December 31, 2009, include:

• Quarterly revenue growth of 121% to $7.6 million in second fiscal quarter 2010 from $3.4 million in the same period of fiscal year 2009.
• Six-month revenue growth of 87% to $12.4 million in the half year ended December 31, 2009 from $6.6 million in the same period of the prior year.
• Quarterly income for the quarter rising to $235,734, or 2 cents per fully diluted share, in the second fiscal quarter of 2010 compared to a loss of $132,177 or one cent per fully diluted share, in the same period of fiscal 2009.
• Delivery of its 5 millionth article of 2009.
• Addition to Derycz's document delivery system of titles from Informa Healthcare, The American Institute of Physics, IOP Publishing, the Royal Society of Chemistry, The British Medical Journal (BMJ), the American Academy of Family Physicians, IOS Press, Annual Reviews, and the IEEE.
• A collaboration with QUOSA Inc., to facilitate copyright-compliant scientific literature re-use for Cubist Pharmaceuticals.
• A five-year General Services Administration (GSA) Federal Supply Schedule Contract, allowing Derycz to support document retrieval for the government sector.

Peter Derycz, President and CEO of Derycz Scientific, commented: "We are very pleased with both our revenue growth in the quarter ended December 31, 2009, and with our positive earnings of 2 cents per fully diluted share. We anticipate that the rest of fiscal year 2010 will continue to be a period of growth for Derycz. We are very pleased with the progress of our Reprints Desk subsidiary, and our Pools Press unit continues to contribute to our corporate expansion."

Quarterly Results of Operations

Revenues more than doubled compared to the same period in 2008. We achieved revenue of $7,590,459 for the three months ended December 31, 2009, compared to revenue of $3,426,953 for the three months ended December 31, 2008, an increase of 121%.

General and administrative expenses increased 30% from $810,441 for the three months ended December 31, 2008 to $1,052,645 for the three months ended December 31, 2009. Pools' share of these expenses was approximately $52,000 for both periods. These expenses include Reprints' salary costs, which were $447,539 in the 2008 period and $699,884 in the 2009 period, an increase of $252,345 or 56%. Both the sales and marketing team and the information technology team have increased during the past year, and the Company has added other additional employees as needed. Management will continue to attempt to contain the expansion of the workforce. However, because of the expansion of sales volume and in order to continue to develop the computer system, the Company expects to add a small number of new employees in the next year.

Derycz recorded net income of $234,734 for the three months ended December 31, 2009 compared to a net loss of $132,177 for the three months ended December 31, 2008. This is the first quarter Derycz has achieved significant profitability. This result is attributable to strong sales at Reprints during the 2009 period.

Half-Year Results of Operations

Derycz achieved revenue of $12,374,158 for the six months ended December 31, 2009, compared to revenue of $6,629,679 for the six months ended December 31, 2008, an increase of 87%. General and administrative expenses increased 38% from $1,583,113 for the six months ended December 31, 2008 to $2,179,695 for the six months ended December 31, 2009. Pools' share of these expenses was approximately $114,000 for both periods. These expenses include Reprints' salary costs, which were $853,434 in the 2008 period and $1,315,320 in the 2009 period, an increase of $461,886 or 54%. 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. Derycz recorded a net loss of $364,843 for the six months ended December 31, 2008 compared to a net loss of $75,957 in the 2009 period.

Liquidity and Capital Resources

As of December 31, 2009, Derycz had cash and cash equivalents of $2,686,281, compared to $1,854,093 as of June 30, 2009. This increase is primarily attributable to an increase in accounts receivable of $2,167,186 and an increase in accounts payable of $3,659,601, partially offset by an increase in prepaid royalties of $474,848.

Second Quarter 2010 Conference Call Details

Derycz Scientific's management will discuss the second quarter and six-month results, on Tuesday, February 16, 2010, after market close at 5:00 p.m. EST (2:00 p.m. PST). To join the call, please dial (877) 407-9210. International participants may access the call by dialing (201) 689-8049. A replay will be available two hours after the completion of the call, and for 90 days following the call, by dialing (877) 660-6853 for domestic participants or (201) 612-7415 for international participants and entering Account Number 286 and Conference ID Number 344923 when prompted. Participants may also access a live webcast of the conference call through the investor relations section of Derycz's website, www.deryczscientific.com.

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.

Source: Derycz Scientific, Inc.
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