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Reprints Desk Parent Company Derycz Scientific Reports Record Revenue for Fiscal Year 2012

September 28, 2012

Derycz Scientific, Inc.

Fiscal Year 2012 Results Include: $43 Million in Annual Revenue; 7 Point Increase in Gross Profit as a Percentage of Revenue; US Operations Well Positioned for Profitability in Fiscal Year 2013

ENCINO, Calif., Sept. 28, 2012 /PRNewswire/-- Derycz Scientific, Inc. (OTC: 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 fiscal year 2012 (ended June 30, 2012).

Year-over-year highlights:

  • $43 million of revenue in fiscal year 2012, a 28% increase over fiscal year 2011 revenue of $33.5 million
  • 18.8% gross profit as a percentage of revenue in fiscal year 2012,  a 7 point increase over fiscal year 2011 gross profit as a percentage of revenue of 11.7%
  • Over 10 million articles delivered worldwide to over 1,000 accounts in more than 100 countries during fiscal year 2012
  • Total of $2.5M in one-time impairment charges in fiscal year 2012 related to the acquisition of TAAG, Pools Press, and intellectual property licenses
  • US Operations well positioned for profitability in fiscal year 2013 due to numerous gross margin improvements and expense reduction measures performed during the year
  • Current guidance of approximately $1M in adjusted EBITDA from US operations expected in fiscal year 2013

Management Commentary
"We can't be more excited about our growth.  We delivered over 10 million scientific articles to over 1,000 accounts in more than 100 countries, which proves that what we are doing makes sense, a lot of sense, all over the world.  It also proves that we have the team, systems and resources to scale and deliver solid solutions to organizations of any size anywhere in the world.   The task ahead for us really lies in continuing to grow the customer base worldwide while continuing to innovate in the products and services we develop.  Our main goal is customer happiness, and we delivered on that goal while at the same time dramatically improving our gross margins, reducing our operating expenses, continuing to innovate with new products and services for our global customers as well as improve our cash position.  We expect our US operations to deliver approximately $1M in adjusted EBITDA for fiscal year 2013, which is approximately a $3 million improvement compared to fiscal year 2012," said Derycz Scientific President and CEO Peter Derycz.  "In contrast to the success of our US operations (mainly the Reprints Desk brand), we've experienced continued difficulties in our TAAG operation. We have responded there by replacing the prior executive and accounting management as well as taking a one-time impairment charge in regards to that acquisition."

Alan Urban, Chief Financial Officer, added "About half way through fiscal year 2012 we completed numerous improvements in gross margin and as a result gross margin as a percentage of revenue increased 7 points to 18.8% for fiscal year 2012.  This improvement, along with our ongoing initiatives related to expense reduction and optimization of business processes, and with the impairment charges related to the acquisition of TAAG, Pools Press, and intellectual property licenses behind us, leaves us well positioned for profitability from US operations going forward."

Conference Call
Derycz Scientific management will host an investment-community conference call on Tuesday, October 2, 2012 beginning at 4:15 p.m. Eastern time (1:15 p.m. Pacific time) to discuss these results and answer questions. To participate in the call please dial +1 (866) 516-3002 for domestic callers or +1 (253) 237-1159 for international callers, and enter passcode 36492176 when prompted. The webcast will also be available from the Company's website 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.

Use of Non-GAAP Measure – Loss from Operations before Depreciation and Amortization, Stock-Based Compensation, and Impairment Charges

Derycz Scientific management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results, management also considers the non-GAAP measure of Income from operations before depreciation and amortization, stock-based compensation, and impairment charges. Management believes that this non-GAAP measure provides useful information about the Company's operating results.  The attached tables provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.

Reconciliation of Loss from Operations before Depreciation and Amortization, Stock-Based Compensation, and Impairment Charges to Loss from Operations

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.  Examples of forward-looking statements in this release include statements related to new products, anticipated revenue and profitability.  The Company assumes no obligation to update the cautionary information in this release.

SOURCE Derycz Scientific, Inc.

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