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May 15, 2012

Reprints Desk's Parent Company Reports Record Revenue for Third Quarter 2012

Results Include $251,000 in Third Quarter Income from Operations before Depreciation and Amortization, Stock-Based Compensation, and Impairment Charges

ENCINO, Calif., May 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 third quarter of its fiscal year 2012 (quarter ended March 31, 2012).

Third Quarter highlights:

  • $251,000 in third quarter income from operations before depreciation and amortization, stock-based compensation, and impairment charges
  • Social, Mobile, and Search tools fully launched, and first sales completed.
  • Total of $2.3M in one-time impairment charges related to the acquisition of TAAG and intellectual property licenses

Third Quarter year-over-year highlights:

  • Gross profit as a percentage of revenue increased to 22.5% from 8.7% in 2011
  • 31% increase in total revenue to $10 million from $7.6 million in 2011 third quarter

Management Commentary

"We've continued to experience positive growth, and are extremely excited about the fact that our main operating company, Reprints Desk, now has positive income from operations before adjustments. Income may be lifted even further as we roll out new high margin Software-as-a-Service (SaaS) offerings, Bibliogo and Article Viewer mobile app as part of our Article Galaxy platform.  Additionally, we've had recent top pharma company wins that should bring an additional ten million dollars in revenues over the next year," said Derycz Scientific President and CEO Peter Derycz.  "In contrast to our Reprints Desk success, we've experienced difficulties in our TAAG operation. We have responded there by instituting a management change that will be bringing a "hands-on" approach to revenue growth and operational efficiencies as well as by taking a one-time impairment charge in regards to that acquisition."

Alan Urban, Chief Financial Officer, added, "As mentioned last quarter, we completed numerous improvements in gross margin and operating expenses and as a result gross margin as a percentage of revenue increased to 22.5% and we achieved $251 thousand of income from operations before depreciation and amortization, stock-based compensation, and impairment charges.  In addition, with the impairment charges related to the acquisition of TAAG and intellectual property licenses behind us, we are well positioned for profitability going forward."

Conference Call

Derycz Scientific management will host an investment-community conference call on Wednesday, May 16, 2012 beginning at 2:00 p.m. Eastern time (11:00 a.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 82552156 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 – Income 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.>

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.