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May 13, 2010

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Reprints Desk Parent Company Derycz Scientific Reports Quarterly Revenue Growth of 62% to $6.2 Million

Derycz Scientific, Inc.

 

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 inBiotechnology 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.