Document Security Systems Reports 3Q Results
Sales Revenue increase 53% - Operating expenses decrease by 24% - Net loss decreases 64%
Company Supplied -- Graphic Arts Online, November 16, 2009
ROCHESTER, N.Y., Nov. 16 -- Document Security Systems, Inc. (NYSE Amex: DMC; "DSS"), a leader in patented protection against counterfeiting and unauthorized copying, scanning and photo imaging, reported results for the third quarter ended September 30, 2009.
Revenue for the third quarter of 2009 was $2.6 million, an increase of 52.6% over the third quarter of 2008, primarily due to security and commercial print sales, which increased 68.4% during the quarter and reflects the impact of the Company's acquisition of DPI Secuprint, a commercial printer, in December, 2008.
Third Quarter Financial Highlights
- Sales of $2.6 million increased 52.6% compared to the third quarter of 2008.
- Sales increased 13.6% sequentially over the second quarter of 2009.
- Third quarter gross profit margins at 38.3% compared to 56.6% in the third quarter of 2008.
- Operating expenses decreased by 24.3% compared to the third quarter of 2008.
- Net Loss decreased by 64.2% to $955,000 compared to $2,663,000 in the third quarter of 2008.
- Net loss per share of $(0.06) compared to $(0.19) in the third quarter of 2008.
- Adjusted EBITDA. (See Reconciliation of GAAP to Non-GAAP Financial Measures table) loss of $407,000 as compared to a loss of $348,000 in the third quarter of 2008.
First Nine Months Financial Highlights
- Sales of $7.6 million increased 42.2% compared to the first nine months of 2008.
- Gross profit of $2.8 million compared to $3.0 million in the first nine months of 2008, a decrease of 6.3%.
- Operating expenses decreased by 33.7% compared to the first nine months of 2008.
- Net Loss decreased by 53.5% to $2,873,000 compared to the $6,182,000 in the first nine months of 2008.
- Net loss per share of $(0.20) compared to $(0.45) in the third quarter of 2008.
- Adjusted EBITDA. (See Reconciliation of GAAP to Non-GAAP Financial Measures table) loss of $1,339,000 as compared to a loss of $1,526,000 in first nine months of 2008.
Other Corporate Developments
- DSS's AuthentiGuard DeterX(TM) Security Paper approved as an "HP Indigo Certified Substrate".
- Completion of first step of spin-off and planned stock dividend of Legalstore.com division.
- Completed $1,491,000 private placement in October.
- Signed 4 year distribution deal with Samsung S1 Corporation, Seoul, South Korea.
- Produced 4 million secure financial instruments containing our anti-counterfeiting technologies since January 1, 2009 - none have been reported counterfeited.
- We have attracted 5 new large fortune 500 clients for whom we manufacture print products containing our security technologies.
Robert Fagenson, Chairman of the Board of Document Security Systems, stated "During the third quarter of 2009, we saw a rebound of customer demand as sales grew 14% from the second quarter of this year. While still below levels we are targeting, we are encouraged by the results."
Document Security System's CEO Patrick White said, "The third quarter financial results further point to the improvement of our business over 2008. We are involved in several new significant revenue opportunities which could quickly improve our financial results. Based on our new cost structure and revenue opportunity pipeline we believe that we are very well positioned for future success."
