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Dynasil Announces Third Quarter 2008 Results

Published on 2008-08-22. Author : SpecialChem

WEST BERLIN, N.J. -- Dynasil Corporation of America has announced the results of operations for its 2008 third quarter ended June 30, 2008. Dynasil is a manufacturer of photonic products including optical materials, components, coatings and specialized instruments. For the 3 months ended June 30, 2008, revenues were $2,676,263, an increase of 3.5% over the three months ended June 30, 2007 and net income was $53,002 or $0.01 per share, a decrease of 46% over net income of $98,104 or $0.02 per share. Third quarter profits were impacted by staffing costs and other expenses in support of a significant acquisition which closed on July 1, 2008. The Company also experienced weaker than expected results in its optical materials business unit. Through three quarters, year to date performance shows a 5.1% increase in revenues to approximately $8.5 million and a 67% increase in net profit to $389,266 versus the prior year. Improved execution and a turnaround in the Company's EMF optical coatings unit is the largest contributor for the significant improvement in profitability.

On July 1, 2008, Dynasil acquired the stock of Radiation Monitoring Devices, Inc. and specific assets of RMD Instruments, LLC (together, "RMD") which are advanced instruments and research companies located in Watertown, MA. The purchase price totaled approximately $20 million. RMD revenues for the twelve months ended 6/30/08 were approximately $22.5 million. Preliminary, unaudited RMD profit before tax for the twelve months ended 6/30/08 was approximately $3 million. Management is very excited about this acquisition and views the addition of the RMD companies to be a transformational event for Dynasil. RMD is expected to more than triple the Company's revenues and net income.

RMD Instruments Corporation manufactures and sells instruments and components that management believes have high growth potential. These are sold into the medical imaging, environmental sensing and quality control markets and include hand-held analyzers for lead paint and medical probes for cancer surgery with the potential to significantly improve surgical outcomes. More than 30% of RMD's 2007 commercial revenue came from after-sales maintenance and support providing ongoing, profitable revenue from the installed base of instruments. RMD has been conducting government research under the SBIR program for more than 25 years and the current contract backlog exceeds one year. Management believes that prior and current research projects are a source for new commercial products in areas like medical imaging, augmented reality and homeland security.

The addition of RMD continues Dynasil's dramatic turnaround story. Since 2004 when CEO Craig Dunham joined the company, Dynasil has grown from an unprofitable $2.0 million of revenues to revenues which are expected to exceed $35.0 million for fiscal year 2009 with strong profitability.

"Adding RMD involved a substantial investment of resources during Quarter Three but it is a major step in executing Dynasil's profitable growth strategy. We plan to apply our skills in effective execution to build on their strong cash flow by accelerating the growth of their current products as well as commercializing new technology," said Mr. Dunham, "We continue to execute our strategy of significant profitable, growth through acquisitions and organic growth through effective execution in our business units."

About Dynasil:

Founded in 1960, Dynasil is a manufacturer of photonic products including optical materials, components, coatings and instruments for a broad range of applications markets in the medical, industrial and defense sectors. Its wholly owned subsidiaries are located in New Jersey, New York and Massachusetts.

This news release may contain forward-looking statements usually containing the words "believe," "expect," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act. Future results of operations, projections, and expectations, which may relate to this release, involve certain risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, the factors detailed in the Company's Annual Report or Form 10-KSB and in the Company's other Securities and Exchange Commission filings, continuation of existing market conditions and demand for our products.

Source: Dynasil


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