Click here for PDF Version with TablesNovember 16, 2009
-- Sales Revenue increase 53%
-- Operating expenses decrease by 24%
-- Net loss decreases 64%
ROCHESTER, NY, November 16, 2009 — 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™ 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.”
About Document Security Systems, Inc
Document Security Systems is a world leader in the development of optical deterrent technologies that help prevent counterfeiting and brand fraud from the use of the most advanced scanners, copiers and imaging systems in the market. The company’s patented and patent-pending technologies protect valuable documents and printed products from counterfeiters and identity thieves. Document Security Systems’ customers, which include international governments, major corporations and world financial institutions, use its covert and overt technologies to protect a number of applications including, but not limited to, currency, vital records, brand protection, ID Cards, internet commerce, passports and gift certificates. Document Security Systems’ strategy is to become the world’s leading producer of cutting-edge security technologies for paper, plastic and electronically generated printed assets.
More information about Document Security Systems, Inc can be found at www.documentsecurity.com and www.plasticprintingprofessionals.com, www.legalstore.com, www.protectedpaper.com and www.dpirochester.com.
Safe Harbor Statement
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding expectations for future financial performance, potential sales from new and existing customers, expected benefits from the Company's cost cutting efforts, the potential sale of Legalstore.com, and/or statements preceded by, followed by or that include the words “believes,” “could,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” or similar expressions. all of which involve uncertainty and risk. Many of these risks and uncertainties are discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the Securities and Exchange Commission (the “SEC”), and in any subsequent reports filed with the SEC, all of which are available at the SEC’s website at www.sec.gov. It is possible the company's future financial performance may differ from expectations due to a variety of factors including, but not limited to, the risks referred to above, and changes in economic and business conditions in the world, increased competitive activity, achieving sales levels to fulfill revenue expectations, consolidation among its competitors and customers, technology advancements, unexpected costs and charges, adequate funding for plans, changes in interest and foreign exchange rates, regulatory and other approvals and failure to implement all plans, for whatever reason. It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on current conditions; expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The company makes no commitment to update any forward-looking statement included herein, or disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.
TABLES FOLLOW.
download full PDF version for tables from the link at the top of this page.
