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Document Security Systems Reports Third Quarter Of 2015 Financial Results

The following excerpt is from the company's SEC filing.

), a leader in anti-counterfeiting and authentication solutions

reported results for the third quarter ended September 30, 2015.

Q3 2015 Financial Highlights

Revenue for the third quarter of 2015 decreased 11% to $4.4 million from $5.0 million in the same year-ago quarter. During the quarter, printed products revenue decreased 11% while technology sales, services and licensing decreased 6%. During the quarter the Company experienced declines in its commercial printing and packaging revenues partially offset by an increase in its plastic cards sales and in particular, increases in sales of ID cards with technology (including RFID, smart cards, and proximity cards).

Costs and expenses totaled $5.2 million, a decrease of 72% from $18.7 million in the third quarter of 2014. The decrease reflected cost decreases in nearly every expense category, along with the impact of an $11.8 million impairment expense recorded in the third quarter of 2014. Direct costs of goods sold, excluding depreciation and amortization, decreased to 57.8% of sales from 62.7% of sales in the third quarter of 2014. In addition, depreciation and amortization costs decreased approximately $917,000 or 69% due to a significant reduction in the carrying-value of the Company’s IP assets in 2015 as compared to 2014.

Net loss to common shareholders totaled $860,000 or $(0.02) per basic and diluted share, as compared to net loss to common shareholders of $8.1 million or ($0.19) per basic and diluted share in the third quarter of 2014. The 89% decrease in net loss was the result of the improvement in results due to the reductions in costs of nearly every expense category that more than offset the decrease in revenue incurred during the quarter. In addition, in 2014, the Company’s net loss reflected a net impairment charge for one of the Company’s investments of approximately $7.1 million which did not reoccur in the 2015 period.

Adjusted EBITDA

loss, a non-GAAP metric defined as earnings before interest, taxes, depreciation, amortization, and stock-based compensation, and other non-recurring items, totaled $162,000 compared to an adjusted EBITDA loss of $362,000 in the third quarter of 2014 (see further discussion about the use of adjusted EBITDA, below). The improvement reflected the increase in adjusted EBITDA generated by the Company’s printed products groups and the benefit of the cost reductions made by the Company that significantly reduced corporate costs.

As of September 30, 2015, the Company had cash and restricted cash of approximately $1.5 million.

About Document Security Systems

Document Security Systems, Inc.’s (NYSE MKT: DSS) products and solutions are used by governments, corporations and financial institutions to defeat fraud and to protect brands and digital information from the expanding world-wide counterfeiting problem. DSS technologies help verify the authenticity of both digital and physical financial instruments, identification documents, sensitive publications, brand packaging and websites. DSS continually invests in research and development to meet the ever-changing security needs of its clients and offers licensing of its patented technologies through its subsidiary, DSS Technology Management, Inc.

For more information on the AuthentiGuard Suite, please visit

www.authentiguard.com

. For more information on DSS and its subsidiaries, please visit

www.DSSsecure.com

. To follow DSS on Facebook, click

For More Information

Investor Relations

(585) 325-3610

Email:

ir@documentsecurity.com

Forward-Looking Statements

Forward-looking statements that may be contained in this press release, including, without limitation, statements related to the Company’s plans, strategies, objectives, expectations, potential value, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act...


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