Will Hold Earnings Conference Call on March 6, 2013 at 4:30 pm ET
ROCHESTER, NY--March 6, 2013 — Document Security Systems, Inc. (NYSE MKT: DSS), a leading developer of anti-counterfeiting, anti-fraud and authentication technologies for governments, corporations and financial institutions, today announced preliminary fourth quarter and full-year 2012 financial results.
Revenues for fourth quarter of 2012 were $5.4 million, a 30% increase over the fourth quarter of 2011. Revenues for the full year of 2012 were $17.1 million, a 28% increase from 2011 resulting from significant growth in the Company’s Packaging and Licensing and Digital Solutions divisions, which grew by 59% and 26%, respectively.
Gross profit for the fourth quarter of 2012 was $1.6 million, a 40% increase over the fourth quarter of 2011. Gross profit for the full year of 2012 increased 37% to $5.7 million from $4.2 million in 2011. The gross profit improvement reflects the Company’s better sales mix along with reductions in production costs, especially at the Company’s commercial and security printing division.
Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock based compensation and other non-recurring items, including professional fees for the Company’s pending merger with Lexington Technology Group) for the fourth quarter of 2012 was a loss of $280,000, or a 49% improvement over the adjusted EBITDA loss of $545,000 for the fourth quarter of 2011. For the full year of 2012, adjusted EBITDA was a loss of $1,314,000, or a 43% improvement over the adjusted EBITDA loss of $2,309,000 in 2011.
The Company recorded a net loss for the fourth quarter of 2012 of $1,117,000, or a net loss of $0.05 per share compared to a loss of $955,000 or $0.05 per share in the fourth quarter of 2011. On a full year basis, net loss was $4.3 million or $0.21 per share in 2012, compared to a net loss of $3.2 million or $0.17 per share in 2011. The increase in net loss for the fourth was primarily the result of non-recurring professional fees related to the proposed merger. The increase in net loss for the full year was primarily due to professional fees related to the potential merger with Lexington Technology Group, and to a lesser extent the effects of a one-time income amount recorded in the first quarter of 2011 due to a change in the fair value of a derivative liability that did not re-occur in 2012 and an immediate amortization of note discount expense recorded in the first quarter of 2012. These three items in aggregate amounted to $1,345,000. Absent these items, net loss for 2012 would have decreased approximately 9% from 2011.
Document Security System’s CEO, Robert Bzdick said, “Our strong ending to 2012 validates the strength of our core products and offerings. Our ability to increase the volume and quality of our revenues consistently throughout the year points to the strengthening of our core businesses that will be a foundation of the Company going forward. As we enter 2013, we seek to continue to benefit from the improved financial performance of our core packaging, plastics and printing divisions, while continuing to invest in the research and development of new products, especially in our digital group. “
CONFERENCE CALL AND WEBCAST DETAILS:
Time: 4:30 p.m. ET
Date: Wednesday, March 6, 2013
Investor Dial In (Toll Free): 877-407-9205
Investor Dial In (International): 201-689-8054
Live Webcast URL: http://www.investorcalendar.com/IC/CEPage.asp?ID=170643
A replay of the teleconference will be available until March 13, 2013 which can be accessed by dialing (877) 660-6853 if calling within the U.S. or (201) 612-7415 if calling internationally. Please enter account #286 and conference ID #410432 to access the replay.
About DSS (Document Security Systems, Inc.)
Document Security Systems, Inc.’s (NYSE MKT:DSS) products and solutions are used by governments, corporations and financial institutions to defeat counterfeiting and fraud and protect brands and digital information from the expanding world-wide counterfeiting problem.
DSS continually invests in research and development to meet the ever changing security needs of the Company’s clients and implements these patented solutions through strategic licensing and through the Company’s four operating groups: DSS Plastics Group, DSS Secure Printing Group, DSS Packaging Group and DSS Digital Group.
Through these divisions, DSS provides counterfeit deterrence and authentication coupled with digital information solutions to corporations, governments, and financial institutions around the world. When implemented, DSS technologies help ensure the authenticity of both digital and physical financial instruments, identification documents, sensitive publications and brand packaging.
For more information on DSS and its subsidiaries, please visit www.DSSsecure.com .
Follow DSS on Facebook, click HERE.
For more information:
Document Security Systems
About Lexington Technology Group
Lexington Technology Group, Inc. is an intellectual property management firm that invests business experience, legal expertise and capital to monetize pioneering inventions. LTG's goal is to identify and capitalize on opportunities for return, while rewarding highly qualified innovators. The firm typically engages with companies that have identified important innovations but that may lack the experience, relationships or capital to succeed on their own, and have not been fairly rewarded in the marketplace. LTG's initiatives contribute to an intellectual property market that enables innovators to benefit from their discoveries and investors to profit from prudent risk. LTG's management team is comprised of experienced patent managers and strategists that have collectively generated over $1 billion licenses, settlements and damages awards to date. www.lex-tg.com.
Cautionary Note Regarding Forward-Looking Statements
Statements in this press release regarding the proposed transaction between DSS and Lexington Technology Group; the expected timetable for completing the transaction; the potential value created by the proposed Merger for DSS's and Lexington Technology Group's stockholders; the potential of the combined companies' technology platform; the companies’ respective or combined ability to raise capital to fund our combined operations and business plan; the continued listing of DSS's or the combined company's securities on the NYSE MKT; market acceptance of DSS products and services; the companies’ collective ability to maintain or protect their intellectual property rights through litigation or otherwise; Lexington Technology Group's limited operating history, competition from other industry competitors with greater market presence and financial resources than those of DSS's; the Company’s ability to license and monetize the patents owned by Lexington Technology Group; potential new legislation or regulation related to enforcing patents; the complexity and costly nature of acquiring patent or other intellectual property assets; the combined company's management and board of directors; and any other statements about DSS' or Lexington Technology Group's management teams' future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "could," "anticipates," "expects," "estimates," "plans," "should," "target," "will," "would" and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the risk that DSS and Lexington Technology Group may not be able to complete the proposed transaction; the inability to realize the potential value created by the proposed Merger for DSS's and Lexington Technology Group's stockholders; our respective or combined inability to raise capital to fund our combined operations and business plan; DSS's or the combined company's inability to maintain the listing of our securities on the NYSE MKT; the potential lack of market acceptance of DSS's products and services; our collective inability to protect our intellectual property rights through litigation or otherwise; competition from other industry competitors with greater market presence and financial resources than those of DSS's; our inability to license and monetize the patents owned by Lexington Technology Group; and other risks and uncertainties more fully described in DSS's Annual Report on Form 10-K for the year ended December 31, 2012, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012, and September 30, 2012, each as filed with the SEC, as well as the other filings that DSS makes with the SEC. Investors and stockholders are also urged to read the risk factors set forth in the proxy statement/prospectus carefully when they are available.
In addition, the statements in this press release reflect the Company’s expectations and beliefs as of the date of this release. Subsequent events and developments will cause these expectations and beliefs to change. However, while the Company may elect to update these forward-looking statements publicly at some point in the future, it specifically disclaims any obligation to do so, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company’s views as of any date after the date of this release.
FINANCIAL TABLES IN FULL PDF VERSION