x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
Delaware
|
22-1734088
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
|
|
44 Hunt Street, Watertown, MA
|
02472
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer ¨
|
Accelerated filer ¨
|
Non-accelerated filer ¨
|
Smaller reporting company x
|
|
Page
|
PART 1. FINANCIAL INFORMATION
|
|
|
|
Item 1. Financial Statements
|
|
|
|
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
|
|
|
|
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 AND SEPTEMBER 30, 2013
|
3
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED DECEMBER 31, 2013 AND 2012
|
5
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED DECEMBER 31, 2013
|
6
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, 2013 AND 2012
|
7
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
8
|
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
15
|
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
22
|
|
|
Item 4. Controls and Procedures
|
23
|
|
|
PART II. OTHER INFORMATION
|
23
|
|
|
Item 1A. Risk Factors
|
23
|
|
|
Item 6. Exhibits
|
24
|
|
|
Signatures
|
24
|
2 | ||
|
|
December 31,
|
|
September 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
ASSETS
|
|
||||||
Current Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,755,356
|
|
$
|
2,436,828
|
|
Accounts receivable, net of allowances of $338,740 and $184,775
at December 31, 2013 and September 30, 2013, respectively |
|
|
2,633,601
|
|
|
3,657,320
|
|
Costs in excess of billings and unbilled receivables
|
|
|
2,292,809
|
|
|
1,537,318
|
|
Inventories, net of reserves
|
|
|
2,678,524
|
|
|
3,140,244
|
|
Prepaid expenses and other current assets
|
|
|
1,509,878
|
|
|
1,291,942
|
|
Total current assets
|
|
|
11,870,168
|
|
|
12,063,652
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment, net
|
|
|
4,568,183
|
|
|
4,773,779
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
Intangibles, net
|
|
|
1,357,492
|
|
|
3,484,583
|
|
Goodwill
|
|
|
6,256,323
|
|
|
6,240,983
|
|
Deferred financing costs, net
|
|
|
103,137
|
|
|
114,229
|
|
Total other assets
|
|
|
7,716,952
|
|
|
9,839,795
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
24,155,303
|
|
$
|
26,677,226
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
||||||
Current Liabilities
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
5,429,762
|
|
$
|
9,819,048
|
|
Capital lease obligations, current
|
|
|
124,383
|
|
|
124,383
|
|
Accounts payable
|
|
|
2,045,238
|
|
|
2,056,262
|
|
Deferred revenue
|
|
|
347,688
|
|
|
515,790
|
|
Accrued expenses and other liabilities
|
|
|
2,875,923
|
|
|
2,846,850
|
|
Total current liabilities
|
|
|
10,822,994
|
|
|
15,362,333
|
|
|
|
|
|
|
|
|
|
Long-term Liabilities
|
|
|
|
|
|
|
|
Capital lease obligations, net of current portion
|
|
|
269,490
|
|
|
232,173
|
|
Convertible notes
|
|
|
378,461
|
|
|
-
|
|
Pension liability
|
|
|
249,966
|
|
|
249,966
|
|
Deferred tax liability
|
|
|
183,417
|
|
|
186,866
|
|
Total long-term liabilities
|
|
|
1,081,334
|
|
|
669,005
|
|
3 | ||
|
|
December 31,
|
|
September 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
Stockholders' Equity
|
|
|
|
|
|
|
|
Common Stock, $0.0005 par value, 40,000,000 shares authorized,
16,274,274 and 16,224,402 shares issued, 15,464,114 and and 15,414,242 shares outstanding at December 31, 2013 and September 30, 2013, respectively. |
|
|
8,137
|
|
|
8,112
|
|
Additional paid in capital
|
|
|
17,599,418
|
|
|
17,476,003
|
|
Accumulated other comprehensive income
|
|
|
188,849
|
|
|
152,685
|
|
Accumulated deficit
|
|
|
(4,546,900)
|
|
|
(6,004,570)
|
|
Less 810,160 shares of treasury stock - at cost
|
|
|
(986,342)
|
|
|
(986,342)
|
|
Total Dynasil stockholders' equity
|
|
|
12,263,162
|
|
|
10,645,888
|
|
Noncontrolling interest
|
|
|
(12,187)
|
|
|
-
|
|
Total stockholders' equity
|
|
|
12,250,975
|
|
|
10,645,888
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
24,155,303
|
|
$
|
26,677,226
|
|
4 | ||
|
|
Three Months Ended
|
|
||||
|
|
December 31,
|
|
||||
|
|
2013
|
|
2012
|
|
||
Net revenue
|
|
$
|
10,711,528
|
|
$
|
10,553,275
|
|
Cost of revenue
|
|
|
6,261,000
|
|
|
5,926,409
|
|
Gross profit
|
|
|
4,450,528
|
|
|
4,626,866
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
396,805
|
|
|
479,878
|
|
Research and development expenses
|
|
|
346,197
|
|
|
637,129
|
|
General and administrative expenses
|
|
|
3,279,999
|
|
|
3,788,949
|
|
Total operating expenses
|
|
|
4,023,001
|
|
|
4,905,956
|
|
Gain on sale of assets
|
|
|
1,186,691
|
|
|
87,803
|
|
Income (loss) from operations
|
|
|
1,614,218
|
|
|
(191,287)
|
|
Interest expense, net
|
|
|
212,778
|
|
|
186,757
|
|
Income (loss) before taxes
|
|
|
1,401,440
|
|
|
(378,044)
|
|
Income tax (credit) provision
|
|
|
(44,043)
|
|
|
1,298
|
|
Net income (loss)
|
|
|
1,445,483
|
|
|
(379,342)
|
|
Less: Net loss attributable to noncontrolling interest
|
|
|
(12,187)
|
|
|
-
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
1,457,670
|
|
$
|
(379,342)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,445,483
|
|
$
|
(379,342)
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
|
36,164
|
|
|
29,739
|
|
Total comprehensive income (loss)
|
|
$
|
1,481,647
|
|
$
|
(349,603)
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share
|
|
$
|
0.10
|
|
$
|
(0.03)
|
|
Diluted net income (loss) per common share
|
|
$
|
0.10
|
|
$
|
(0.03)
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
15,021,757
|
|
|
14,673,356
|
|
Diluted
|
|
|
15,281,841
|
|
|
14,673,356
|
|
5 | ||
|
|
|
|
|
|
|
Additional
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|||
|
|
Common
|
|
Common
|
|
Paid-in
|
|
Comprehensive
|
|
Retained
|
|
Treasury Stock
|
|
Noncontrolling
|
|
Stockholders'
|
|
|||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Income
|
|
Earnings
|
|
Shares
|
|
Amount
|
|
Interest
|
|
Equity
|
|
|||||||
Balance, September 30, 2013
|
|
16,224,402
|
|
$
|
8,112
|
|
$
|
17,476,003
|
|
$
|
152,685
|
|
$
|
(6,004,570)
|
|
810,160
|
|
$
|
(986,342)
|
|
$
|
-
|
|
$
|
10,645,888
|
|
Issuance of shares of common
stock under employee stock purchase plan |
|
3,848
|
|
|
2
|
|
|
4,462
|
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
costs |
|
46,024
|
|
|
23
|
|
|
118,953
|
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
|
118,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment |
|
-
|
|
|
-
|
|
|
-
|
|
|
36,164
|
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
|
36,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,457,670
|
|
-
|
|
|
-
|
|
|
(12,187)
|
|
|
1,445,483
|
|
Balance, December 31, 2013
|
|
16,274,274
|
|
$
|
8,137
|
|
$
|
17,599,418
|
|
$
|
188,849
|
|
$
|
(4,546,900)
|
|
810,160
|
|
$
|
(986,342)
|
|
$
|
(12,187)
|
|
$
|
12,250,975
|
|
6 | ||
|
|
Three Months Ended
|
|
||||
|
|
December 31,
|
|
||||
|
|
2013
|
|
2012
|
|
||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,445,483
|
|
$
|
(379,342)
|
|
Adjustments to reconcile net income (loss) to net cash:
|
|
|
|
|
|
|
|
Stock compensation expense
|
|
|
119,646
|
|
|
73,516
|
|
Foreign exchange loss
|
|
|
6,868
|
|
|
26,398
|
|
Gain on sale of assets
|
|
|
(1,186,691)
|
|
|
(87,803)
|
|
Depreciation and amortization
|
|
|
266,325
|
|
|
426,458
|
|
Other
|
|
|
11,970
|
|
|
28,707
|
|
Other changes in assets and libilities:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
600,153
|
|
|
607,217
|
|
Inventories
|
|
|
(224,502)
|
|
|
(322,298)
|
|
Costs in excess of billings and unbilled receivables
|
|
|
(755,491)
|
|
|
(205,749)
|
|
Prepaid expenses and other assets
|
|
|
(219,403)
|
|
|
(76,842)
|
|
Accounts payable
|
|
|
(8,567)
|
|
|
399,184
|
|
Accrued expenses and other liabilities
|
|
|
273,836
|
|
|
(852,463)
|
|
Deferred revenue
|
|
|
(166,609)
|
|
|
140,355
|
|
Net cash provided by (used in) operating activities
|
|
|
163,018
|
|
|
(222,662)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Proceeds from sale of assets
|
|
|
4,357,219
|
|
|
80,252
|
|
Purchases of property, plant and equipment
|
|
|
(130,918)
|
|
|
(315,568)
|
|
Net cash provided by (used in) investing activities
|
|
|
4,226,301
|
|
|
(235,316)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
3,794
|
|
|
6,110
|
|
Payment of debt issuance costs
|
|
|
(1,715)
|
|
|
-
|
|
Net proceeds from issuance of convertible notes
|
|
|
378,461
|
|
|
-
|
|
Principal payments on capital leases
|
|
|
(29,864)
|
|
|
-
|
|
Payments on long-term debt
|
|
|
(4,389,286)
|
|
|
(472,587)
|
|
Net cash used in financing activities
|
|
|
(4,038,610)
|
|
|
(466,477)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
(32,181)
|
|
|
(18,525)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
318,528
|
|
|
(942,980)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning
|
|
|
2,436,828
|
|
|
3,414,880
|
|
Cash and cash equivalents, ending
|
|
$
|
2,755,356
|
|
$
|
2,471,900
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
Non cash activities:
|
|
|
|
|
|
|
|
Assets purchased under capital leases
|
|
$
|
67,181
|
|
$
|
-
|
|
7 | ||
8 | ||
9 | ||
|
|
December 31,
|
|
September 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
Raw Materials
|
|
$
|
1,713,898
|
|
$
|
2,132,962
|
|
Work-in-Process
|
|
|
717,888
|
|
|
703,873
|
|
Finished Goods
|
|
|
246,738
|
|
|
303,409
|
|
|
|
$
|
2,678,524
|
|
$
|
3,140,244
|
|
|
|
Useful
|
|
Gross
|
|
Accumulated
|
|
|
|
|
||
December 31, 2013
|
|
Life (years)
|
|
Amount
|
|
Amortization
|
|
Net
|
|
|||
Acquired Customer Base
|
|
5 to 15
|
|
$
|
881,075
|
|
$
|
352,659
|
|
$
|
528,416
|
|
Know How
|
|
15
|
|
|
512,000
|
|
|
187,815
|
|
|
324,185
|
|
Trade Names
|
|
Indefinite
|
|
|
341,558
|
|
|
-
|
|
|
341,558
|
|
Biomedical Technologies
|
|
2.25 - 5
|
|
|
260,000
|
|
|
96,667
|
|
|
163,333
|
|
|
|
|
|
$
|
1,994,633
|
|
$
|
637,141
|
|
$
|
1,357,492
|
|
|
|
Useful
|
|
Gross
|
|
Accumulated
|
|
|
|
|
||
September 30, 2013
|
|
Life (years)
|
|
Amount
|
|
Amortization
|
|
Net
|
|
|||
Acquired Customer Base
|
|
5 to 15
|
|
$
|
5,145,638
|
|
$
|
2,645,715
|
|
$
|
2,499,923
|
|
Know How
|
|
15
|
|
|
512,000
|
|
|
179,283
|
|
|
332,717
|
|
Trade Names
|
|
15 or Indefinite
|
|
|
547,802
|
|
|
75,856
|
|
|
471,946
|
|
Biomedical Technologies
|
|
5
|
|
|
300,000
|
|
|
120,003
|
|
|
179,997
|
|
|
|
|
|
$
|
6,505,440
|
|
$
|
3,020,857
|
|
$
|
3,484,583
|
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
|
|||||||
Acquired Customer Base
|
|
$
|
59,964
|
|
$
|
79,952
|
|
$
|
79,952
|
|
$
|
79,952
|
|
$
|
79,952
|
|
$
|
148,644
|
|
$
|
528,416
|
|
Know How
|
|
|
25,596
|
|
|
34,128
|
|
|
34,128
|
|
|
34,128
|
|
|
34,128
|
|
|
162,077
|
|
|
324,185
|
|
Biomedical Technologies
|
|
|
50,000
|
|
|
66,667
|
|
|
46,666
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
163,333
|
|
|
|
$
|
135,560
|
|
$
|
180,747
|
|
$
|
160,746
|
|
$
|
114,080
|
|
$
|
114,080
|
|
$
|
310,721
|
|
$
|
1,015,934
|
|
|
·
|
A significant adverse long term outlook for any of its industries;
|
|
·
|
An adverse finding or rejection from a regulatory body involved in new product regulatory approvals;
|
|
·
|
Failure of an anticipated commercialization of a product or product line;
|
10 | ||
|
·
|
Unanticipated competition or the introduction of a disruptive technology;
|
|
·
|
The testing for recoverability under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 of a significant asset group within a reporting unit;
|
|
·
|
A loss of key personnel; and
|
|
·
|
An expectation that a reporting unit carrying goodwill, or a significant portion of a reporting unit, will be sold or otherwise disposed of.
|
|
|
December 31, 2013
|
|
December 31, 2012
|
|
||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
15,021,757
|
|
|
14,673,356
|
|
Effect of dilutive securities
|
|
|
|
|
|
|
|
Stock Options
|
|
|
-
|
|
|
-
|
|
Restricted Stock
|
|
|
260,084
|
|
|
-
|
|
Dilutive Average Shares Outstanding
|
|
|
15,281,841
|
|
|
14,673,356
|
|
|
|
|
|
|
Weighted Average
|
|
Weighted Average
|
|
|
|
|
Options
|
|
Exercise Price per
|
|
Remain Contractual
|
|
||
|
|
Outstanding
|
|
Share
|
|
Term (in Years)
|
|
||
Balance at September 30, 2013
|
|
|
630,532
|
|
$
|
3.33
|
|
1.06
|
|
Outstanding and exercisable at September 30, 2013
|
|
|
630,532
|
|
$
|
3.33
|
|
1.06
|
|
Granted
|
|
|
-
|
|
|
-
|
|
|
|
Exercised
|
|
|
-
|
|
|
-
|
|
|
|
Cancelled
|
|
|
-
|
|
|
-
|
|
|
|
Balance at December 31, 2013
|
|
|
630,532
|
|
$
|
3.33
|
|
0.81
|
|
Outstanding and exercisable at December 31, 2013
|
|
|
630,532
|
|
$
|
3.33
|
|
0.81
|
|
11 | ||
|
|
|
|
|
Weighted Average
|
|
Weighted Average
|
|
|
|
|
Options
|
|
Exercise Price per
|
|
Remain Contractual
|
|
||
|
|
Outstanding
|
|
Share
|
|
Term (in Years)
|
|
||
Balance at September 30, 2012
|
|
|
794,483
|
|
$
|
3.34
|
|
1.75
|
|
Outstanding and exercisable at September 30, 2012
|
|
|
794,483
|
|
$
|
3.34
|
|
1.75
|
|
Granted
|
|
|
-
|
|
|
-
|
|
|
|
Exercised
|
|
|
-
|
|
|
-
|
|
|
|
Cancelled
|
|
|
(20,000)
|
|
$
|
4.06
|
|
|
|
Balance at December 31, 2012
|
|
|
774,483
|
|
$
|
3.32
|
|
1.54
|
|
Outstanding and exercisable at December 31, 2012
|
|
|
774,483
|
|
$
|
3.32
|
|
1.54
|
|
Restricted Stock Activity for the Three
|
|
|
|
|
Weighted-Average
|
|
|
Months ended December 31, 2013
|
|
Shares
|
|
Grant-Date Fair Value
|
|
||
Nonvested at September 30, 2013
|
|
|
423,168
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
-
|
|
$
|
-
|
|
Vested
|
|
|
(12,500)
|
|
$
|
1.08
|
|
Cancelled
|
|
|
-
|
|
$
|
-
|
|
Nonvested at December 31, 2013
|
|
|
410,668
|
|
$
|
0.73
|
|
Restricted Stock Activity for the Three
|
|
|
|
|
Weighted-Average
|
|
|
Months ended December 31, 2012
|
|
Shares
|
|
Grant-Date Fair Value
|
|
||
Nonvested at September 30, 2012
|
|
|
127,834
|
|
$
|
1.92
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
4,000
|
|
$
|
1.45
|
|
Vested
|
|
|
(15,000)
|
|
$
|
1.53
|
|
Cancelled
|
|
|
-
|
|
$
|
-
|
|
Nonvested at December 31, 2012
|
|
|
116,834
|
|
$
|
1.95
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
||
Stock Compensation Expense
|
|
December 31, 2013
|
|
December 31, 2012
|
|
||
Stock Grants
|
|
$
|
50,626
|
|
$
|
52,461
|
|
Restricted Stock Grants
|
|
|
68,351
|
|
|
12,618
|
|
Option Grants
|
|
|
-
|
|
|
7,359
|
|
Employee Stock Purchase Plan
|
|
|
669
|
|
|
1,078
|
|
Total
|
|
$
|
119,646
|
|
$
|
73,516
|
|
12 | ||
Results of Operations for the Three Months Ended December 31,
|
|
|||||||||||||||
2013
|
|
|||||||||||||||
|
|
Contract
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Research
|
|
Optics
|
|
Instruments
|
|
Biomedical
|
|
Total
|
|
|||||
Revenue
|
|
$
|
5,840,442
|
|
$
|
4,098,508
|
|
$
|
772,578
|
|
$
|
-
|
|
$
|
10,711,528
|
|
Gross Profit
|
|
|
2,529,539
|
|
|
1,597,259
|
|
|
323,730
|
|
|
-
|
|
|
4,450,528
|
|
Operating Income (Loss)
|
|
|
348,394
|
|
|
398,428
|
|
|
1,041,768
|
|
|
(174,372)
|
|
|
1,614,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
69,547
|
|
|
178,108
|
|
|
2,003
|
|
|
16,667
|
|
|
266,325
|
|
Capital expenditures
|
|
|
-
|
|
|
130,918
|
|
|
-
|
|
|
-
|
|
|
130,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles, Net
|
|
|
324,185
|
|
|
869,974
|
|
|
-
|
|
|
163,333
|
|
|
1,357,492
|
|
Goodwill
|
|
|
4,938,625
|
|
|
1,317,698
|
|
|
-
|
|
|
-
|
|
|
6,256,323
|
|
Total Assets
|
|
$
|
10,359,612
|
|
$
|
12,538,356
|
|
$
|
752,431
|
|
$
|
504,904
|
|
$
|
24,155,303
|
|
Results of Operations for the Three Months Ended December 31,
|
|
|||||||||||||||
2012
|
|
|||||||||||||||
|
|
Contract
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
|
|
Optics
|
|
Instruments
|
|
Biomedical
|
|
Total
|
|
|||||
Revenue
|
|
$
|
4,910,840
|
|
$
|
4,251,940
|
|
$
|
1,284,038
|
|
$
|
106,457
|
|
$
|
10,553,275
|
|
Gross Profit
|
|
|
2,214,053
|
|
|
1,700,555
|
|
|
605,801
|
|
|
106,457
|
|
|
4,626,866
|
|
Operating Income (Loss)
|
|
|
(606)
|
|
|
385,676
|
|
|
(455,694)
|
|
|
(120,663)
|
|
|
(191,287)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
62,782
|
|
|
185,628
|
|
|
163,048
|
|
|
15,000
|
|
|
426,458
|
|
Capital expenditures
|
|
|
186,330
|
|
|
122,146
|
|
|
7,092
|
|
|
-
|
|
|
315,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles, Net
|
|
|
339,886
|
|
|
946,525
|
|
|
5,016,201
|
|
|
224,996
|
|
|
6,527,608
|
|
Goodwill
|
|
|
4,938,625
|
|
|
1,310,802
|
|
|
4,015,072
|
|
|
-
|
|
|
10,264,499
|
|
Total Assets
|
|
$
|
13,290,669
|
|
$
|
10,607,828
|
|
$
|
12,092,507
|
|
$
|
388,671
|
|
$
|
36,379,675
|
|
13 | ||
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
||||||
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
||||||
Geographic Location
|
|
Revenue
|
|
% of Total
|
|
|
Revenue
|
|
% of Total
|
|
||
United States
|
|
$
|
8,907,730
|
|
83
|
%
|
|
$
|
8,494,488
|
|
81
|
%
|
Europe
|
|
|
829,437
|
|
8
|
%
|
|
|
888,341
|
|
8
|
%
|
Other
|
|
|
974,361
|
|
9
|
%
|
|
|
1,170,446
|
|
11
|
%
|
|
|
$
|
10,711,528
|
|
100
|
%
|
|
$
|
10,553,275
|
|
100
|
%
|
14 | ||
15 | ||
16 | ||
Results of Operations for the Three Months Ended December 31,
|
|
|||||||||||||||
2013
|
|
|||||||||||||||
|
|
Contract
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
|
|
Optics
|
|
Instruments
|
|
Biomedical
|
|
Total
|
|
|||||
Revenue
|
|
$
|
5,840,442
|
|
$
|
4,098,508
|
|
$
|
772,578
|
|
$
|
-
|
|
$
|
10,711,528
|
|
Gross Profit
|
|
|
2,529,539
|
|
|
1,597,259
|
|
|
323,730
|
|
|
-
|
|
|
4,450,528
|
|
Operating Income (Loss)
|
|
|
348,394
|
|
|
398,428
|
|
|
1,041,768
|
|
|
(174,372)
|
|
|
1,614,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
69,547
|
|
|
178,108
|
|
|
2,003
|
|
|
16,667
|
|
|
266,325
|
|
Capital expenditures
|
|
|
-
|
|
|
130,918
|
|
|
-
|
|
|
-
|
|
|
130,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles, Net
|
|
|
324,185
|
|
|
869,974
|
|
|
-
|
|
|
163,333
|
|
|
1,357,492
|
|
Goodwill
|
|
|
4,938,625
|
|
|
1,317,698
|
|
|
-
|
|
|
-
|
|
|
6,256,323
|
|
Total Assets
|
|
$
|
10,359,612
|
|
$
|
12,538,356
|
|
$
|
752,431
|
|
$
|
504,904
|
|
$
|
24,155,303
|
|
Results of Operations for the Three Months Ended December 31,
|
|
|||||||||||||||
2012
|
|
|||||||||||||||
|
|
Contract
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
|
|
Optics
|
|
Instruments
|
|
Biomedical
|
|
Total
|
|
|||||
Revenue
|
|
$
|
4,910,840
|
|
$
|
4,251,940
|
|
$
|
1,284,038
|
|
$
|
106,457
|
|
$
|
10,553,275
|
|
Gross Profit
|
|
|
2,214,053
|
|
|
1,700,555
|
|
|
605,801
|
|
|
106,457
|
|
|
4,626,866
|
|
Operating Income (Loss)
|
|
|
(606)
|
|
|
385,676
|
|
|
(455,694)
|
|
|
(120,663)
|
|
|
(191,287)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
62,782
|
|
|
185,628
|
|
|
163,048
|
|
|
15,000
|
|
|
426,458
|
|
Capital expenditures
|
|
|
186,330
|
|
|
122,146
|
|
|
7,092
|
|
|
-
|
|
|
315,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles, Net
|
|
|
339,886
|
|
|
946,525
|
|
|
5,016,201
|
|
|
224,996
|
|
|
6,527,608
|
|
Goodwill
|
|
|
4,938,625
|
|
|
1,310,802
|
|
|
4,015,072
|
|
|
-
|
|
|
10,264,499
|
|
Total Assets
|
|
$
|
13,290,669
|
|
$
|
10,607,828
|
|
$
|
12,092,507
|
|
$
|
388,671
|
|
$
|
36,379,675
|
|
17 | ||
18 | ||
19 | ||
|
·
|
A significant adverse long term outlook for any of our industries;
|
|
·
|
An adverse finding or rejection from a regulatory body involved in new product regulatory approvals;
|
|
·
|
Failure of an anticipated commercialization product line;
|
|
·
|
Unanticipated competition or a disruptive technology introduction;
|
|
·
|
The testing for recoverability under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 of a significant asset group within a reporting unit;
|
|
·
|
A loss of key personnel; and
|
|
·
|
An expectation that a reporting unit carrying goodwill, or a significant portion of a reporting unit, will be sold or otherwise disposed of.
|
20 | ||
21 | ||
22 | ||
23 | ||
BY:
|
/s/ Peter Sulick
|
|
DATED:
|
February 12, 2014
|
|
|
Peter Sulick,
|
|
|
|
|
|
Interim Chief Executive Officer and Interim President
|
|
|
|
|
|
/s/ Thomas C. Leonard
|
|
DATED:
|
February 12, 2014
|
|
|
Thomas C. Leonard,
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
24 | ||