Document Security Systems, Inc. Announces 2016 First Quarter Financial Results

ROCHESTER, N.Y., May 17, 2016 /PRNewswire/ -- Document Security Systems, Inc. (NYSE MKT: DSS), (DSS), a leader in anti-counterfeiting and authentication solutions, reported results for the first quarter of 2016.

"During the first quarter of 2016, the Company took advantage of an increase in orders from several of our largest packaging group customers resulting in strong revenue and operating results.  We continue to see growth from our best customers, and highest margin product and service offerings. This is starting to translate into revenue strength even while reducing our cost base.  The momentum with which we ended 2015 has continued during the quarter," said Jeff Ronaldi, CEO of Document Security Systems. Mr. Ronaldi continued: "As 2016 progresses, we expect successes from new product initiatives will add to the strength of our business in the anti-counterfeiting and authentication marketplace.   As companies continue to fight the ever-increasing problem of counterfeiting, DSS' wide array of product offerings is well positioned to continue to widen our share of this expanding market opportunity."     

Q1 2016 Financial Highlights
Revenue for the first quarter of 2016 increased 27% to $4.3 million from $3.4 million in the same year-ago quarter.  During the quarter, the Company had strong performance from its printed products groups, whose revenues which increased 32%, which was partially offset by a decline in technology sales, services and licensing revenue of 11%. 

Costs and expenses totaled $4.9 million, a decrease of 2% from $5.0 million in the same year-ago period. During the quarter, direct costs of goods sold increased in correlation with the increase in revenue.  Otherwise, nearly all other expense categories decreased as compared to the first quarter of 2015. 

Net loss during the quarter was approximately $624,000 ($0.01 per share), which was a 62% decrease in net loss of $1.6 million ($0.04 per share) in the first quarter of 2016. The significant decrease in net loss was the combined result of the Company's ability to increase revenues while decreasing non-direct costs during the quarter. 

Adjusted EBITDA loss, a non-GAAP metric defined as earnings before interest, taxes, depreciation, amortization, and stock-based compensation, and asset impairments as well as other non-recurring items, was approximately $107,000 during the  quarter compared to an adjusted EBITDA loss of $869,000 in the first quarter of 2015 (see further discussion about the use of adjusted EBITDA, below). Once again, the significant improvement reflected both the increase in revenues and the decrease in costs in nearly every expense category. 

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 ensure 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.

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 here.

For More Information
Investor Relations
Document Security Systems
(585) 325-3610
Email: [email protected]

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 and contain words such as "believes," "anticipates," "expects," "plans," "intends" and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those disclosed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on March 30, 2016.  Forward-looking statements that may be contained in this press release are being made as of the date of its release, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements.

About the Presentation of Adjusted EBITDA
The Company uses Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by the Company by adding back to net income (loss) interest, income taxes, depreciation and amortization expense, as further adjusted to add back stock-based compensation expense and non-recurring items, and impairments of investments and intangible assets. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing its financial results with other companies in the industry, many of which also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as amortization, depreciation, stock-based compensation and impairment charges, as well as non-operating charges for interest and income taxes, investors can evaluate the Company's operations and its ability to generate cash flows from operations and can compare its results on a more consistent basis to the results of other companies in the industry. Management also uses Adjusted EBITDA to evaluate potential acquisitions, establish internal budgets and goals, and evaluate performance of its business units and management. The Company considers Adjusted EBITDA to be an important indicator of the Company's operational strength and performance of its business and a useful measure of the Company's historical and prospective operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes interest income and expense and income taxes and non-recurring items, all of which impact the Company's profitability and operating cash flows, as well as depreciation, amortization, impairment charges and stock-based compensation. The Company believes that these limitations are compensated by clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net income and loss presented in accordance with GAAP. Adjusted EBITDA as defined by the Company may not be comparable with similarly named measures provided by other entities. The following is a reconciliation of net loss to Adjusted EBITDA loss:

SOURCE Document Security Systems, Inc.

Related Links

http://www.documentsecurity.com