DSS - Earnings call transcript Q3 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Document Security Systems' Third Quarter 2017 Earnings Call. Currently, offline lines are in a listen-only mode. Later there will be an opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please be advised today's program may be recorded. It is now my pleasure to turn the program over to Mr. Janson. Jody

sir. begin, may You

Jody Janson

Janson, you. of from Good for Systems' to everyone CFO, and me am would quarter Security Jones; at Systems. Phil And Board, are afternoon. us today CEO, Robert I joining Fagenson. Jody I joining call. Security today's earnings like Relations for Director XXXX Document the call thank on conference Thank Chairman Investor DSS the third Ronaldi; the Document Jeff

the call announcing Following questions. remarks, XXXX our will open issued release prepared Document afternoon press financial Systems its for Security we This quarter results. a third

Before Safe Harbor we statement. the begin, I'll review Company's

could Forward-looking statements made Act the expects, anticipates, Litigation and Safe These statements expectations, limitations, as are and objectives, subject potential and relating on differ results plans, projected. value, intends, that the actual such contains Harbor intentions provisions pursuant risks to to of phrases. adequacy Reform without Private similar words are statements materially the from and forward-looking Securities cause Company's resources believes, strategies, call, to the this results to plans, words the and including of uncertainties

XX, Form in are for risks in in In other Commission. differences factors, statements, specifically filed XX-K year could Factors section the and XXXX, Risk December those the with Annual not but result on addition the uncertainties Company's noted the included, limited Report important to, that Securities disclosed to and factors this forward-looking those ended the Exchange of fiscal

obligation the statements the actual those made as the differ assumes being results XXXX, projected update the made of update reasons statements. as today, call forward-looking no XX, statements could part and are to forward-looking why from Forward-looking November Company in or this of to

reconciliations afternoon, call turn will During Board, and Document discuss In over this non-GAAP net Security Company's Systems EBITDA. I like today, additional Fagenson. the management the to loss the Chairman press now will would Robert? financial adjusted find disclosures release measure this of of to issued adjusted you regarding the call EBITDA. to Robert

Robert Fagenson

and for shareholders wasn't we differences thank do us Board. is Company and and our that conference hoped many our What progress discuss areas who in Jody, quarter remaining calls. with for, Jeff quarter being that had are you very while today, positive and will and you, made Phil another will remaining you EBITDA, volume the Thank I of often is in showed the what reconstituted business returns seasonal all in has one affect business as participants hope in lost next. The our and we see

very some We Board experienced have new high quality, members. very

will and certainly We the Company going have most reconstituted helpful forward, forward. that and all our our Board to management Board be think committees moving I engaged

Financial Phil? So, with that, the I'll to our call Phil Jones, over Officer. Chief turn

Philip Jones

are our announced close we which market results Today details Robert. quarter you, in Thank XXXX and XX-Q today Form the we today SEC. third with summarized press filed release the the financial after published in

as of in revenues the the the quarter compared quarter during third to Company's highlighted As XXXX. dipped the PR,

several were hoping to numbers, to better While we there that that sales factors decline. we are see contributed recognized the

up largest the generally vacations first been for as Group typically very September dampened Printing season. Company's big August are then for two holiday begin has quarter Packaging customers month of to and months the First, strong typically the slower months summer the as July work our and a stock

our a This Group market Group strong remains third this customer offset with the positions from unfortunately long-term fourth was slipping quarter timing of A excellent season be with the decline in our XXXX. the Printed behind and XX% This in relationships. many we revenue believe will healthy quarter. of Products early order recording October. year September in decline contributed to orders this into However, schedule

XX% of sales the compared technology our to sales as decline in third reported Secondly, group of also XXXX. quarter a

figure XXXX the which that in occur amount, replicated IP technology quarter was they company this in received in from the our great, by not a the of do management was third Absent do fee one-time time-to-time However, that have settlements XX% license create one-time this $XXX,XXX impacted quarter. this quarter. variability results. are business, revenue sales approximately but increased in our These for would

So, to relationship, last derived large landed the from the continues at the this Group end year. revenues benefit it customer of from SunGard

first XXXX far, are up Products X% thus revenues while Printed down technology decrease year-to-date. nine year reflect the X% the of slight now a For in sales months

same in approximately Our the XX.X% as goods sold to also quarter This dip. were of gross despite decrease percentage we costs the were down during the of consistent is able sales sign the with maintain sales. direct decreasing cost margin as a XX%, the good

In saw to decreases costs primarily increases other our in fees, based fees. and in professional SunGard and addition, we offsets sales with of and product offerings. in compensation Those support marketing technology

future sacrificing drive So, will in costs to resources the we've that commitment been the to without able certain growth. areas reduce

quarter, loss profit the For of EBITDA but earned adjusted had an Company net $XXX,XXX, the a $XXX,XXX.

which not impacted again settlement. strong While into one-time of about once quarter $XXX,XXX third license was a XXXX, favorably

We lines. in our are that to sixth support point absorb of impact core EBITDA especially newest while This our pleased the in the for that of sales can positive results. product businesses investments variability our consecutive we quarter strength generated at continuing

we profit, have year-to-date, EBITDA XX% adjusted and lower to doubled $XXX% more the the up our than net months For nine first by XXXX. of $XXX,XXX loss is for

by have orders million timing in balance the September XX, especially sheet, Group. reflecting of and our totaling XXXX, described the with issue receivable account at Packaging and Printing $X.X inventory as unrestricted sales inventory, $X.X to cash million the I we the of impacted Moving high

company improved One Company EBITDA decreased impact when to in $X.X debt. of payable current of at account a due the adjusted underline million. by at debt, limited able the in current note accrued liability XXXX to transfer has quarter that patterns recourse been debt February Our settled its listed important use is of this our these during that with account that's is to to revolves continues approximately results debt It reduce the expenses that short-term is liabilities accounts.

Absent of short-term September $X.X liabilities our $X.X of which the settled cash. decreased have from For beginning total capital since the million. approximately $XX.X December XXXX the this XX, of amount, debt improvement approximately this can as Furthermore, year. is is million million an to be use debt without XX, networking

to summary, We is subject Products strengthen variability continue to coming In to Printed our continue business, to going we the our sales sheet expect to balance Group as be results quarters. positive especially in occasional EBITDA our quarter-to-quarter. from produce

our low by results. its in cost margins, of adjusted Furthermore, positive our gross and sixth However, third as consistent our consecutive us core periods strengthening products opportunities further to build sales the with are EBITDA, we Company. seeing generation the and improvement direct we proven quarter can for of balance financial develop to sheet that allows maintain maintain and as one ability position, profitability, on match quarter market upon next we of even continue consistent the of the to

for call I you to turn time. questions performance thank detailed will quarter be CEO, will more regarding With financial this the Jeff? third your the answer now available Jeffrey to Ronaldi. and call. our that, our I end at So, of position

Jeffrey Ronaldi

revenue joining us our Thank there many like expectations, I during topline didn't are the again on the meet everyone would Phil. today, positive call our thank you, for to while quarter.

going in quarter by impacted. Group full-year that fourth heard the sales As expect be don't slip Phil that Printed will our quarter. slipped at that to Products some results our they're the describe, was in third I the quarter

has been Our its customer from Printed typically relationships. Products this this Furthermore, position long-term Group fourth market in Group which a repeat weighted, its strong had should and benefits year. quarter

read their we and we customer that this field formed weren't headed. packages, of and impact but development look present the exciting to system. customer and resources of marks AuthentiGuard. their AuthentiGuard forward These end, Our of we throughout which implementation. are project has is our by to smartphone been marks our AuthentiGuard as have to with app sales, customer seen our millions by technology U.S. our is of revenue our at To anti-counterfeiting that's first supply large exciting see and personnel bags, chain. supply chain, discussed, product project Phil their expand global collection an counterfeits expanding to This This continued throughout where dedicated marketing major this plans implementing on labels are discovery

major AuthentiGuard. To and for Chan see during Asia, meet of we one members helping from at aggressively for begun contractors Asia up addition, to capabilities quarter, the opportunity International. us the in and largest is benefited Mr. the We're this resources division, DSS their opportunities brand build our [indiscernible] now issues Fai owners. end, the have have first build into plenty working where source push we we new currently our our our In this immense shareholder think further of Board an and of and guidance specifically Hong presence with staffing our ramp to counterfeiting We Kong. there

you am unique the your CEO, again, of all other any I would continued As like if I in committed confidence. creating have through you appreciate for our Robert support comments. Once of for above interest With turn thank your greatly over initiatives described your continued and Fagenson, the DSS. stockholders that, to value call to and proposition back

Robert Fagenson

to year. positive Phil happened to the as grow Jeff. the has believe ample that have as because than debt flow sheet by balance The resetting what the topline is and sheet we Company the patents it that's remains the company. cash not while cash relinquishment certain price to be certainly in reflected rather and be able they'll Well in showing to company continue our this yet hand have settled to before, alluded cash in in progress things Thanks, last not heard, share you've at have the continues and of balance around strong, Company we we the positive

quarter are company month cash that eating every every and itself We flow. negative with is a longer no

fall. for will thank on management are awards thank So, for us. as to for them our call hard to will that, ours that Operator? and had. they we newly And engaged again up finally will be had open you, want and the we in we future. and that the to the am our the waited I diligently of I I future for and stability we shareholders is to soon so with going all once want questions. hoping we And long sticking with being as in know team Board working growth count here, expanded helping believe the

Operator

Thank you. first And our Ladenburg with [Operator question we take Wyman from Instructions] Sandy Thalmann. can

now is line Your open.

Sandy Wyman

update my to you an for taking years I call. been something Can in reported congratulations on customers? us any kind for wind few give be Yes. you the last of on fulfilling. additional and the major Thank there's know

else the do in one, have The pipeline? first we anything Thanks.

Jeffrey Ronaldi

not until the have interest for Thanks, have the to require We with. exactly and who us to customer and and support for that them we full are for of Company. work Sandy every have in do based lots as that, and at pipeline help again chain. them to almost specific your supply art us thanks pipeline do authentic opportunities promising we secure consumer disclose with we with offering continue product the our working we're Having their said very in

Sandy Wyman

Okay. revenues? us the think kind Thanks. a And on you can to progress, we might you when any give some China timeframe start then of see

Jeffrey Ronaldi

Yes.

in them need train lead first We've this up industry. unfortunately there with to them The within six is early probably be to longer. sell the to specific based be and We a anti-counterfeiting sales effectively. months and get agency three able very this going us are It We Kong Hong industry is to worked in out track we out the before identified record has get to time of speed. process. product the can to

six not for So, revenue we're or achieve months to more. going

with So, we are about going we're it. excited where

Sandy Wyman

a Thanks right. All lot.

Jeffrey Ronaldi

you. Thank

Operator

time, At there this are additional Instructions] [Operator no questions.

Jeffrey Ronaldi

virtue, you right, I then with I'd us. up. the about they necessity is things corner, this that When they thank Once that of on bringing closer to reality that always and that with are to but every all patience to team again, financial many only you Board wrap working not been a to pipeline, management in around hear go month we know for Company. we'll is are never are away. that sticking All a not to like great closer well stability are The positive our has many, with the us over for money. and the have is working far the

as waste picking our start not carefully, I think be the not ability show our the XXXX able opportunities to more and results time, to shoes have waste choose our unfolds. resources, will to We

that had and with you unless something So, add, like to member anything management gentlemen, team further?

Philip Jones

Jeff. Nothing,

Jeffrey Ronaldi

night better you, will quarter and We say see hope you good to next news. all. Thank with

Operator

conclude does today's your This Thank program. participation. you for

You at may time. any disconnect

DSS (DSS) 14 Nov 172017 Q3 Earnings call transcript