Segment, Customer and Geographical Reporting

9 Months Ended

Jun. 30, 2018

Segment Reporting Disclosure [Text Block]

Note 10 – Segment, Customer and Geographical Reporting

Segment Financial Information

Dynasil reports three reportable segments: contract research (“Contract Research”), optics (“Optics”) and biomedical (“Biomedical”). Within these segments, there is a segregation of operating segments based upon the organizational structure used to evaluate performance and make decisions on resource allocation, as well as availability and materiality of separate financial results consistent with that structure. The Optics segment aggregates four operating segments – Dynasil Fused Silica, Optometrics, Hilger Crystals (“Hilger”), and Evaporated Metal Films – that manufacture commercial products, including optical crystals for sensing in the security and medical imaging markets, as well as optical components, optical coatings and optical materials for scientific instrumentation and other applications. The Contract Research segment is one of the largest small business participants in U.S. government-funded research. The Biomedical segment consists of a single operating segment, Dynasil Biomedical Corporation (“Dynasil Biomedical”), a medical technology incubator which owns rights to certain early stage medical technologies. Dynasil Biomedical holds common and preferred stock in the Xcede joint venture which is developing a tissue sealant technology and currently has no other operations.

The Company’s segment information for the three months ended June 30, 2018 and 2017 is summarized below:

Results of Operations for the Three Months Ended June 30,
2018
	Optics			Contract ‎ Research			Biomedical			Total
Revenue	$	6,159,000		$	4,383,000		$	-		$	10,542,000
Gross profit		2,299,000			1,876,000			-			4,175,000
GM %		37	%		43	%		-			40	%
Operating expenses		1,721,000			1,760,000			84,000			3,565,000
Operating income (loss)		578,000			116,000			(84,000	)		610,000

Depreciation and amortization		261,000			53,000			3,000			317,000
Capital expenditures		707,000			76,000			20,000			803,000

Intangibles, net		408,000			171,000			380,000			959,000
Goodwill		968,000			4,939,000			-			5,907,000
Total assets	$	21,117,000		$	8,018,000		$	507,000		$	29,642,000

Results of Operations for the Three Months Ended June 30,
2017
		Optics			Contract ‎ Research			Biomedical			Total
Revenue	$	4,837,000		$	3,999,000		$	-		$	8,836,000
Gross profit		1,655,000			1,709,000			-			3,364,000
GM %		34	%		43	%		-			38	%
Operating expenses		1,619,000			1,640,000			377,000			3,636,000
Operating income (loss)		36,000			69,000			(377,000	)		(272,000	)

Depreciation and amortization		248,000			52,000			1,000			301,000
Capital expenditures		179,000			54,000			26,000			259,000

Intangibles, net		468,000			205,000			394,000			1,067,000
Goodwill		955,000			4,939,000			-			5,894,000
Total assets	$	19,488,000		$	8,004,000		$	690,000		$	28,182,000

The Company’s segment information for the nine months ended June 30, 2018 and 2017 is summarized below:

Results of Operations for the Nine Months Ended June 30,
2018
	Optics			Contract ‎ Research			Biomedical			Total
Revenue	$	17,011,000		$	12,974,000		$	-		$	29,985,000
Gross profit		6,038,000			5,621,000			-			11,659,000
GM %		35	%		43	%		-			39	%
Operating expenses		5,154,000			5,297,000			724,000			11,175,000
Operating income (loss)		884,000			324,000			(724,000	)		484,000

Depreciation and amortization		738,000			179,000			10,000			927,000
Capital expenditures		1,635,000			153,000			65,000			1,853,000

Intangibles, net		408,000			171,000			380,000			959,000
Goodwill		968,000			4,939,000			-			5,907,000
Total assets	$	21,117,000		$	8,018,000		$	507,000		$	29,642,000

Results of Operations for the Nine Months Ended June 30,
2017
		Optics			Contract ‎ Research			Biomedical			Total
Revenue	$	14,524,000		$	13,541,000		$	-		$	28,065,000
Gross profit		5,144,000			5,535,000			-			10,679,000
GM %		35	%		41	%		-			38	%
Operating expenses		4,544,000			5,182,000			1,150,000			10,876,000
Operating income (loss)		600,000			353,000			(1,150,000	)		(197,000	)

Depreciation and amortization		719,000			200,000			7,000			926,000
Capital expenditures		373,000			88,000			72,000			533,000

Intangibles, net		468,000			205,000			394,000			1,067,000
Goodwill		955,000			4,939,000			-			5,894,000
Total assets	$	19,488,000		$	8,004,000		$	690,000		$	28,182,000

Customer Financial Information

For both the three and nine months ended June 30, 2018 and 2017, no customer in the Optics segment represented more than 10% of the total segment revenue.

For the three months ended June 30, 2018, four customers of the Contract Research segment, three various agencies of the U.S. Government and one commercial customer, each represented more than 10% of the total segment revenue. For the nine months ended June 30, 2018, three customers of the Contract Research segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue. For the three and nine months ended June 30, 2017, three customers of the Contract Research segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue. For the three months ended June 30, 2018 and 2017, these customers made up 72% and 52%, respectively, of Contract Research revenue. For the nine months ended June 30, 2018 and 2017, these customers made up 59% and 58%, respectively, of Contract Research revenue.

Geographic Financial Information

Revenue by geographic location in total and as a percentage of total revenue, for the three months ended June 30, 2018 and 2017 are as follows:

	Three Months Ended					Three Months Ended
	June 30, 2018					June 30, 2017
Geographic Location	Revenue		% of Total			Revenue		% of Total
United States	$	7,512,000		71	%	$	6,928,000		78	%
Europe		2,029,000		19	%		962,000		11	%
Other		1,001,000		10	%		946,000		11	%
	$	10,542,000		100	%	$	8,836,000		100	%

Revenue by geographic location in total and as a percentage of total revenue, for the nine months ended June 30, 2018 and 2017 are as follows:

	Nine Months Ended					Nine Months Ended
	June 30, 2018					June 30, 2017
Geographic Location	Revenue		% of Total			Revenue		% of Total
United States	$	22,993,000		77	%	$	22,051,000		78	%
Europe		4,662,000		15	%		3,262,000		12	%
Other		2,330,000		8	%		2,752,000		10	%
	$	29,985,000		100	%	$	28,065,000		100	%