Segment, Customer and Geographical Reporting

3 Months Ended

Dec. 31, 2018

Segment Reporting Disclosure [Text Block]

Note 10 – Segment, Customer and Geographical Reporting

Segment Financial Information

Dynasil reports three reportable segments: innovation and development (“Innovation and Development”), (formerly known as the Contract Research segment), 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 Innovation and Development 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 December 31, 2018 and 2017 is summarized below:

Results of Operations for the Three Months Ended December 31,

2018

	Optics			Innovation and Development*			Biomedical			Total
Revenue	$	5,721,000		$	4,307,000		$	-		$	10,028,000
Gross profit		1,879,000			1,813,000			-			3,692,000
GM %		33	%		42	%		-			37	%
Operating expenses		1,885,000			1,879,000			53,000			3,817,000
Operating income (loss)		(6,000	)		(66,000	)		(53,000	)		(125,000	)

Depreciation and amortization		276,000			59,000			3,000			338,000
Capital expenditures		187,000			17,000			-			204,000

Intangibles, net		363,000			154,000			201,000			718,000
Goodwill		925,000			4,939,000			-			5,864,000
Total assets	$	21,870,000		$	8,109,000		$	205,000		$	30,184,000

Results of Operations for the Three Months Ended December 31,

2017

	Optics			Innovation and Development*			Biomedical			Total
Revenue	$	4,942,000		$	4,247,000		$	-		$	9,189,000
Gross profit		1,724,000			1,851,000			-			3,575,000
GM %		35	%		44	%		-			39	%
Operating expenses		1,576,000			1,723,000			445,000			3,744,000
Operating income (loss)		148,000			128,000			(445,000	)		(169,000	)

Depreciation and amortization		231,000			65,000			3,000			299,000
Capital expenditures		590,000			19,000			16,000			625,000

Intangibles, net		453,000			188,000			337,000			978,000
Goodwill		1,012,000			4,939,000			-			5,951,000
Total assets	$	18,969,000		$	8,114,000		$	614,000		$	27,697,000

*Formerly Contract Research

Customer Financial Information

For the three months ended December 31, 2018 one customer in the Optics segment represented greater than 10% of the total segment revenue. For the three months ended December 31, 2017, no customer in the Optics segment represented more than 10% of the total segment revenue.

For the three months ended December 31, 2018, three customers of the Innovation and Development segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue. For the three months ended December 31, 2017, four customers of the Innovation and Development segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue.

Geographic Financial Information

Revenue by geographic location in total and as a percentage of total revenue, for the three months ended December 31, 2018 and 2017 are as follows:

	Three Months Ended					Three Months Ended
	December 31, 2018					December 31, 2017
Geographic Location	Revenue		% of Total			Revenue		% of Total
United States	$	7,460,000		74	%	$	7,353,000		80	%
Asia		930,000		9	%		522,000		5	%
Europe		1,524,000		16	%		1,268,000		14	%
Other		114,000		1	%		46,000		1	%
	$	10,028,000		100	%	$	9,189,000		100	%