DSS (DSS) 15 May 182018 Q1 Earnings call transcript

Good day everyone and welcome to Document Security Systems' Incorporated First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. Please note that the call may be recorded. [Operator Instructions] It is now my pleasure to turn today’s conference over to Investor Relations Director, Jody Janson. ahead. go please Sir,

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

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

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

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

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

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

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

for hopefully, and am is thank us will will and I’ll unreliable, Phil the Jeff for forward Company I on the satellite Jody, have saying you I every so and will with the last be with being to solid link, you give will today. progress confidence have continues be be to towards if bring good interesting. you, Q&A. and just and you a afternoon, questions, and goals Thank doing good make basically all I and the you up productive the try which is I moving our able you somewhat answers Company that Management quarter you on you job a will that find todate agree.

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financial press quarter our filed with are the in filed Today XXXX results, detailed summarized the you, today first we release Thank announced the and today SEC. XX-Q also Robert. which in

group decreased decrease press As in revenues, described by XXXX. a million. products which in decrease was the quarter first the XX% the driven of revenue aggregated quarter revenues $X.X as the X% compared for The printed had of Company's to release,

completely XXXX of While had of ever group approximately the million. unexpected disappointing, it not in fourth sales was biggest since in quarter its $X.X quarter that

services, quarterly March sales businesses. from strong its quarter variable printed first continues of from of benefit group period sales provided on of at timing, other in six which products the first in Technology while and quarter, to ending fluctuation expected of hand the continue AuthentiGuard XXXX. XXXX, the are it’s the revenues which some provide were stable quarter from can company very the months, six-month sales $XXX,XXX were products past up XX% with XX, two posting the for includes XXX% the were build which based large comparable This group the particular based have and XXXX. So during was when to upon, looking a X.X% customers, digital the relationship on down to authentication technology

to legal increase of marketing in with sales and quarter progress. are an cost. we in fees activity X% cases, Kong. and impacted consulting the in litigation expense, professional decreased costs stock in the pleased and new Total which increase R&D of opening in which increases cost costs decrease reflects very with XXXX, reflected presence certain the Hong Asia, during committed our of based XX% by expenses offset of this So and a The building in an compensation primarily our location first increase fee professional our

the In Company the with The adaptation of initiation assisting which the to excited Supply in investment remainder for and increase Centre XXXX product opportunities project market target of Asia with an blockchain Kong a technology Chain research in to an into for we Hong research are the for authentication. entrance of saw Management Hong addition, beyond. is is and the costs R&D about us Logistics Kong due Pacific

reflected costs. Printed For $XXX,XXX, correlating the net and loss the Products the which Company a softness the of impacted decrease gross which in in further this quarter produced had sales impact by our the was which of profit the R&D the group, at our but of we're positive than is quarter by adjusted consecutive results. professional also quarter eighth in more increase XXXX were first fees EBITDA adjusted Further lower results of profitable, still and EBITDA

XXXX, Moving assets $X.X current position unrestricted million March balance our XX, and as of was to net cash $X.X at million. were the our sheet,

nonpayment is the the X-K call quarter. the the this debt whereupon that this our discussed Despite call on of X-K, $X.X obligation approximately approximately currently at recorded debt the payment net occurred. under company of filed March on means the of of to a call The of of amount gain underlying full February to since the will as Furthermore, default the owed value the underlying triggered remedy result quarter XX are the year to for This XXXX. on transfer prior in of debt February carrying the pay fact notes of this date, liability of did the of amounts the that not we and million. the As will debt agreement XX, and the amount patents expected the the result Company the the XXXX. in patents a in related aggregate company’s a essentially the short-term of resolution the was amounts funder. extinguishment and sole maturity books satisfaction disclosed their net satisfied that owned In as term, for settled fourth certain to at for remedy in a funder funder basis. funder the certain non-cash our by due agreement earnings XX, under default matured we $XXX,XXX for is This million current full approximately agreement of to $X.X the end the company a be related amount on contractual the

We with this are as associated on as finalizing working issue the agreement possible. soon

Jeff? we the our if please impact will working you capital on can statements have questions significantly to which during turn Q&A Ronaldi, the let that, call Jeff recognize So our position. over call. me but improve the I'll CEO, know financial of that the With any portion our net

us to thank today. would Thank call you, the joining everyone I for Phil. like on

expansion and they counterfeiting quarter to strength stories As in Asia-Pacific customers and chains the the by as regards throughout retain the a resources were Asia-Pacific of of and the of product customers build our market. phase opening region. an office presence Phil of center region we and Hong develop the worldwide AuthentiGuard for attract Kong, And many of usage noted, directly initial in into expand supply that global the our in two products intend to sales their big of is The epidemic. their

Malaysia, the in begun and Philippines, had to we have have marketing developed quarter, During our Kong, and sales Hong India and Australia. implement calls first have sales and programs China,

AuthentiGuard traditional opportunities. both printing security and targeting are We and opportunities licensing

We are responses U.S. public receiving are established especially very trusted company. since safety and well we positive

to current implementation have but phase posed array the meet of Asian of used that Hong been serve on efforts challenges AuthentiGuard especially the markets. in as a to are with as addition that prospective customers AuthentiGuard the we expand improvement next not app, our to five Kong, developers customer have by available working diverse the the us wide continual only In well. smartphones of of in These they we

us have industry us management, who addition, during we the based the In provides them. project We supply R&D next unique center, initiated into to quarter supply AuthentiGuard inroads platform. that integrate with generation customers research blockchain and chain design integrate and believe made of current access a Kong prospective academic chain we provided tools product has to a helping us into have as our for that existing logistics we to opportunity their the experts minimal and are Hong blocking our with capabilities proven with announced disruption which ability and our and provide range our and a

Our this is issues our ability customers generation to enhance goal utilizing for next counterfeit our prevent to technology.

the results have excited discussed in AuthentiGuard various our quality working their requirements maintain includes large to and In are regards our have We their capability look implementation the with as this of to of achieve global on a forward to we print AuthentiGuard, This the and we product. past, with suppliers program. project. to customer with of first partnership been the the working certify

experiences which these business source not evolving print will the its we opportunities. are effort of to problems. world the suppliers supply our our our way feel core, to expansion dedicated to and has infield this other continues This for At chain. this customers these Furthermore, team significant from anti-counterfeit use also and the with guide development development but customer suppliers research suppliers, Our global of pave of counterfeit with and only and ever with efforts. a our implementation deepened we customer's for which will our relationship of on related opportunities be still project our their team been to solutions the throughout AuthentiGuard throughout implementation learn and working future research has AuthentiGuard

can growth use pleased line, XXX% our environment (X:XX:XX) you Phil period. provides importantly and mentioned on which desperately course, may AuthentiGuard. it of living the look have. need. showed expands see as prospects from customers in customer [indiscernible] this you We're which also But experience for which questions revenue Operator, your Of more question-and-answer that, to impact the a With increase the as our the forward quarter. start answering please to the our to of further us the I understanding

Instructions] [Operator

It questions no time. we at have appears this

be you. opportunities all this we forward, patience we’ll thank as doing they investors company Jeff, thank move our understanding can operator, to bring you. management and Okay, the everything your All Phil, would to appreciate move diligently confident is gentlemen? your customers patience large I as themselves with operation rewarded. the opportunity shareholder, further, to present as as Anything remain continue well and fruition, ultimately to a and inquiries forward our

Thanks. No.

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