In June, I wrote an article about a relatively unknown B2B information aggregation company called Derycz Scientific (DYSC). The premise of my story was in its headline, which read, DYSC is a "B2B information aggregator nobody knows, but its customers love".
The latter part of my headline was proven true last month, when a report released by Outsell, a media, information and technology analyst and research advisory firm, reported that DYSC's main operating arm, Reprintsdesk.com, placed #1 in its vendor satisfaction survey.
Here are a few quotes from the report as well as the results:
"Reprints Desk scored the best in all three attributes, continuing its standout performance from 2008"…. page 24
Category Rank Score
Depth & Breath of Coverage #1 4.5 out of 5.0
Fair Pricing #1 4.2
Ease of doing business #1 4.4
"Reprints Desk took first place at more than a half point above the
average"... page 25
Overall Satisfaction Rating #1 4.4
"Reprints Desk has the most loyal following" … page 2
Loyalty Ratings #1 4.6
DYSC Gaining Market Share
In the Outsell report, two distinct groups were combined: the non-for-profit agencies, such as the 100 year old British Library and, the for-profit companies such as DYSC. In the non-for-profit group, the leader by far was the British Library, which generated sales of $221 million in 2010. In the for-profit group, the leader was Infotrieve (which ironically was founded by Peter Derycz in 1989. He later sold it to a private equity group in 2003). Outsell reported that Infotrieve generated $43.4 mm in sales with Reprints in second place at $22.3 million. However, that was in 2010 and DYSC has grown significantly since then. In fact, DYSC reported in its most recent earnings release that it is on track to generate in excess of $40 million in sales in 2013. If they continue on this pace, they could move into the top spot over rival Infotrieve by next year. This would be a stunning achievement for newcomer DYSC, as they already handily beat Infotrieve in all the vendor customer satisfaction survey categories.
$4.2 Billion Document Delivery Market
According to DYSC, "instead of buying costly subscriptions, document delivery services are commonly used by corporations, academic institutions, and government organizations as a legal method for retrieving single copies of full-text papers from scholarly peer-reviewed journals. Outsell considers document delivery vendors as a $4.2 billion sub-segment of the $63.4 billion information industry's Search, Aggregation & Syndication (SAS) segment". With a run rate of $40 million in sales, DYSC has less than 1% of the overall document delivery market share. However, with a growing reputation for excellent customer service and loyalty, expect DYSC's market share to increase significantly in the near future.
DYSC currently has approximately 18 million shares outstanding and its common stock trades at $.89 cents, giving the Company a valuation of $16 million. I had predicted in June, we would start seeing a significant turn around in its financial results by now. The last two quarters have shown a steady increase in positive cash flow, it has paid down most of their debt and appear to be in a strong position heading into 2013.
Disclaimer: All financial analysis is not to be construed as a recommendation by me to buy or sell DYSC. I do not make any representations or warranties as to the accuracy of this information. Readers are cautioned to complete their own due diligence before making any decision to buy or sell of any securities.
Disclosure: I am long DYSC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.