In June, I wrote about Derycz Scientific (OTCBB:DYSC) with a headline reading that DYSC is the "B2B information aggregator nobody knows, but its customers love". Last month, a report released on the topic validated my headline.
In a recent survey, which debuted last month, 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. A free complete copy of the report can be viewed online at:
Here are a few excerpts from what Outsell had to say as well as the results:
"Reprints Desk scored the best in all three attributes, continuing its standout performance from 2008"….
Survey Question 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"
Overall Satisfaction Rating #1 4.4
"Reprints Desk has the most loyal following"
Loyalty Ratings #1 4.6
DYSC Gaining Market Share
Also highlighted in the report is that the top player in the space is the 100+ year old "non-for-profit" British Library, which generated sales of $221 million in 2010. While the British Library competes for business in this space, DYCS's only true "for-profit" competition is from Infotrieve, which ironically was founded by Peter Derycz in 1989 (he sold it in 2003). And, DYSC is the only public company in the space. DYSC's Reprint Desk handily beat Infotrieve in all the vendor customer satisfaction survey categories. And it looks like DYSC may be about to overtake them in sales also. In 2010, Outsell reported Infotrieve at $43.4 mm in sales and Reprints at $22.3. According to recent DYSC's earnings calls, they is expect to generate sales in mid- $40 million range in fiscal 2013, which could place them in the top spot by revenues (for all for-profit companies).
Room for Growth
According to DYSC, "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 that they do not subscribe to. Outsell considers document delivery vendors as a sub-segment of the $63.4 billion information industry's Search, Aggregation & Syndication (SAS) segment". In fact, according to Outsell, this subsegment is $4.2 billion. This has DYSC at 1/10 of 1% of market share, giving them ample enough room for growth.
DYSC currently has approximately 18 million shares outstanding and its common stock trades on the OTCBB at $.89 cents, giving the Company a valuation of $16 million USD. I had predicted in June that by now, we would see a significant turn around in its financial results. The last two quarters, while not a robust as I would have liked, have in fact shown a steady turn from 6 quarters of cash flow losses to two straight quarters of positive cash flow. They have paid down almost all their debt from their free cash flow and should be in a strong position going into 2013, with new high margin tools and products.
Disclaimer: I am Long Derycz Scientific, Inc (DYSC). I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. 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 these of any securities.
Disclosure: I am long DYSC.