Derycz Scientific Investor Presentation

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Safe Harbor Statement: In conjunction with the provisions of the safe harbor section of the private securities litigation reform act of 1995, this document contains certain forward-looking statements pertaining to future anticipated projected plans, performance and developments, as well as other statements relating to future operations and results.

Any statements in this document that are not statements of historical fact may be considered to be forward-looking statements. Written words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “intends,” “goal,” objective,” “seek,” ”attempt” or variations of these or similar words, identify forward-looking statements.

These statements by their nature are estimates of future results only and involve substantial risks and uncertainties. There can be no assurance that actual results will not differ materially from expectations.

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Derycz Scientific Investor Presentation

  1. 1. 1PAGE  DERYCZ SCIENTIFIC CONFIDENTIALROTH OC GROWTH STOCK CONFERENCE  DERYCZMARCH 2011 SCIENTIFIC TICKER: DYSC
  2. 2. 2PAGE  DERYCZ SCIENTIFIC SAFE HARBOR STATEMENT In conjunction with the provisions of the safe harbor section of the private securities litigation reform act of 1995, this document contains certain forward‐looking statements pertaining to future anticipated projected plans, performance and developments, as well as other statements relating to future operations and results. Any statements in this document that are not statements of historical fact may be considered to be forward‐looking statements. Written words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “intends,” “goal,” objective,” “seek,” ”attempt” or variations of these or similar words, identify forward‐looking statements. These statements by their nature are estimates of future results only and involve substantial risks and uncertainties. There can be no assurance that actual results will not differ materially from expectations.
  3. 3. 3PAGE  DERYCZ SCIENTIFIC INVESTMENT HIGHLIGHTS • Unique content marketplace sitting at the crossroads of the $285 billion Information Services sub‐segment of the $1 trillion Periodicals industry • Industry leading services recognized as a pioneering in a unique market niche • Desirable, proprietary and hard to replicate assets • Experienced management team with a history of creating shareholder value • Technology driven service model with significant operating leverage • Solving time, quality and cost problem for content distribution in transitioning marketplace • Proven track record of dynamic revenue growth and financial performance
  4. 4. 4PAGE  DERYCZ SCIENTIFIC CONFIDENTIALCOMPANY OVERVIEW DERYCZ SCIENTIFIC TICKER: DYSC
  5. 5. 5PAGE  DERYCZ SCIENTIFIC SITTING AT THE CENTER OF  THE INFORMATION SERVICES VALUE CHAIN Clients rely on DYSC to deliver timely access to mission critical content used to make strategic decisions on a daily basis PUBLISHERS CUSTOMERS
  6. 6. 6PAGE  DERYCZ SCIENTIFIC Changing an Industry via the Internet Industry Status Quo Internet Revolutionary New Paradigm Travel agencies dominated, Buy tickets, rent cars, book hotel rooms online, power disintermediation rules shifts to consumer Big box stores, malls, retail outlets One click to purchase, buy online via credit cards File sharing shakes up industry, model is evolving to Record stores selling entire CDs buying songs for $0.99 Newspapers, classifieds, flea The most successful online business has become the markets, auctions largest online marketplace Paper resumes & experience search Electronic resumes, employer & employee screening firms tools Costly, inefficient, inaccurate High quality, cost effective data collection
  7. 7. 7 PAGE  DERYCZ SCIENTIFIC DYSC TIMELINE Pools Press is  Reprints Desk  Reprints Desk  Derycz Scientific  TDI Library  Acquired by  Ranked First in  Launches   Reports 121%  Services   Derycz  Outsells  Premier Product:  Revenue Increase  transitions   Scientific Document  Mighty Linkout  for Second Fiscal  customer  Delivery Study Machine  Quarter 2010 base to   Reprints  Desk11/2006 2/2007 3/2008 4/2008 2/2009 6/2009 12/2009 2/2010 11/2010 12/2010 2/2011 Peter Derycz DYSC  Reprints Desk  Derycz Scientific  EContent  Derycz Scientific  founds DYSC Becomes a  Named to  Delivers Five‐ Magazine Names  reports record  Public  "KMWorld  Millionth Article  Derycz Scientific  revenues for  Company 100  of 2009 Subsidiary One of  2011 fiscal  Companies  100 Companies  second quarter that Matter in  That Matter Most  Knowledge  in the Digital  Announces    Management"  Content Industry potential  List acquisition of  European  logistics services  provider 
  8. 8. 8PAGE  DERYCZ SCIENTIFIC THE DYSC PLATFORM DYSC provides a  DERYCZ controlled marketplace  that brings together  SCIENTIFIC premium publishers of  specialized journals and  periodicals with  Corporate Consumers   relying on such content  and data for strategic  decision making. • Recently ranked #1 by industry analyst  • Print‐on‐Demand Services for  Outsell  Copyright and Regulatory sensitive  printing  • Provides reprints, ePrints and single  copies of articles to its customers  • Acquired majority stake in Feb 2007  and launched new services and  • Copyright Management & Enforcement  branding in 2008  services for publishers  • Logistics management for corporate  • Specialized and proprietary approaches  communications  to content workflow management • Integrated services are currently  under development
  9. 9. 9PAGE  DERYCZ SCIENTIFIC DYSC PRODUCT PORTFOLIO DYSC offers its  PRODUCT DESCRIPTION clients a  Mighty Linkout Machine is an article retrieval solution that increases end comprehensive  MIGHTY LINKOUT MACHINE user satisfaction and significantly reduces document delivery costs – with platform to address  no maintenance costs and no IT involvement. their content  Single article administration and same‐day delivery with most articles management needs delivered within a few minutes to a few hours, original and clean color STM DOCUMENT DELIVERY articles by default, PDFs without plug‐ins, and flexible ordering options. Optional Rightsphere rights management integration is also available. Scientific journal article aggregation and preparation, enabling inclusion eCTD ARTICLE SERVICE within the reference sections of electronic Common Technical Document (eCTD) submissions made to the FDA and other regulatory agencies. Global article reprints procurement solution that enables healthcare and healthcare communications companies to efficiently manage and REPRINTS NRx effectively utilize scientific journal articles to increase product prescriptions and sales. Group purchasing software service that consolidates fragmented article reprint buying to deliver a global spending view and unlock company REPRINTS GPO purchasing power for savings on annual and per order bulk article reprint purchases. Outsourcing service that enables STM publishers to unlock the full financial value of their content by enabling Reprints Desk to manage all PUBLISHER SERVICE BUREAU or part of their journal article reprints business – order management, short‐run and full web press printing, proactive sales promotion, and secure ePrint hosting.
  10. 10. 10PAGE  DERYCZ SCIENTIFIC BUSINESS MODEL:  THE RIGHT CONTENT AT THE RIGHT PLACE AT THE RIGHT TIME • The Problem: – ABC Pharmaceuticals has just released a prescription drug it believes is superior to that of an established competitor • A few seminal scientific articles prove this and ABC would like to distribute 100,000 print and electronic copies of these articles to physicians • The Solution: – DYSC provides a platform for ABC Pharmaceuticals to procure the desired scientific articles, content and rights in a timely, cost effective, efficient and easy to use fashion
  11. 11. 11PAGE  DERYCZ SCIENTIFIC CONFIDENTIALWHY DERYCZ SCIENTIFIC? DERYCZ SCIENTIFIC TICKER: DYSC
  12. 12. 12PAGE  DERYCZ SCIENTIFIC A COMPREHENSIVE AND INTEGRATED SOLUTION Copy & Digital  Reporting & • Creates direct  Rights Management • Allows for efficient  Tracking relationships with  indexing, searching,  publishers of unique  • Procures rights to  content delivery and  • Tools for corporations to  content content for Clients use  management track, report and share  cost effectively costly and hard to find  content to enhance  productivity and reduce  costs DYSC Content  Publisher Relations Engine
  13. 13. 13PAGE  DERYCZ SCIENTIFIC HIGHEST QUALITY SERVICE OFFERING  IN THE MARKETPLACE DYSC subsidiary  Reprints Desk vaulted  to the top of the  industry’s rankings  against long running  incumbents in just its  3rd year of operation  and continues to lead  the pack year after year. HIGHEST SCORE
  14. 14. 14PAGE  DERYCZ SCIENTIFIC CLIENT CASE STUDY: “X” Life Sciences Challenges: • Sought to reduce platform fees associated with 3rd party document delivery platform for scientific literature. • Desired elimination of costly expedited (“rush”) service fees. • Looking for comprehensive and integrated product that increased staff productivity Solutions: • Adopted and launched Reprints Desk’s ultra‐rapid article supply system enterprise‐wide. • Immediately transitioned to a full self‐service model for end users with the first line of support pushed to the Reprints  Desk. • Seamlessly integrated with existing discovery platforms such as PubMed and OVID. • Deployed a tailored version of Reprints Desk’s article resolver solution that quickly matches orders  against subscriptions,  then delivers article‐level links.  Results: • Eliminated more than $10,000 in annual platform fees and $30,000 in rush delivery surcharges. • Received articles in clean PDF format 100% of the time and improved ordering and delivery speed. • Created user satisfaction and saved time for administrators who no longer had to intervene in document delivery operations. Powered by Reprints Desk, the Literature Services department optimizes spending on scientific literature and supports R&D and medical information with DYSC ultra‐rapid document delivery service.
  15. 15. 15PAGE  DERYCZ SCIENTIFIC RECOGNIZED BY LEADING CLIENTS & EXPERTS ORGANIZATION DESCRIPTION Peter Derycz named to 2010 "PharmaVoice 100" Readers of PharmaVoice magazine bestowed honor on the 100 most inspiring people in the life sciences industry Reprints Desk ranked #1 by industry analyst Outsell Reprints Desk named among “Top 100 Companies that Matter” by KM World (3nd consecutive year)
  16. 16. 16PAGE  DERYCZ SCIENTIFIC BUILDING DESIRABLE, PROPRIETARY  AND HARD TO REPLICATE ASSETS DYSC has built a  Content  sustainable  Database &  competitive  Distribution  advantage through  Platform focusing on  establishing core  processes and  assets  that are difficult to  recreate or imitate. Trust  Relationships  with Clients  & Publishers DYSC Distribution  Platform Reputation  for Excellence
  17. 17. 17PAGE  DERYCZ SCIENTIFIC CAPTURING A GLOBAL MARKET OPPORTUNITY DYSC serves clients globally which helps mitigate the political and economic risk of any given economy and drives penetration into new and emerging markets providing opportunities for rapid growth $24.9m $14.6m $12.2m $3.8m $0.4m 2006 2007 2008 2009 2010
  18. 18. 18PAGE  DERYCZ SCIENTIFIC INTEGRATION OF DIGITAL INFORMATION AND  PHYSICAL LOGISTIC CAPABILITIES  Derycz is following  Expected strategic acquisition of European Information  the Netflix and  Amazon models of  Logistics Services Company TAAG to serve growing  integrating digital  European demand. information and  logistics capabilities in   order to competitive  Strategic Value  differentiate and  • Replicates successful U.S. model with Pools Press  aggressively capture  • Expand physical presence in Europe market share.   • Expand European customer base Financial Value • $13 million in TAAG revenues represent an increase Derycz consolidated  revenues of 50% • Immediately accretive to consolidated EBITDA • All stock transaction preserves cash for continued growth Acquisition expected to be completed by March 31, 2011. Life‐science companies are increasingly using scientific literature in evidence‐based promotions and  increasingly seeking single‐source suppliers
  19. 19. 19PAGE  DERYCZ SCIENTIFIC GROWTH STRATEGY Revenues  Further Penetrate Market  and Take Share Continue to Expand   International Expansion Customer Base  Develop Broader Industry  Resources Develop New   Consulting Service Offerings  Content Management  Platform & Services  Further Gain Share of Spend  from Existing Customers Increase Sales to Existing   Target Most Rapidly Growing  Customers Customers   Cross‐Sell Full Product Range Pursue Strategic   Expand Range of Services  Acquisitions  Increase Customer Base Time
  20. 20. 20PAGE  DERYCZ SCIENTIFIC PROVEN MANAGEMENT TEAM ALIGNED WITH SHAREHOLDERS The DYSC Management  NAME POSITION BACKGROUND team is deeply  Peter Derycz President & CEO 20 year Industry Veteran & Entrepreneur. Grew experienced with  Infotrieve (a purveyor of scientific articles) to $32 million unique domain  in sales before selling to a group of Private Equity investors in 2003. expertise and a proven  Jan Peterson Director &  20+ years in STM (Scientific, Technical, Medical) track record Head of Publisher  publishing and content development. Established Relations individual article sales as a legitimate revenue stream for publishers and coined the term “Article Economy”. Scott Ahlberg Head of Corporate  18 years of rights management, product development Services and content distribution. Richard McKilligan CFO & General Counsel Law degree from Cornell Law School, MBA from the University of Chicago and undergraduate degree in Accountancy from the University of Illinois at Urbana‐ Champaign. Member of the State Bar of California, the New York State Bar Association and The Florida Bar. Tracy Forrester Head of Reprint  15 years experience managing reprints and Operations information/library service operations in both the public and private sectors. Marc Nissan Chief Application  13 years of solid experience building stable content Architect delivery and management systems. Ian Palmer Head of Marketing 13 years of marketing management working for content and technology industry leaders including Medscape, Inc., Safari Books Online, LLC, Singular Publishing Group, Inc., and Impinj, Inc. ., an RFID technology provider and previous winner of the Red Herring Top 100 Private Companies of North America Award.
  21. 21. 21PAGE  DERYCZ SCIENTIFIC CONFIDENTIALFINANCIAL OVERVIEW DERYCZ SCIENTIFIC TICKER: DYSC
  22. 22. 22PAGE  DERYCZ SCIENTIFIC CONSISTENT QUARTERLY REVENUE GROWTH… $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 12/31/2008 3/31/2009 6/30/2009 9/30/2009 12/31/2009 3/31/2010 6/30/2010 9/30/2010 12/31/2010
  23. 23. 23PAGE  DERYCZ SCIENTIFIC …DRIVING SIGNIFICANT ANNUAL REVENUE GROWTH
  24. 24. 24PAGE  DERYCZ SCIENTIFIC GROSS PROFIT MARGIN IS ACCELERATING:  LAYING THE FOUNDATION TO SCALE Gross Margin has been  growing significantly in  absolute dollars (CAGR  of 87.1%) while Margin  % has reflected recent  investments in content  and royalties.
  25. 25. 25PAGE  DERYCZ SCIENTIFIC Consistent Stock Price Appreciation DYSC Price History Compared with the NASDAQ Composite (3/7/10 – 3/7/11) 
  26. 26. 26PAGE  DERYCZ SCIENTIFIC INVESTMENT HIGHLIGHTS • Unique content marketplace sitting at the crossroads of the $285 billion Information Services sub‐segment of the $1 trillion Periodicals industry • Industry leading services recognized as a pioneering in a unique market niche • Desirable, proprietary and hard to replicate assets • Experienced management team with a history of creating shareholder value • Technology driven service model with significant operating leverage • Solving time, quality and cost problem for content distribution in transitioning marketplace • Proven track record of dynamic revenue growth and financial performance

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