Dyadic to Host Investor Conference Call Thursday, November 12, 2015 at 5:00PM EST
- DuPont Acquires Industrial Technology Business for $75 Million
- Dyadic Retains C1 License to Focus in Pharmaceutical Sector
- Intention to Initiate at Least a $15 Million Share Buyback
- Q3 Product Revenue up 21% Year-over-Year and Gross Profit up 69% Year-over-Year
- Receipt of $2,170,000 Net Litigation Settlement, In Favor Of The Company
- Litigation Mediation Scheduled on November 18, 2015 and 2016 Court Date Expected
- Cash and cash equivalents of approximately $6.3 million as of September 30, 2015
JUPITER, Fla., Nov. 12, 2015 (GLOBE NEWSWIRE) -- Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global biotechnology company focused on the discovery, development, manufacture and sale of enzymes and other proteins for the bioenergy, bio-based chemicals, biopharmaceutical, food and feed industries, announced today financial results for the quarter ended September 30, 2015.
As announced on November 10th, 2015, the Company has entered into a definitive agreement to sell substantially all the assets of its Industrial Technology business to DuPont’s Industrial Biosciences business (“DuPont”) for $75 million in cash (the “Transaction”). Following completion of the Transaction, which is expected by the end of 2015, Dyadic intends to focus on its biopharmaceutical business. Completion of the Transaction is subject to approval by a majority of Dyadic’s stockholders and customary closing conditions.
Mark Emalfarb, Dyadic’s founder and CEO, said, “This Transaction is an exceptional opportunity to provide Dyadic operational flexibility to further develop our pharmaceutical business. The infusion of capital will help accelerate our pharmaceutical offerings where we believe our C1 technology has the potential to help develop and manufacture drugs and vaccines faster and more efficiently than existing production systems. We expect that Dyadic’s focus on the pharmaceutical industry will enable the company to potentially achieve our research and business goals sooner and more effectively than otherwise possible.”
Dyadic intends to continue its existing programs with Sanofi Pasteur and its involvement within the EU-funded ZAPI program. In addition, the Company plans to focus its research programs on the development and manufacturing of new human and animal vaccines, monoclonal antibodies, biosimilars and/or biobetters, and other therapeutic proteins.
“The DuPont Transaction is further validation of the C1 technology platform, which is already being used by industry leaders such as Abengoa, BASF and Sanofi Pasteur. These validations, along with our recent positive preclinical test results in our vaccine development project with Sanofi Pasteur, are encouraging,” added Michael Tarnok, Dyadic’s Chairman. “We are pleased to be able to provide liquidity and increased value to our stockholders and look forward to building our pharmaceutical business.”
Dyadic intends to use a minimum of $15 million of the transaction proceeds to initiate a stock repurchase program. The timing and details of such stock repurchase program are under consideration. The total amount of proceeds that will be used to repurchase stock will be contingent on several factors, including the amount of the convertible debt to be paid off in connection with the transaction, the amount of transaction expenses, the amount necessary to satisfy retained and contingent liabilities, the costs and outcome of Dyadic’s ongoing professional liability litigation and the amount management determines will be required to fund the ongoing pharmaceutical business.
Dyadic will retain all of the potential rights and obligations associated with its ongoing professional services liability litigation against the law firms Greenberg, Traurig, LLP, Greenberg Traurig, P.A. and Bilzin, Sumberg Baena Price and Axelrod, LLP. On September 29, 2015, the Court removed the professional liability litigation from its trial docket and, in an effort to promote settlement, ordered the parties to non-binding arbitration with an initial hearing to occur before December 16, 2015. The parties are scheduled to appear before the Court on November 13, 2015 for hearings on various pre-trial motions, at which time the Court is also expected to set a 2016 trial date. The parties have also voluntarily agreed to participate in non-binding mediation on November 18, 2015. Additionally, On July 31, 2015, the Company reached a settlement with another defendant law firm and on August 12, 2015, the Company received $ 2,170,000, net of fees and expenses as reported in today’s financial statement.
Business Highlights & Third Quarter and Nine Months Ended September 30, 2015 Financial Results:
We have reclassified the revenues and expenses of our industrial technology business to “income (loss) from discontinued operations” and the related assets and liabilities to “assets held for sale” and “liabilities related to assets held for sale” for all of the periods presented in the accompanying consolidated financial statements.
Results of Continuing Operations:
At September 30, 2015, cash and cash equivalents were approximately $6.3 million compared to $2.5 million at December 31, 2014.
On July 31, 2015, the Company reached a settlement with another defendant law firm and on August 12, 2015, the Company received full payment of $2,170,000 (net of fees and expenses), which has been reported in the Company’s consolidated statement of operations for the quarter ending September 30, 2015.
Net Income from continuing operations for the three month period ended September 30, 2015 was $1.3 million, or $0.04 per basic and diluted share, compared to a net loss of $1.2 million, or ($0.04) per basic and diluted share, for the same period a year ago. Net loss for the nine month period ended September 30, 2015 was $0.8 million, or ($0.02) per basic and diluted share, compared to a net loss of $4.3 million, or ($0.13) per basic and diluted share, for the same period a year ago.
Research and development revenue for the three and nine month periods ended September 30, 2015 was approximately $213,000 and $286,000, respectively, compared to $0 and ($7,000) for the same period a year ago. The increase in revenue for the period reflects two ongoing biopharmaceutical R&D projects.
Gross profit for the three and nine month periods ended September 30, 2015 increased to approximately $178,000 and $194,000, respectively, compared to a loss of $3,000 and $41,000 for the same period a year ago. At this time the Company has two ongoing biopharmaceutical R&D projects.
General and administrative expenses for the three month period ended September 30, 2015 declined 19% to approximately $1,000,000 compared to $1,238,000 for the same period a year ago. The decrease primarily reflects lower litigation costs of approximately $208,000.
General and administrative expenses for the nine month period ended September 30, 2015 declined 23% to approximately $3,218,000 compared to $4,184,000 for the same period a year ago. The decrease primarily reflects lower litigation costs of approximately $1,360,000 offset by higher professional service costs, compensation and project related spending of $394,000.
Research and Development expenses for the three and nine month periods ended September 30, 2015 decreased to $0 from approximately $4,000 and $72,000, respectively, in 2014 as a result of the closure of our North Carolina lab in April 2014.
Other income increased in the three and nine month periods ended September 30, 2015 by approximately $2,143,000 and $2,156,000, respectively as compared to the same periods in the prior year. The increase principally relates to the settlement with one of the three remaining defendant law firms in its ongoing professional liability litigation.
Discontinued Operations:
Net Income from discontinued operations for the three month period ended September 30, 2015 was $0.6 million, or $0.02 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per basic and diluted share, for the same period a year ago. Net income for the nine month period ended September 30, 2015 was $2.0 million, or $0.05 per basic and diluted share, compared to a net loss of $22,000, or ($0.00) per basic and diluted share, for the same period a year ago.
About Dyadic
Dyadic International, Inc. is a global biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of enzymes and other proteins for the bioenergy, bio-based chemical, biopharmaceutical and industrial enzyme industries. Dyadic utilizes an integrated technology platform based on its C1 microorganism, which enables the development and large scale manufacture of low cost enzymes and other proteins for diverse market opportunities. The C1 platform technology can also be used to screen for the discovery of novel genes.
Please visit Dyadic’s website at www.dyadic.com. Dyadic trades on the OTCQX tier of the OTC marketplace. Investors can find real-time quotes, market information and financial reports for Dyadic on the OTC marketplace website at www.otcmarkets.com/stock/DYAI/quote.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press release are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks, uncertainties and other factors that could cause Dyadic’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Investors are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements speak only as of the date of this press release and, except as required by law, Dyadic expressly disclaims any intent or obligation to update or revise any forward-looking statements to reflect actual results, any changes in expectations or any change in events. Factors that could cause results to differ materially include, but are not limited to: (1) the likelihood that the transaction relating to the sale of substantially all of Dyadic’s enzyme and technology assets, including its C1 Platform Technology, is consummated on a timely basis or at all, including whether the conditions required to complete the transaction will be met, the failure of our shareholders to approve the Transaction, the occurrence of any event, change or other circumstance that could give rise to the termination of the Transaction, the outcome of any legal proceeding that may be instituted against us and others following the announcement of the Transaction, the failure to complete the Transaction for any other reason, the amount of the costs, fees, expenses and charges related to the Transaction, the effect of the announcement of the Transaction on our customer relationships, operating results and business generally, including the ability to retain key employees, disruption from the Transaction making it more difficult to maintain relationships with customers, employees or suppliers; (2) general economic conditions, including the recent conditions in the global markets; (3) the ability to retain and attract employees; (4) competitive pressures and reliance on key customers and collaborators; (5) Dyadic’s research and development efforts, (6) the outcome of the current litigation by Dyadic against its former counsel; (7) Dyadic’s ability to extend the maturity date of its existing debt if the Transaction is delayed beyond December 31, 2015 and/or obtain additional debt or equity financing sources and (8) other many other factors discussed in Dyadic’s publicly available filings, including information set forth under the caption “Risk Factors” in our December 31, 2014 Annual Report filed with OTC Markets on March 27, 2015.
Conference Call Information
Dyadic will hold a conference call to discuss the quarterly results beginning at 5:00 PM Eastern time on November 12, 2015. In order to participate in the live session, please use the following dial-in numbers five to ten minutes prior to start time:
Calling from the United States or Canada: 888-337-8198
Calling from other countries: 719-325-2215
Confirmation Code: 6844094
A replay of the conference call will be available on Dyadic’s website (www.dyadic.com) within 24 hours after the live event and available for a period of 15 days after the call.
The Transaction referenced in this communication has not yet commenced, and no proxies are yet being solicited. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares. It is also not a substitute for the proxy statement or any other documents that Dyadic may post to its website, the OTC Marketplace Portal or send to stockholders in connection with the proposed transaction.
| DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| REVENUES: | ||||||||||||||||||
| Research and Development Revenue | $ | 213,485 | $ | - | $ | 285,721 | $ | (6,505 | ) | |||||||||
| Total Revenue | 213,485 | - | 285,721 | (6,505 | ) | |||||||||||||
| COST OF GOODS SOLD: | 34,993 | 2,878 | 92,145 | 34,281 | ||||||||||||||
| GROSS PROFIT | 178,492 | (2,878 | ) | 193,576 | (40,786 | ) | ||||||||||||
| EXPENSES: | ||||||||||||||||||
| General and Administrative | 1,000,641 | 1,237,924 | 3,217,837 | 4,203,337 | ||||||||||||||
| Research and Development | - | 3,993 | - | 72,422 | ||||||||||||||
| Gain on Sale of Fixed Assets | - | - | - | (19,755 | ) | |||||||||||||
| Total Expenses | 1,000,641 | 1,241,917 | 3,217,837 | 4,256,004 | ||||||||||||||
| LOSS FROM CONTINUING OPERATIONS | (822,149 | ) | (1,244,795 | ) | (3,024,261 | ) | (4,296,790 | ) | ||||||||||
| Other Income | ||||||||||||||||||
| Interest Income | 2,638 | 6,519 | 8,725 | 23,052 | ||||||||||||||
| Gain on Settlement of Litigation, Net | 2,170,000 | - | 2,170,000 | - | ||||||||||||||
| Total Other Income | 2,172,638 | 6,519 | 2,178,725 | 23,052 | ||||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE | 1,350,489 | (1,238,276 | ) | (845,536 | ) | (4,273,738 | ) | |||||||||||
| INCOME TAXES | ||||||||||||||||||
| Provision for Income Taxes | (22,222 | ) | - | - | - | |||||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS | 1,328,267 | (1,238,276 | ) | (845,536 | ) | (4,273,738 | ) | |||||||||||
| NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX | 581,959 | 190,683 | 1,951,889 | (21,717 | ) | |||||||||||||
| NET INCOME (LOSS) | $ | 1,910,226 | $ | (1,047,593 | ) | $ | 1,106,353 | $ | (4,295,455 | ) | ||||||||
| BASIC NET INCOME (LOSS) PER COMMON SHARE | ||||||||||||||||||
| Basic Net Income (Loss) from continuing operations per share | $ | 0.04 | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.13 | ) | |||||||
| Basic Net Income from discontinued operations per share | 0.02 | 0.01 | 0.05 | 0.00 | ||||||||||||||
| Basic Net Income (Loss) per share | $ | 0.06 | $ | (0.03 | ) | $ | 0.03 | $ | (0.13 | ) | ||||||||
| Diluted NET INCOME (LOSS) PER COMMON SHARE | ||||||||||||||||||
| Diluted Net Income (Loss) from continuing operations per share | $ | 0.04 | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.13 | ) | |||||||
| Diluted Net Income from discontinued operations per share | 0.02 | 0.01 | 0.05 | 0.00 | ||||||||||||||
| Diluted Net Income (Loss) per share | $ | 0.06 | $ | (0.03 | ) | $ | 0.03 | $ | (0.13 | ) | ||||||||
| Weighted-Average Common Shares Outstanding | ||||||||||||||||||
| Basic | 34,247,456 | 34,110,995 | 34,219,493 | 34,086,943 | ||||||||||||||
| Diluted | 34,418,151 | 34,110,995 | 34,410,769 | 34,086,943 | ||||||||||||||
| Balance Sheet Information (Unaudited): | September 30, 2015 | December 31, 2014* | ||||||||||||||||
| (Unaudited) | (Audited) | |||||||||||||||||
| Cash, Cash Equivalents | $ | 6,316 | $ | 2,495 | ||||||||||||||
| Assets Held for Sale | 6,335 | 5,889 | ||||||||||||||||
| Total Assets | 12,777 | 8,535 | ||||||||||||||||
| Liabilities Related to Assets Held for Sale | 2,604 | 1,718 | ||||||||||||||||
| Note Payable & Convertible Debt | 10,086 | 8,136 | ||||||||||||||||
| Accumulated Deficit | (83,394 | ) | (84,500 | ) | ||||||||||||||
| Stockholders' Deficit | (630 | ) | (2,265 | ) | ||||||||||||||
| * Condensed from audited financial statements | ||||||||||||||||||
| BALANCE SHEET DISCONTINUED OPERATIONS (Unaudited) | ||||||||||||||||||
| September 30, 2015 | December 31, 2014 | |||||||||||||||||
| ASSETS HELD FOR SALE | ||||||||||||||||||
| Accounts Receivable, Net of Allowance for Doubtful Accounts of $66,000 and $64,382, Respectively | $ | 2,096,773 | $ | 1,044,990 | ||||||||||||||
| Inventory, Net of Inventory Reserves of $62,752 and $237,782, Respectively | 3,127,114 | 3,607,062 | ||||||||||||||||
| Prepaid Expenses and Other Current Assets | 104,168 | 135,006 | ||||||||||||||||
| Fixed Assets, Net of Accumulated Depreciation of $2,646,391 and $2,495,775, Respectively | 472,938 | 539,902 | ||||||||||||||||
| Intangible Assets, Net of Accumulated Amortization of $742,351 and $710,199, Respectively | 400,063 | 418,973 | ||||||||||||||||
| Other Assets | 133,505 | 142,901 | ||||||||||||||||
| $ | 6,334,561 | $ | 5,888,834 | |||||||||||||||
| LIABILITIES RELATED TO ASSETS HELD FOR SALE | ||||||||||||||||||
| Accounts Payable | $ | 1,315,271 | $ | 1,008,778 | ||||||||||||||
| Accrued Expenses | 562,338 | 346,768 | ||||||||||||||||
| Deferred Research and Development Obligation | 726,463 | 362,089 | ||||||||||||||||
| 2,604,072 | 1,717,635 | |||||||||||||||||
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS (Unaudited) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| REVENUES: | ||||||||||||||||||
| Product Related Revenue, Net | $ | 3,272,497 | $ | 2,712,295 | $ | 9,507,207 | $ | 7,629,019 | ||||||||||
| License Fee Revenue | 567 | 700,000 | 800,567 | 700,000 | ||||||||||||||
| Research and Development Revenue | 471,322 | 373,730 | 1,230,233 | 1,510,226 | ||||||||||||||
| Total Revenue | 3,744,386 | 3,786,025 | 11,538,007 | 9,839,245 | ||||||||||||||
| COST OF GOODS SOLD: | 2,264,790 | 1,946,974 | 6,856,869 | 6,339,098 | ||||||||||||||
| GROSS PROFIT | 1,479,596 | 1,839,051 | 4,681,138 | 3,500,147 | ||||||||||||||
| EXPENSES: | ||||||||||||||||||
| General and Administrative | 82,733 | 198,641 | (21,472 | ) | 489,505 | |||||||||||||
| Sales and Marketing | 139,263 | 316,119 | 681,727 | 899,090 | ||||||||||||||
| Research and Development | 453,208 | 840,472 | 1,261,783 | 1,513,299 | ||||||||||||||
| Foreign Currency Exchange Loss (Gain), Net | (8,661 | ) | 120,234 | 154,754 | 108,246 | |||||||||||||
| Total Expenses | 666,543 | 1,475,466 | 2,076,792 | 3,010,140 | ||||||||||||||
| INCOME FROM DISCONTINUED OPERATIONS | 813,053 | 363,585 | 2,604,346 | 490,007 | ||||||||||||||
| Other Income (Expense) | ||||||||||||||||||
| Interest Expense | (221,116 | ) | (172,902 | ) | (620,257 | ) | (511,724 | ) | ||||||||||
| Total Other Income (Expense) | (221,116 | ) | (172,902 | ) | (620,257 | ) | (511,724 | ) | ||||||||||
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS BEFORE | 591,937 | 190,683 | 1,984,089 | (21,717 | ) | |||||||||||||
| INCOME TAXES | ||||||||||||||||||
| Provision for Income Taxes | (9,978 | ) | - | (32,200 | ) | - | ||||||||||||
| NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS | $ | 581,959 | $ | 190,683 | $ | 1,951,889 | $ | (21,717 | ) | |||||||||
Contact: Dyadic International, Inc. Thomas L. Dubinski Chief Financial Officer Phone: 561-743-8333 Email: tdubinski@dyadic.com