Dyadic International Reports 2012 Third Quarter Financial Results

JUPITER, Fla., Nov. 8, 2012 /PRNewswire/ -- Dyadic International, Inc. (OTC Pink: 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 and industrial enzyme industries, today announced financial results for the quarter ended September 30, 2012.

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Business Outlook

Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "As we continue down the road toward a profitable 2012, recent events have further increased our confidence in Dyadic's near-term growth prospects."

"Dyadic's research team in the Netherlands has experienced a string of successes over the last few months in using Dyadic's patented and proprietary C1 technology to conduct research projects funded by third parties in the key areas of biofuels, animal health and nutrition, food and biopharmaceuticals. In particular, the novel ability of Dyadic's C1 white strain to produce purer cost-efficient enzymes, is proving to be an additional valuable tool in attracting research and licensing partners. Some of these projects are currently in the process of being expanded which will generate additional R&D revenue and further increase the likelihood of increased future license revenue to Dyadic. The greater than two-fold increase in deferred research and development obligation in the third quarter as compared to the previous quarter as listed in our third quarter financial statements represents a growing backlog of research revenue which will be recognized in subsequent quarters as this research is performed. This shows that research and development activities are actually still growing even though the related revenue will not be recognized until future periods."

"Adding to Dyadic's recent research accomplishments for existing partners such as Abengoa Bioenergy, which expanded its non-exclusive license with Dyadic earlier this year, is a strong pipeline of new research and license collaborations. Many of these new opportunities are in the late stage or letter of intent stage of negotiations and are nearing completion, which we expect will generate additional research, product and/or license revenues. Lastly, Dyadic's improving cash position which will continue into next year will help us fund operations and continue to support our growing business."

Third Quarter Highlights

• Net product related revenue for the quarter ended September 30, 2012 increased 3% compared to the same period a year ago and is up 6% year-to-date, highlighted by a year-to-date increase of 30% in sales to top ten accounts
• Dyadic Netherlands became a member of the Bio-Mimetic Project, a three-year multidisciplinary research consortium funded by the European Community's Seventh Framework Programme (FP7) and coordinated by Procter & Gamble Technical Centres Limited to employ environmentally-friendly technologies to convert lignin into high value sustainable commercial products such as adhesives, detergents and cosmetics
• Demonstrated performance results of Dyadic's AlternaFuel® CMAX3™ which equaled or exceeded the performance of other industry-leading enzymes in converting biomass into fermentable sugars for the production of biofuels and bio-based chemicals
• Dyadic Netherlands became a member of the HealthBread Project, a two-year multidisciplinary research consortium funded by the European Community's Seventh Framework Programme (FP7) to develop whole grain and white breads with improved nutritional value, taste and product quality
• 11^th U.S. patent issued to Dyadic consisting of broad and encompassing claims that provide additional protection for the C1 fungal expression system for Dyadic, its customers and licensees
• Dyadic's biofuels enzyme, AlternaFuel® CMAX™ was successfully verified by SEKAB E-Technology in the ethanol demonstration plant in Ornskoldsvik, Sweden as part of the recently concluded DISCO Project funded by the European Community's Seventh Framework Programme (FP7)

Financial Results

Total revenue for the third quarter ended September 30, 2012 decreased 2% to $2.5 million compared to $2.6 million for the quarter ended September 30, 2011. Total revenue for the nine months ended September 30, 2012 increased 64% to $12.9 million compared to $7.9 million for the same period last year. The decrease in total revenue for the third quarter ended September 30, 2012 was due to a decrease in research and development revenue from the same period a year ago. The increase in total revenue for the nine months ended September 30, 2012 was due to increases in all revenue segments.

Net product-related revenue for the third quarter ended September 30, 2012 increased 3% to $2.1 million compared to $2.0 million for the third quarter ended September 30, 2011. Net product-related revenue for the nine months ended September 30, 2012 increased 6% to $5.8 million compared to $5.5 million for the nine months ended September 30, 2011.

Research and development revenue for the third quarter ended September 30, 2012 decreased 20% to $427,000 compared to $536,000 for the third quarter ended September 30, 2011. Research and development revenue for the nine months ended September 30, 2012 increased 18% to $1.6 million compared to $1.3 million for the nine months ended September 30, 2011. The decrease in research and development revenue for the third quarter was due to the timing of the revenue recognition of certain research projects conducted at Dyadic's research and development facility in the Netherlands. The growing backlog of research and development revenue is indicated by the greater than two-fold increase in Deferred Research and Development Obligation to $714,000 as of September 30, 2012 as compared to $309,000 at June 30, 2012.

There was no license fee revenue for the third quarter ended September 30, 2012. License fee revenue for the nine months ended September 30, 2012 increased more than five-fold to $5.5 million compared to $1.0 million for the nine months ended September 30, 2011. The increase in license fee revenue for the nine month period ended September 30, 2012 compared to the same period last year was due to a $5.5 million license fee recognized in the second quarter of 2012 from Dyadic's non-exclusive licensee, Abengoa Bioenergy, for an expansion of its rights under its license agreement with Dyadic.

Gross profit for the third quarter ended September 30, 2012 decreased 22% to $614,000 compared to $784,000 for the third quarter ended September 30, 2011. This decrease was due to lower research and development revenue during the period as indicated above. Gross profit for the nine months ended September 30, 2012 increased 158% to $7.4 million compared to $2.9 million for the same period last year due to increased margins on product revenue and the recognition of license fee income.

Total expenses for the third quarter ended September 30, 2012 decreased 32% to $1.4 million compared to $2.0 million for the third quarter ended September 30, 2011. For the nine months ended September 30, 2011, total expenses decreased 26% to $4.5 million compared to $6.1 million for the nine months ended September 30, 2011. The decrease in both periods was due largely to a reduction in litigation-related costs from the same period a year ago as well as Dyadic's focus on improving cost controls and operational efficiencies.

On August 8, 2012, the Company received $525,000 in settlement of certain of its claims against two defendants in the Company's professional liability lawsuit against its former outside legal counsel which is included in Other Income (Expense) for the three and nine month periods ended September 30, 2012.

Net loss for the third quarter ended September 30, 2012 was $392,000, or $(0.01) per basic and diluted share, compared to a net loss of $1.3 million, or $(0.04) per basic and diluted share for the third quarter ended September 30, 2011. Net income for the nine months ended September 30, 2012 was $2.8 million, or $0.09 per basic and $0.08 per diluted share, compared to a net loss of $3.6 million, or $(0.11) per basic and diluted share, for the nine months ended September 30, 2011.

At September 30, 2012, cash and cash equivalents were $2.9 million compared to $3.7 million at December 31, 2011. After the third quarter ended, Dyadic received $2.0 million of the total license fee of $5.5 million recognized from the expansion of Dyadic's license with Abengoa Bioenergy which was completed in April 2012.  The two remaining payments of $1.0 million and $2.5 million are due in January and July 2013, respectively.

The financial information contained in this press release should be read in conjunction with the financial statements and related footnotes which have been posted on the OTC market website at http://www.otcmarkets.com/stock/DYAI/filings and on Dyadic's website at http://dyadic.com/investorinfo/financials/.

Conference Call

Dyadic's third quarter 2012 financial results conference call is scheduled for 5:00 p.m. Eastern Time on Thursday, November 8, 2012. The conference call may be accessed by dialing 888-221-9518 (from the United States or Canada) or 913-312-0966 (from other countries) five to ten minutes prior to start time and providing the passcode 9107146. A replay of the conference call will be available on the Dyadic website (www.dyadic.com) shortly after the live event.

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 chemicals, biopharmaceutical and industrial enzyme industries.

Dyadic trades on the OTC Pink tier of the OTC market. Investors can find real-time quotes, market information and financial reports for Dyadic on the OTC market website (www.otcmarkets.com/stock/DYAI/quote).

Cautionary Statement for Forward-Looking Statements

Certain statements contained in this press release are forward-looking statements. These forward-looking statements involve risks and uncertainties 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. Except as required by law, Dyadic expressly disclaims any intent or obligation to update any forward-looking statements.

 

 

 

SOURCE Dyadic International, Inc.