Dyadic International Reports 2011 Third Quarter Financial Results

JUPITER, Fla., Nov. 3, 2011 /PRNewswire/ -- Dyadic International, Inc. ("Dyadic") (OTC Pink: DYAI), a global biotechnology company focused on the discovery, development, manufacture and sale of enzyme and protein products for the bioenergy, industrial enzyme and biopharmaceutical industries, today announced financial results for the quarter ended September 30, 2011.

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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 www.otcmarkets.com/stock/DYAI/financials and on Dyadic's website at www.dyadic.com/wt/dyad/investors.

Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "In the third quarter, Dyadic continued to make strong progress in performing funded research at our facility in the Netherlands which not only increases our research and development revenue but also enhances our opportunities for broader strategic partnerships.  We also continued to see improvements in the customer base and profitability of our industrial enzyme business. Lastly, our biofuels licensees reported progress in the third quarter in scaling up towards ultimate commercialization of second generation biofuels and biochemicals which may utilize our C1 technology."

Financial Results

Total revenue for the third quarter ended September 30, 2011 increased 30% to $2.6 million compared to $2.0 million for the quarter ended September 30, 2010. Total revenue for the nine months ended September 30, 2011 increased 27% to $7.9 million compared to $6.2 million for the same period last year. The increase in total revenue for both periods as compared to the same periods ended September 30, 2010 was due to an increase in research and development revenue and, with respect to the nine month comparison, also due to an increase in license fee revenue.

Net product related revenue for the third quarter ended September 30, 2011 increased to $2.0 million compared to $1.9 million for the third quarter ended September 30, 2010. Net product related revenue for the nine months ended September 30, 2011 was flat as compared to the same period a year ago.

Research and development revenue for the third quarter ended September 30, 2011 increased to $536,000 compared to $64,000 for the third quarter ended September 30, 2010. Research and development revenue for the nine months ended September 30, 2011 increased to $1.3 million compared to $618,000 for the nine months ended September 30, 2010.

There was no license fee revenue for the third quarter ended September 30, 2011. License fee revenue for the nine months ended September 30, 2011 increased to $1.0 million compared to $32,000 for the nine months ended September 30, 2010. The increase in license fee revenue for the nine month period ended September 30, 2011 compared to the same period last year was due to an upfront license fee recognized in the second quarter of 2011 from a licensee in the animal feed industry.

Gross profit for the third quarter ended September 30, 2011 increased to $784,000 compared to $339,000 for the third quarter ended September 30, 2010.  This increase was the result of higher research and development revenue and improved product margins.  Gross profit for the nine months ended September 30, 2011 nearly doubled to $2.9 million compared to the same period last year due to increased margins on product revenue and the recognition of license fee income.

General and administrative expenses for the third quarter ended September 30, 2011 increased to $1.3 million compared to $1.1 million for the third quarter ended September 30, 2010.  For the nine months ended September 30, 2011, general and administrative expenses increased to $4.4 million compared to $3.7 million for the nine months ended September 30, 2010. The increase in both periods was due to costs incurred by Dyadic in the completion of the arbitration of its professional liability lawsuit against its former auditors, as well as additional business development costs.

Net loss for the third quarter ended September 30, 2011 was $1.3 million, or $(0.04) per basic and diluted share, compared to a net loss of $1.4 million, or $(0.04) per basic and diluted share for the third quarter ended September 30, 2010. Net loss for the nine months ended September 30, 2011 was $3.6 million, or $(0.11) per basic and diluted share, compared to a net loss of $3.9 million, or $(0.13) per basic and diluted share, for the nine months ended September 30, 2010.

At September 30, 2011, cash and cash equivalents were $4.0 million compared to $4.5 million at December 31, 2010. During the third quarter of 2011, Dyadic raised $3.0 million through the private placement of convertible subordinated secured promissory notes, of which $2.4 million was received during the third quarter as reflected in the condensed consolidated balance sheet as of September 30, 2011. The remaining $600,000 was received in October and will be reflected in the year-end financial statements. A significant portion of the decrease in cash since the end of last year was due to costs incurred by Dyadic in the completion of the arbitration of its professional liability lawsuit against its former auditors.

Conference Call

Dyadic's third quarter 2011 financial results conference call is scheduled for 5:00 p.m. Eastern Time on Thursday, November 3, 2011. The conference call may be accessed by dialing 888-661-5176 (from the United States or Canada) or 913-312-0702 (from other countries) five to ten minutes prior to start time and providing the passcode 3489907. 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 enzyme and protein products for the bioenergy, industrial enzyme and biopharmaceutical 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.

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


























Nine Months Ended
September 30,


Three Months Ended
September 30,



2011


2010


2011


2010

Revenue:


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Product Related Revenue, Net

$

5,492,082

$

5,541,489

$

2,039,528

$

1,922,552

License Fee Revenue


1,017,000


32,000


-


-

Research and Development Revenue


1,349,985


617,695


535,883


64,120

      Total Revenue


7,859,067


6,191,184


2,575,411


1,986,672










Cost of Goods Sold


5,004,147


4,738,392


1,790,994


1,647,413

Gross Profit


2,854,920


1,452,792


784,417


339,259










Expenses:









General and Administrative


4,353,282


3,740,039


1,340,945


1,105,897

Sales and Marketing


807,199


738,757


270,746


266,161

Research and Development


910,597


920,444


288,480


271,809

Foreign Currency Exchange Losses (Gains), Net


6,183


137,852


87,527


(122,691)

      Total Expenses


6,077,261


5,537,092


1,987,698


1,521,176










(Loss) from Operations


(3,222,341)


(4,084,300)


(1,203,281)


(1,181,917)










Other Income (Expense):









Interest Income


8,388


46,003


1,714


9,992

Interest Expense


(342,872)


(132,657)


(116,135)


(67,591)

Gain on Reduction of Accrued Stockholder Litigation


-


410,000


-


-

Other


-


(155,260)


-


(155,503)

Total Other Income (Expense)


(334,484)


168,086


(114,421)


(213,102)



















Net (Loss)

$

(3,556,825)

$

(3,916,214)

$

(1,317,702)

$

(1,395,019)



















Net (Loss) per Common Share









Basic

$

(0.11)

$

(0.13)

$

(0.04)

$

(0.04)

Diluted

$

(0.11)

$

(0.13)

$

(0.04)

$

(0.04)










Weighted Average Common Shares Used in Calculating Net (Loss) Per Share:









Basic


31,317,553


30,971,296


31,413,614


31,063,147

Diluted


31,317,553


30,971,296


31,413,614


31,063,147



DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS









September 30,
2011



December 31,
2010


ASSETS


(Unaudited)





Current Assets:







Cash and Cash Equivalents

$

4,039,753


$

4,535,279


Restricted Cash


256,628



247,082


Accounts Receivable, Net


1,344,250



1,276,574


Inventory, Net


2,702,264



2,782,433


Prepaid Expenses and Other Current Assets


347,631



336,638


                 Total Current Assets


8,690,526



9,178,006









Fixed Assets, Net


606,445



719,161


Intangible Assets, Net


413,634



310,978


Other Assets


16,930



16,930



$

9,727,535


$

10,225,075









LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)







Current Liabilities:







Accounts Payable

$

1,199,079


$

1,801,123


Accrued Expenses


436,949



417,996


Accrued Interest Payable  


114,778



146,230


Deferred Research and Development Obligation


155,648



-


Note Payable to Stockholder


1,424,941



1,424,941


Income Taxes Payable


168



168


                 Total Current Liabilities


3,331,563



3,790,458


Convertible Subordinated Debt


6,400,000



4,000,000




9,731,563



7,790,458


COMMITMENTS AND CONTINGENCIES







Stockholders’ Equity (Deficit):







Preferred Stock, $.0001 Par Value:







Authorized Shares – 5,000,000; None Issued and Outstanding


-



-


Common Stock, $.001 par value,







Authorized Shares – 100,000,000; Issued and







Outstanding  – 31,427,495 and 31,138,120, Respectively


31,428



31,138


Additional Paid-in Capital


78,219,580



77,101,690


Accumulated Deficit


(78,255,036)



(74,698,211)




(4,028)



2,434,617



$

9,727,535


$

10,225,075











DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS





















Nine Months Ended  September 30,



2011



2010



(Unaudited)



(Unaudited)

Operating Activities






Net (Loss)

$

(3,556,825)


$

(3,916,214)

Adjustments to Reconcile Net (Loss) to Net Cash (Used In) Operating Activities:






Depreciation and Amortization of Fixed Assets


193,128



230,999

Amortization of Intangible and Other Assets


23,675



11,465

Reduction of Allowance for Doubtful Accounts


(50,011)



(111,399)

Reduction of Inventory Reserve


(75,389)



(363,795)

Compensation Expense on Stock Option Grants


1,068,374



668,154

Stock Issued for Financial Services


-



63,000

Gain on Reduction of Accrued Stockholder  Litigation


-



(410,000)

Changes in Operating Assets and Liabilities:






Accounts Receivable


(17,665)



344,493

Inventory


155,558



248,567

Prepaid Expenses and Other Current Assets


(10,942)



129,288

Accounts Payable


(602,044)



(197,463)

Accrued Expenses


18,902



(222,143)

Accrued Interest Payable


(31,452)



6,253

Accrued Stockholder Litigation


-



(2,840,000)

Deferred Research and Development Obligation


155,648



-

Income Taxes Payable


-



1,238

Net Cash (Used In) Operating Activities


(2,729,043)



(6,357,557)







Investing Activities






Purchases of Fixed Assets


(80,412)



(166,446)

Cost of Patents


(126,331)



(81,228)

Restricted Cash


(9,546)



12,036

Net Cash (Used In) Investing Activities


(216,289)



(235,638)







Financing Activities






Proceeds from Issuance of Convertible Subordinated Debt


2,400,000



4,000,000

Proceeds from Stock Warrant Exercises


15,000



16,876

Proceeds from Stock Option Exercises


34,806



31,197

Net Cash Provided by Financing Activities


2,449,806



4,048,073







Net (Decrease) in Cash and Cash Equivalents


(495,526)



(2,545,122)

Cash and Cash Equivalents at Beginning of Period


4,535,279



8,419,934

Cash and Cash Equivalents at End of Period

$

4,039,753


$

5,874,812







Supplemental Cash Flow Information












Cash Paid for Interest

$

374,324


$

126,404



SOURCE Dyadic International, Inc.



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