2014

Dyadic International Reports Full Year 2013 Financial Results - Total Revenue increased 10% -

- Product Related Revenue increased 25% -

- License Fee Revenue increased 9% -

- Income from Operations of $0.6 million -

JUPITER, Fla., March 13, 2014 /PRNewswire/ -- Dyadic International, Inc. ("Dyadic") (OTCQX: DYAI), a global biotechnology company focused on the discovery, development, manufacture and sale of enzymes and others proteins for the bioenergy, bio-based chemicals, biopharmaceutical and industrial enzyme industries, today announced financial results for the year ended December 31, 2013.

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Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "We continue to lay the foundation for our continued success including increasing available capital, signing a broad license agreement with BASF, joining the OTCQX U.S. Premier marketplace and expanding our state-of-the-art Dutch research center.  Our strategic objectives have always been to unlock the enormous potential of our technologies, including the C1 platform.  We think we are remarkably well positioned to continue to grow and exploit new opportunities in 2014 and beyond."

Full Year 2013 Financial Results

Revenue

Total revenue increased 10% for the year ended December 31, 2013 to $17.1 million as compared to $15.6 million for the year ended December 31, 2012.

Net product related revenue increased 25% to $9.8 million for the year ended December 31, 2013 as compared to $7.8 million for the year ended December 31, 2012.  The increase was driven primarily by increases in the animal health and nutrition segments, the addition of two major customers and additional registration by a customer of an animal feed product containing a Dyadic enzyme in Europe. Our product related business has an increasingly global footprint with 47% of sales in Europe, 35% of sales in North America and 17% of sales in Asia.

License fee revenue for the year increased by $500,000 due to the licensing agreement Dyadic entered into with BASF in the second quarter of 2013.  The agreement called for BASF to pay an aggregate $6.0 million upfront license fee as compared to the $5.5 million that Abengoa paid for an expansion of their non-exclusive C1 license in 2012.

Research and development revenue for the year ended December 31, 2013 decreased 42% to $1.3 million compared to $2.3 million for the year ended December 31, 2012.  The decrease was the result of delays in the start of certain external research and development projects, and the reallocation of research and development resources from externally funded projects to new product development initiatives.  These initiatives are internally funded, and are expected to accelerate the continued enhancements and improvements to our C1 Platform Technology. 

Cost of Goods Sold

For the year ended December 31, 2013, cost of goods sold was approximately $9.1 million, or 81.8% of total revenue excluding license fees, as compared to approximately $7.6 million, or 75.4% of total revenue excluding license fees, for the year ended December 31, 2012, an increase of approximately $1.5 million. We have excluded license fee revenue from the percentages above because license fee revenues do not have costs attributed to them for financial reporting purposes.  This increase in cost of goods sold was primarily the result of the shift from higher margin research and development revenue to industrial enzyme product sales. In addition, product related margins decreased in 2013 by approximately 5% due to increased manufacturing and raw material costs, and product mix. However, we have made progress with our manufacturing operations over the past several months lowering raw material costs and increasing yields and productivity, which we expect to positively impact margins in 2014.

Gross Profit

Gross profit remained relatively flat year-over-year at approximately $8.0 million for both of the years ended December 31, 2013 and 2012.  The minimal growth in gross profit was primarily due to the higher license fees and product related revenues, being offset by lower research and development revenue.

Operating Expenses

Total operating expenses for the year ended December 31, 2013 increased 17% to $7.5 million compared to $6.4 million for the year ended December 31, 2012.  The increase was due primarily to increased costs associated with litigation against our former outside legal counsel of approximately $1.5 million, which was partially offset by the recovery of a doubtful account receivable of $300,000 that was previously fully reserved as of December 31, 2012.  The increased litigation costs were anticipated and are expected to be lower in 2014 as the preparation for trial starts to wind down in anticipation of the trial itself.  The professional liability lawsuit is expected to continue through 2014 and into 2015.

Research and development expenses increased $145,000 to $1.1 million as we continue with our accelerated new product development program to further enhance our proprietary C1 platform technology, and to bring new C1-based products to market.  Research and development expenses are expected to further increase in 2014.

Net Loss

Based on the factors discussed above, the net loss for the year ended December 31, 2013 was $428,000, or ($0.01) per basic and fully diluted share, as compared to a net income of $1.3 million, or $0.04 per basic and fully diluted share, for year ended December 31, 2012.

Pro forma for the non-recurring expenses associated with litigation against our former outside legal counsel and other related events, we had a positive net income of $1.3 million, or $0.04 per basic and fully diluted share for the year ended December 31, 2013, as compared to a pro forma net income of $1.0 million, or $0.03 per basic and fully diluted share for the year ended December 31, 2012.

Cash and Cash Equivalents

At December 31, 2013, cash and cash equivalents totaled $8.9 million as compared to $4.0 million at December 31, 2012. The increase was largely due to Dyadic's receipt of the BASF license fee and receipt of the remaining $3.5 million due under the Abengoa License Expansion announced in 2012.

Debt

Total Convertible Subordinated Debt ("Debt") as of December 31, 2013 and 2012 was $6.8 million and $7.0 million, respectively. In January 2013, $182,000 of the Debt was converted to common stock. In October 2013, Dyadic extended the maturity dates of all of its outstanding debt to January 1, 2015. Dyadic has a right to prepay $6.8 million of the Debt any time after March 31, 2014, without penalty, with 30 days written notice. The remaining $1.4 million Note Payable to Stockholder is non-convertible, and is not subject to the prepayment provision.

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

Conference Call

Dyadic's 2013 year-end financial results conference call is scheduled for 5:00 p.m. Eastern Standard Time on Thursday, March 13, 2014. The conference call may be accessed by dialing 888-220-8440 (from the United States or Canada) or 913-312-0733 (from other countries) five to ten minutes prior to start time and providing the passcode 7388205. A replay of the conference call will be available on Dyadic's 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 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 earnings press release are "forward-looking statements" within the meaning of the federal securities laws. Statements about our beliefs and expectations regarding our technology platform, our licensing strategy, our ability to create higher margin products, expected litigation costs, our ability to continue past success and the enormous potential and value of C1 as well as  statements containing the words "may," "could," "would," "should," "believe," "expect," "anticipate," "plan," "estimate," "target," "project," "intend" and similar expressions may constitute forward-looking statements. 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 in this earnings press release. 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 earnings 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. If Dyadic does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Factors that could cause results to differ materially include, but are not limited to: (1) general economic conditions, including the recent conditions in the global markets; (2) Dyadic's ability to retain and attract employees; (3) competitive pressures and reliance on key customers and collaborators; (4) Dyadic's research and development efforts, (5) the outcome of the current litigation by Dyadic against its former counsel and (6) other factors discussed in Dyadic's publicly available filings, including the risk factors included in Dyadic's Initial Information and Disclosure Statement filed with the OTC Markets Group on March 11, 2014.

 

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

















 Year Ended  December 31, 




2013


2012


Revenue:






Product Related Revenue, Net

$

9,800,767

$

7,819,547


License Fee Revenue


6,000,000


5,500,000


Research and Development Revenue


1,333,974


2,282,173


           Total Revenue


17,134,741


15,601,720








Cost of Goods Sold


9,103,957


7,616,222


Gross Profit


8,030,784


7,985,498








Expenses:






General and Administrative


5,546,999


4,802,653


Sales and Marketing 


944,124


700,778


Research and Development 


1,066,471


921,714


Foreign Currency Exchange (Gains), Net


(83,312)


(27,989)


           Total Expenses


7,474,282


6,397,156








Income from Operations


556,502


1,588,342








Other Income (Expense) 






Interest Income


14,613


5,245


Interest Expense


(686,022)


(701,090)


Gain (Loss) on Settlement of Litigation


(313,143)


525,000


           Total Other Income (Expense)


(984,552)


(170,845)








Income (Loss) before Provision for Income Taxes


(428,050)


1,417,497








Provision for Income Taxes


-


(68,000)








Net Income (Loss)

$

(428,050)

$

1,349,497








Net Income (Loss) per Common Share:






    Basic

$

(0.01)

$

0.04


    Diluted

$

(0.01)

$

0.04








Weighted Average Common Shares Used in 






  Calculating Net Income (Loss) per Share:






    Basic


32,797,253


31,608,841


    Diluted


32,797,253


34,225,590








 

 

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS











December 31,




2013


2012

ASSETS






Current Assets:






Cash 


$

8,892,396

$

3,990,062

Restricted Cash



200,378


192,355

Accounts Receivable, Net



1,677,338


1,260,798

License Fee Receivable



110,693


3,500,000

Inventory, Net



2,800,090


2,765,187

Prepaid Expenses and Other Current Assets



171,601


237,389

                        Total Current Assets



13,852,496


11,945,791







Fixed Assets, Net



504,781


393,860

Intangible Assets, Net



566,867


525,224

Other Assets



16,173


16,173



$

14,940,317

$

12,881,048







LIABILITIES AND STOCKHOLDERS' EQUITY






Current Liabilities:






Accounts Payable


$

2,573,106

$

1,687,177

Accrued Expenses



469,681


412,483

Accrued Interest Payable



171,601


1,905

Note Payable to Stockholder



-


1,424,941

Deferred Research and Development Obligation



914,769


567,400

                        Total Current Liabilities



4,129,157


4,093,906

Note Payable to Stockholder



1,424,941


-

Convertible Subordinated Debt



6,818,000


7,000,000

                        Total Liabilities



12,372,098


11,093,906







COMMITMENTS AND CONTINGENCIES












   Stockholders' Equity:






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 – 34,028,245 and 31,656,245, Respectively



34,028


31,656

Additional Paid-In Capital



81,209,585


79,847,761

Stock Subscriptions Receivable



(182,838)


-

Stock to be Issued



27,769


-

Accumulated Deficit



(78,520,325)


(78,092,275)

                        Total Stockholders' Equity 



2,568,219


1,787,142



$

14,940,317

$

12,881,048







 

 

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS































Year Ended December 31,









2013


2012

Operating Activities









Net Income (Loss)





$

(428,050)

$

1,349,497

Adjustments to Reconcile Net Income (Loss) to Net Cash






  Provided By Operating Activities:









Depreciation and Amortization of Fixed Assets



201,224


204,176


Amortization of Intangible and Other Assets




52,279


52,305


Increase (Decrease) in Allowance for Doubtful Accounts



(380,507)


320,573


Increase (Decrease) in Inventory Reserve




(81,000)


245,000


Compensation Expense on Stock Option Grants



806,557


1,198,559


Change in Operating Assets and Liabilities









Accounts Receivable





(36,033)


193,402



License Fee Receivable




3,389,307


(3,500,000)



Inventory






46,097


266,195



Prepaid Expenses and Other Current Assets



65,788


43,423



Accounts Payable





885,929


(348,076)



Accrued Expenses





57,198


(26,557)



Accrued Interest Payable




169,696


(171,591)



Deferred Research and Development Obligation


347,369


538,266












Net Cash Provided by Operating Activities




5,095,854


365,172












Investing Activities









Purchases of Fixed Assets






(312,145)


(45,815)

Patent Costs







(93,922)


(80,144)

Restricted Cash






(8,023)


22,021












Net Cash (Used In) Investing Activities




(414,090)


(103,938)












Financing Activities




















Proceeds from Stock Warrant Exercises




159,195


-

Proceeds from Stock Option Exercises





61,375


37,073












Net Cash Provided by Financing Activities




220,570


37,073












Net Increase in Cash






4,902,334


298,307

Cash at Beginning of Year






3,990,062


3,691,755












Cash at End of Year





$

8,892,396

$

3,990,062












Supplement Cash Flow Information:



















Cash Paid for Interest





$

516,326

$

872,681












Cash Paid for Income Taxes




$

-

$

68,000












Non-Cash Items:




















Conversion of Convertible Debt into Share of Common Stock


$

182,000

$

-












Non-Cash Advances to Employees for Stock Options and






  Stock Warrant Exercises





$

182,838

$

-












 

SOURCE Dyadic International, Inc.



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