Dyadic International Reports Second Quarter 2012 Financial Results Achieves profitability on more than doubling of revenue

JUPITER, Fla., Aug. 13, 2012 /PRNewswire/ -- Dyadic International, Inc. ("Dyadic") (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 second quarter and six months ended June 30, 2012.

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Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "I am very pleased with the progress we have made in reporting a profit for the second quarter and first half of 2012 which ranks among the best results in the company's history.  Equally gratifying is that these results were driven by significant revenue increases in all of Dyadic's business segments highlighted by the expansion of our license agreement with Abengoa Bioenergy as well as double-digit increases in our industrial enzyme and research and development businesses. Our research and development team in The Netherlands continues to enhance Dyadic's technologies and products as recently demonstrated by comparative tests of our AlternaFuel® CMAX3™ which equaled or exceeded the performance of other leading enzymes on the market in converting biomass into fermentable sugars. We are working diligently to build on these results by continuing to demonstrate Dyadic's capabilities to engineer robust fungal strains that produce high quality, cost-efficient enzymes and other proteins at commercial scale for multiple industry applications."

Second Quarter Highlights

  • Total revenue for the quarter more than doubled over the same period last year fueled by growth in all operating segments:
    • Greater than four-fold increase in license fee revenue
    • 19% increase in the sale of industrial enzymes
    • 18% increase in research and development revenue
  • Gross profit for the quarter increased more than three-fold over the same period last year
  • Net income for the quarter was $0.13 per basic share and $0.12 per diluted share as compared to a loss of $0.02 per basic and diluted share for the same period last year
  • Recognized a fee of $5.5 million for the expansion of Dyadic's non-exclusive license agreement with Abengoa Bioenergy New Technologies, Inc. ("Abengoa") to use Dyadic's C1 platform technology to develop, manufacture and sell enzymes to convert biomass into sugars for the production of fuels, chemicals and/or power
  • Demonstrated productivity 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
  • Joined a multidisciplinary research consortium funded by the European Community's Seventh Framework Programme (FP7) to conduct a three year research project coordinated by Procter & Gamble Technical Centres Limited which will employ environmentally-friendly technologies to convert the renewable agricultural waste stream, lignin, into high value sustainable commercial products such as adhesives, detergents and cosmetics

Financial Results

Total revenue for the second quarter ended June 30, 2012 increased to $7.8 million compared to $3.0 million for the second quarter ended June 30, 2011. Total revenue for the six months ended June 30, 2012 increased to $10.4 million compared to $5.3 million for the six months ended June 30, 2011. The increases in total revenue for the three and six month periods ended June 30, 2012 as compared to the same periods ended June 30, 2011 were due to increases in license fee revenue, product related revenue and research and development revenue.

License fee revenue for the three and six months ended June 30, 2012 increased to $5.5 million compared to $1.0 million for the same periods last year. The increases in license fee revenue for the three and six month periods ended June 30, 2012 compared to the same periods ended June 30, 2011 were due to a $5.5 million license fee recognized in the second quarter of 2012 from Abengoa for the expansion of its license rights pursuant to an amended and restated license agreement entered into between Dyadic and Abengoa in April 2012.

Net product related revenue for the second quarter ended June 30, 2012 increased 19% to $2.0 million compared to $1.6 million for the second quarter ended June 30, 2011. Net product related revenue for the six months ended June 30, 2012 increased 7% to $3.7 million from $3.5 million for the same period a year ago.

Research and development revenue for the second quarter ended June 30, 2012 increased 18% to $381,000 compared to $323,000 for the second quarter ended June 30, 2011. Research and development revenue for the six months ended June 30, 2012 increased 43% to $1.2 million compared to $814,000 for the six months ended June 30, 2011.

Gross profit for the second quarter ended June 30, 2012 increased to $6.0 million compared to $1.3 million for the second quarter ended June 30, 2011.  Gross profit for the six months ended June 30, 2012 increased to $6.7 million compared to $2.1 million from the same period a year ago.

Total expenses for the second quarter ended June 30, 2012 decreased 8% to $1.8 million compared to $1.9 million for the same period last year.  Total expenses for the six months ended June 30, 2012 decreased 23% to $3.1 million compared to $4.1 million for the same period a year ago.  The decreases in total expenses were due to a reduction in litigation-related costs from the same period a year ago and Dyadic's continued focus on improving cost controls and operational efficiencies.

Interest expense for the three and six months ended June 30, 2012 increased 53% to $174,000 and $348,000, respectively, compared to the same periods last year.  These increases were due to an additional $3.0 million of convertible debt raised in the second half of 2011.

Net income for the second quarter ended June 30, 2012 was $4.0 million, or $0.13 per basic and $0.12 per diluted share, compared to a net loss of $736,000, or a net loss of $0.02 per basic and diluted share for the second quarter ended June 30, 2011. Net income for the six months ended June 30, 2012 was $3.2 million, or $0.10 per basic and $0.09 per diluted share, compared to a net loss of $2.2 million, or a net loss of $0.07 per basic and diluted share, for the six months ended June 30, 2011.

At June 30, 2012, cash and cash equivalents were $2.3 million compared to $3.7 million at December 31, 2011. The license fee of $5.5 million from Abengoa referenced above is payable in three installments over the next twelve months. The first installment of $2.0 million is due in October 2012.

On April 12, 2012, Dyadic extended the maturity dates of its $8.4 million in outstanding debt to January 1, 2014.  All other provisions of the outstanding debt remained unchanged.

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 http://dyadic.com/investorinfo/financials/.

Conference Call

Dyadic will host a conference call at 5:00 p.m. Eastern Time today to discuss its 2012 second quarter financial results.

In order to participate in the conference call, please use the following dial-in numbers and confirmation code:

  • From the United States or Canada:  888-812-8522
  • From other countries:  913-312-0980
  • Passcode:  4245750

A replay of the conference call will be available on Dyadic's website at 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.

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


























 Six Months Ended June 30, 


 Three Months Ended June 30, 



2012


2011


2012


2011

Revenue:


 (Unaudited) 

 


 (Unaudited) 

 


 (Unaudited) 

 


 (Unaudited) 

 

Product Related Revenue, Net

$

3,704,846

$

3,452,554

$

1,965,465

$

1,647,346

License Fee Revenue


5,500,000


1,017,000


5,500,000


1,017,000

Research and Development Revenue


1,164,520


814,102


380,939


322,793

       Total Revenue


10,369,366


5,283,656


7,846,404


2,987,139










Cost of Goods Sold:


3,629,039


3,213,153


1,862,912


1,684,827

Gross Profit


6,740,327


2,070,503


5,983,492


1,302,312










Expenses:









General and Administrative


2,256,914


3,012,337


1,275,542


1,327,746

Sales and Marketing 


358,818


536,453


129,681


268,719

Research and Development 


464,419


622,117


268,107


318,114

Foreign Currency Exchange Loss (Gain), Net


61,579


(81,344)


103,298


12,690

       Total Expenses


3,141,730


4,089,563


1,776,628


1,927,269










Income (Loss) from Operations


3,598,597


(2,019,060)


4,206,864


(624,957)










Other Income (Expense) 









Interest Income


2,754


6,675


1,269


2,484

Interest Expense


(347,719)


(226,737)


(173,563)


(113,731)

Total Other Income (Expense)


(344,965)


(220,062)


(172,294)


(111,247)










Income (Loss) Before Provision for Income Taxes


3,253,632


(2,239,122)


4,034,570


(736,204)










Provision for Income Taxes


(65,000)


-


(65,000)


-










Net Income (Loss)

$

3,188,632

$

(2,239,122)

$

3,969,570

$

(736,204)



















Net Income (Loss) per Common Share









Basic

$

0.10

$

(0.07)

$

0.13

$

(0.02)

Diluted

$

0.09

$

(0.07)

$

0.12

$

(0.02)










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








Basic


31,562,375


31,265,054


31,609,349


31,271,269

Diluted


33,776,053


31,265,054


33,793,937


31,271,269

 

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



















June 30, 2012



December 31, 2011

ASSETS




(unaudited)




Current Assets:








Cash and Cash Equivalents



$

2,262,569


$

3,691,755

Restricted Cash




210,138



214,376

Accounts Receivable, Net




1,531,989



1,774,773

License Fee Receivable




5,500,000



-

Inventory, Net




3,104,778



3,276,382

Prepaid Expenses and Other Current Assets




292,400



280,812

                  Total Current Assets




12,901,874



9,238,098









Fixed Assets, Net




452,763



552,221

Intangible Assets, Net




507,246



497,385

Other Assets




16,173



16,173




$

13,878,056


$

10,303,877









LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)








Current Liabilities:








Accounts Payable



$

1,486,045


$

2,065,708

Accrued Expenses




393,614



437,719

Accrued Interest Payable  




173,365



173,496

Income Taxes Payable  




65,000



-

Note Payable to Stockholder




-



1,424,941

Deferred Research and Development Obligation




308,640



-

                  Total Current Liabilities




2,426,664



4,101,864

Note Payable to Stockholder




1,424,941



-

Convertible Subordinated Debt




7,000,000



7,000,000





10,851,605



11,101,864

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 – 31,648,120 and 31,448,745, Respectively




31,648



31,449

Additional Paid-in Capital




79,247,943



78,608,586

Stock to be Issued




-



3,750

Accumulated Deficit




(76,253,140)



(79,441,772)





3,026,451



(797,987)




$

13,878,056


$

10,303,877

 

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
















 Six Months Ended June 30, 



2012



2011



 (Unaudited) 



 (Unaudited) 

Operating Activities






 Net Income (Loss) 

$

3,188,632


$

(2,239,122)

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






 Depreciation and Amortization of Fixed Assets 


108,726



138,151

 Amortization of Intangible and Other Assets 


24,457



15,402

 Reserve (Recovery) of Doubtful Accounts 


117,000



(50,011)

 Reserve (Recovery) of Inventory Reserve 


140,000



(75,389)

 Compensation Expense on Stock Option Grants 


600,881



658,684

 Stock to be Issued for Financial Services 


(3,750)



-

 Changes in Operating Assets and Liabilities: 






 Accounts Receivable 


125,784



(300,506)

 License Fee Receivable 


(5,500,000)



-

 Inventory 


31,604



(258,972)

 Prepaid Expenses and Other Current Assets 


(11,588)



(86,844)

 Accounts Payable 


(579,663)



484,003

 Accrued Expenses 


(44,105)



223,249

 Accrued Interest Payable 


(131)



(32,700)

 Income Taxes Payable 


65,000



-

 Deferred Research and Development Obligation 


308,636



150,369

 Net Cash (Used In) Operating Activities 


(1,428,517)



(1,373,686)







 Investing Activities 






 Purchases of Fixed Assets 


(9,265)



(76,919)

 Cost of Patents 


(34,318)



(67,985)

 Restricted Cash  


4,238



(23,370)

 Net Cash (Used In) Investing Activities 


(39,345)



(168,274)







 Financing Activities 






 Proceeds from Stock Warrant Exercises 


-



15,000

 Proceeds from Stock Option Exercises 


38,676



34,369

 Net Cash Provided by Financing Activities 


38,676



49,369







 Net (Decrease) in Cash and Cash Equivalents 


(1,429,186)



(1,492,591)

 Cash and Cash Equivalents at Beginning of Period 


3,691,755



4,535,279

 Cash and Cash Equivalents at End of Period 

$

2,262,569


$

3,042,688







 Supplemental Cash Flow Information: 






 Cash Paid for Interest 

$

173,349


$

259,437

 

SOURCE Dyadic International, Inc.



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