Dyadic International Reports 2010 Fiscal Year Financial Results

Mar 10, 2011, 09:15 ET from Dyadic International, Inc.

JUPITER, Fla., March 10, 2011 /PRNewswire/ -- Dyadic International, Inc. (OTC Pink: DYAI), a global biotechnology company, today announced financial results for the year ended December 31, 2010. The financial information contained in this press release should be read in conjunction with the financial statements, footnotes and independent auditors' report which have been posted on the OTC Markets website at www.otcmarkets.com and on Dyadic's website at www.dyadic.com.

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Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "In 2010, Dyadic made substantial progress toward the continued growth of our licensing, research and development, and industrial enzyme businesses. We commenced discussions and negotiations with a broad spectrum of potential new partners and continue to work towards successfully concluding these potential collaborations. Our non-exclusive licensees, Codexis and Abengoa Bioenergy, continue to report positive results in using Dyadic's C1 platform technology to reduce the costs involved in the commercialization of cellulosic ethanol and the production of cellulosic sugars for a variety of applications. Dyadic Netherlands has continued to attract funded research projects which provide a fertile testing ground of our technologies for various industry applications and the potential for those projects to evolve into broader partnerships. Our industrial enzyme business grew revenues by nine percent with improved margins as we continue to achieve greater distribution of new and existing products to our global customers. The recent launch of our Fibrezyme® G200 pulp and paper product was developed from an improved variant of our C1 technology which produces purer forms of proteins and enzymes at higher yields demonstrating once again the versatility and robust nature of our C1 technology platform. Lastly, we continued to strengthen our intellectual property portfolio with the recent grants of two additional U.S. patents."

2010 Highlights

  • Achieved annual revenues of approximately $8.4 million for the year ended December 31, 2010 which included an approximately nine percent increase in product related revenue with improved margins.
  • Raised $4 million in a private placement of convertible subordinated secured promissory notes.
  • Furthered the application of Dyadic's C1 platform technology in the field of biopharmaceuticals by collaborating with EnGen Bio as Dyadic's prospective exclusive licensee for additional collaborations in this field.
  • Achieved a final resolution and dismissal of the stockholder class action lawsuit.
  • Engaged The Abraham Group led by former U.S. Secretary of Energy, Spencer Abraham, as a strategic advisor.
  • Strengthened the management team in the areas of strategic alliances and sales and marketing.
  • Completed the re-sequencing and, with Scripps Florida, a division of the Scripps Research Institute, the re-annotation of the C1 genome.
  • Received an additional U.S. patent pertaining to expression and subsequent screening of DNA libraries in filamentous fungal hosts which may help speed up the discovery of novel genes and development of their corresponding enzymes and proteins.

Financial Results

Total revenue for the year ended December 31, 2010 decreased to approximately $8.4 million as compared to approximately $21.4 million for the prior year.

Net product related revenue for the year ended December 31, 2010 increased nine percent to approximately $7.4 million as compared to approximately $6.8 million for the year ended December 31, 2009. Gross margins for the year ended December 31, 2010 continued to improve as a result of the restructuring of Dyadic's industrial enzyme business to focus on higher margin products for growing segments of the industry such as animal feed, while streamlining and discontinuing lower margin products.

License fee revenue decreased to approximately $37,250 for the year ended December 31, 2010 as compared to $10.3 million for the prior year. This decrease was due largely to the fact that Dyadic recognized a $10 million upfront license fee from Codexis, Inc. in 2009 pursuant to a non-exclusive license agreement between Codexis and Dyadic and did not consummate any similar license agreements in 2010.

Research and development revenue decreased to approximately $1.0 million for the year ended December 31, 2010 as compared to approximately $4.3 million for the year ended December 31, 2009.  This decrease was largely due to the recognition of approximately $3.3 million in research and development revenue in 2009 from Dyadic's non-exclusive licensee, Abengoa Bioenergy.

Net loss for the year ended December 31, 2010 was approximately $5.5 million, or $(0.18) per basic and fully diluted share, as compared to net income of approximately $5.2 million, or $0.17 per basic and $0.16 per fully diluted share, for fiscal 2009.

At December 31, 2010, cash and cash equivalents totaled approximately $4.5 million as compared to approximately $8.4 million at December 31, 2009. This decrease was largely due to the net loss for the period and the resolution of the stockholder class action lawsuit which was partially offset by the private debt placement mentioned below.

At December 31, 2010, total debt was approximately $5.4 million as compared to approximately $1.4 million at December 31, 2009. This increase was due to Dyadic's private placement in 2010 of $4.0 million of convertible subordinated debt.

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.  Please visit Dyadic's website at www.dyadic.com.

Dyadic makes financial disclosures through the OTC Disclosure and News Service which offers free information on the OTC Markets website (www.otcmarkets.com) concerning companies traded on the OTC Markets. Investors can access and download Dyadic's financial reports and other announcements that Dyadic makes through the OTC Markets website. Dyadic will also continue providing updates through regular press releases as appropriate.

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

CONSOLIDATED STATEMENTS OF OPERATIONS




Year Ended  December 31,



2010


2009

Revenue:





Product Related Revenue, Net

$

7,389,793

$

6,800,071

License Fee Revenue


37,250


10,300,000

Research and Development Revenue


1,010,559


4,321,258

          Total Revenue


8,437,602


21,421,329






Cost of Goods Sold


6,497,935


6,292,411

Gross Profit


1,939,667


15,128,918






Expenses:





General and Administrative


5,157,755


4,334,190

Sales and Marketing


988,453


958,143

Research and Development


1,240,510


1,211,035

Foreign Currency Exchange Losses, Net


148,423


56,455

          Total Expenses


7,535,141


6,559,823






Income (Loss) from Operations


(5,595,474)


8,569,095






Other Income (Expense)





Interest Income


61,573


141,811

Interest Expense


(248,319)


(219,892)

Loss on Stockholder Litigation


-


(3,250,000)

Gain on Reduction of Accrued Stockholder Litigation


410,000


-

Other


(155,712)


-

          Total Other Income (Expense)


67,542


(3,328,081)











Net Income (Loss)

$

(5,527,932)

$

5,241,014






Net Income (Loss) per Common Share:





Basic

$

(0.18)

$

0.17

Diluted

$

(0.18)

$

0.16






Weighted Average Common Shares Used in





 Calculating Net Income (Loss) per Share:





Basic


31,011,137


30,121,396

Diluted


31,011,137


33,231,170



DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES 

CONSOLIDATED BALANCE SHEETS 




December 31,



2010


2009

ASSETS





Current Assets:





Cash and Cash Equivalents

$

4,535,279

$

8,419,934

Restricted Cash


247,082


316,129

Accounts Receivable, Net


1,276,574


1,376,034

Inventory, Net


2,782,433


2,820,381

Prepaid Expenses and Other Current Assets


336,638


420,654

                    Total Current Assets


9,178,006


13,353,132






Fixed Assets, Net


719,161


839,639

Intangible Assets, Net


310,978


148,167

Other Assets


16,930


16,930


$

10,225,075

$

14,357,868






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Accounts Payable

$

1,801,123

$

1,949,038

Accrued Expenses


417,996


713,163

Accrued Stockholder Litigation


-


3,250,000

Accrued Interest Payable


146,230


59,838

Note Payable to Stockholder


1,424,941


1,424,941

Income Taxes Payable


168


767

                    Total Current Liabilities


3,790,458


7,397,747

Convertible Subordinated Debt


4,000,000


-



7,790,458


7,397,747






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 – 31,138,120 and 30,613,995,

Respectively


31,138


30,614

Additional Paid-In Capital


77,101,690


76,075,899

Stock to be Issued


-


23,887

Accumulated Deficit


(74,698,211)


(69,170,279)

                    Total Stockholders' Equity


2,434,617


6,960,121


$

10,225,075

$

14,357,868








DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS 




Year Ended  December 31,



2010



2009

Operating Activities






Net Income (Loss)

$

(5,527,932)


$

5,241,014

Adjustments to Reconcile Net Income (Loss) to Net Cash

Provided by (Used In) Operating Activities:






Depreciation and Amortization of Fixed Assets


309,162



294,194

Amortization of Intangible and Other Assets


18,142



14,253

Reduction of Allowance for Doubtful Accounts


(55,818)



(55,550)

Reduction of Inventory Reserve


(418,406)



(842,587)

Compensation Expense on Stock Option Grants


888,147



118,103

Stock Issued for Consulting Services


63,000



31,521

Loss on Stockholder Litigation


-



3,250,000

Gain on Reduction of Accrued Stockholder Litigation


(410,000)



-

Changes in Operating Assets and Liabilities:






Accounts Receivable


155,278



183,716

Inventory


456,354



1,797,956

Prepaid Expenses and Other Current Assets


84,016



216,548

Other Assets


-



120,573

Accounts Payable


(147,915)



(729,756)

Accrued Expenses


(295,167)



387,529

Accrued Interest Payable


86,392



(134,422)

Accrued Stockholder Litigation


(2,840,000)



-

Deferred Research and Development Obligation


-



(3,332,863)

Income Taxes Payable


(599)



(7,892)

Net Cash Provided by (Used In) Operating Activities


(7,635,346)



6,552,337







Investing Activities






Purchases of Fixed Assets


(188,684)



(94,376)

Patent Costs


(180,953)



-

Restricted Cash


69,047



28,227

Net Cash (Used In) Investing Activities


(300,590)



(66,149)







Financing Activities






Repayment of Note Payable to Stockholder


-



(1,000,000)

Proceeds from Issuance of Convertible Subordinated Debt


4,000,000



-

Proceeds from Stock Warrant Exercises


16,642



86,654

Proceeds from Stock Option Exercises


34,639



20,550

Net Cash (Used In) Provided by Financing Activities


4,051,281



(892,796)







Net Increase (Decrease) in Cash and Cash Equivalents


(3,884,655)



5,593,392

Cash and Cash Equivalents at Beginning of Year


8,419,934



2,826,542

Cash and Cash Equivalents at End of Year

$

4,535,279


$

8,419,934













Supplemental Cash Flow Information:












Cash Paid for Interest

$

161,927


$

354,314









SOURCE Dyadic International, Inc.



RELATED LINKS

http://www.dyadic.com