JUPITER, Fla., May 15, 2013 /PRNewswire/ -- Dyadic International, Inc. (OTC Pink: DYAI), a global biotechnology company, today announced financial results for the quarter ended March 31, 2013.
Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "The highlights of Dyadic's first quarter are continuing momentum in our industrial enzyme business and commercialization of our C1 enzyme expression platform. As we announced earlier today, Dyadic entered into a landmark partnership agreement with BASF, which further validates C1 as an industry-leading enzyme discovery and production platform. Based on our current trajectory, we expect profitability and revenue growth in 2013. Industrial enzyme sales increased by over 20% compared to the first quarter of last year. Our cash position improved with the January 2013 receipt of a $1,000,000 license payment, representing the second installment due under the Abengoa license expansion. Finally, the hiring of Danai Brooks as our new Chief Operating Officer will provide the company with additional leadership, augment our management capabilities, and accelerate our licensing and other strategic collaboration efforts."
Operating HighlightsEarlier today, Dyadic announced that it entered a non-exclusive worldwide license agreement with BASF, the world's leading chemical company with over $90 billion in sales. Under the terms of the agreement, BASF will be able to use Dyadic's patented and proprietary C1 platform technology to develop, produce, distribute and sell industrial enzymes in certain fields for a variety of applications. Additionally, BASF will fund research and development at Dyadic's research lab in The Netherlands. In addition to this research funding, BASF has agreed to pay Dyadic a $6 million upfront license fee, and certain research and commercial milestone fees, as well as royalties upon commercialization.
Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "Empowering BASF, the world's leading chemical company, with our C1 technology provides them with access to a commercially-proven industrial enzyme production platform. In using its vast resources to develop, manufacture and sell new products from the C1 platform, BASF will have business opportunities for a variety of markets, including animal and human nutrition. This transaction will have long-lasting effects on the industrial enzyme businesses of both Dyadic and BASF."
Emalfarb concluded, "Dyadic looks forward to working with BASF and utilizing our C1 technology for the expression of next-generation enzyme products for a range of applications. This collaboration is yet another example of Dyadic's ability to leverage our technologies in a variety of industries."
In addition to the BASF research and license agreement noted above, other recent developments include:
First Quarter 2013 Financial ResultsFirst quarter 2013 revenue was $2.5 million, which is comparable to the first quarter of 2012. Product related revenue increased 20% to $2.1 million from $1.7 million for the same period last year. Product sales growth was offset by a 51% decrease in research and development revenue to $387,000 for the first quarter of 2013. The decline was due to a delay in the start of several external research and development projects that have now either begun or are expected to begin in the second quarter. Due to the nature and timing of projects and resources, research and development revenue may vary materially from quarter-to-quarter as projects are initiated, completed, or extended.
Gross profit decreased to $520,000 in the first quarter of 2013 from $757,000 in the first quarter of 2012 due to the decrease in research and development revenue and the loss of related margins on that revenue. Product margins decreased slightly in the first quarter of 2013 as compared to 2012, due primarily to changes in the product sales mix. During the first quarter of 2013, the Company also increased its provision for slow moving inventory, and experienced increases in certain raw material prices. The Company continuously evaluates more cost effective raw materials for use in its manufacturing processes on an ongoing basis. Product related revenue margins are expected to improve through the remainder of the year.
Operating expenses increased 33% to $1.8 million when compared to Q1 2012. This increase was due to higher general and administrative expenses, primarily a result of additional legal costs being incurred for experts necessary for the Company's litigation against former outside legal counsel. These costs were anticipated and are expected to be incurred through the conclusion of trial. During the first quarter, the Company increased its investment in research and development to $290,000, a 48% increase over Q1 2012.
The net loss for the quarter ended March 31, 2013 was $1.5 million ($0.05 per basic and diluted share), versus a net loss of $781,000 ($0.02 per basic and diluted share) for the quarter ended March 31, 2012. The increase in the net loss was due primarily to the decrease in research and development revenue gross profit combined with increased operating expenses.
During the first quarter of 2013, the Company generated operating cash flows of $154,000.
For the same period in 2012, the Company used $454,000 of cash flow in operations. During the first quarter of 2013, the Company received the second installment of $1.0 million due under the Abengoa license agreement expansion. For the same period, capital expenditures were $88,000, and proceeds from the exercise of stock options were $59,000.
The Company's cash and cash equivalents increased 3% to $4.1 million at quarter end, when compared to the cash balance of $4.0 million as of December 31, 2012. Debt decreased by $182,000 to $8.2 million as of March 31, 2013, due to the conversion of subordinated debt to common stock during the quarter.
2013 OutlookAs a result of the BASF licensing fee and expected growth in product sales, the Company now expects to report profitability and increased revenue for the full year 2013.
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 CallA conference call to discuss Q1 2013 results is scheduled for 5:00 p.m. Eastern Time on Wednesday, May 15, 2013. The conference call may be accessed by dialing +1 (800) 289-0517 (from the United States or Canada) or +1 (913) 981-5556 (from other countries) five to ten minutes prior to start time and providing the passcode 2781568. A simultaneous webcast of the call can be accessed via the Dyadic website (www.dyadic.com). A replay of the conference call will also be available on the Dyadic website shortly after the live event.
About DyadicDyadic 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 StatementsCertain 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 SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, 20132012Revenue: (Unaudited) (Unaudited) Product Related Revenue, Net
1,739,381Research and Development Revenue386,736783,581Total Revenue2,481,8082,522,962Cost of Goods Sold:1,961,3921,766,125Gross Profit520,416756,837Expenses:General and Administrative1,258,366981,373Sales and Marketing 203,930229,137Research and Development 289,584196,310Foreign Currency Exchange Losses/(Gains), Net60,293(41,719)Total Expenses1,812,1731,365,101(Loss) from Operations(1,291,757)(608,264)Other Income (Expense) Interest Income1,2781,485Interest Expense(169,717)(174,156)Total Other Income (Expense)(168,439)(172,671)Net (Loss)
(780,935)Net (Loss) per Common ShareBasic
(0.02)Weighted Average Common Shares Used in Calculating Net (Loss) Per Share:Basic31,929,18531,515,400Diluted31,929,18531,515,400 DYADIC INTERNATIONAL, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETSMarch 31,
2012ASSETS(Unaudited)Current Assets:Cash and Cash Equivalents$
3,990,062Restricted Cash186,554192,355Accounts Receivable, Net1,417,6021,260,798License Fee Receivable2,500,0003,500,000Inventory, Net1,998,9212,765,187Prepaid Expenses and Other Current Assets242,443237,389Total Current Assets10,457,46011,945,791Fixed Assets, Net434,360393,860Intangible Assets, Net521,138525,224Other Assets16,17316,173$
12,881,048LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:Accounts Payable$
1,687,177Accrued Expenses384,341412,483Accrued Interest Payable170,8331,905Note Payable to Stockholder1,424,9411,424,941Convertible Subordinated Debt6,818,000-Deferred Research and Development Obligation493,169567,400Total Current Liabilities10,667,9094,093,906Convertible Subordinated Debt-7,000,00010,667,90911,093,906COMMITMENTS AND CONTINGENCIESStockholders' Equity:Preferred Stock, $.0001 Par Value:Authorized Shares – 5,000,000; None Issued and Outstanding--Common Stock, $.001 par value,Authorized Shares – 100,000,000; Issued and Outstanding – 32,126,245 and 31,656,245, Respectively32,12631,656Additional Paid-in Capital80,281,56779,847,761Accumulated Deficit(79,552,471)(78,092,275)Total Stockholders' Equity761,2221,787,142$
12,881,048 DYADIC INTERNATIONAL, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 20132012 (Unaudited) (Unaudited) Operating Activities Net (Loss)
(780,935) Adjustments to Reconcile Net (Loss) to Net CashProvided By (Used in) Operating Activities: Depreciation and Amortization of Fixed Assets 47,66852,534 Amortization of Intangible and Other Assets 12,14612,131 Recovery of Allowance for Doubtful Accounts (15,000)- Increase in Inventory Reserve 108,000- Compensation Expense on Stock Option Grants 193,776308,974 Changes in Operating Assets and Liabilities: Accounts Receivable (141,804)127,574 License Fee Receivable 1,000,000- Inventory 658,266(507,903) Prepaid Expenses and Other Current Assets (5,054)(76,398) Accounts Payable (310,552)114,106 Accrued Expenses (28,142)(11,410) Accrued Interest Payable 168,928(131) Deferred Research and Development Obligation (74,231)307,275 Net Cash Provided By (Used In) Operating Activities 153,805(454,183) Investing Activities Purchases of Fixed Assets (88,168)(6,332) Cost of Patents (8,060)(17,099) Restricted Cash 5,801(7,496) Net Cash (Used In) Investing Activities (90,427)(30,927) Financing Activities Proceeds from Stock Option Exercises 58,50023,337 Net Increase (Decrease) in Cash and Cash Equivalents 121,878(461,773) Cash and Cash Equivalents at Beginning of Period 3,990,0623,691,755 Cash and Cash Equivalents at End of Period
3,229,982 Supplemental Cash Flow Information: Cash Paid for Interest
173,496 Non-Cash Items: Conversion of Convertible Subordinated Debtinto Shares of Common Stock
|SOURCE Dyadic International, Inc.|
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