There was no license fee revenue recognized in the third quarter. The remaining $1.0 million upfront fee for the technology license that was signed with BASF on May 6, 2013 was due upon completion of the technology transfer. The transfer was completed on October 11, 2013 and the remaining revenue will be recognized in the fourth quarter. The payment was received on November 5, 2013.
Research and development revenue for the third quarter decreased 50% to $216,000 compared to $427,000 for the third quarter of 2012. This decrease was due to the delay 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. Dyadic is now generating additional research and development revenue from the ongoing research funded by BASF.
Gross profit for the third quarter increased 14% to $691,000 compared to $614,000 for the third quarter last year. The increase was due primarily to increased product related revenue and the associated margins. Gross margins as a percent of sales were negatively impacted by changes to the product mix and the decreased research and development revenue, which generally have higher margins.
Operating expenses for the third quarter increased 44% to $2.0 million compared to $1.4 million for the same period last year. The increase was due primarily to increased costs associated with litigation against the Company's former outside legal counsel of approximately $514,000. The increased litigation costs were anticipated and are expected to continue into 2014.
On October 22, 2013, the arbitration proceedings brought by Mr. Emalfarb against the Company were dismissed. In consideration for the dismissal, the Company agreed t
|SOURCE Dyadic International, Inc.|
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