Dyadic International Reports 2010 First Quarter Financial Results

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May 14, 2010, 04:15 ET

JUPITER, Fla., May 14 /PRNewswire-FirstCall/ -- Dyadic International, Inc. ("Dyadic") (Pink Sheets: DYAI), a leading-edge biotechnology company focused on the discovery, development, manufacture and sale of specialty enzyme products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries, today announced financial results for the quarter ended March 31, 2010. 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 Pink Sheets website at www.pinksheets.com and on Dyadic's website at www.dyadic.com.

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Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "We are pleased with our first quarter results as we continue to build our infrastructure to meet the increasing demands for our enzyme products and further the advancement and monetization of our technologies. We are particularly encouraged by the 30% increase in our product sales from the same period last year."

First Quarter Highlights and Recent Events

Achieved approximately 30% growth in first quarter product revenues over the same period last year
Improved product margins
Increased production capacity to meet current and anticipated demand
Resolved the securities class action stockholder lawsuit
Strengthened Dyadic's leadership team through the appointment of an Executive Director Strategic Alliances and a Vice President Sales & Marketing
Dedicated a greater portion of Dyadic's research and development capabilities to profit generating collaborations

Financial Results

Total revenue for the three months ended March 31, 2010 decreased to approximately $2.0 million, as compared to approximately $5.0 million for the three months ended March 31, 2009. The decrease was primarily attributable to Dyadic's recognition in the first quarter of 2009 of approximately $3.3 million from Abengoa Bioenergy R&D, Inc. ("Abengoa") pursuant to an agreement between Abengoa and Dyadic. Excluding this agreement from 2009, total revenue for the first quarter of 2010 increased 21% over the same period last year, highlighted by an approximate 30% increase in net product related revenue, from approximately $1.5 million for the three months ended March 31, 2009 to approximately $1.9 million for the three months ended March 31, 2010.

Product related gross margins as a percentage of revenues increased approximately 10% which was largely due to the continued focus on the sale of higher margin products to growing segments of the industrial enzyme market as well as an increase in operational efficiencies.

Research and development expenses decreased approximately 25% from the same period last year, to $286,000, as Dyadic dedicated a greater portion of its research and development resources to profit generating collaborations.

Other income for the first quarter of 2010 increased by approximately $440,000, of which $410,000 represented the gain from the reduction of the stockholder litigation accrual.

Net loss for the quarter ended March 31, 2010 was approximately $1.1 million, or $(0.04) per basic and diluted share, as compared to net income of approximately $2.3 million, or $0.08 per basic and $0.07 per diluted share for the quarter ended March 31, 2009. This decrease is due to the recognition of approximately $3.3 million of Abengoa research and development revenue in the first quarter of 2009 as described above.

General and administrative costs increased approximately 65% from approximately $823,000 for the three months ended March 31, 2009 to approximately $1.4 million for the three months ended March 31, 2010, due primarily to additional legal, consulting and accounting fees as well as stock based compensation. Some of these legal fees were attributable to the class action stockholder lawsuit which has subsequently been resolved.

At March 31, 2010, cash and cash equivalents were approximately $7.5 million and working capital was approximately $5.1 million.

Mr. Emalfarb further stated, "The growth of our industrial enzyme revenue validates the continued demand for our products and the improving confidence of our customers in the global economic recovery. Our recent addition of key sales and strategic positions reflects our deep commitment to aggressively leveraging our technologies in the primary areas of biofuels and biopharmaceuticals while also continuing to grow our core industrial enzyme business. We intend to achieve this growth by capitalizing on the GRAS acknowledgment we received from the FDA last year and by continuing to offer high-quality products for the animal feed, pulp and paper, starch and alcohol, food and brewing, textiles and alternative fuels markets."

About Dyadic

Dyadic International, Inc. is a leading-edge early-stage biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries. Please visit Dyadic's website at www.dyadic.com.

Dyadic makes financial disclosures through the Pink OTC Markets Disclosure and News Service which offers free information on the Pink Sheets website (www.pinksheets.com) concerning issuers listed on the Pink Sheets over-the-counter market. Investors can access and download Dyadic's financial reports and other announcements that Dyadic makes through the Pink Sheets 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended March 31,
		2010		2009
Revenue:		(Unaudited)		(Unaudited)
Product Related Revenue, Net	$	1,879,145	$	1,456,199
License Fee Revenue		32,000		-
Research and Development Revenue		88,235		3,524,413
Total Revenue		1,999,380		4,980,612

Cost of Goods Sold		1,605,329		1,155,997
Gross Profit		394,051		3,824,615

Expenses:
General and Administrative		1,359,667		823,257
Sales and Marketing		226,605		271,017
Research and Development		286,167		383,202
Foreign Currency Exchange Losses, Net		33,293		31,482
Total Expenses		1,905,732		1,508,958

Income (Loss) from Operations		(1,511,681)		2,315,657

Other Income (Expense)
Interest Income		21,270		22,879
Interest Expense		(33,379)		(66,550)
Gain on Reduction of Accrued Stockholder Litigation		410,000		-
Other		-		1,198
Total Other Income (Expense)		397,891		(42,473)


Net Income (Loss)	$	(1,113,790)	$	2,273,184


Net Income (Loss) per Common Share
Basic	$	(0.04)	$	0.08
Diluted	$	(0.04)	$	0.07

Weighted Average Common Shares Used in Calculating
Net Income (Loss) Per Share:
Basic		30,832,621		29,990,675
Diluted		30,832,621		32,223,645

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
		March 31, 2010		December 31, 2009
Assets		(Unaudited)
Current Assets:
Cash and Cash Equivalents	$	7,545,537	$	8,419,934
Restricted Cash		317,558		316,129
Accounts Receivable, Net		1,370,985		1,376,034
Inventory, Net		2,467,109		2,820,381
Prepaid Expenses and Other Current Assets		386,150		420,654
Total Current Assets		12,087,339		13,353,132

Fixed Assets, Net		872,548		839,639
Intangible Assets, Net		144,652		148,167
Other Assets		29,518		16,930
	$	13,134,057	$	14,357,868

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts Payable	$	1,996,122	$	1,949,038
Accrued Expenses		611,600		713,163
Accrued Stockholder Litigation		2,840,000		3,250,000
Accrued Interest Payable to Stockholder		33,379		59,838
Deferred Research and Development Obligation		90,614		-
Note Payable to Stockholder		1,424,941		1,424,941
Income Taxes Payable		-		767
Total Current Liabilities		6,996,656		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 – 30,986,370		30,986		30,614
Additional Paid-in Capital		76,327,484		76,075,899
Stock to be Issued		63,000		23,887
Accumulated Deficit		(70,284,069)		(69,170,279)
		6,137,401		6,960,121
	$	13,134,057	$	14,357,868

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		Three Months Ended March 31,
		2010		2009
		(Unaudited)		(Unaudited)
Operating Activities
Net Income (Loss)	$	(1,113,790)	$	2,273,184
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By (Used In) Operating Activities:
Depreciation and Amortization of Fixed Assets		71,713		52,397
Amortization of Intangible and Other Assets		3,515		3,514
Recovery of Doubtful Accounts		-		(4,476)
Recovery of Inventory Reserve		(97,713)		-
Compensation Expense on Stock Option Grants		196,101		28,851
Stock to be Issued for Rent		-		5,000
Stock to be Issued for Financial Services		63,000		-
Gain on Reduction of Accrued Stockholder Litigation		(410,000)		-
Changes in Operating Assets and Liabilities:
Accounts Receivable		5,049		53,823
Inventory		450,985		257,144
Prepaid Expenses and Other Current Assets		34,504		(4,881,458)
Other Assets		(12,588)		16,717
Accounts Payable		47,084		42,301
Accrued Expenses		(101,563)		(25,952)
Accrued Interest Payable to Stockholder		(26,459)		(194,260)
Deferred Research and Development Obligation		90,614		6,667,137
Income Taxes Payable		(767)		(7,634)
Net Cash Provided By (Used In) Operating Activities		(800,315)		4,286,288

Investing Activities
Purchases of Fixed Assets		(104,622)		-
Restricted Cash Deposit		(1,429)		18,980
Net Cash Provided By (Used In) Investing Activities		(106,051)		18,980

Financing Activities
Proceeds from Stock Option Exercises		15,093		-
Proceeds from Warrant Exercises		16,876		-
Repayment of Note Payable to Stockholder		-		(1,000,000)
Net Cash Provided By (Used In) Financing Activities		31,969		(1,000,000)

Net Increase (Decrease) in Cash and Cash Equivalents		(874,397)		3,305,268
Cash and Cash Equivalents at Beginning of Period		8,419,934		2,826,542
Cash and Cash Equivalents at End of Period	$	7,545,537	$	6,131,810

Supplemental Cash Flow Information:
Cash Paid for Interest	$	59,838	$	260,810