Dyadic (AMEX:DIL)
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Dyadic International, Inc. (AMEX:DIL), a biotechnology
company, today announced financial results for the first quarter ended
March 31, 2006.
First Quarter 2006 and Subsequent Highlights:
Net sales for the quarter ended March 31, 2006, were approximately
$3.8 million, as compared to approximately $3.7 million for the
quarter ended March 31, 2005. First quarter 2006 net sales to
customers in the pulp & paper industry were more than double those in
the same quarter last year and totaled $479,000 which represented 13%
of net sales, as compared to 6% in the 2005 first quarter. First
quarter 2006 net sales to customers in the animal feed industry also
increased significantly and represented 8% of net sales as compared to
5% last year. Textile industry net sales were approximately $2.7
million in the first quarter of 2006 versus approximately $3.1 million
in the first quarter of 2005. As previously discussed, the market for
enzymes for applications in the textile industry continues to be
affected by global pressure on pricing and margins.
Net loss for the quarter ended March 31, 2006, was approximately
$2.3 million, or $0.10 per share (basic and diluted), as compared to a
net loss of approximately $3.1 million, or $0.14 per share (basic and
diluted), for the quarter ended March 31, 2005.
Cash and cash equivalents were approximately $9.1 million as of
March 31, 2006. In addition, to date in the second quarter of 2006,
Dyadic has received approximately $3.5 million in gross proceeds from
the exercise of warrants and stock options.
In May 2006, Dyadic announced that the Company's two largest
stockholders -- the Emalfarb Trust, an affiliate of Mark Emalfarb, and
the Francisco Trust, which was established for the benefit of Mr.
Emalfarb's immediate family -- converted promissory notes which had
combined principal and accrued interest of approximately $1.6 million
into an additional 473,835 shares of Dyadic common stock. Subsequent
to the conversion of the convertible promissory notes, in the
aggregate, these two trusts own approximately 44.2% of Dyadic's
outstanding shares of common stock as of May 1, 2006.
In addition, Dyadic announced the extension of the maturity date
of the Revolving Note held by the Emalfarb Trust to January 1, 2008
from January 1, 2007. The Revolving Note has a combined principal and
accrued interest balance of approximately $2.4 million.
Additional Highlights:
-- Strengthened our management team and Board of Directors with
the addition of Dr. Glenn Nedwin, co-founder and former
President of Novozymes, Inc., a California-based R&D
subsidiary of Danish-based Novozymes A/S, who joined Dyadic as
Chief Scientific Officer and President of the BioSciences
Business.
-- Continued working with the Iowa Corn Promotion Board on a
Department of Energy-funded program, where Dyadic is providing
enzymes to convert cellulose and hemicellulose, which comprise
as much as half the weight of Dried Distillers' Grains
(DDG's), to fermentable sugars. These sugars can be utilized
to produce additional ethanol and other chemicals that have
historically been petroleum-derived.
-- Partnered with The Scripps Research Institute to work with
Dyadic scientists to provide a complete annotation of the
genome of Dyadic's proprietary C1 fungal organism, which was
sequenced by another vendor in 2005. We expect this knowledge
to facilitate further development of our proprietary C1 Host
Technology as a robust platform for the discovery, development
and production of biotherapeutics, enzymes and other
biomolecules for medical and industrial applications.
-- Purchased the remaining 17.5% of the equity that Dyadic did
not already own in its Asian subsidiary.
-- Expanded our international reach with the addition of
distributors in several countries where we do not currently
sell direct.
-- Added capacity at our manufacturing facility in Poland to meet
the growth we expect in our pulp & paper and feed enzyme
businesses.
"We believe that we have made great strides during the first
quarter in expanding our Enzyme Business, and in the continued
development of our patented C1 Host Technology platform as well as
other proprietary technologies for enzyme, biofuel and pharmaceutical
applications. We see a significant opportunity to use our technologies
for the design and large-scale production of proprietary enzymes to
convert various agricultural products and waste products into
fermentable sugars, which can then be used in the production of
traditional and cellulosic ethanol. We also moved forward in the
development of our C1 Host Technology to facilitate the discovery,
development and large-scale production of human antibodies and other
high-value therapeutic proteins," said President and CEO Mark
Emalfarb.
"These and other developments significantly enhance Dyadic and the
company's financial flexibility, simplify our balance sheet, and
represent a strong vote of confidence in Dyadic's future," commented
Mr. Emalfarb. "Our initiatives to increase sales of Dyadic's
proprietary enzymes to the pulp & paper and animal feed industries are
delivering the results we anticipated. We made our first shipment of
products to a U.S.-based paper customer in the first quarter, and are
optimistic that further successful mill trials will position Dyadic
for greatly increased sales volume in the future in what we estimate
is a $1 billion market opportunity," Emalfarb said.
About Dyadic
Dyadic International, Inc. is engaged in the development,
manufacture and sale of biological products using a number of
proprietary fungal strains to produce enzymes and other biomaterials,
principally focused on a system for protein production based on the
patented Chrysosporium lucknowense fungus, known as C1. Dyadic is
applying its technologies to produce enzymes for use in converting
various agricultural products (e.g. corn) and waste products (e.g.
switch grass, wheat straw, sugar cane bagasse, etc.) into fermentable
sugars, which can then be used in the production of traditional and
cellulosic ethanol as well as other products currently derived from
petroleum. Dyadic's C1 technology also is being developed to
facilitate the discovery, development and large-scale production of
human antibodies and other high-value therapeutic proteins. Dyadic
currently sells more than 45 liquid and dry enzyme products to more
than 200 industrial customers in approximately 50 countries for the
textile, pulp & paper and animal feed industries.
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 our actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. For a discussion of these risks and
uncertainties, please see our filings from time to time with the
Securities and Exchange Commission, which are available free of charge
on the SEC's web site at http://www.sec.gov, including our Annual
Report on Form 10-KSB for the year ended December 31, 2005, and our
Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006.
Except as required by law, we expressly disclaim any intent or
obligation to update any forward-looking statements.
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Dyadic International, Inc.
Condensed Consolidated Balance Sheet
March 31, 2006
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 9,104,190
Restricted cash 34,658
Accounts receivable, net of allowance for
uncollectible accounts of $523,326 2,788,882
Inventory 5,952,959
Prepaid expenses and other current assets 1,030,927
------------
Total current assets 18,911,616
------------
Fixed assets, net 1,787,766
Intangible assets, net 135,143
Goodwill 467,821
Other assets 121,038
------------
Total assets $21,423,384
============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,689,922
Accrued expenses 1,100,027
Accrued interest payable to stockholders 143,592
Current portion of notes payable to stockholders 1,557,960
Short term notes payable 104,250
Income taxes payable 54,269
------------
Total current liabilities 5,650,020
------------
Long-term liabilities:
Notes payable to stockholders, net of current portion 2,338,487
Other liabilities 111,471
Minority interest 104,556
------------
Total long-term liabilities 2,554,514
------------
Total liabilities 8,204,534
------------
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 - 22,467,577 22,468
Additional paid-in capital 49,763,907
Notes receivable from exercise of stock options (212,500)
Accumulated deficit (36,355,025)
------------
Total stockholders' equity 13,218,850
------------
Total liabilities and stockholders' equity $21,423,384
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Dyadic International, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
2006 2005
------------ ------------
Net sales $ 3,825,756 $ 3,734,360
Cost of goods sold 2,940,383 2,984,756
------------ ------------
Gross profit 885,373 749,604
------------ ------------
Expenses:
Research and development 907,679 1,568,006
Sales and marketing 802,930 569,431
General and administrative 1,334,569 1,449,322
Foreign currency exchange losses
(gains), net 31,261 (61,262)
------------ ------------
Total expenses 3,076,439 3,525,497
------------ ------------
Loss from operations (2,191,066) (2,775,893)
------------ ------------
Other income (expense):
Interest expense (173,954) (173,402)
Investment income (loss), net 102,034 (71,259)
Minority interest (663) (7,424)
Other expense, net (58,050) (68,010)
------------ ------------
Total other expense (130,633) (320,095)
------------ ------------
Loss before income taxes (2,321,699) (3,095,988)
Provision for income taxes 25,609 12,307
------------ ------------
Net loss $(2,347,308) $(3,108,295)
============ ============
Net loss per common share:
Basic and Diluted $ (0.10) $ (0.14)
============ ============
Weighted average common shares used in
calculating net loss per share:
Basic and diluted 22,431,596 21,934,583
============ ============
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