Dyadic (AMEX:DIL)
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Dyadic International, Inc. (AMEX:DIL), a biotechnology
company, today announced financial results for the second quarter and
six-months ended June 30, 2006.
Second Quarter 2006:
Net sales for the quarter ended June 30, 2006, were approximately
$4.0 million, as compared to approximately $4.0 million for the
quarter ended June 30, 2005.
Second quarter 2006 net sales in the pulp & paper industry
increased by 35% over those in the same quarter last year, and totaled
approximately $723,000, which represented 18% of net sales, as
compared to 13% in the 2005 second quarter. Textile industry net sales
were approximately $2.6 million in the second quarter of 2006 versus
approximately $2.8 million in the second quarter of 2005. As
previously reported, 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 June 30, 2006, was approximately
$3.0 million, or $0.13 per share (basic and diluted), as compared to a
net loss of approximately $2.3 million, or $0.10 per share (basic and
diluted), for the quarter ended June 30, 2005.
Cash and cash equivalents were approximately $10.0 million as of
June 30, 2006.
First Half 2006:
Net sales for the six months ended June 30, 2006, were
approximately $7.8 million as compared to approximately $7.7 million
for the comparable period last year. Net sales for the six months
ended June 30, 2006, in the pulp & paper industry increased by 57%
over those in the same period last year, and totaled approximately
$1.2 million. Textile industry net sales were approximately $5.3
million in the first six months of 2006 versus approximately $5.8
million in the same period last year.
Net sales of higher-margin products to industries such as pulp &
paper, animal feed and others, in the aggregate were approximately
$2.5 million for the six months ended June 30, 2006, as compared to
approximately $1.8 million for the comparable period last year,
representing an increase of 35% over net sales for the six-months
ended June 30, 2005.
Net loss for the six months ended June 30, 2006, was approximately
$5.4 million, or $0.23 per share (basic and diluted), as compared to
approximately $5.4 million, or $0.25 per share (basic and diluted),
for the six months ended June 30, 2005.
Additional Highlights:
-- CELLULOSIC ETHANOL. In a presentation last month at the BIO
World Congress on Industrial Biotechnology and Bioprocessing,
Dyadic scientists updated the Company's progress in the
development of enzymes for conversion of lignocellulosic
biomass to ethanol. Capitalizing on our investment in research
and development (R&D) in this area over the last decade,
recent experiments show that proprietary Dyadic enzyme mixes
rapidly and efficiently degraded the cellulosic substrates
tested, and we anticipate these results to guide us to develop
commercially efficient strains and processes for the
production of cellulosic ethanol. The presentation slides are
available on the Company's website at http://www.dyadic.com.
-- CORN TO ETHANOL. Dyadic has 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.
-- THERAPEUTIC PROTEINS. In a presentation last month at the
Society of Industrial Microbiology conference, Dyadic updated
its progress in the expression and biological activity of
therapeutic antibodies in the C1 Expression System. Subsequent
to our successful development of C1 strains with reduced
protease activity, initial results from the latest experiments
indicate that C1 is capable of producing biologically active
full length antibodies at good yields. We intend to focus our
further efforts in this area on biochemically characterizing
antibody products produced from C1 and further improving
yields and protein structures through gene, strain and
fermentation development. The presentation slides are
available on the Company's website at http://www.dyadic.com.
-- C1 GENOME ANNOTATION. In partnership with The Scripps Research
Institute, we completed initial computer algorithm-driven
annotation of Dyadic's proprietary C1 genome. Through this
effort, we located over 11,000 genes and are in the process of
further identifying them and refining the computer results
with human-led annotation. We expect the resulting
comprehensive genetic and biochemical blueprint of C1 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.
"We continue to make progress in all areas core to the Company's
growth strategy - pulp & paper, cellulosic ethanol and biotherapeutic
proteins," commented President and CEO of Dyadic, Mark Emalfarb. "We
are beginning to see results from our significant investment in the
pulp & paper effort, especially in such geographic regions as Asia and
South America, where we have had a sustained effort the longest. We
have a host of trials under way with pulp & paper plants around the
world and expect to see improved financial results in all geographies,
including North America, by year-end."
"With the preliminary annotation of the C1 proprietary genome in
hand, we are quickly gaining knowledge about the cellular mechanism of
our patented C1 fungus, which serves as a biofactory for our products.
Through this knowledge we expect to continue to make our production
system more versatile and robust," added Dr. Glenn Nedwin, Dyadic's
Chief Scientific Officer and President of the Biosciences Business.
"In the cellulosic ethanol area, we are in discussions with a
number of potential partners and are considering other options to
commercialize our technology to exploit this major opportunity," added
Dr. Nedwin. "We are very cognizant of the potential opportunity in
this area and view it as just the beginning of the Carbohydrate
Economy, where many bio-based products are expected to be produced
from carbohydrates (sugars) contained within cellulosic substrates,
similar to the way in which many different products are produced from
oil at petroleum refineries around the world."
Dr. Nedwin continued, "We are also pleased by the R&D progress in
the development of our C1 Host Technology for the production of
therapeutic proteins and expect the new biological activity and yield
data to enhance our dataset, potentially leading to collaborations
with biotech and pharma companies."
"Today we are carefully managing our resources, prioritizing among
the significant opportunities in front of us and are focused on
optimizing the Company's growth potential in ways to maximize
shareholder value," added Mr. Emalfarb.
About Dyadic
Dyadic International, Inc., based in Jupiter, Florida, with
operations in the United States of America, Hong Kong and mainland
China, Poland and The Netherlands, 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, animal feed, alcohol, starch, and food and
beverage 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
subsequent filings with the SEC. 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
June 30, 2006
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $10,001,638
Restricted cash 34,887
Accounts receivable, net of allowance for
uncollectible accounts of $559,492 3,355,105
Inventory 6,501,296
Prepaid expenses and other current assets 1,605,996
------------
Total current assets 21,498,922
------------
Fixed assets, net 1,809,973
Intangible assets, net 122,111
Goodwill 1,808,458
Other assets 125,394
------------
Total assets $25,364,858
============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,869,427
Accrued expenses 1,378,873
Short term note payable 121,625
Income taxes payable 81,359
------------
Total current liabilities 3,451,284
------------
Long-term liabilities:
Note payable to stockholder 2,355,778
Other liabilities 75,380
------------
Total long-term liabilities 2,431,158
------------
Total liabilities 5,882,442
------------
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 - 24,507,104 24,507
Additional paid-in capital 59,031,044
Notes receivable from exercise of stock options (212,500)
Accumulated deficit (39,360,635)
------------
Total stockholders' equity 19,482,416
------------
Total liabilities and stockholders' equity $25,364,858
============
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Dyadic International, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $3,969,566 $3,988,077 $7,795,322 $7,722,437
Cost of goods sold 2,893,030 3,210,890 5,833,413 6,195,648
------------ ------------ ------------ ------------
Gross profit 1,076,536 777,187 1,961,909 1,526,789
------------ ------------ ------------ ------------
Expenses:
Research and
development 990,278 954,188 1,897,958 2,509,162
Selling and
marketing 812,948 616,966 1,615,878 1,186,397
General and
administrative 2,077,169 1,436,899 3,411,738 2,899,251
Foreign currency
exchange losses
(gains), net 65,481 (38,503) 96,742 (36,481)
------------ ------------ ------------ ------------
Total expenses 3,945,876 2,969,550 7,022,316 6,558,329
------------ ------------ ------------ ------------
Loss from
operations (2,869,340) (2,192,363) (5,060,407) (5,031,540)
------------ ------------ ------------ ------------
Other income
(expense):
Interest expense (273,796) (176,360) (447,750) (349,761)
Investment
income, net 87,816 94,516 189,850 23,258
Minority
interest (12,692) (3,147) (13,355) (10,571)
Other (expense)
income, net 69,669 711 11,620 (4,016)
------------ ------------ ------------ ------------
Total other
expense (129,003) (84,280) (259,635) (341,090)
------------ ------------ ------------ ------------
Loss before income
taxes (2,998,343) (2,276,643) (5,320,042) (5,372,630)
Provision for
income taxes 7,267 15,571 32,876 27,878
------------ ------------ ------------ ------------
Net loss $(3,005,610) $(2,292,214) $(5,352,918) $(5,400,508)
============ ============ ============ ============
Net loss per
common share:
Basic and
diluted $(0.13) $(0.10) $(0.23) $(0.25)
============ ============ ============ ============
Weighted average
common shares
used in
calculating net
loss per share:
Basic and
diluted 23,726,130 22,060,371 23,082,443 21,997,824
============ ============ ============ ============
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