Dyadic (AMEX:DIL)
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Dyadic International, Inc. (AMEX:DIL), a biotechnology company, today
announced financial results for the third quarter ended September 30,
2006, highlighted by a notable increase in sales of the Company's
proprietary enzymes to customers in the pulp and paper industry,
effective cost management resulting in a strong closing cash balance,
and improved gross margin as compared to the third quarter of 2005.
Third Quarter 2006:
Total net sales for the quarter ended September 30, 2006 increased
slightly to approximately $4.2 million, as compared to approximately
$4.1 million for the quarter ended September 30, 2005.
Third quarter 2006 net sales to the pulp & paper industry increased by
72% versus prior year to approximately $0.9 million, which represented
21% of net sales as compared to 13% of net sales for the third quarter
of 2005. Textile industry net sales were approximately $2.4 million for
the third quarter of 2006 versus approximately $2.8 million in the third
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. Sales of enzymes to the animal feed and
other markets increased to approximately $0.9 million for this year's
third quarter from approximately $0.8 million for the same period of
2005.
Gross margin for the third quarter of 2006 increased to 31% of revenue
as compared to 20% for the third quarter of 2005, reflecting the shift
in sales from the textile industry to the pulp and paper, animal feed
and other higher margin industries.
Net loss for the quarter ended September 30, 2006 decreased to
approximately $2.3 million, or $0.10 per share (basic and diluted), as
compared to a net loss of approximately $2.5 million, or $0.11 per share
(basic and diluted), for the quarter ended September 30, 2005.
At September 30, 2006, cash and cash equivalents were approximately $9.4
million, prior to the closing on November 8, 2006 of the $10 million R&D
and stock purchase transaction with Abengoa Bioenergy. Inventories at
the end of this year's third quarter were approximately $6.3 million.
Working capital at September 30, 2006 amounted to approximately $16.5
million, and shareholders' equity was approximately $17.9 million.
Nine Months 2006:
Net sales for the nine months ended September 30, 2006 were
approximately $12 million as compared to approximately $11.9 million for
the comparable period last year. Net sales to the pulp & paper industry
increased by 63% for the nine months ended September 30, 2006 over those
in the same period last year, and totaled approximately $2.1 million.
Textile industry net sales were approximately $7.8 million for the first
nine months of 2006 versus approximately $8.6 million for the same
period last year. Sales of enzymes to the animal feed and other markets
increased to approximately $2.1 million for the first nine months of
2006 from approximately $1.9 million for the same period of 2005.
Gross margin for the nine months ended September 30, 2006 increased to
27% of revenue as compared to 20% for the first nine months of 2005.
This increase was primarily the result of a 32% increase in net sales of
higher-margin products to industries such as pulp & paper, animal feed
and others to a total of approximately $4.2 million for this year's
first nine months, as compared to approximately $3.2 million for the
comparable period last year.
Net loss for the nine months ended September 30, 2006, was approximately
$7.7 million, or $0.33 per share (basic and diluted), as compared to net
loss of approximately $7.9 million, or $0.36 per share (basic and
diluted), for the nine months ended September 30, 2005.
"We made important strides in the development of our core C1 and other
enabling technologies for our enzyme, biorefinery and bioscience
initiatives, while effectively managing our cash position," said
President and CEO Mark Emalfarb. Cash at September 30, 2006, was
approximately $9.4 million, prior to the closing on November 8, 2006 of
the $10 million R&D and stock purchase transaction with Abengoa
Bioenergy Company, a major global ethanol producer and a leader in the
production of ethanol from both corn and cellulose feedstocks.
"In addition to significantly enhancing our cash position, we believe
our partnership with Abengoa will help us accelerate the development of
our proprietary C1 biofactory and other technologies for large-scale
production of fermentable sugars which may be used for the production of
ethanol, other biofuels, polymers and other chemicals from renewable
biomass, thereby transitioning our petroleum-based economy to one based
on agricultural residues and energy crops," Emalfarb said.
C1 Host Technology Development Progress Update
Dr. Glenn Nedwin, Dyadic's Chief Science Officer and President of the
Biosciences Business, commented, "Dyadic recently was granted an
important U.S. patent which we believe protects our novel technology for
robotic screening in filamentous fungi using our C1 platform, further
strengthening the Company’s intellectual
property position. With broad claims covering C1 (Chrysosporium
lucknowense) and a number of other industrially relevant fungi,
including Trichoderma and Aspergillus, we believe the
patent also validates Dyadic's 'one stop shop' model where gene
discovery and improvement, gene expression, and product manufacturing
can all be performed in the same host organism. This provides Dyadic
with a unique capability to improve the odds of identifying potentially
useful proteins and to screen for gene variants for improving functional
properties of target proteins, thereby shortening R&D development
timelines, reducing development costs, and increasing the probability of
successfully bringing products to the market."
Dr. Nedwin continued, "We have also had success in further developing
our C1 fungal biofactory for the production of human antibodies and
other high-value therapeutic proteins. We have successfully expressed a
fully functional, bioactive, stable monoclonal antibody in our low
protease C1 strain. Due to its expected low cost of manufacturing as
compared to mammalian cells and its ability to produce human proteins,
we believe our C1 host may become a significant alternative production
host for the pharmaceutical industry.
"Other recent C1 technology developments include the identification of a
number of novel enzymes which may be important for low-cost production
of fermentable sugars, initially targeted towards cellulosic ethanol
production, and the ability to over-express multiple genes in C1. We
also are moving forward in our collaboration with The Scripps Research
Institute to further annotate the C1 genome, which will yield a
comprehensive genetic and biochemical blueprint. We believe that these
tools may allow us to identify additional commercial enzyme product
leads, including improved cellulases and hemicellulases for use in
textile, pulp and paper, food and animal feed applications, the
production of ethanol from biomass, and the identification and
production of high-value therapeutic proteins. We expect that these
improvements in our core C1 and related technologies will enable C1 to
produce a wider variety of proteins at higher yields and at lower cost."
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.
Dyadic International, Inc.
Condensed Consolidated Balance Sheet
September 30, 2006
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$ 9,436,613
Accounts receivable, net of allowance for uncollectible accounts of
$598,953
2,976,433
Inventory
6,280,197
Prepaid expenses and other current assets
1,253,298
Total current assets
19,946,541
Fixed assets, net
1,818,991
Intangible assets, net
109,079
Goodwill
1,808,458
Other assets
67,448
Total assets
$ 23,750,517
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$ 1,694,717
Accrued expenses
1,586,756
Accrued interest – shareholder
48,897
Income taxes payable
100,539
Total current liabilities
3,430,909
Long-term liabilities:
Note payable to stockholder
2,367,305
Other liabilities
74,078
Total long-term liabilities
2,441,383
Total liabilities
5,872,292
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 – 24,623,525
24,624
Additional paid-in capital
59,770,752
Notes receivable from exercise of stock options
(212,500)
Accumulated deficit
(41,704,651)
Total stockholders’ equity
17,878,225
Total liabilities and stockholders’ equity
$ 23,750,517
Dyadic International, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three-Months Ended
Nine-Months Ended
September 30,
September 30,
2006
2005
2006
2005
Net sales
$ 4,204,771
$ 4,140,145
$ 12,000,093
$ 11,862,582
Cost of goods sold
2,893,037
3,317,956
8,726,450
9,513,604
Gross profit
1,311,734
822,189
3,273,643
2,348,978
Expenses:
Research and development
997,791
1,020,105
2,895,749
3,529,268
Selling and marketing
924,476
809,824
2,540,355
1,996,221
General and administrative
1,728,772
1,412,625
5,140,510
4,311,875
Foreign currency exchange losses (gains), net
14,535
9,127
111,277
(27,354)
Total expenses
3,665,574
3,251,681
10,687,891
9,810,010
Loss from operations
(2,353,840)
(2,429,492)
(7,414,248)
(7,461,032)
Other income (expense):
Interest expense
(70,218)
(177,184)
(517,969)
(526,945)
Investment income, net
104,065
109,232
293,916
132,490
Minority interest
--
(24,805)
(13,355)
(35,376)
Other income, net
1,328
5,637
12,949
1,621
Total other income (expense)
35,175
(87,120)
(224,459)
(428,210)
Loss before income taxes
(2,318,665)
(2,516,612)
(7,638,707)
(7,889,242)
Provision for income taxes
25,351
15,387
58,227
43,265
Net loss
$ (2,344,016)
$ (2,531,999)
$ (7,696,934)
$ (7,932,507)
Net loss per common share:
Basic and diluted
$ (0.10)
$ (0.11)
$ (0.33)
$ (0.36)
Weighted average common shares used in calculating net loss per
share:
Basic and diluted
24,565,671
22,251,105
23,582,285
22,084,352
Dyadic International, Inc. (AMEX:DIL), a biotechnology company,
today announced financial results for the third quarter ended
September 30, 2006, highlighted by a notable increase in sales of the
Company's proprietary enzymes to customers in the pulp and paper
industry, effective cost management resulting in a strong closing cash
balance, and improved gross margin as compared to the third quarter of
2005.
Third Quarter 2006:
Total net sales for the quarter ended September 30, 2006 increased
slightly to approximately $4.2 million, as compared to approximately
$4.1 million for the quarter ended September 30, 2005.
Third quarter 2006 net sales to the pulp & paper industry
increased by 72% versus prior year to approximately $0.9 million,
which represented 21% of net sales as compared to 13% of net sales for
the third quarter of 2005. Textile industry net sales were
approximately $2.4 million for the third quarter of 2006 versus
approximately $2.8 million in the third 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. Sales of enzymes to the animal feed and other markets
increased to approximately $0.9 million for this year's third quarter
from approximately $0.8 million for the same period of 2005.
Gross margin for the third quarter of 2006 increased to 31% of
revenue as compared to 20% for the third quarter of 2005, reflecting
the shift in sales from the textile industry to the pulp and paper,
animal feed and other higher margin industries.
Net loss for the quarter ended September 30, 2006 decreased to
approximately $2.3 million, or $0.10 per share (basic and diluted), as
compared to a net loss of approximately $2.5 million, or $0.11 per
share (basic and diluted), for the quarter ended September 30, 2005.
At September 30, 2006, cash and cash equivalents were
approximately $9.4 million, prior to the closing on November 8, 2006
of the $10 million R&D and stock purchase transaction with Abengoa
Bioenergy. Inventories at the end of this year's third quarter were
approximately $6.3 million. Working capital at September 30, 2006
amounted to approximately $16.5 million, and shareholders' equity was
approximately $17.9 million.
Nine Months 2006:
Net sales for the nine months ended September 30, 2006 were
approximately $12 million as compared to approximately $11.9 million
for the comparable period last year. Net sales to the pulp & paper
industry increased by 63% for the nine months ended September 30, 2006
over those in the same period last year, and totaled approximately
$2.1 million. Textile industry net sales were approximately $7.8
million for the first nine months of 2006 versus approximately $8.6
million for the same period last year. Sales of enzymes to the animal
feed and other markets increased to approximately $2.1 million for the
first nine months of 2006 from approximately $1.9 million for the same
period of 2005.
Gross margin for the nine months ended September 30, 2006
increased to 27% of revenue as compared to 20% for the first nine
months of 2005. This increase was primarily the result of a 32%
increase in net sales of higher-margin products to industries such as
pulp & paper, animal feed and others to a total of approximately $4.2
million for this year's first nine months, as compared to
approximately $3.2 million for the comparable period last year.
Net loss for the nine months ended September 30, 2006, was
approximately $7.7 million, or $0.33 per share (basic and diluted), as
compared to net loss of approximately $7.9 million, or $0.36 per share
(basic and diluted), for the nine months ended September 30, 2005.
"We made important strides in the development of our core C1 and
other enabling technologies for our enzyme, biorefinery and bioscience
initiatives, while effectively managing our cash position," said
President and CEO Mark Emalfarb. Cash at September 30, 2006, was
approximately $9.4 million, prior to the closing on November 8, 2006
of the $10 million R&D and stock purchase transaction with Abengoa
Bioenergy Company, a major global ethanol producer and a leader in the
production of ethanol from both corn and cellulose feedstocks.
"In addition to significantly enhancing our cash position, we
believe our partnership with Abengoa will help us accelerate the
development of our proprietary C1 biofactory and other technologies
for large-scale production of fermentable sugars which may be used for
the production of ethanol, other biofuels, polymers and other
chemicals from renewable biomass, thereby transitioning our
petroleum-based economy to one based on agricultural residues and
energy crops," Emalfarb said.
C1 Host Technology Development Progress Update
Dr. Glenn Nedwin, Dyadic's Chief Science Officer and President of
the Biosciences Business, commented, "Dyadic recently was granted an
important U.S. patent which we believe protects our novel technology
for robotic screening in filamentous fungi using our C1 platform,
further strengthening the Company's intellectual property position.
With broad claims covering C1 (Chrysosporium lucknowense) and a number
of other industrially relevant fungi, including Trichoderma and
Aspergillus, we believe the patent also validates Dyadic's 'one stop
shop' model where gene discovery and improvement, gene expression, and
product manufacturing can all be performed in the same host organism.
This provides Dyadic with a unique capability to improve the odds of
identifying potentially useful proteins and to screen for gene
variants for improving functional properties of target proteins,
thereby shortening R&D development timelines, reducing development
costs, and increasing the probability of successfully bringing
products to the market."
Dr. Nedwin continued, "We have also had success in further
developing our C1 fungal biofactory for the production of human
antibodies and other high-value therapeutic proteins. We have
successfully expressed a fully functional, bioactive, stable
monoclonal antibody in our low protease C1 strain. Due to its expected
low cost of manufacturing as compared to mammalian cells and its
ability to produce human proteins, we believe our C1 host may become a
significant alternative production host for the pharmaceutical
industry.
"Other recent C1 technology developments include the
identification of a number of novel enzymes which may be important for
low-cost production of fermentable sugars, initially targeted towards
cellulosic ethanol production, and the ability to over-express
multiple genes in C1. We also are moving forward in our collaboration
with The Scripps Research Institute to further annotate the C1 genome,
which will yield a comprehensive genetic and biochemical blueprint. We
believe that these tools may allow us to identify additional
commercial enzyme product leads, including improved cellulases and
hemicellulases for use in textile, pulp and paper, food and animal
feed applications, the production of ethanol from biomass, and the
identification and production of high-value therapeutic proteins. We
expect that these improvements in our core C1 and related technologies
will enable C1 to produce a wider variety of proteins at higher yields
and at lower cost."
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.
-0-
*T
Dyadic International, Inc.
Condensed Consolidated Balance Sheet
September 30, 2006
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $9,436,613
Accounts receivable, net of allowance for uncollectible
accounts of $598,953 2,976,433
Inventory 6,280,197
Prepaid expenses and other current assets 1,253,298
------------
Total current assets 19,946,541
------------
Fixed assets, net 1,818,991
Intangible assets, net 109,079
Goodwill 1,808,458
Other assets 67,448
------------
Total assets $23,750,517
============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,694,717
Accrued expenses 1,586,756
Accrued interest - shareholder 48,897
Income taxes payable 100,539
------------
Total current liabilities 3,430,909
------------
Long-term liabilities:
Note payable to stockholder 2,367,305
Other liabilities 74,078
------------
Total long-term liabilities 2,441,383
------------
Total liabilities 5,872,292
------------
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 - 24,623,525 24,624
Additional paid-in capital 59,770,752
Notes receivable from exercise of stock options (212,500)
Accumulated deficit (41,704,651)
------------
Total stockholders' equity 17,878,225
------------
Total liabilities and stockholders' equity $23,750,517
============
*T
-0-
*T
Dyadic International, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three-Months Ended Nine-Months Ended
September 30, September 30,
2006 2005 2006 2005
----------------------------------------------------
Net sales $4,204,771 $4,140,145 $12,000,093 $11,862,582
Cost of goods sold 2,893,037 3,317,956 8,726,450 9,513,604
----------------------------------------------------
Gross profit 1,311,734 822,189 3,273,643 2,348,978
----------------------------------------------------
Expenses:
Research and
development 997,791 1,020,105 2,895,749 3,529,268
Selling and
marketing 924,476 809,824 2,540,355 1,996,221
General and
administrative 1,728,772 1,412,625 5,140,510 4,311,875
Foreign currency
exchange losses
(gains), net 14,535 9,127 111,277 (27,354)
----------------------------------------------------
Total expenses 3,665,574 3,251,681 10,687,891 9,810,010
----------------------------------------------------
Loss from
operations (2,353,840) (2,429,492) (7,414,248) (7,461,032)
----------------------------------------------------
Other income
(expense):
Interest expense (70,218) (177,184) (517,969) (526,945)
Investment
income, net 104,065 109,232 293,916 132,490
Minority interest -- (24,805) (13,355) (35,376)
Other income, net 1,328 5,637 12,949 1,621
----------------------------------------------------
Total other income
(expense) 35,175 (87,120) (224,459) (428,210)
----------------------------------------------------
Loss before income
taxes (2,318,665) (2,516,612) (7,638,707) (7,889,242)
Provision for
income taxes 25,351 15,387 58,227 43,265
----------------------------------------------------
Net loss $(2,344,016) $(2,531,999) $(7,696,934) $(7,932,507)
====================================================
Net loss per
common share:
Basic and diluted $(0.10) $(0.11) $(0.33) $(0.36)
====================================================
Weighted average
common shares
used in
calculating net
loss per share:
Basic and diluted 24,565,671 22,251,105 23,582,285 22,084,352
====================================================
*T