Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global
biotechnology company focused on further improving and applying the
proprietary C1 expression system to help speed up the development
and production of biologic vaccines and drugs at flexible
commercial scales, today announced its financial results for the
quarter ended March 31, 2017.
BUSINESS HIGHLIGHTS AND RECENT
DEVELOPMENTS
- Cash, cash equivalents and investment grade securities,
including interest receivable at March 31, 2017 was
approximately $43.6 million
- Escrowed funds from the sale of the Company's industrial
business to DuPont of approximately $7.4 million are expected to be
received in July 2017
- In April 2017, received approximately $4.4 million litigation
settlement payment, net of legal fees and other expenses, from the
last remaining defendant law firm, Greenberg Traurig, LLP and
Greenberg Traurig, P.A., ending our long-standing professional
liability litigation
- Net income for the first quarter of 2017, including litigation
settlement gain of approximately $4.4 million, was approximately
$2.1 million or $0.07 per basic and diluted share
- The Company repurchased approximately 3.7 million shares, in
both open market and private transactions, at an average price of
$1.55 per share, through February 15, 2017, the expiration date of
the 2016 Stock Repurchase Program
- As of March 31, 2017, there were approximately 28.7
million shares outstanding and approximately 10.2 million shares
held in treasury
- On May 4, 2017, the Company entered into a small research
program with another of the world’s largest pharmaceutical
companies to demonstrate the potential of the C1 technology to
produce therapeutic proteins
FINANCIAL RESULTS FOR THE QUARTER ENDED
MARCH 31, 2017
At March 31, 2017, cash and cash
equivalents were approximately $8.0 million compared to $6.9
million at December 31, 2016. The carrying value of investment
grade securities, including accrued interest as of March 31,
2017 was $35.6 million compared to $43.6 million at December 31,
2016.
Cash and cash equivalents do not include the
approximately $7.4 million of cash held in escrow in connection
with the DuPont Transaction, which we anticipate to be released in
July 2017, if no claims are made prior to such release.
Net increase in cash and cash equivalents for
the three months ended March 31, 2017 of approximately $1.1
million principally reflects approximately $7.5 million of cash
proceeds from maturities of investment grade securities, net of
purchases and premium paid, and cash received from interest earned
of approximately $0.6 million, partially offset by cash used for
the repurchase of common stock of approximately $5.7 million,
litigation costs of approximately $0.6 million, and all other cash
used in operations of approximately $0.7 million.
On February 15, 2017, the Company has
successfully completed its one year 2016 Stock Repurchase Program.
From January 1, 2017 through February 15, 2017, the expiration date
of the 2016 Stock Repurchase Program, the Company purchased
approximately 3.7 million shares in both open market and private
transactions at an average price of $1.55 per share.
On April 14, 2017, the Company received the
litigation settlement payment from the last remaining defendant law
firm Greenberg Traurig, LLP, and Greenberg Traurig, P.A.
(collectively, "Greenberg Traurig"), in its ongoing professional
liability litigation, in the amount of approximately $4.4 million,
net of legal fees and other expenses. The settlement amount was
reported in other income, for the quarter ended March 31, 2017.
Net income for the three months ended
March 31, 2017, including the litigation settlement gain of
approximately $4.4 million, was approximately $2.1 million, or
$0.07 per basic and diluted share, compared to a net loss of $(0.9)
million, or $(0.02) per basic and diluted share for the same period
a year ago.
Research and development revenue for the three
months ended March 31, 2017 increased to approximately
$122,000 compared to approximately $87,000 for the same period a
year ago. The cost of revenue for the three months ended
March 31, 2017 increased to approximately $122,000 compared to
approximately $85,000 for the same period a year ago. The increase
in research and development revenue, and cost of revenue reflects
the activities of the ZAPI project and a confidential
biopharmaceutical collaborative research project started in
December 2016.
For the three months ended March 31, 2017,
the Company recorded a $210,540 provision for contract losses. The
amount reflects the increase in the total estimated research costs
due to the Company's extended involvement in the ZAPI program. The
reported loss will be accredited into the statement of operations
over the term of the contract.
Research and development expenses for the three
months ended March 31, 2017 increased 30.6% to approximately
$320,000 compared to approximately $245,000 for the same period a
year ago. The increase principally reflects the costs of
biopharmaceutical contract research initiatives and personnel
related costs.
General and administrative expenses for the
three months ended March 31, 2017 increased 100.7% to approximately
$1,790,000 compared to $892,000 for the same period a year ago. The
increase principally reflects new employment agreements for
executives of approximately $391,000, litigation costs for trial of
approximately $369,000, financial reporting costs of approximately
$115,000, and biopharmaceutical business development costs of
approximately $99,000. These increases were partially offset by
lower board compensation costs of approximately $76,000 due to the
formation of the Special Committee of the Board in 2016.
Interest income for the three months ended
March 31, 2017 increased 78.5% to approximately $116,000
compared to approximately $65,000 for the same period a year ago.
The increase in interest income reflects returns earned on the
Company's investment grade debt securities, which are classified as
held-to-maturity.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call
today, Thursday, May 11, 2017 at 5:00 p.m. to
discuss the financial results for the quarter ended March 31, 2017.
In order to participate in the conference call, please dial
888-663-2260 for U.S./Canada callers and +913-312-0416 for
International callers, using access code 8410672.
A replay of the conference call will be
available on Dyadic’s website (www.dyadic.com) within 24 hours
after the live event.
About Dyadic International,
Inc.
Dyadic International, Inc. is a global
biotechnology company which is developing what it believes will be
a potentially significant biopharmaceutical protein production
system based on the fungus Myceliopthora thermophila, nicknamed C1.
The C1 microorganism, which enables the development and large scale
manufacture of low cost proteins, has the potential to be further
developed into a safe and efficient expression system that may help
speed up the development, production and performance of biologic
vaccines and drugs at flexible commercial scales. Dyadic is
using the C1 technology and other technologies to conduct research,
development and commercial activities for the development and
manufacturing of human and animal vaccines, monoclonal antibodies,
biosimilars and/or biobetters, and other therapeutic proteins.
Dyadic pursues research & development collaborations, licensing
arrangements and other commercial opportunities with its partners
and collaborators to leverage the value and benefits of these
technologies in developing and manufacturing biopharmaceuticals
which these technologies help produce. In particular, as the aging
population grows in developed and undeveloped countries, Dyadic
believes the C1 technology may help bring biologic drugs to market
faster, in greater volumes, at lower cost, and with new properties
to drug developers and manufacturers and, hopefully, improve access
and cost to patients and the healthcare system, but most
importantly saving lives.
Please visit Dyadic’s website at
www.dyadic.com for additional information, including details
regarding Dyadic’s plans for its biopharmaceutical business.
Dyadic trades on the OTCQX tier of the OTC
marketplace. Investors can find real-time quotes, market
information and financial reports for Dyadic in the Company’s
annual and quarterly reports which are filed with the OTC markets.
Please visit the OTC markets website at
www.otcmarkets.com/stock/DYAI/quote.
Safe Harbor Regarding Forward-Looking
Statements
Certain statements contained in this press
release are forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements involve
risks, uncertainties and other factors 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. Investors
are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. Any forward-looking
statements speak only as of the date of this press release and,
except as required by law, Dyadic expressly disclaims any intent or
obligation to update or revise any forward-looking statements to
reflect actual results, any changes in expectations or any change
in events. Factors that could cause results to differ materially
include, but are not limited to: (1) general economic, political
and market conditions; (2) our ability to carry out and implement
our biopharmaceutical research and business plans and strategic
initiatives; (3) Dyadic’s ability to retain and attract employees,
consultants, directors and advisors; (4) our ability to implement
and successfully carry out Dyadic’s and third parties research and
development efforts; (5) our ability to obtain new license and
research agreements; (6) our ability to maintain our existing
access to, and/or expand access to third party contract research
organizations in order to carry out our research projects for
ourselves and third parties; (7) competitive pressures and reliance
on key customers and collaborators; and (8) other factors discussed
in Dyadic’s publicly available filings, including information set
forth under the caption “Risk Factors” in our December 31, 2016
Annual Report filed with OTC Markets on March 24, 2017. New risks
and uncertainties arise from time to time, and it is impossible for
us to predict these events or how they may affect us.
DYADIC INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
Three Months Ended March 31, |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(Unaudited) |
REVENUES: |
|
|
|
Research
and Development Revenue |
$ |
121,527 |
|
|
$ |
86,891 |
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
Cost of
Revenue |
121,528 |
|
|
85,146 |
|
Provision
for Contract Losses |
210,540 |
|
|
— |
|
Research
and Development |
319,524 |
|
|
244,934 |
|
General
and Administrative |
1,790,291 |
|
|
891,979 |
|
Foreign
Currency Exchange Gain |
(27,836 |
) |
|
(132,799 |
) |
Total Costs and
Expenses |
2,414,047 |
|
|
1,089,260 |
|
|
|
|
|
LOSS FROM
OPERATIONS |
(2,292,520 |
) |
|
(1,002,369 |
) |
|
|
|
|
Other Income
(Expense): |
|
|
|
Settlement of Litigation, Net |
4,358,223 |
|
|
— |
|
Interest
Income |
116,193 |
|
|
65,017 |
|
Interest
Expense |
— |
|
|
(728 |
) |
Total Other Income |
4,474,416 |
|
|
64,289 |
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
2,181,896 |
|
|
(938,080 |
) |
|
|
|
|
Provision for Income
Taxes |
85,556 |
|
|
— |
|
|
|
|
|
NET INCOME (LOSS) |
$ |
2,096,340 |
|
|
$ |
(938,080 |
) |
|
|
|
|
NET INCOME (LOSS) PER
SHARE |
|
|
|
Basic |
$ |
0.07 |
|
|
$ |
(0.02 |
) |
Diluted |
$ |
0.07 |
|
|
$ |
(0.02 |
) |
|
|
|
|
Weighted-Average Number
of Shares: |
|
|
|
Basic |
29,616,461 |
|
|
38,793,717 |
|
Diluted |
29,686,676 |
|
|
38,793,717 |
|
Balance Sheet
Information: |
March 31, 2017 |
|
December 31, 2016* |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
Cash and
Cash Equivalents |
$ |
7,979,545 |
|
|
$ |
6,889,357 |
|
Escrowed
Funds from Sale of Assets |
7,365,963 |
|
|
7,364,859 |
|
Investment Securities, Short-term and Long-term and Interest
Receivable |
35,623,449 |
|
|
43,609,849 |
|
Litigation Settlement Receivable |
4,358,223 |
|
|
— |
|
Total
Assets |
55,671,969 |
|
|
58,700,420 |
|
Accumulated Deficit |
(23,119,198 |
) |
|
(25,204,314 |
) |
Stockholders' Equity |
$ |
54,437,392 |
|
|
$ |
57,690,183 |
|
|
|
|
|
*Condensed from audited
financial statements |
|
|
|
Contact:
Dyadic International, Inc.
Thomas L. Dubinski
Chief Financial Officer
Phone: 561-743-8333
Email: tdubinski@dyadic.com
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