Dyadic International reports $1.1 million net loss for first-quarter 2010

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. 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."

Dyadic's

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."