Concentration of Business Risk

9 Months Ended

Sep. 30, 2012

Concentration of Business Risk [Abstract]

Concentration of Business Risk

8. Concentration of Business Risk

A relatively small number of customers and collaboration partners historically have accounted for a significant percentage of the Company’s revenue. Revenue from the Company’s largest customer, DuPont, represented 57% and 42% for the three months ended September 30, 2012 and 2011 and 52% and 45% for the three and nine months ended September 30, 2012 and 2011 of total revenue from continuing operations. Revenue from the Company’s second largest customer, DSM, represented 19% and 15% for the three and nine months ended September 30, 2012 of total revenue. Accounts receivable from these two customers comprised approximately 77% of accounts receivable at September 30, 2012 and 78% at December 31, 2011.

Revenue by geographic area was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
North America	$	3,400	$	4,785	$	13,514	$	15,525
Europe		5,585		9,488		22,579		22,100
South America		978		3,860		6,097		8,542
Asia		299		283		998		779
	$	10,262	$	18,416	$	43,188	$	46,946

The Company manufactures and sells enzymes primarily within four main product lines. The animal health and nutrition product line primarily includes the Phyzyme^® XP phytase enzyme and from time to time toll manufacturing of other products in this market and the grain processing product line includes Fuelzyme^® alpha-amylase, Veretase^® alpha-amylase, Xylathin™ xylanase and DELTAZYM ^® GA L-E5 gluco-amylase enzymes.

The following table sets forth product and contract manufacturing revenues by individual product line (in thousands):

	Three Months Ended September 30,
	2012		% of Product Revenue			2011		% of Product Revenue
Product revenues:
Animal health and nutrition	$	5,849		61	%	$	8,624		58	%
Grain processing		2,054		21	%		3,942		27	%
Oilseed processing (1)		0		0	%		1,929		13	%
All other products		101		1	%		247		2	%
Total product revenue	$	8,004		83	%	$	14,742		100	%
Contract manufacturing (1)		1,561		17	%		0		0	%
Total product and contract manufacturing revenue	$	9,565		100	%	$	14,742		100	%

	Nine Months Ended September 30,
	2012		% of Product Revenue			2011		% of Product Revenue
Product revenues:
Animal health and nutrition	$	22,521		63	%	$	24,734		59	%
Grain processing		7,895		22	%		12,371		29	%
Oilseed processing (1)		579		2	%		4,541		11	%
All other products		972		2	%		606		1	%
Total product revenue	$	31,967		89	%	$	42,252		100	%
Contract manufacturing (1)		4,047		11	%		0		0	%
Total product and contract manufacturing revenue	$	36,014		100	%	$	42,252		100	%

(1) As the Company will continue to provide manufacturing services for the products sold and licensed to DSM, all revenue through the minimum term specified in the contract after the agreement date (March 23, 2012) is classified as contract manufacturing revenue on the Company’s condensed consolidated statements of comprehensive income (loss). All historical amounts related to Purifine and Veretase will continue to be shown as oilseed processing and grain processing product revenue.

The Company manufactures its enzyme products through a manufacturing facility in Mexico City, owned by Fermic. The carrying value of property and equipment held at Fermic reported on the Company’s consolidated balance sheets totaled approximately $1.6 million at September 30, 2012 and $1.1 million December 31, 2011.