Full Press Release Details
Applied DNA Sciences Reports
Fiscal Second Quarter 2017 Financial Results
to Hold Conference Call and Webcast Today at 4:30 PM Eastern Time
STONY BROOK, N.Y., May 11, 2017 - Applied DNA Sciences,
Inc. (NASDAQ: APDN) ("Applied DNA", or "the Company"), a provider of DNA-based supply chain, anti-counterfeiting
and anti-theft technology, product genotyping and DNA mass production for diagnostics, announced financial results for the fiscal
2017 second quarter ended March 31, 2017.
"Our fiscal second quarter was distinguished by the continued
development of commercial activity and a high number of pre-commercial opportunities, both of which we believe lay the groundwork
for greater commercial-scale adoption of our SigNature DNA platform," stated Dr. James A. Hayward, president
and CEO of Applied DNA. "Revenue in the quarter was driven primarily by the recognition of deferred cotton revenue and from
our synthetic fiber and consumer asset marking markets."
"We have made strides in diversifying our recurring revenue
in fiscal 2017, building upon the base that began in 2013 with the Defense Logistics Agency and has expanded since then with asset
and auto tagging in Europe and the long term cotton contracts between Himatsingka and their customer," continued Dr. Hayward.
"Building on the annual revenue commitments in cotton we announced in the first fiscal quarter, in the second fiscal quarter
we shipped our fourth purchase order from Techmer to SigNature T tag synthetic fiber and launched our CertainT platform,
which we believe will create a new revenue stream with the licensing of our CertainT logo to brands and retailers, indicating the
use of our tag, test and track platform. Subsequent to the close of the quarter, we entered into a five-year agreement to supply
bulk DNA that is expected to generate approximately $500,000 annually and we shipped our fifth purchase order from Techmer. Cumulatively,
we believe these milestones evidence the steady maturation of our revenue model and further penetration of our business verticals."
"Also after the close of the quarter, we announced that
Bed, Bath and Beyond debuted its new Wamsutta PimaCott home fashion products line, which uses our SigNature T technology.
From our perspective, the debut of SigNature T at one of the country's biggest home textile retailers (Home Textiles Today,
2016 Survey) validates our cotton strategy, elevates the discussion on supply chain security and authenticity and positions our
technology platform as the solution through which brands and retailers can mitigate risk and uncertainty in their global supply
Second Quarter Financial Highlights:
Concluded Dr. Hayward, "Looking
ahead to the second half of the fiscal year, we believe we will continue the recognition of deferred revenue from SigNature T marked
cotton, supplemented by non cotton derived revenue sources. We are seeing increasing interest in the marking of synthetic fiber
for home textile use, including our program with Loftex Home, where synthetics are increasingly used as an alternative to cotton.
With the transferability of our technology and our unique competitive position in securing bulk products and commodities, we are
experiencing shortened development and sales cycles and a growing pipeline of pre-commercial opportunities. We believe we are well
positioned to continue closing commercial-scale contracts and broadening the adoption of our technology platform."
Six-Month Financial Highlights:
Operational Highlights:
Loftex Home, the manufacturer
of high-quality towels and home textiles, is adopting CertainT in its line of towels to ensure that they contain recycled plastic
water bottles (PET). As a licensee, CertainT aligns Loftex Home's commitment to innovation with the opportunity to bring
its consumers sustainable products that are authentic and traceable to origin;
Fiscal 2017 Second Quarter Conference Call Information
The Company will hold a conference call and webcast to discuss
its fiscal 2017 second-quarter results on Thursday May 11, 2017 at 4:30 PM EST. To participate on the conference call, please follow
the instructions below. While every attempt will be made to answer investors' questions on the Q&A portion of the call,
due to the large number of expected participants, not all questions may be answered.
For Replay (available 1 hour following the conclusion of
Information about Non-GAAP Financial Measures
As used herein, "GAAP" refers to accounting principles
generally accepted in the United States of America. To supplement our condensed consolidated financial statements prepared and
presented in accordance with GAAP, this earnings release includes Adjusted EBITDA, which is a non-GAAP financial measure as defined
in Rule 101 of Regulation G promulgated by the Securities and Exchange Commission. Generally, a non-GAAP financial measure is a
numerical measure of a company's historical or future performance, financial position, or cash flows that either excludes
or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented
in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use this non-GAAP
financial measure for internal financial and operational decision making purposes and as a means to evaluate period-to-period comparisons
of the performance and results of operations of our core business. Our management believes that these non-GAAP financial measures
provide meaningful supplemental information regarding the performance of our business by excluding non-cash expenses that may not
be indicative of our recurring operating results. We believe this non-GAAP financial measure is useful to investors as it allows
for greater transparency with respect to key metrics used by management in its financial and operational decision making.
"EBITDA"- is defined as earnings (loss) before interest
expense, income tax expense and depreciation and amortization expense.
"Adjusted EBITDA"- is defined as EBITDA adjusted
to exclude (i) stock-based compensation and (ii) other non-cash expenses.
About Applied DNA Sciences
DNA Sciences makes life real and safe by providing innovative, molecular-based technology solutions and services that can
help protect products, brands, entire supply chains, and intellectual property of companies, governments and consumers from theft,
counterfeiting, fraud and diversion. The proprietary DNA-based "CertainTTM" Platform can be used
to identify, tag, track, and trace products, to help assure authenticity, origin, traceability and quality of products. SigNature DNA
describes the core technology ingredient that is at the heart of a family of uncopyable, security and authentication solutions
such as SigNature T and fiberTyping , targeted toward textiles and apparel, BackTrac
and DNAnet , for anti-theft and loss prevention, and digitalDNA , providing powerful track- and-trace.
All provide a forensic chain of evidence, and can be used to prosecute perpetrators. Applied DNA Sciences is also engaged in the
large-scale production of specific DNA sequences using the polymerase chain reaction.
Go to adnas.com for more information, events and to learn
more about how Applied DNA Sciences makes life real and safe. Common stock listed on NASDAQ under the symbol APDN, and warrants
are listed under the symbol APDNW.
Forward-Looking Statements
The statements made by APDN in this press release may be "forward-looking"
in nature within the meaning of the Private Securities Litigation Act of 1995. Forward-looking statements describe APDN's
future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties,
many of which are beyond the control of APDN. Actual results could differ materially from those projected due to our short operating
history, limited financial resources, limited market acceptance, market competition and various other factors detailed from time
to time in APDN's SEC reports and filings, including our Annual Report on Form 10-K filed on December 6, 2016, and our quarterly
reports on Form 10-Q filed on February 9, 2017 and May 11, 2017, which are or will be available at www.sec.gov. APDN undertakes
no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date
hereof to reflect the occurrence of unanticipated events, unless otherwise required by law.
| Investor contact: | Debbie Bailey, 631-240-8817, debbie.bailey@adnas.com |
| Sanjay M. Hurry, 212-838-3777, LHA, shurry@lhai.com | |
| Media contact: | Susan Forman, Dian Griesel Int'l., 212-825-3210, sforman@dgicomm.com |
Financial Tables Follow
APPLIED DNA SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | September 30, | |||||||
| 2017 | 2016 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,020,412 | $ | 4,479,274 | ||||
| Accounts receivable, net of allowance of $29,902 and $32,965 at March 31, 2017 and September 30, 2016, respectively | 5,192,358 | 6,374,895 | ||||||
| Inventories | 353,582 | 297,759 | ||||||
| Prepaid expenses and other current assets | 182,848 | 200,006 | ||||||
| Total current assets | 9,749,200 | 11,351,934 | ||||||
| Property, plant and equipment-net of accumulated depreciation of $1,464,845 and $1,263,200 at March 31, 2017 and September 30, 2016, respectively | 672,347 | 792,499 | ||||||
| Other assets: | ||||||||
| Long term accounts receivables | 1,044,780 | 1,535,000 | ||||||
| Deposits | 61,626 | 61,126 | ||||||
| Deferred offering costs | - | 13,986 | ||||||
| Goodwill | 285,386 | 285,386 | ||||||
| Intangible assets, net of accumulated amortization of $545,915 and $423,649, as of March 31,2017 and September 30, 2016, respectively | 1,403,634 | 1,525,900 | ||||||
| Total Assets | $ | 13,216,973 | $ | 15,565,831 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 1,896,154 | $ | 2,247,341 | ||||
| Deferred revenue | 1,325,140 | 1,837,588 | ||||||
| Total current liabilities | 3,221,294 | 4,084,929 | ||||||
| Long term accounts payable | 141,099 | 215,500 | ||||||
| Long term deferred revenue | 563,634 | 900,000 | ||||||
| Total liabilities | 3,926,027 | 5,200,429 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' Equity | ||||||||
| Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2017 and September 30, 2016 | - | - | ||||||
| Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of as of March 31, 2017 and September 30, 2016 | - | - | ||||||
| Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of March 31, 2017 and September 30, 2016 | - | - | ||||||
| Common stock, par value $0.001 per share; 500,000,000 shares authorized; 26,351,483 and 24,078,756 shares issued and outstanding as of March 31, 2017 and September 30, 2016, respectively | 26,351 | 24,079 | ||||||
| Additional paid in capital | 240,472,224 | 234,158,711 | ||||||
| Accumulated deficit | (231,207,629 | ) | (223,817,388 | ) | ||||
| Total stockholders' equity | 9,290,946 | 10,365,402 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 13,216,973 | $ | 15,565,831 |
APPLIED DNA SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product revenues | $ | 689,188 | $ | 178,371 | $ | 1,393,605 | $ | 871,585 | ||||||||
| Service revenues | 216,185 | 394,951 | 414,776 | 1,025,851 | ||||||||||||
| Total revenues | 905,373 | 573,322 | 1,808,381 | 1,897,436 | ||||||||||||
| Cost of revenues | 297,372 | 253,734 | 572,204 | 514,646 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 3,230,371 | 2,522,735 | 7,131,288 | 5,619,051 | ||||||||||||
| Research and development | 635,893 | 1,073,079 | 1,154,521 | 1,742,147 | ||||||||||||
| Depreciation and amortization | 163,368 | 170,981 | 325,345 | 389,327 | ||||||||||||
| Total operating expenses | 4,029,632 | 3,766,795 | 8,611,154 | 7,750,525 | ||||||||||||
| LOSS FROM OPERATIONS | (3,421,631 | ) | (3,447,207 | ) | (7,374,977 | ) | (6,367,735 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income, net | 1,204 | 4,062 | 2,535 | 6,907 | ||||||||||||
| Other expense, net | (8,429 | ) | (24,478 | ) | (17,798 | ) | (33,065 | ) | ||||||||
| Net loss before provision for income taxes | (3,428,856 | ) | (3,467,623 | ) | (7,390,240 | ) | (6,393,893 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| NET LOSS | $ | (3,428,856 | ) | $ | (3,467,623 | ) | $ | (7,390,240 | ) | $ | (6,393,893 | ) | ||||
| Net loss per share-basic and diluted | $ | (0.13 | ) | $ | (0.14 | ) | $ | (0.29 | ) | $ | (0.27 | ) | ||||
| Weighted average shares outstanding- | ||||||||||||||||
| Basic and diluted | 26,351,483 | 24,072,092 | 25,886,892 | 23,307,134 |
APPLIED DNA SCIENCES, INC.
CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net Loss | $ | (3,428,856 | ) | $ | (3,467,623 | ) | $ | (7,390,240 | ) | $ | (6,393,893 | ) | ||||
| Interest (income) expense, net | (1,204 | ) | (4,062 | ) | (2,535 | ) | (6,907 | ) | ||||||||
| Depreciation and amortization | 163,368 | 170,981 | 325,345 | 389,327 | ||||||||||||
| Stock based compensation expense | 537,904 | 499,668 | 1,995,924 | 954,781 | ||||||||||||
| Bad debt expense | 15,601 | 10,000 | 21,247 | 22,313 | ||||||||||||
| Total non-cash items | 715,669 | 676,587 | 2,339,981 | 1,359,514 | ||||||||||||
| Consolidated Adjusted EBITDA (loss) | (2,713,187 | ) | (2,791,036 | ) | (5,050,259 | ) | (5,034,379 | ) |