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STONY BROOK, NY--(Marketwired - May 12, 2016) - Applied DNA Sciences, Inc. (NASDAQ: APDN) (Twitter: @APDN) (Applied
DNA) (the Company), a provider of DNA-based supply chain, anti-counterfeiting and anti-theft technology, product genotyping and
product authentication solutions, announced financial results for the fiscal 2016 second quarter ended March 31, 2016.
"Our second quarter results reflect variability in the timing of purchase orders and contract awards. While revenue was lower
than we planned, we continued to advance initiatives across our revenue-generating verticals to further entrench our
anti-counterfeiting and authentication solutions with customers," stated Dr. James A. Hayward, chairman and CEO of Applied DNA. "We
on-boarded six new cotton manufacturers, began offering DNAnet Home Asset Marking kits through the Automobile Association of
America (AAA) website, increased the annual commitment of DNAnet used to protect luxury brands of European automobiles, and,
subsequent to the close of the quarter, were awarded up to a $2.5 million follow-on Blanket Purchase Agreement (BPA) from a U.S.
government agency."
Second Quarter Financial Highlights:
- Revenues decreased 62% for the second quarter of fiscal 2016 to $573 thousand, compared with $1.5 million reported in the
second quarter of fiscal 2015, and decreased 57% from the $1.3 million reported in the first fiscal quarter ended December 31,
2015.
- The year-over-year decrease in revenue is primarily attributable to the scheduled lower revenue from two government contract
awards and a decrease in revenue from suppliers of the Defense Logistics Agency (DLA) due to the consolidation of our contracts
with multiple individual suppliers of the DLA to one contract directly with DLA, as well as a decrease in revenue from another
Federal Agency. The sequential decrease in revenues resulted primarily from lower revenue from the two government contract
awards, a decrease in revenue in DNA manufacturing for the diagnostic market as well as decrease in revenue for textiles related
to DNA transfer units that were installed during the prior fiscal quarter.
- Total operating expenses for the second quarter of fiscal 2016 were $4.0 million, compared with $3.4 million in the prior
year's quarter, an increase of approximately $623 thousand or 18%. The increase in year-over-year total operating expenses is
primarily attributable to an increase in selling, general and administrative expense, research and development expense and
depreciation and amortization expenses. Total operating expense for the fiscal second quarter of 2016 decreased $224 thousand as
compared to total operating expenses of $4.2 million in the fiscal first quarter of 2016. The sequential decrease is related to a
decrease in selling, general and administrative expense of $434 thousand and depreciation and amortization expense of $47
thousand, offset by an increase in research and development expenses of $257 thousand.
- Net loss for the quarter ended March 31, 2016 was $3.5 million, or $0.14 per share, compared with a net loss of $1.9 million,
or $0.11 per share for the quarter ended March 31, 2015 and a net loss of $2.9 million, or $0.13 per share for the quarter ended
December 31, 2015.
- Excluding non-cash expenses, Adjusted EBITDA for the quarter ended March 31, 2016 was negative $2.8 million compared to a
negative Adjusted EBITDA of $1.2 million for the same quarter last year and a negative Adjusted EBITDA of $2.2 million in the
prior fiscal quarter reflecting lower revenue. See below for information regarding non-GAAP measures.
- Cash and cash equivalents as of March 31, 2016 totaled $9.8 million as compared to $12.4 million at December 31, 2015. The
decrease in cash balances is due primarily to the use of cash to fund operations.
- Net cash used in operating activities in the fiscal second quarter of 2016 was $2.5 million. This compares with $1.6 million
for the corresponding prior-year period.
First Six-Month Financial Highlights:
- The Company recorded six-month revenues of almost $1.9 million, a decrease of 31% from the same period last fiscal year. The
decrease in revenues was from a scheduled decrease in revenue related from the two government contract awards of $478,000, which
expire in July and August of 2016, and a decrease in revenue from suppliers of the DLA due to the consolidation of our contracts
with several individual suppliers of the DLA to one contract directly with the DLA as well as other decreases in revenue from
another military customer for a total decrease of approximately $410,000. These decreases were offset by an increase in revenue
in the DNA manufacturing for the diagnostic market of $242 thousand.
- Operating expenses for the six months ended March 31, 2016 decreased by approximately $189 thousand or 2% for the same period
last fiscal year. The decrease is primarily attributable to a decrease in stock-based compensation expense associated with grants
to employees during the six month period ended March 31, 2015, offset by an increase in research and development expenses.
- Net loss for the six months ended March 31, 2016 was $6.4 million or $0.27 per share, compared with a net loss of $9.7
million or $0.59 per share for the six months ended March 31, 2015.
- Excluding non-cash expenses and interest Adjusted EBITDA for the six months ended March 31, 2016 would have been a negative
$5.0 million compared with an Adjusted EBITDA of negative $2.9 million for the same period last year. See below for information
regarding non-GAAP measures.
Commenting on the Company's business outlook for the second half of 2016, Dr. Hayward stated, "Although we believe we have
substantial near-term opportunities in our pipeline, predicting their timing and size is an ongoing challenge. In cotton, revenue
visibility through our partners is limited even as awareness and interest by brands and retailers build in the PimaCott™ and
HomeGrown™ cotton brands. We are seeing interest by diverse retailers that would indicate revenue growth relative to last year, but
until demand converts into firm purchase orders, we are unable to predict with certainty our growth. What is clear is that we are
filling a real need in the marketplace, and I am pleased to report that PimaCott cotton is now available on the shelves of a second
major North American retailer, and that apparel customers are just beginning to authenticate their cotton label compliance with our
DNA."
"Progress is rarely linear and this is especially true for early-stage growth companies like Applied DNA," concluded Dr.
Hayward. "Demand for our solutions is burgeoning and we are nurturing that demand with our technology and our people to assure our
future success."
Recent Highlights:
- On February 25, Applied DNA introduced new pharmaceutical-grade and packaging inks suitable for tablet and packaging marking
in partnership with Nissha Printing Company and Kishu Giken Kogyo Co., Ltd. This partnership offers solutions for Japanese
pharmaceutical manufacturers to comply with a July 2016 regulatory deadline to ensure product integrity and protect patient
safety by barcoding packaging.
- On March 2, the Company launched www.dnasecurity.net. Created in
conjunction with Security Marketing Resource (SMR), the website features information and training videos on Applied DNA's
products for security professionals, law enforcement, commercial organizations and community members, and serves as a conduit to
sales of the Company's DNAnet kits.
- On March 3, Applied DNA announced that the U.S. Patent and Trademark Office granted U.S. Patent No. 9,266,370, entitled, "DNA
Marking of Previously Undistinguished Items for Traceability" to the Company on February 23, 2016. The intellectual property
protected by this patent is applicable in a broad range of markets, including, pharmaceuticals, consumer products, industrial
materials, and electronics.
- On March 8, the Company announced the on-boarding of six new cotton manufacturers for Pimacott and Homegrown consumer goods.
Since that announcement, additional offshore textile manufacturers have been on-boarded. The addition of these new manufacturers
is expected to expand the Company's footprint in the retail marketplace from 10 SKUs to 1,000, and from 500 stores in the U.S.
Canada and Mexico to 1,700.
- On March 21, Applied DNA announced a marketing partnership with AAA to prominently feature the Company's DNAnet kits to the
AAA East Central region's 2.7 million members via its website.
- On April 4, the Company introduced a proprietary enhanced DNA authentication technology to specifically quantify cotton
species. With this technology, consumer cotton brands can now determine the amounts of inappropriate blends in their cotton and
not just the presence of inferior blends. This technology, combined with the outcome of our United States Department of
Agriculture collaboration, will benefit those retailers who have pledged to avoid products that take advantage of child labor or
unethical labor practices.
- On May 1, Applied DNA announced the appointment of former Strategic Advisory Board member Bob Miglani to the new position of
Chief of Business Development to spearhead the Company's penetration of FDA-regulated markets, including pharmaceuticals, food,
personal care and medical devices. Mr. Miglani was most recently with Pfizer Inc. as Senior Director, External Medical Affairs,
where he led Pfizer's efforts to partner with external medical, scientific and consumer organizations. Mr. Miglani has a proven
record of accomplishment of developing innovative partnerships with medical and healthcare organizations in the United States,
Europe, India and other parts of the world.
- On May 10, the Company announced a $2.5 million blanket purchase agreement (BPA) with an undisclosed non-defense Federal
agency. This latest win builds on Applied DNA's current roster of contracts across six defense and non-defense agencies, and
represents a ten-fold increase in this agency's initial work with Applied DNA. The BPA also allows Applied DNA to develop new
products and solutions for the contracting agency at an accelerated deployment pace compared with traditional
contract-development paths.
Fiscal 2016 Second Quarter Conference Call Information
The Company will hold a conference call and webcast to discuss its fiscal 2016 second-quarter results on Thursday, May 12, 2016
at 4:30 PM ET. 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.
To Participate:
Reserve your conference call seat now at: http://dpregister.com/10084950. Conference call dial-in information will be provided at completion of the
registration process.
Live webcast: http://services.choruscall.com/links/apdn160512
Replay (available 1 hour following the conclusion of the live call):
For those investors unable to attend the live call, a copy of the presentation is expected to be posted by end of business on
May 12, 2016 and available under the "Investor Information" tab of the company's web site.
About Applied DNA Sciences
We make life real and safe by providing botanical-DNA based security and authentication 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. Our patented DNA-based solutions can be used to identify, tag, track, and trace products, to
help assure authenticity, traceability and quality of products. SigNature® DNA describes the platform
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, 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. We are 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 14, 2015, and our subsequent quarterly report on Form 10-Q
filed on February 10, 2016 which are 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.
APPLIED DNA SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, September 30, 2016 2015 ------------- ------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 9,785,827 $ 7,312,184 Accounts receivable, net of allowance of $19,453 and $7,140 at March 31, 2016 and September 30, 2015, respectively 5,026,854 3,929,517 Prepaid expenses and other current assets 126,367 293,351 ------------- ------------- Total current assets 14,939,048 11,535,052 Property, plant and equipment, net of accumulated depreciation of $1,038,674 at March 31, 2016 and $852,867 at September 30, 2015 879,169 572,107 Other assets: Long term accounts receivables - 1,500,000 Deposits 58,488 62,988 Goodwill 285,386 285,386 Intangible assets, net of accumulated amortization and impairment of $353,816 and $238,368 at March 31, 2016 and September 30, 2015, respectively 1,549,493 1,598,779 ------------- ------------- Total Assets $ 17,711,584 $ 15,554,312 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 2,633,774 $ 2,385,006 Deferred revenue 50,162 282,050 ------------- ------------- Total current liabilities 2,683,936 2,667,056 Long term accounts payable - 320,400 ------------- ------------- Total liabilities 2,683,936 2,987,456 ------------- ------------- 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, 2016 and September 30, 2015 - - Series A Preferred stock, par value $0.001 per share, 10,000,000 shares authorized; -0- issued and outstanding as of March 31, 2016 and September 30, 2015 - - Series B Preferred stock, par value $0.001 per share, 10,000,000 shares authorized; -0- issued and outstanding as of March 31, 2016 and September 30, 2015 - - Common stock, par value $0.001 per share; 500,000,000 shares authorized; 24,075,092 and 21,504,578 shares issued and outstanding as of March 31, 2016 and September 30, 2015, respectively 24,076 21,505 Additional paid in capital 233,038,874 224,186,760 Accumulated deficit (218,035,302) (211,641,409) ------------- ------------- Total stockholders' equity 15,027,648 12,566,856 ------------- ------------- Total Liabilities and Stockholders' Equity $ 17,711,584 $ 15,554,312 ============= =============
APPLIED DNA SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended March 31, March 31, 2016 2015 2016 2015 ----------- ----------- ----------- ----------- Revenues $ 573,322 $ 1,518,761 $ 1,897,436 $ 2,760,563 Operating expenses: Selling, general and administrative 3,120,469 2,901,207 6,674,831 7,569,950 Research and development 729,079 373,380 1,201,013 651,652 Depreciation and amortization 170,981 123,079 389,327 232,805 ----------- ----------- ----------- ----------- Total operating expenses 4,020,529 3,397,666 8,265,171 8,454,407 ----------- ----------- ----------- ----------- LOSS FROM OPERATIONS (3,447,207) (1,878,905) (6,367,735) (5,693,844) Other income (expense): Interest income (expense), net 4,062 16 6,907 (31,859) Other (expense) income, net (24,478) (6,693) (33,065) (13,135) Loss on conversion of promissory notes - - - (980,842) Loss on change in fair value of warrant liability - - - (2,994,540) ----------- ----------- ----------- ----------- Net loss before provision for income taxes (3,467,623) (1,885,582) (6,393,893) (9,714,220) Provision for income taxes - - - - ----------- ----------- ----------- ----------- NET LOSS $(3,467,623) $(1,885,582) $(6,393,893) $(9,714,220) =========== =========== =========== =========== Net loss per share-basic and diluted $ (0.14) $ (0.11) $ (0.27) $ (0.59) =========== =========== =========== =========== Weighted average shares outstanding- Basic and diluted 24,072,092 17,362,573 23,307,134 16,404,299 =========== =========== =========== ===========
APPLIED DNA SCIENCES, INC. CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA (Unaudited) Three Months Ended Six Months Ended March 31, March 31, 2016 2015 2016 2015 ----------- ----------- ----------- ----------- Net Loss $(3,467,623) $(1,885,582) $(6,393,893) $(9,714,220) Interest (income) expense, net (4,062) (16) (6,907) 31,859 Depreciation and amortization 170,981 123,079 389,327 232,805 Loss on change in fair value of warrant liability -- -- -- 2,994,540 Stock based compensation expense 499,668 539,996 954,781 2,538,519 Loss on conversion of promissory notes -- -- -- 980,842 Bad debt expense 10,000 -- 22,313 2,779 ----------- ----------- ----------- ----------- Total non-cash items 676,587 663,059 1,359,514 6,781,344 ----------- ----------- ----------- ----------- Consolidated Adjusted EBITDA (loss) (2,791,036) (1,222,523) (5,034,379) (2,932,876) =========== =========== =========== ===========
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Investor contact:
Debbie Bailey
631-240-8817
debbie.bailey@adnas.com
Sanjay Hurry
LHA
212-838-3777
shurry@lhai.com
Media contact:
Susan Forman
Dian Griesel Int'l.
212-825-3210
sforman@dgicomm.com
web: www.adnas.com
twitter: @APDN