STONY BROOK, NY
-- (Marketwired)
-- 08/10/15
Applied DNA Sciences, Inc. (NASDAQ: APDN) (Twitter: @APDN), a provider of DNA-based anti-counterfeiting technology and product authentication solutions, announced results of its third quarter of fiscal 2015.
Dr. James A. Hayward, President and Chief Executive Officer, stated: "We are very pleased to report our third consecutive quarter of record-setting revenues.Global recognition of our platforms continues to open new and varied business opportunities. Our fiscal third-quarter results demonstrate the significant strides we are making toward converting pilot projects to fully commercialized programs. During the quarter, we commenced delivery of SigNature® T DNA for the upcoming cotton-ginning season which begins next month. This DNA will be used to produce our PimaCott™ brand of SigNature-marked pima cotton, being taken up by a number of different brand-owners and retailers, and we believe for the first time ever, will secure the supply chain from field to consumer. Our work with two US government contracts continues towards commercialization of DNA marking on products from microcircuit manufacturing companies as well as in federal supply classes new to APDN."
Financial Highlights for the Third Quarter:
- Revenues increased 170% for the third quarter of fiscal 2015 to a record $2.3 million, compared with $841 thousand reported in the third quarter of fiscal 2014, and a 49% increase from the $1.5 million reported in the second fiscal quarter ended March 31, 2015. This increase in revenues resulted primarily from sales in the textile industry for protecting cotton supply chains and revenue from two government contracts.
- Total operating expenses were $3.9 million, compared with $3.3 million in the prior year's quarter, an increase of approximately $612 thousand or 18%.The increase is primarily attributable to an increase in non-cash stock-based compensation expense of $610 thousand offset by a decrease in legal fees.
- Net loss for the three months ended June 30, 2015 was $1.7 million, or $0.08 per share, compared with a net loss of $1.9 million, or $0.14 per share for the three months ended June 30, 2014 and a net loss of $1.9 million, or $0.11 per share for the three months ended March 31, 2015.
- Excluding non-cash expenses, Adjusted EBITDA for the three months ended June 30, 2015 was negative $478 thousand compared to a negative Adjusted EBITDA of $1.9 million (a decrease of 75%) for the same quarter last year and a negative Adjusted EBITDA of $1.2 million (a decrease of 61%) for our prior fiscal quarter. The improvement in adjusted EBITDA is primarily related to the increased revenues achieved with cash-based operating expenses remaining consistent for the three months ended June 30, 2015. See below for information regarding non-GAAP measures.
Recent Highlights:
- Signed Agreement with Louis Dreyfus Commodities. Using APDN's SigNature® T DNA, cotton fibers will be tagged at the source or country of origin, allowing purity of content verification at all stages of the supply chain. Louis Dreyfus, one of the world's largest cotton merchandisers, will provide secure logistics supply chain support for the tagging and authentication of cotton fibers.
- Launched Homegrown™ Source-Verified Upland Cotton from Grower to Consumer. Along with Divatex, Applied DNA Sciences will be tagging upland cotton fibers at the source, securing the supply chain of American grown cotton fiber, assuring that finished product is produced from cotton grown in the USA.
- Demands for APDN's Home Asset Marking Program Increase. More municipalities are offering or recommending DNAnet™ to their citizens, and we have trained over 30 regional police departments to recognize recovered assets that have been DNA-marked.
Dr. Hayward continued: "We are passing through a positive inflection in our business as pilot projects transition to commercial deployments and with market forces creating tailwinds.
"Adoption of our solutions by global supply chains creates revenue opportunity at each node when the products change hands. In our fiscal fourth quarter we will continue our focus on securing supply chains, expanding our role in government, and facilitating law enforcement and consumer protection.
- We will be working closely with our textiles partners to deliver a successful ginning season marking cotton. We expect additional brands and retailers to adopt SigNature T and our cotton geotypying program, known as fiberTyping®, to ensure the veracity of their label claims.
- We expect additional municipalities to support home asset marking with DNAnet, and we will continue to recruit the support of law enforcement.
- We will execute our federal contracts and partnerships with other commercial suppliers to the Department of Defense and other US government Agencies.
- The painful reality of recent cybersecurity attacks against the US and the fictional harbinger of cyberattacks to come painted by GhostFleet authors P.W. Singer and August Cole, point to the role of physical security in the prevention of cyberattacks. We believe there is no technology that offers the sensitivity, fidelity and forensic high-road to secure cyber supply chains and to deter cybercrime than DNA. We will continue to develop mechanisms in support of protecting semiconductors in high volume.
"We believe our opportunities are substantial and that we have never been better positioned for growth."
Financial Highlights for the First Nine Months:
- The Company recorded record nine-month revenues of over $5.0 million, an increase of 142% from the same period last fiscal year, and an 82% increase over full-year fiscal 2014 revenues, which was the Company's prior annual record. The increase in revenues was primarily due to two government contracts,as well as revenues related to sales in the textile industry for protecting cotton supply chains.
- Operating expenses for the nine months ended June 30, 2015 increased by approximately $890 thousand or 8%. The increase is attributable to an increase in SG&A expenses of non-cash stock-based compensation expense of approximately $1.8 million, offset by decreases in legal and consulting expenses. This was also offset by a decrease in research and development expenses of approximately $124,000.
- Net loss for the nine months ended June 30, 2015 was $11.4 million or $0.63 per share, compared with a net loss of $11.0 million or $0.82 per share for the nine months ended June 30, 2014.
- Excluding non-cash expenses and interest, Adjusted EBITDA for the nine months ended June 30, 2015 was negative $3.4 million compared with an Adjusted EBITDA of negative $6.9 million (a decrease of approximately 50%) for the same period last year. See below for information regarding non-GAAP measures.
Fiscal Third-Quarter 2015 Conference Call Information
The Company will hold a conference call to discuss its third-quarter 2015 results tomorrow, August 11, 2015 at 9:00 AM EDT. To participate on the conference call, please follow the instructions below. A slide presentation that will accompany the call may be accessed using the following link: http://www.visualwebcaster.com/event.asp?id=102712
Participant Toll Free: 888-503-8169
Participant Toll: 719-325-2281
Participant Passcode: 3567685
For those who cannot listen to the live broadcast, the presentation material and webcast replay of the call will be available at our investor relations website, http://www.adnas.com/quarterly-results, by end of business on August 11, 2015.
While every attempt will be made to answer your questions, due to the large number of expected participants, not all questions may be answered on the call.
Information about Non-GAAP Financial Measures
Asused 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 in 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 they allow 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) change in fair value of warrant liability, (ii) the loss on conversion of promissory notes, (iii) stock-based compensation and (iv) other non-cash expenses.
The accompanying table below provides a reconciliation of the non-GAAP financial measure presented to the most directly comparable financial measure prepared in accordance with GAAP.
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. SigNature® DNA describes the platform ingredient that is at the heart of all of our security and authentication solutions. SigNature DNA is at the core of a family of uncopyable products such as DNAnet®, our anti-theft product, SigNature® T, targeted toward textiles, and digitalDNA®, providing powerful track and trace. All provide a forensic chain of evidence and can be used to prosecute perpetrators.
Applied DNA Sciences common stock is listed on NASDAQ under the symbol APDN, and its 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 15, 2014, as amended on March 6, 2015, and our subsequent quarterly reports on Form 10-Q filed on February 9, 2015, May 11,2015 and August 10, 2015, 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.
Financial Tables Follow
APPLIED DNA SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2015 2014
--------------- ---------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 10,730,144 $ 1,393,132
Accounts receivable, net of allowance of
$30,228 and $9,634 at June 30, 2015 and
September 30, 2014, respectively 2,077,756 834,818
Prepaid expenses and other current assets 209,831 135,365
--------------- ---------------
Total current assets 13,017,731 2,363,315
Property, plant and equipment, net of
accumulated depreciation of $743,914 at
June 30, 2015 and $759,087 at September 30,
2014 526,816 576,128
Other assets:
Deposits 52,988 57,638
Deferred offering costs 0 181,104
Intangible assets, net of accumulated
amortization and impairment of $325,555 and
$256,208 at June 30, 2015 and September 30,
2014, respectively 525,902 327,872
--------------- ---------------
Total Assets $ 14,123,437 $ 3,506,057
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities,
including related party accrued interest of
$6,597 at September 30, 2014, respectively $ 1,418,615 $ 1,494,759
Promissory notes payable, including
$1,000,000 with a related party at
September 30,2014 - 1,800,000
Deferred revenue 204,863 583,362
--------------- ---------------
Total current liabilities 1,623,478 3,878,121
Warrant liability - 1,096,412
--------------- ---------------
Total liabilities 1,623,478 4,974,533
--------------- ---------------
Commitments and contingencies
Stockholders' Equity (Deficit)
Preferred stock, par value $0.001 per share;
10,000,000 shares authorized; -0- shares
issued and outstanding as of June 30, 2015
and September 30, 2014 - -
Series A Preferred stock, par value $0.001
per share, 10,000,000 shares authorized;
-0- issued and outstanding as of June 30,
2015 and September 30, 2014 - -
Series B Preferred stock, par value $0.001
per share, 10,000,000 shares authorized;
-0- issued and outstanding as of June 30,
2015 and September 30, 2014 - -
Common stock, par value $0.001 per share;
500,000,000 and 1,350,000,000 shares
authorized; 21,482,202 and 13,935,954
shares issued and outstanding as of June
30, 2015 and September 30, 2014,
respectively 21,483 13,937
Additional paid in capital 223,623,850 198,277,859
Accumulated deficit (211,145,374) (199,760,272)
--------------- ---------------
Total stockholders' equity (deficit) 12,499,959 (1,468,476)
--------------- ---------------
Total Liabilities and Stockholders' Equity
(Deficit) $ 14,123,437 $ 3,506,057
=============== ===============
APPLIED DNA SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended June
June 30, 30,
2015 2014 2015 2014
------------ ------------ ------------- -------------
Revenues $ 2,267,671 $ 841,197 $ 5,028,234 $ 2,075,698
Operating expenses:
Selling, general and
administrative 3,508,455 2,948,452 11,078,405 10,093,631
Research and
development 310,093 266,331 961,745 1,085,416
Depreciation and
amortization 121,339 113,424 354,144 325,448
------------ ------------ ------------- -------------
Total operating
expenses 3,939,887 3,328,207 12,394,294 11,504,495
------------ ------------ ------------- -------------
LOSS FROM OPERATIONS (1,672,216) (2,487,010) (7,366,060) (9,428,797)
Other income (expense):
Interest income
(expense), net 5,052 111 (26,807) 784
Other (expense) income,
net (3,718) 52,299 (16,853) 130,186
Loss on conversion of
promissory notes - - (980,842) -
Gain (loss) on change
in fair value of
warrant liability - 515,543 (2,994,540) (1,663,316)
------------ ------------ ------------- -------------
Net loss before
provision for income
taxes (1,670,882) (1,919,057) (11,385,102) (10,961,143)
Provision for income
taxes - - - -
------------ ------------ ------------- -------------
NET LOSS $(1,670,882) $(1,919,057) $(11,385,102) $(10,961,143)
============ ============ ============= =============
Net loss per share-
basic and diluted $ (0.08) $ (0.14) $ (0.63) $ (0.82)
============ ============ ============= =============
Weighted average shares
outstanding-
Basic and diluted 21,444,335 13,569,262 18,075,506 13,400,540
============ ============ ============= =============
APPLIED DNA SCIENCES, INC.
CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
Three Months Ended June Nine Months Ended June 30,
30,
2015 2014 2015 2014
------------ ------------ -------------- --------------
Net Loss $(1,670,882) $(1,919,057) $ (11,385,102) $ (10,961,143)
Operating expenses:
Interest (income)
expense, net (5,052) (111) 26,807 (784)
Depreciation and
amortization 121,339 113,424 354,144 325,448
(Gain) loss on change
in fair value of
warrant liability - (515,543) 2,994,540 1,663,316
Stock based
compensation expense 1,057,097 404,507 3,595,631 2,055,337
Loss on conversion of
promissory notes - - 980,842 -
Bad debt expense 18,971 734 21,750 16,878
------------ ------------ -------------- --------------
Total non-cash items 1,192,355 3,011 7,973,714 4,060,195
------------ ------------ -------------- --------------
Consolidated Adjusted
EBITDA (loss) (478,527) (1,916,046) (3,411,388) (6,900,948)
============ ============ ============== ==============
Investor contact:
Debbie Bailey
631-240-8817
debbie.bailey@adnas.com
Media contact:
Enrique Briz
Dian Griesel Int'l.
212-825-3210
ebriz@dgicomm.com
web:www.adnas.com
twitter: @APDN
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