Applied DNA Sciences Reports Fiscal Fourth Quarter and Year End Results

December 6, 2016 4:05 PM

STONY BROOK, NY -- (Marketwired) -- 12/06/16 -- 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 product authentication solutions, announced financial results for the full fiscal year and quarter ended September 30, 2016.

Commenting on Applied DNA's performance for the fiscal year, Dr. James A. Hayward, president and chief executive officer, stated, "Fiscal 2016 stands out for the growing maturation of three key verticals - textiles, government/defense and pharmaceuticals - reflecting our efforts to build demand combined with favorable industry developments. Our financial results for the year, however, do not yet reflect these efforts. Revenues were negatively impacted by excess 2015 customer inventory cotton taggant that curtailed orders in fiscal 2016 despite an expected multiple in total usage of marked cotton tagged in the 2015 and 2016 ginning seasons, and by the completion of two non-recurring government contracts. Our pharmaceutical efforts significantly increased at the end of Q3, too soon to see results in fiscal 2016."

Fiscal Fourth Quarter Results:

Fiscal 2016 Financial Results:

Dr. Hayward added, "In textiles, major brands and retailers are responding to the value proposition of our technology to secure and purify the global cotton supply chain, and demand for DNA-tagged cotton is now coming from a broader set of supply chain participants. We believe recent reports of mislabeled Egyptian cotton goods will further catalyze demand given that similar mislabeling occurs in goods manufactured from premium US Pima cotton. In our government/military vertical, the completion of the RIF and SBIR development contracts has yielded a marking platform that can mark at high volumes at the point of manufacture of multiple commodities. This platform gives us entrée into commercial OEMs for the marking of commodities applicable to defense, industrial and consumer markets. Our go-to-market strategy includes channel partners, such as Action-Pak, a contract packaging services provider with a broad base of military, industrial and commercial suppliers, to further our penetration of these markets and educate OEMs on our validation and authentication solutions to meet their supply chain security needs."

Operational Highlights:

Concluded Dr. Hayward, "As we look ahead to fiscal 2017, growing market adoption by participants in our textile, government/defense and pharmaceutical verticals are expected to give us a foundation for revenue growth with opportunities in diagnostics and asset-marking, among others, contributing incremental revenue. We remain focused on tight control of operating expenses and have the financial resources to pursue our growth initiatives."

Fiscal Fourth Quarter 2016 Conference Call Information

The Company will hold a conference call and webcast to discuss its fiscal fourth quarter and year-end 2016 results on Tuesday, December 6, 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:

Live webcast: https://services.choruscall.com/links/apdn161206.html

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 December 6, 2016 and available under the 'Presentations' section of the company's Investor Relations web site: http://adnas.com/adnas_home/investors/.

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 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.

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 6, 2016, which is 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.                         
                        CONSOLIDATED BALANCE SHEETS                         
                                                                            
                                                       September 30,        
                                              ------------------------------
                                                    2016           2015     
                                              ------------------------------
                    ASSETS                                                  
Current assets:                                                             
Cash and cash equivalents                      $    4,479,274 $    7,312,184
Accounts receivable, net of allowance of                                    
 $32,965 and $7,140 at September 30, 2016 and                               
 2015, respectively                                 6,374,895      3,929,517
Inventories                                           297,759              -
Prepaid expenses and other current assets             200,006        293,351
                                                -------------  -------------
Total current assets                               11,351,934     11,535,052
                                                                            
Property, plant and equipment-net of                                        
 accumulated depreciation of $1,263,200 and                                 
 $852,867 at September 30, 2016 and 2015,                                   
 respectively                                         792,499        572,107
                                                                            
Other assets:                                                               
Long term accounts receivables                      1,535,000      1,500,000
Deposits                                               61,126         62,988
Deferred offering costs                                13,986              -
Goodwill                                              285,386        285,386
                                                                            
Intangible assets, net of accumulated                                       
 amortization of $423,649 and $238,368, as of                               
 September 30, 2016 and 2015, respectively          1,525,900      1,598,779
                                                -------------  -------------
                                                                            
Total Assets                                   $   15,565,831 $   15,554,312
                                                =============  =============
                                                                            
     LIABILITIES AND STOCKHOLDERS' EQUITY                                   
                                                                            
Current liabilities:                                                        
Accounts payable and accrued liabilities       $    2,247,341 $    2,385,006
Deferred revenue                                    1,837,588        282,050
                                                -------------  -------------
Total current liabilities                           4,084,929      2,667,056
Long term accounts payable                            215,500        320,400
Long term deferred revenue                            900,000              -
                                                -------------  -------------
                                                                            
Total liabilities                                   5,200,429      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 September 30,                                 
 2016 and 2015                                              -              -
Series A Preferred stock, par value $0.001 per                              
 share; 10,000,000 shares authorized; -0-                                   
 issued and outstanding as of September 30,                                 
 2016 and 2015                                              -              -
Series B Preferred stock, par value $0.001 per                              
 share; 10,000,000 shares authorized; -0-                                   
 issued and outstanding as of September 30,                                 
 2016 and 2015                                              -              -
                                                                            
Common stock, par value $0.001 per share;                                   
 500,000,000 shares authorized; 24,078,756 and                              
 21,504,578 shares issued and outstanding as                                
 of September 30, 2016 and 2015, respectively          24,079         21,505
Additional paid in capital                        234,158,711    224,186,760
Accumulated deficit                             (223,817,388)  (211,641,409)
                                                -------------  -------------
                                                                            
Total stockholders' equity                         10,365,402     12,566,856
                                                -------------  -------------
Total Liabilities and Stockholders' Equity     $   15,565,831 $   15,554,312
                                                =============  =============
                                                                            
                                                                            
                         APPLIED DNA SCIENCES, INC.                         
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                                                                            
                      Three Months Ended            Twelve Months Ended     
                         September 30,                 September 30,        
                      2016           2015           2016           2015     
                ------------------------------------------------------------
Revenues:                                                                   
Product revenues $    1,381,168 $    3,018,690 $    2,538,202 $    5,435,776
Service revenues        254,927        961,575      1,648,225      3,572,723
                  -------------  -------------  -------------  -------------
Total revenues        1,636,095      3,980,265      4,186,427      9,008,499
Cost of revenues        441,971        255,254        746,582        384,269
Operating                                                                   
 expenses:                                                                  
Selling, general                                                            
 and                                                                        
 administrative       2,623,151      3,086,448     11,239,397     13,410,256
Research and                                                                
 development            832,227        989,981      3,693,810      2,577,307
Depreciation and                                                            
 amortization           148,528        136,496        706,496        490,641
                  -------------  -------------  -------------  -------------
                                                                            
Total operating                                                             
 expenses             3,603,906      4,212,925     15,639,703     16,478,204
                  -------------  -------------  -------------  -------------
                                                                            
LOSS FROM                                                                   
 OPERATIONS         (2,409,782)      (487,914)   (12,199,858)    (7,853,974)
Other income                                                                
 (expense):                                                                 
Interest income                                                             
 (expense), net           1,437          3,340         11,004       (23,468)
Other (expense)                                                             
 income, net            (6,731)       (11,460)         12,875       (28,313)
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       (2,415,076)      (496,034)   (12,175,979)   (11,881,137)
Provision for                                                               
 income taxes                 -              -              -              -
                  -------------  -------------  -------------  -------------
                                                                            
NET LOSS         $  (2,415,076) $    (496,034) $ (12,175,979) $ (11,881,137)
                  -------------  -------------  -------------  -------------
Net loss per                                                                
 share-basic and                                                            
 diluted         $       (0.10) $       (0.02) $       (0.51) $       (0.63)
                  -------------  -------------  -------------  -------------
Weighted average                                                            
 shares                                                                     
 outstanding-                                                               
 Basic and                                                                  
 diluted             24,078,657     21,483,946     23,693,096     18,938,283
                  -------------  -------------  -------------  -------------
                                                                            
                                                                            
                         APPLIED DNA SCIENCES, INC.                         
             CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA              
                                                                            
                                                                            
                      Three Months Ended           Twelve Months Ended      
                         September 30,                 September 30,        
                      2016           2015           2016           2015     
                ------------------------------------------------------------
                                                                            
Net Loss         $  (2,415,076) $    (496,034) $ (12,175,979) $ (11,881,137)
                                                                            
                                                                            
Interest                                                                    
 (income)                                                                   
 expense, net           (1,437)        (3,340)       (11,004)         23,468
Depreciation and                                                            
 amortization           148,528        136,496        706,496        490,641
Loss on change                                                              
 in fair value                                                              
 of warrant                                                                 
 liability                   --             --             --      2,994,540
Stock based                                                                 
 compensation                                                               
 expense                594,656        562,933      2,116,960      4,158,564
Loss on                                                                     
 conversion of                                                              
 promissory                                                                 
 notes                       --             --             --        980,842
Bad debt expense         10,577         13,246        116,824         34,996
                  -------------  -------------  -------------  -------------
                                                                            
Total non-cash                                                              
 items                  752,324        709,335      2,929,276      8,683,051
                  -------------  -------------  -------------  -------------
                                                                            
Consolidated                                                                
 Adjusted EBITDA                                                            
 (loss)             (1,662,752)        213,301    (9,246,703)    (3,198,086)
                  =============  =============  =============  =============
                                                                            
                                                                            
   Investor contact: Debbie Bailey631-240-8817debbie.bailey@adnas.com Sanjay M. Hurry212-838-3777LHAshurry@lhai.comMedia contact:Susan FormanDian Griesel Int'l.212-825-3210sforman@dgicomm.comWeb: www.adnas.com Twitter: @APDN

Source: Applied DNA Sciences

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