Applied DNA Sciences Reports Fiscal First Quarter 2017 Financial Results

February 9, 2017 4:06 PM

STONY BROOK, NY -- (Marketwired) -- 02/09/17 -- 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 fiscal 2017 first quarter ended December 31, 2016.

"Our fiscal first quarter results reflect variability in the recognition of our deferred cotton revenue due to the timing of commitments in our textile business that masks an expansion in our base of business over the prior quarter," stated Dr. James Hayward, president and CEO of Applied DNA. "During the quarter, we shipped SigNature T to mark a new premium cotton varietal and subsequent to quarter end, on-boarded a seventh U.S. gin. We expect commitments for marked cotton utilizing taggant shipped during the fourth fiscal quarter of 2016 to allow for the release of more deferred revenues in the current quarter as well as the remainder of fiscal 2017. We also began to mark synthetic fiber with Techmer for use in the automotive industry and initiated a pilot project in an adjacent market that addresses the issues of dilution and diversion in the fertilizer industry's supply chain.

First Quarter Financial Highlights:

"We made steady progress in the quarter to expand our penetration of business verticals with near-term drivers of growth while building our recurring revenue stream," continued Dr. Hayward. "In the most visible sign of market adoption of SigNature T DNA to date, through one of our partners, we will provide SigNature T DNA to a prominent North American retailer over a multi-year period. This agreement represents the maturing of our cotton business, giving us for the first time revenue certainty on an annual basis beginning with the 2017 ginning season. In our asset marking vertical, the largest auto insurance company in Scandinavia has begun to actively promote our SmartDNA® marking kit to policy holders of a second auto brand. Growing market adoption by these and other key business verticals, we believe, sets the stage for greater and more diversified revenue opportunities."

Operational Highlights:

Concluded Dr. Hayward, "As growing market awareness converts into adoption, the value proposition of SigNature T DNA has attracted individuals to the Company whose cumulative industry expertise and business acumen can help shape our growth and open new avenues for business development. Dr. Mehmood Khan, vice-chairman of PepsiCo, and Ray Kelly, former Commissioner of the New York Police Department, will add valuable insight into our business strategy as we build our base of business across key verticals. Together with the opportunities ahead of us and the financial resources with which to pursue them, we believe Applied DNA Sciences is well positioned to succeed."

Fiscal 2017 First Quarter Conference Call Information

The Company will hold a conference call and webcast to discuss its fiscal 2017 first quarter results on Thursday February 9, 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.

To Participate:

Live webcast: http://services.choruscall.com/links/apdn170209.html

Replay (available 1 hour following the conclusion of the live call):

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

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. Our common stock is listed on NASDAQ under the symbol APDN, and our publicly traded warrants are listed on NASDAQ 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.                         
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                                                                            
                                               December 31,    September 30,
                                                   2016            2016     
                                             --------------- ---------------
                    ASSETS                      (unaudited)                 
Current assets:                                                             
Cash and cash equivalents                    $     6,701,586 $     4,479,274
Accounts receivable, net of allowance of                                    
 $23,411 and $32,965 at December 31, 2016 and                               
 September 30, 2016, respectively                  6,156,173       6,374,895
Inventories                                          323,324         297,759
Prepaid expenses and other current assets            133,230         200,006
                                             --------------- ---------------
Total current assets                              13,314,313      11,351,934
                                                                            
Property, plant and equipment-net of                                        
 accumulated depreciation of $1,363,789 and                                 
 $1,263,200 at December 31, 2016 and                                        
 September 30, 2016, respectively                    723,790         792,499
                                                                            
Other assets:                                                               
Long term accounts receivables                       920,000       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 $485,037 and $423,649, as of                               
 December 31, 2016 and September 30, 2016,                                  
 respectively                                      1,464,512       1,525,900
                                              --------------  --------------
                                                                            
Total Assets                                 $    16,769,627 $    15,565,831
                                             =============== ===============
                                                                            
     LIABILITIES AND STOCKHOLDERS' EQUITY                                   
                                                                            
Current liabilities:                                                        
Accounts payable and accrued liabilities     $     2,201,021 $     2,247,341
Deferred revenue                                   1,791,707       1,837,588
                                             --------------- ---------------
Total current liabilities                          3,992,728       4,084,929
Long term accounts payable                           127,000         215,500
Long term deferred revenue                           468,000         900,000
                                             --------------- ---------------
                                                                            
Total liabilities                                  4,587,728       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 December 31,                                  
 2016 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 December                                
 31, 2016 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 December 31,                                  
 2016 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 December 31, 2016 and September 30,                                  
 2016, respectively                                   26,351          24,079
Additional paid in capital                       239,934,320     234,158,711
Accumulated deficit                            (227,778,772)   (223,817,388)
                                             --------------- ---------------
                                                                            
Total stockholders' equity                        12,181,899      10,365,402
                                             --------------- ---------------
Total Liabilities and Stockholders' Equity   $    16,769,627 $    15,565,831
                                             =============== ===============
                                                                            
                                                                            
                         APPLIED DNA SCIENCES, INC.                         
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                                (Unaudited)                                 
                                                   Three Months Ended       
                                                       December 31,         
                                             ------------------------------ 
                                                   2016            2015     
                                             --------------  -------------- 
                                                                            
Revenues:                                                                   
Product revenues                             $      704,417  $      693,214 
Service revenues                                    198,591         630,900 
                                             --------------   ------------- 
                                                                            
Total revenues                                      903,008       1,324,114 
                                                                            
                                                                            
Cost of revenues                                    274,832         184,268 
                                                                            
Operating expenses:                                                         
Selling, general and administrative               3,900,917       3,169,063 
Research and development                            518,628         672,965 
Depreciation and amortization                       161,977         218,346 
                                             --------------  -------------- 
                                                                            
Total operating expenses                          4,581,522       4,060,374 
                                             --------------  -------------- 
                                                                            
LOSS FROM OPERATIONS                             (3,953,346)     (2,920,528)
                                                                            
Other income (expense):                                                     
Interest income (expense), net                        1,331           2,845 
Other income (expense), net                          (9,369)         (8,587)
                                              -------------   ------------- 
                                                                            
Loss before provision for income taxes           (3,961,384)     (2,926,270)
                                                                            
Provision for income taxes                                -               - 
                                             --------------  -------------- 
                                                                            
                                             --------------  -------------- 
                                                                            
NET LOSS                                     $   (3,961,384) $   (2,926,270)
                                             ==============  ============== 
                                                                            
Net loss per share-basic and diluted         $        (0.16) $        (0.13)
                                             ==============  ============== 
                                                                            
Weighted average shares outstanding- Basic                                  
 and diluted                                     25,427,407      22,542,176 
                                             ==============  ============== 
                                                                            
                                                                            
                         APPLIED DNA SCIENCES, INC.                         
             CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA              
                                                                            
                                             Three Months Ended December 31,
                                                   2016            2015     
                                             --------------- ---------------
                                                                            
Net Loss                                       $ (3,961,384)   $ (2,926,270)
                                                                            
Interest (income) expense, net                       (1,331)         (2,845)
Depreciation and amortization                        161,977         218,346
Stock based compensation expense                   1,458,020         455,111
Bad debt expense                                       5,646          10,000
                                             --------------- ---------------
                                                                            
Total non-cash items                               1,624,312         680,612
                                             --------------- ---------------
                                                                            
Consolidated Adjusted EBITDA (loss)              (2,337,072)     (2,245,658)
                                             =============== ===============
                                                                            
                                                                            
   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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