Applied DNA Sciences Reports Year End and Fiscal Fourth Quarter Results

December 28, 2017 4:05 PM

Company To Hold Conference Call and Webcast Today, Thursday, December 28, 2017 at 4:30 PM EST

STONY BROOK, N.Y.--(BUSINESS WIRE)-- Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the "Company"), announced financial results for the full fiscal year and quarter ended September 30, 2017.

Commenting on Applied DNA’s performance for the fiscal year, Dr. James A. Hayward, president and chief executive officer, stated, “Fiscal 2017 did not fulfill our revenue expectations, but nonetheless stands out for the growing validation of our disruptive DNA technology platform by leading global companies and government agencies, resulting in a broader base of business activity and new revenue opportunities, and drove our expected annual recurring revenue to increase to over $6.5 million per year. In addition, working diligently to execute on our growth strategy, we exited the fiscal year with 23 feasibility pilots in our pipeline, an increase from 14 at the end of the third fiscal quarter, with two of the 23 pilots now commercialized.”

“Entering fiscal 2018, momentum in business activity is increasing following the recent signing of new strategic partnerships across several of our key business verticals,” continued Dr. Hayward. “Videojet gives us direct line-of-sight into multiple commercial ecosystems, including enhanced opportunities to tag Federal Supply Classes within the Defense Logistics Agency in which we do not yet have a presence, and in pharmaceuticals, where the global healthcare industry is moving to comply with federally mandated regulations, such as the U.S. Drug Supply Chain Security Act (US DSCSA) and the EU’s Falsified Medicine Directive (EUFMD), both of which require serialized pharmaceutical packaging. Our new memorandum of understanding with Colorcon potentially broadens the applicability of our platform and gives us access to both the pharmaceutical and nutraceutical industries. Similarly, through our partnership with Rosier S.A. for DNA-tagged fertilizer, we are preparing to enter markets that represent over 60% of total global fertilizer consumption. Having established a foundation of growing recurring revenues, an expanding pipeline of pilot projects and with the addition of several new strategic partnerships expected to contribute to revenue in the current year, we believe we are firmly on a trajectory for growth in fiscal 2018.”

Fiscal 2017 Financial Results:

Fiscal Fourth Quarter Results:

Fiscal Fourth Quarter Operational Highlights:

Fiscal Fourth Quarter 2017 Conference Call Information

The Company will hold a conference call and webcast to discuss its fiscal fourth quarter and year-end 2017 results on Thursday, December 28, 2017 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/apdn171205.html

Replay (available 1 hour following the conclusion of the live call through December 29, 2017):

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 28, 2017 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

Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping and DNA mass production for diagnostics and therapeutics.

We make 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 CertainT® platform can be used to identify, tag, test, and track products, to help assure authenticity, origin, traceability, sustainability 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 towards 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.

Visit adnas.com for more information. Follow us on Twitter and LinkedIn. Join our mailing list.

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 28, 2017, 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,
2017 2016
ASSETS
Current assets:
Cash and cash equivalents $ 2,959,781 $ 4,479,274
Accounts receivable, net of allowance of $10,000 and $32,965 at September 30, 2017 and 2016, respectively 2,587,969 6,374,895
Inventories 326,468 297,759
Prepaid expenses and other current assets 366,954 200,006
Total current assets 6,241,172 11,351,934
Property and equipment, net 523,688 792,499
Other assets:
Long term accounts receivables - 1,535,000
Deposits 61,626 61,126
Deferred offering costs - 13,986
Goodwill 285,386 285,386
Intangible assets, net 1,042,076 1,525,900
Total Assets $ 8,153,948 $ 15,565,831
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 944,133 $ 2,247,341
Deferred revenue 351,735 1,837,588
Total current liabilities 1,295,868 4,084,929

Long term accounts payable

- 215,500
Long term deferred revenue - 900,000

Total liabilities 1,295,868 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 September 30, 2017 and 2016

- -

Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized;-0- issued and outstanding as of September 30, 2017 and 2016

- -

Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized;-0- issued and outstanding as of September 30, 2017 and 2016

- -

Common stock, par value $0.001 per share; 500,000,000 shares authorized; 27,377,057 and24,078,756 shares issued and outstanding as of September 30, 2017 and 2016, respectively

27,377 24,079
Additional paid in capital 243,503,858 234,158,711
Accumulated deficit (236,673,155 ) (223,817,388)
Total stockholders’ equity 6,858,080 10,365,402
Total Liabilities and Stockholders’ Equity $ 8,153,948 $ 15,565,831
APPLIED DNA SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended September 30, Twelve Months Ended September 30,
2017 2016 2017 2016
Revenues:
Product revenues $ 846,941 $ 1,381,168 3,733,995 $ 2,538,202
Service revenues 298,556 254,927 1,017,265 1,648,225
Total revenues 1,145,497 1,636,095 4,751,260 4,186,427
Cost of revenues 272,680 434,961 1,077,232 1,170,653
Operating expenses:
Selling, general and administrative 2,790,398 2,623,150 13,324,503 10,808,299
Research and development 524,746 839,238 2,282,362 3,700,837
Depreciation and amortization 400,519 148,528 887,305 706,496
Total operating expenses 3,715,663 3,610,916 16,494,170 15,215,632
LOSS FROM OPERATIONS (2,842,846) (2,409,782) (12,820,142) (12,199,858)
Other income (expense):
Interest income (expense), net - 1,437 2,763 11,004
Other (expense) income, net (11,832) (6,731) (38,388) 12,875
Net loss before provision for income taxes (2,854,678) (2,415,076) (12,855,767) (12,175,979)
Provision for income taxes - - - -
NET LOSS $ (2,854,678) $ (2,415,076) $ (12,855,767) $ (12,175,979)
Net loss per share-basic and diluted $ (0.10) $ (0.10) $ (0.49) $ (0.51)
Weighted average shares outstanding- Basic and diluted 27,377,057 24,078,657 26,378,991

23,693,096

APPLIED DNA SCIENCES, INC.
CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA

Three Months Ended September 30,

Twelve Months Ended September 30,

2017 2016 2017 2016
Net Loss $ (2,854,678) $ (2,415,076) $ (12,855,767) $ (12,175,979)
Interest (income) expense, net - (1,437) (2,763) (11,004)
Depreciation and amortization 400,519 148,528 887,305 706,496
Stock based compensation expense 695,005 594,656 3,257,305 2,116,960
Bad debt expense 55,752 10,577 423,920 116,824
Total non-cash items 1,151,276 752,324 4,565,767 2,929,276
Consolidated Adjusted EBITDA (loss) $ (1,703,402) $ (1,662,752) $ (8,290,000) $ (9,246,703)

Investors:

LHA

Sanjay M. Hurry, 212-838-3777

shurry@lhai.com

Media:

Dian Griesel Int’l.

Susan Forman, 212-825-3210

sforman@dgicomm.com

Web: www.adnas.com

Twitter: @APDN

Source: Applied DNA Sciences, Inc.

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