STONY BROOK, NY--(Marketwired - February 10, 2016) - Applied DNA Sciences, Inc. (APDN) (“Applied DNA”) (Twitter: @APDN), 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 first quarter ended December 31, 2015.
“Our fiscal first quarter performance reflects continued penetration of near-term business verticals beyond textiles, our most mature vertical,” stated Dr. James A. Hayward, President and Chief Executive Officer of Applied DNA Sciences. “We are pleased to report revenue growth on a year-over-year basis, which was driven by orders from our Diagnostics and Asset Marking verticals and two government contract awards. As expected, seasonality of the cotton ginning season caused revenue to dip from the fiscal 2015 fourth quarter.”
Dr. Hayward continued, “Our DNA-based solutions are applicable to multiple verticals; our momentum was sustained this quarter toward commercial deployment as part of our ongoing strategy to diversify our revenue base as our DNA-based security solutions for supply chains continued to gain traction. The textiles market affords us substantial opportunity and we are expanding our penetration of this market with additional brands and retailers that should translate to greater diversity of textile revenue than we achieved last year.”
First Quarter Financial Highlights:
Revenues increased 7% for the first quarter of fiscal 2016 to $1.32 million, compared with $1.24 million reported in the first quarter of fiscal 2015, and decreased 67% from the $4.0 million reported in the fourth fiscal quarter ended September 30, 2015.
The year-over-year increase in revenue is primarily attributable to DNA manufacturing for the diagnostic market, two ongoing government contracts and an increase in sales for asset and valuables marking. The sequential decrease in revenues resulted primarily from the seasonality of the cotton ginning season to the Company’s business.
Total operating expenses were $4.2 million, compared with $5.1 million in the prior year’s quarter, a decrease of approximately $815 thousand or 16%. The decrease in year-over-year total operating expenses is primarily attributable to a decrease in selling, general and administrative expense partially offset by increases in research and development expense of $194 thousand and depreciation and amortization expenses of $109 thousand.
Net loss for the quarter ended December 31, 2015 was $2.9 million, or $0.13 per share, compared with a net loss of $7.8 million, or $0.51 per share for the quarter ended December 31, 2014 and a net loss of $496 thousand, or $0.02 per share for the quarter ended September 30, 2015.
Excluding non-cash expenses, Adjusted EBITDA for the quarter ended December 31, 2015 was negative $2.2 million compared to a negative Adjusted EBITDA of $1.7 million for the same quarter last year and a positive Adjusted EBITDA of $213 thousand in the prior fiscal quarter due mainly to a number of non-recurring expenses of approximately $425,000 incurred during the quarter ended December 31, 2015. See below for information regarding non-GAAP measures.
Cash and cash equivalents as of December 31, 2015 totaled $12.4 million as compared to $7.3 million at September 30, 2015. The increase in cash balances is due primarily to the registered direct public offering and concurrent private placement conducted in the quarter that raised gross proceeds of approximately $8.75 million.
Net cash used in operating activities in the fiscal first quarter of 2016 was $2.7 million.This compares with $2.4 million the corresponding prior-year period.
Recent Highlights:
The Company was featured in a National Public Radio story, aired yesterday, entitled: “Cotton Sheet Conspiracy Brought Down by DNA Testing”. Listen at: http://kvpr.org/post/cotton-sheet-conspiracy-brought-down-dna-testing.
The Company announces the formation of a Strategic Advisory Board (SAB) that will provide guidance in specific market verticals. Initially, the SAB will be comprised of two former executives with decades of experience in the pharmaceutical field who will assist the Company in its entry into the pharmaceutical industry, and a globally recognized leader of a major energy utility, who will guide the Company’s expansion into the protection of critical infrastructure in power grids and railways.
On December 1, the Company announced that it had successfully completed a six-month development project funded by existing defense contracts to incorporate its SigNature® DNA technology into various conductive and non-conductive silicone elastomers. In addition, the project validated the embedding of the Company’s SigNature DNA in elastomers for commercial applications, such as those commonly used in the automotive, medical device and toy industries. Subsequent project stages aim for a full commercial launch of select DNA-embedded silicone rubber products.
The Company completed DNA marking of plastic master batches used for the generation of fibers in synthetic textiles.
Related projects are underway in plastic colorants and molded products.
The Company expanded its PartnerProtect™ channel for print media. Completion of multiple pilots forms a cumulative experience that will accelerate delivery to an expanding customer base. Categories include tax stamps for a foreign country, secure labels for United States federal use, inkjet marking and food-grade and pharmaceutical labels.
The Company announces the expansion of its fiberTyping® business to a global marketplace. New customers include luxury European men’s and women’s apparel, top denim lines, outdoor and performance sportswear and apparel brands, and boutique and large retailers of premium pima products. These customers use fiberTyping to diagnose if they have a problem in their supply chain, with the opportunity to solve the problem by using SigNature T® tagging to ensure traceability from point-of-origin to point-of-sale.
The Company received Notice of Allowance from the US Patent Office for three additional patents, including an additional patent on the genotyping of mature cotton fibers and textiles.
On January 12, 2016, the Company announced that it had signed a Cooperative Research and Development Agreement (CRADA) with the United States Department of Agriculture (USDA). The Agreement is expected to enhance Applied DNA’s identification of cotton cultivars including the ability to identify key cultivars for specific cotton growing regions, including those with questionable labor practices.
On January 5, 2016, the Company announced a contract with a key distributor in Europe to provide its metal marking product to one of Europe’s leading electricity providers. The contract is for a period of two years with an option to extend for a third year and is estimated to be valued at between $130,000 and $260,000 per annum.
The Company’s Asset Protection Program has advanced westward from its Long Island headquarters to inclusion in four states, more than 250 communities and more than 100 law enforcement agencies. Future sales in this vertical will be supported by its relationship with Security Marketing Resources (SMR) of California.
Preparations are near complete to launch the Company’s SMR DNA Security Initiative for Asset Protection, with line of sight to 500 US security dealers and their 500,000+ commercial and consumer customers.
Dr. Hayward concluded, “Applied DNA remains well positioned to benefit from the large and growing demand for supply chain security and anti-counterfeiting solutions in fiscal 2016. Our pipeline of pilot projects is expected to continue to deepen the validation of our technology and drive much stronger fundamentals, as evidenced by our success in purifying cotton supply chains. We remain committed to growing the business in a disciplined, structured way that applies our financial resources to maximize returns. As we move to replicate recent successes across verticals with near-term drivers of growth, the growing awareness and interest we are receiving from the marketplace serves to further validate our value proposition and strategy.”
Fiscal 2016 First Quarter Conference Call Information
The Company will hold a conference call and webcast to discuss its fiscal 2016 first quarter results on Wednesday, February 10, 2016 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:
Reserve your conference call seat now at: http://dpregister.com/10079875. Conference call dial-in information will be provided upon completion of the registration process.
Live webcast: http://services.choruscall.com/links/apdn160202
Replay (available 1 hour following the conclusion of the live call):
Participant Toll Free: 877-344-7529
Participant Toll: 412-317-0088
Participant Passcode: 10079875
Webcast replay: http://services.choruscall.com/links/apdn160202
For those investors unable to attend the live call, a copy of the presentation is expected to be posted by end of business on February 10, 2016 and available under the “Investor Information” tab of the company’s web site.
