Applied DNA Sciences, Inc. Reports Fiscal Third Quarter 2017 Financial Results
Published: Aug 11, 2017
STONY BROOK, N.Y.--(BUSINESS WIRE)--Applied DNA Sciences, Inc. (NASDAQ:APDN) (“Applied DNA”, or "the Company"), announced financial results for the fiscal 2017 third quarter ended June 30, 2017.
"We continued to make excellent progress in driving market adoption of our DNA technology platform in the fiscal third quarter while generating strong sales growth from our most established revenue-generating vertical from an initial cotton order for the upcoming ginning season,” said Dr. James A. Hayward, president and CEO of Applied DNA Sciences. “In textiles, we see evidence that our technology platform is gaining momentum as brands and retailers find it increasingly advantageous to provide assurances that the products on their shelves meet their product quality claims. Our recently announced, more favorable licensing agreement with key cotton partner Himatsingka America, Inc. (“Himatsingka”) illustrates the increasingly strategic role our molecular tag technology is playing in supporting manufacturers’ business goals. In addition, product and customer reviews of Bed, Bath and Beyond®’s Wamsutta® PimaCott® home fashions – manufactured by Himatsingka and incorporating our SigNature® T technology – demonstrate that authenticity is good for business. Beyond textiles, we also secured new revenue-generating awards in government/military and diagnostics verticals that broaden our opportunities for revenue growth.”
Third Quarter Financial Highlights:
- Revenues increased 175% for the third quarter of fiscal 2017 to $1.8 million, compared with $653 thousand reported in the third quarter of fiscal 2016, and increased 99% compared with revenues of $905 thousand reported in the second fiscal quarter ended March 31, 2017. The increase in revenue is primarily attributable to an increase in textile revenues.
- Total operating expenses were $4.2 million, compared with $3.9 million in the prior year’s quarter, an increase of approximately 7%. The increase in total operating expenses is primarily attributable to an increase associated with the write-off of an account receivable balance.
- Net loss for the quarter ended June 30, 2017 was $2.6 million, or $0.10 per share, compared with a net loss of $3.4 million, or $0.14 per share for the quarter ended June 30, 2016 and a net loss of $3.4 million, or $0.13 per share for the quarter ended March 31, 2017.
- Excluding non-cash expenses, Adjusted EBITDA for the quarter ended June 30, 2017 was negative $1.5 million, compared to negative Adjusted EBITDA of $2.5 million for the same quarter last fiscal year and negative Adjusted EBITDA of $2.7 million in the prior fiscal quarter. See below for information regarding non-GAAP measures.
- Net cash used in operating activities in the third quarter of fiscal 2017 was $1.9 million. This compares with $2.2 million in the corresponding prior-year period.
Continued Dr. Hayward, “Business development activity during the quarter was strong with pre-commercial opportunities growing to 14 active engagements at present from nine last quarter,” continued Dr. Hayward. “Recently concluded pilot projects, such as in Aloe vera, touch upon multiple markets, from food and supplements to pharmaceuticals and personal care. As announced earlier this week, large-scale fertilizer tagging, offers the opportunity for large-scale deployments that address entire commercial ecosystems, as we do in cotton. While the timing of conversion from pilot to commercial contract is uncertain, we remain focused on expanding the basket of opportunities and on shortening sales cycles.
“As we look ahead, we see several areas of revenue growth. We believe that the start of the cotton ginning season and the growing “pull” we have experienced from brands and from new categories in our existing retail channels will help catalyze sales and improve working-capital to cash conversion. Business activity in non-cotton textile markets is also increasing as manufacturers of products utilizing synthetic fibers move to our technology platform to their sales advantage. Lastly, through our success in cotton we have been able to secure annual minimum revenue commitments from customers such as Loftex Home, LLC and GHCL Limited as licensees of CertainT™, our program that integrates our commercial platforms into a licensable strategy to generate royalty fees, in addition to revenues from the sale of DNA taggant and testing services. CertainT is today a cornerstone of our go-to-market strategy and a key component to building a diverse, recurring revenue base. With CertainT, we can participate not only at the front-end of the supply chain with the application of our molecular tags, but at the back-end of the value chain where the cumulative value-add is the highest and we can share in the economics with brands and retailers.”
Concluded Dr. Hayward, “We have been moving aggressively to build the market for our technology platform and continue to expand our pipeline of opportunities. To help ensure that we have the financial flexibility to capture the opportunities before us today, we have entered into binding private placement subscription agreements with a key customer, as well as all executive officers and members of the board of directors. As we continue to build our business, we believe our successes today will be the foundation for our sustained growth tomorrow.”