The provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping and DNA mass production posted strong sales gains, but its net loss for the year also grew.
In a Nutshell: Applied DNA Sciences saw revenues increase 13 percent to $4.8 million in the fiscal year ended Sept. 30. The company attributed the increase to growth in product revenue of about $1.4 million in the textile industry, primarily for protecting cotton supply chains. The Stony Brook, New York-based company reported a net loss for fiscal 2017 of $12.9 million compared with a net loss of $12.2 million in the prior fiscal year.
The company entered into a securities purchase agreement on Dec. 20 with certain institutional investors to purchase an aggregate of 2.735 million shares of common stock and warrants. The offering closed on Dec. 22, with net proceeds anticipated to be about $4.2 million. Applied DNA intends to use the net proceeds of the offering for working capital, capital expenditures, business development and research and development expenditures, and the acquisitions of new technologies or businesses.
[Read more about Applied DNA: Applied DNA Taps Technology to Change the Way Companies Source Cotton]
Sales: For the fourth quarter, revenues decreased 30 percent to $1.1 million, compared with $1.6 million reported in the fourth quarter of fiscal 2016. The year-over-year quarterly decrease in revenues resulted primarily from decreased sales to the textile industry due to shipments of DNA concentrate that were more heavily weighted in the third quarter of fiscal 2017 compared to fiscal 2016, when they took place in the fourth quarter, as well as the restructuring of payment terms under a licensing agreement with Himatsingka America Inc.
Earnings: The company posted a net loss for the quarter of $2.9 million compared with a net loss of $2.4 million in the prior-year period. Adjusted earnings before interest, taxes, depreciation and amortization was constant at a negative $1.7 million for both the quarters ended September 30, 2017 and for the same quarter last year.
CEO’s Take: James A. Hayward, president and chief executive officer, said, “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.”