By Grant Zeng, CFA
Update on Fiscal 2017 First Quarter Financials
On February 9, Applied DNA Sciences (NASDAQ:APDN) announced financial results for the fiscal first quarter ended December 31, 2016.
Total revenue for the fiscal first quarter was $0.9 million, compared with $1.32 million reported in the first quarter of fiscal 2016, a decrease of 32%. Total revenue for 1Q17 also decreased 45% from the $1.64 million reported in the fourth fiscal quarter ended September 30, 2016.
During the conference call, management revealed that the year-over-year decrease in revenue is primarily attributable to a decrease in two government contract awards which both expired last quarter.
SG&A expenses for fiscal first quarter of 2017 were $3.9 million, compared to $3.6 million for the same period of 2016.
R&D expenses for fiscal first quarter of 2017 were $0.5 million, compared to $0.5 million for the same quarter of 2016.
Total operating expenses for 1Q17 were $4.6 million, compared with $4.1 million in the prior year's quarter, an increase of approximately 11%. The increase in year-over-year total operating expenses was primarily attributable to an increase in SG&A primarily associated with stock option grants.
Net loss for the quarter ended December 31, 2016 was $4.0 million ($0.16 per share), compared with a net loss of $2.9 million ($0.13 per share) for the quarter ended December 31, 2015.
Excluding non-cash expenses, adjusted EBITDA for the quarter ended December 31, 2016 was negative $2.3 million compared to a negative adjusted EBITDA of $2.2 million for the same quarter last year and a negative adjusted EBITDA of $1.7 million in the prior fiscal quarter due mainly to a decrease in revenues.
Balance Sheet Remains Strong
APDN reported cash and cash equivalents of $6.7 million as of December 31, 2016, compared to $4.5 million at September 30, 2016.
In early November 2016, APDN closed a private placement pursuant to a securities purchase agreement with a single healthcare dedicated institutional investor to purchase $5 million of common stock and warrants at a combined price of $2.20 per share of common stock and warrant. In the private placement, Applied DNA sold 2,272,727 shares of its common stock and warrants to purchase 2,272,727 shares of its common stock. The warrants have the same terms as the Company’s existing publicly traded warrants (NASDAQ: APDNW) with an exercise price of $3.50 per share and an expiration date of November 20, 2019.
The net proceeds to the Company from the private placement were $4.3 million.
We welcome this new financing, which not only boosts the company’s balance sheet, but more importantly validates the company’s technology and commercial efforts. With the boosted balance sheet, APDN is well positioned to accelerate revenue growth in fiscal 2017 and beyond.
Net cash used in operating activities in the fiscal first quarter of 2017 was $2.1 million. This compared with $2.7 million the corresponding prior-year period.
Current cash in hand can fund the operations in the next 12 months according to our financial model.
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