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Evogene Ltd. Reports Second Quarter 2012 Financial Results


8/14/2012 8:54:28 AM

REHOVOT, ISRAEL--(Marketwire - August 14, 2012) -

Evogene Ltd. (TASE: EVGN) announced today financial results for the second quarter, ended June 30, 2012.

Highlights for the second quarter of 2012 included:

  • Revenues for the second quarter of 2012 were $4.1 million, representing an increase of approximately 20% compared to the same period in 2011.
  • Entered into collaboration with Rasi Seeds, a leading seed company in India, for increasing yield and drought tolerance in hybrid rice.
  • Launch of ATHLETE™ 4.0, an enhanced version of the Company's computational plant gene discovery technology.
  • Evogene's wholly owned subsidiary, Evofuel, entered into collaboration with T6 Industrial S.A. for development of castor bean as feedstock for biodiesel in Argentina.
  • As of June 30, 2012, Evogene had approximately $53 million in cash resources, not including trade receivables of approximately $4 million.

Ofer Haviv, Evogene's president and CEO, stated: "Currently, as severe drought is occurring in the United States and South America, negatively impacting supply of agricultural products and key commodities prices, awareness of the critical need to introduce genetic improvements to enhance agricultural crops is becoming even more apparent. As a leading supplier of improved traits to the major seed companies, we are very pleased to see Evogene's continuing progress in addressing this critical challenge through our key fields of activities, while at the same time continuing to invest heavily in additional infrastructure and new technologies for the future.

Yield and abiotic stress tolerance - Utilizing our broad base of proprietary technologies, Evogene is advancing multiple collaborative programs to improve these important traits. These include multiyear collaborations with Monsanto Company in corn, soybean, cotton and canola and with Bayer CropScience in wheat. In addition, the company announced during the past quarter a new collaboration with Rasi Seeds, a leading seed company in India, for rice. India and south-east Asia are key markets for our technology and we are excited to expand our presence in this growing region of the world. At present, hundreds of Evogene's discovered genes for improving these traits, are undergoing development and validation in our partners' pipelines.

Disease and other biotic stress resistance - Evogene has been broadening its activity in this field, which includes on-going collaborations with Syngenta for improving soybean nematode resistance and Dupont for soybean rust resistance. We see great potential for expanding our efforts in this field through additional partnerships as well as internal programs.

Agro-chemicals - Evogene has been evaluating various paths to leverage its proprietary technologies to identify new and innovative chemicals for global agriculture, as resistance of pests and weeds to existing chemicals is becoming more and more of a challenge. In doing so, we see great synergy in combining our capabilities and innovative approach for plant genomics with applied chemistry in the search for new chemical solutions and we believe that our extensive know how in plant biology provides us with a significant advantage in identifying relevant target proteins.

Feedstock for Biofuel - Evogene's wholly owned subsidiary, Evofuel, continues to progress towards its goal of supplying seed for cost competitive biofuel feedstock. With our current focus on Latin American markets, we recently announced expansion of Evofuel castor bean varieties development to Argentina through collaboration with T6 Industrial, in addition to our ongoing activities with SLC Agricola in Brazil. T6 is a leading biodiesel producer in Argentina and we consider this partnership as an important step towards establishing large scale production of castor bean as a key feedstock for the biodiesel industry."

Mr. Haviv continued, "In order to support these activities, Evogene invests considerable resources in development of its human resources and computational technologies as well as its capabilities in field trials and proprietary plant genomic data generation. During the first half of 2012, Evogene launched ATHLETE™ 4.0, a new version of our computational technology for gene discovery, which now incorporates additional computational tools and algorithms and the ability to integrate new data types. In addition, the company has recently completed the largest and one of the most complex field experiments, ever undertaken by us, for genomic and phenotypic data generation for a target field crop."

Mr. Haviv concluded, "In each of these broad market areas, we see Evogene as a key contributor to meeting critical food, fuel and feed challenges worldwide, and by doing so, providing significant increases in shareholder value."

Revenues for the first six months ended June 30, 2012 were $8.3 million, representing an increase of over 20% compared to $6.8 million for the same period in 2011. Revenues for the second quarter of 2012 were $4.1 million, compared to $3.4 million reported for the same period in 2011. Revenues for the first half and the second quarter of 2012 consist primarily of research and licensing revenues generated under the company's various collaboration agreements with seed companies.

Cost of Revenues include expenses related to the support of our on-going activities under our collaborations with seed companies, all of which provide for future milestone and royalties revenues. Cost of Revenues for the first six months ended June 30, 2012 was $4.5 million, compared to $3.6 million for the same period in 2011. Cost of Revenues for the second quarter of 2012 was $2.4 million, compared to $1.8 million for the same period in 2011. This increase in Cost of Revenues primarily relates to the extension of our collaboration with Monsanto, signed November 2011.

Research & Development expenses for the first six months ended June 30, 2012, which do not include expenses incurred in support of on-going collaborations which, as stated above, are accounted for as Cost of Revenues, were $3.3 million, compared to $2.7 million for the same period in 2011. Research & Development expenses for the second quarter of 2012 were $1.9 million, compared to $1.5 million reported for the same period in 2011. This increase in R&D expenses primarily relates to increase in the company's internal programs to support future growth, such as the Biofuel program and extensive field experiments for generation of proprietary plant data.

Loss from ordinary operations for the first six months of 2012 was $1.1 million, compared to loss from ordinary operations of $1.0 million in the same period in 2011. Loss from ordinary operations for the second quarter of 2012 was $1.0 million, compared to loss from ordinary operations of $0.6 million in the same period in 2011.

Financial expenses during 2011 due to publicly traded warrants: During the first two quarters of calendar 2011, Evogene had approximately 4.5 million publicly traded warrants outstanding, which were issued as part of its IPO on the Tel Aviv Stock Exchange in May 2007. As of May 31, 2011, the date of expiration of these warrants, over 99.9% of which had been exercised. While these warrants were outstanding, any change as of the end of a reporting period in the market price of the Company's ordinary shares resulted in non-cash financial income/expense due to their revaluation on our statements of comprehensive profit or loss. These non-cash financial income/expense due to publicly traded warrants were no longer applicable after the second quarter of 2011.

Total comprehensive loss for the first six months ended June 30, 2012, was $0.7 million, compared to a total comprehensive profit of $3.9 million for the same period in 2011. Comprehensive loss for the second quarter of 2012 was $1.2 million, compared to a comprehensive profit of $2.8 million for the same period in 2011. Total comprehensive loss for the first six months and second quarter of 2012 does not include any non-cash financial affects due to exercise of most of the publicly traded warrants as stated above, while the comprehensive profit for the first six months of 2011 includes $3.7 million of such non-cash financial revenues and the comprehensive profit for second quarter of 2011 includes $2.7 million of such non-cash financial revenues.

As of June 30, 2012, Evogene had approximately $53 million in cash and cash equivalents, marketable securities and short term deposits, not including trade receivables of $3.9 million, this is compared to approximately $59 million as of December 31, 2011, not including trade receivables of $0.8 million.

About Evogene

Evogene is a world leading developer of improved plant traits, such as yield and drought tolerance, for a wide diversity of key crops through the use of plant genomics. The company focuses on utilizing its proprietary computational genomic technologies to provide a complete solution for plant trait improvement through combining state of the art biotechnology and advanced breeding methods. Evogene is collaborating with world leading seed companies to introduce its improved plant traits into key commercial crops under milestone and royalty bearing agreements. Evogene's headquarters are in Rehovot, Israel, and its stock is traded on the Tel Aviv Stock Exchange (TASE: EVGN). For additional information, please visit Evogene's website at www.evogene.com

This press release contains "forward-looking statements" relating to future events. These statements may be identified by words such as "may", "expects", "intends", "anticipates", "plans", "believes", "scheduled", "estimates" or words of similar meaning. Such statements are based on current expectations, estimates, projections and assumptions, describe opinions about future events, involve certain risks and uncertainties which are difficult to predict and are not guarantees of future performance. Therefore, actual future results, performance or achievements of Evogene may differ materially from what is expressed or implied by such forward-looking statements due to a variety of factors, many of which beyond Evogene's control, including, without limitation, those risk factors contained in Evogene's reports filed with the Israeli Securities Authority. Evogene disclaims any obligation or commitment to update these forward-looking statements to reflect future events or developments or changes in expectations, estimates, projections and assumptions.

                                                                            
                                                                            
                                                                            
BALANCE SHEETS                                                              
--------------------------------------------------------------------------- 
                                                                            
Dollar in thousands (except per share data)                                 
                                                                            
                                       As of                                
                                    December 31         As of June 30       
                                   ------------  -------------------------- 
                                       2011          2012          2011     
                                      Audited      Unaudited     Unaudited  
                                   ------------  ------------  ------------ 
Current assets                                                              
Cash and cash equivalents                 6,465        11,558        21,710 
Marketable securities                    34,672        30,643        35,267 
Short term deposits                      17,652        10,600         3,995 
Receivables                                 800         3,911         2,809 
Other account receivables                   981           681           591 
                                   ------------  ------------  ------------ 
                                         60,570        57,393        64,372 
                                   ------------  ------------  ------------ 
Non-current assets                                                          
Long term deposits                           48            47            46 
Property and equipment                    7,138         7,825         5,860 
Intangible assets                           134           111           156 
                                   ------------  ------------  ------------ 
                                          7,320         7,983         6,062 
                                   ------------  ------------  ------------ 
                                                                            
Total Assets                             67,890        65,376        70,434 
                                   ============  ============  ============ 
                                                                            
Current liabilities                                                         
Trade payable                             2,059         1,299         1,028 
Deferred revenues                         4,037         4,374         4,300 
Liabilities in respect of grants                                            
 from the Chief Scientist                   905           493           487 
Other accounts payable and                                                  
 accruals                                 2,079         1,866         1,559 
                                   ------------  ------------  ------------ 
                                          9,080         8,032         7,374 
                                   ------------  ------------  ------------ 
Long-term Liabilities                                                       
Liability related to chief                                                  
 scientists grants                        3,039         2,947         3,398 
Deferred revenues                         7,673         6,027         6,798 
Accrued severance pay, net                    9             9             9 
                                   ------------  ------------  ------------ 
                                         10,721         8,983        10,205 
                                   ------------  ------------  ------------ 
Shareholders' Equity                                                        
Share capital                               100           100           100 
Premium on shares                        81,364        82,042        80,411 
PUT Option                               (7,764)       (7,764)       (4,433)
Reserve - transaction with a                                                
 controlling shareholder                  1,156         1,156         1,156 
Reserve - share based payment                                               
 transactions                             6,692         7,021         5,835 
Accumulated deficit                     (33,459)      (34,194)      (30,214)
                                   ------------  ------------  ------------ 
Total liabilities and                                                       
 shareholders' equity                    48,089        48,361        52,855 
                                   ------------  ------------  ------------ 
                                                                            
                                         67,890        65,376        70,434 
                                   ============  ============  ============ 

                                                                            
                                                                            
                                                                            
STATEMENTS OF COMPREHENSIVE INCOME                                          
--------------------------------------------------------------------------- 
                                                                            
Dollar in thousands (except per share data)                                 
                                                                            
                                                                            
                      For the      For the period of                        
                     Year ended   three months ended     For the period of  
                         on               on            six months ended on 
                    -----------  --------------------  -------------------- 
                    December 31   June 30    June 30    June 30    June 30  
                        2011        2012       2011       2012       2011   
                      Audited    Unaudited  Unaudited  Unaudited  Unaudited 
                    -----------  ---------  ---------  ---------  --------- 
                                                                            
Revenues                 14,901      4,087      3,429      8,287      6,816 
                                                                            
Cost of revenues          8,247      2,404      1,846      4,483      3,556 
                    -----------  ---------  ---------  ---------  --------- 
                                                                            
Gross profit              6,654      1,683      1,583      3,804      3,260 
                    -----------  ---------  ---------  ---------  --------- 
                                                                            
Operating expenses:                                                         
 Research and                                                               
  development, net        6,384      1,851      1,464      3,308      2,690 
 Business                                                                   
  development                                                               
  expenses                1,136        295        215        544        487 
 General and                                                                
  administrative          2,313        533        545      1,069      1,123 
 Other expenses               4          -          -          -          - 
                    -----------  ---------  ---------  ---------  --------- 
Total operating                                                             
 expenses                 9,837      2,679      2,224      4,921      4,300 
                    -----------  ---------  ---------  ---------  --------- 
Loss from ordinary                                                          
 operation               (3,183)      (996)      (641)    (1,117)    (1,040)
                                                                            
                                                                            
Financial income          1,294          -        738        510      1,333 
Financial expenses       (1,039)      (114)        (9)       (57)       (51)
Financial income                                                            
 (expenses) due to                                                          
 revaluation of                                                             
 Options                  3,729          -      2,691          -      3,729 
Financial expenses                                                          
 due torevaluation                                                          
 of Obligation to                                                           
 the OCS                   (156)       (29)        (6)       (19)       (81)
                    -----------  ---------  ---------  ---------  --------- 
Profit (loss)                                                               
 before tax                 645     (1,139)     2,773       (683)     3,890 
Tax on income                 -        (52)         -        (52)         - 
                    -----------  ---------  ---------  ---------  --------- 
                                                                            
                                                                            
Total Comprehensive                                                         
 income (loss)              645     (1,191)     2,773       (735)     3,890 
                    ===========  =========  =========  =========  ========= 
                                                                            
Basic profit (loss)                                                         
 per share (in                                                              
 dollar)                   0.02     (0.032)     0.089      (0.02)     0.125 
                    ===========  =========  =========  =========  ========= 
                                                                            
Diluted profit                                                              
 (loss) per share                                                           
 (in dollar)               0.02     (0.032)     0.083      (0.02)     0.116 
                    ===========  =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            

Contact Information
Evogene:
Liat Cinamon
Director of IR&PR
E-mail: Email Contact
Tel: +972-8-931-1933


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