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Evogene Ltd. Reports Third Quarter 2012 Financial Results

11/21/2012 11:15:23 AM

REHOVOT, ISRAEL--(Marketwire - November 20, 2012) -

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

Ofer Haviv, Evogene's president and CEO, stated: "As demonstrated by our recently announced launch of our Phenomix Agbio Platform, which enables advanced collection, storage and integrated analysis of phenotypic data directly from field experiments, we continue to significantly enhance and expand our state-of-the-art, world leading computational capabilities and validation platforms for plant genomics."

Mr. Haviv continued, "These broad capabilities provide Evogene with a unique, proven and continuously improving ability to accurately predict and validate novel genes for trait improvement in a wide variety of key crops. To date, the company's product focus has been primarily on improving yield and abiotic stress tolerance."

Mr. Haviv concluded, "Now, in order to more fully leverage our unique capabilities and infrastructure, the company has created four market driven operating divisions: Yield and abiotic stress, Biotic stress, Ag-chemicals and Biofuel. Each division is led by dedicated R&D and Business Development directors. We are already seeing that this new structure allows both much greater focus and increased productivity with respect to our current programs, and an accelerating identification of new opportunities for our rapidly growing company."

Revenues for the first nine months ended September 30, 2012 were $12.3 million, compared to $10.2 million for the same period in 2011, representing an increase of about 20%. Revenues for the third quarter of 2012 were $4.0 million, compared to $3.4 million reported for the same period in 2011, representing an increase of about 18%. This increase in revenues primarily relates to the extension of our collaboration with Monsanto, signed on November 2011.

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 royalty revenues. Cost of Revenues for the first nine months ended September 30, 2012 was $6.9 million, compared to $5.5 million for the same period in 2011. Cost of Revenues for the third quarter of 2012 was $2.4 million, compared to $2.0 million for the same period in 2011. This increase in Cost of Revenues is in parallel to the increase in revenues.

Research & Development expenses for the first nine months ended September 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 $5.2 million, compared to $4.6 million 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. Research & Development expenses for the third quarter of 2012 were $1.9 million, compared to $2.0 million for the same period in 2011.

Loss from ordinary operations for the first nine months ended September 30, 2012, was $2.2 million, compared to loss from ordinary operations of $2.4 million for the same period in 2011. Loss from ordinary operations for the third quarter of 2012 was $1.1 million, compared to loss from ordinary operations of $1.3 million for the same period in 2011.

Financial income 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% 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 or expense due to their revaluation on our statements of comprehensive profit or loss. Such accounting due to publicly traded warrants was no longer applicable after the second quarter of 2011.

Total comprehensive loss for the first nine months ended September 30, 2012, was $1.8 million, compared to a total comprehensive profit of $1.6 million for the same period in 2011. Comprehensive loss for the third quarter of 2012 was $1.0 million, compared to a comprehensive loss of $2.3 million for the same period in 2011. As more fully explained in the preceding paragraph, the comprehensive profit for the first nine months of 2011 includes $3.7 million of non-cash financial income relating to publicly traded warrants expired on May 2011, whereas total comprehensive loss for the first nine months and third quarter of 2012 does not include any such non-cash financial effects due to such warrants.

As of September 30, 2012, Evogene had approximately $54 million in cash and cash equivalents, marketable securities and short term deposits compared to approximately $59 million as of December 31, 2011. The decrease of approximately $5 million during the nine month period relates primarily to increased activities with respect to Evogene's internal research programs and further expansion of its facilities in support of the company's ongoing growth.

About Evogene's Operating Divisions
Yield and abiotic stress
- 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. At present, hundreds of Evogene's discovered genes for improving these traits are undergoing development and validation in our partners' pipelines.

Biotic stress - Evogene has been broadening its activities 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 - As resistance of pests and weeds to existing chemicals becomes more and more of a challenge, Evogene has been evaluating various paths to leverage its proprietary technologies to identify new and innovative chemicals for global agriculture. 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 believe that our extensive knowhow in plant biology provides Evogene with a significant advantage in identifying relevant target proteins.

Biofuel - Evogene's wholly owned subsidiary, Evofuel, continues to progress towards its goal of supplying seed for cost competitive biofuel feedstock with current focus on Latin American markets collaborating with SLC Agricola in Brazil and T6 Industrial in Argentina.

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

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                                                              
USD in thousands (except per share data)                                    
                                       As of                                
                                    December 31      As of September 30     
                                   ------------  -------------------------- 
                                       2011          2012          2011     
                                      Audited      Unaudited     Unaudited  
                                   ------------  ------------  ------------ 
Current assets                                                              
Cash and cash equivalents                 6,465        20,913         7,726 
Marketable securities                    34,672        30,260        38,053 
Short term deposits                      17,652         2,700        13,787 
Receivables                                 800         1,502         1,280 
Other account receivables                   981           439           732 
                                   ------------  ------------  ------------ 
                                         60,570        55,814        61,578 
                                   ------------  ------------  ------------ 
Non-current assets                                                          
Long term deposits                           48            38            49 
Property and equipment                    7,138         7,597         5,809 
Intangible assets                           134           100           145 
                                   ------------  ------------  ------------ 
                                          7,320         7,735         6,003 
                                   ------------  ------------  ------------ 
Total Assets                             67,890        63,549        67,581 
                                   ============  ============  ============ 
Current liabilities                                                         
Trade payable                             2,059         1,052           998 
Deferred revenues                         4,037         4,347         4,311 
Liabilities in respect of grants                                            
 from the Chief Scientist                   905           470           487 
Other accounts payable and                                                  
 accruals                                 2,079         1,891         1,651 
                                   ------------  ------------  ------------ 
                                          9,080         7,760         7,447 
                                   ------------  ------------  ------------ 
Long-term Liabilities                                                       
Liability related to chief                                                  
 scientists grants                        3,039         2,879         3,287 
Deferred revenues                         7,673         5,013         5,780 
Accrued severance pay, net                    9             9             9 
                                   ------------  ------------  ------------ 
                                         10,721         7,901         9,076 
                                   ------------  ------------  ------------ 
Shareholders' Equity                                                        
Share capital                               100           101           100 
Premium on shares                        81,364        82,340        80,498 
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         7,271         6,290 
Accumulated deficit                     (33,459)      (35,216)      (32,553)
                                   ------------  ------------  ------------ 
                                         48,089        47,888        51,058 
                                   ------------  ------------  ------------ 
Total Liabilities and                                                       
 Shareholders' Equity                    67,890        63,549        67,581 
                                   ============  ============  ============ 
STATEMENTS OF COMPREHENSIVE INCOME                                          
Dollar in thousands (except per share data)                                 
                                   Period of               Period of  
                 Year ended    three months ended      nine months ended         
                 ----------  ----------------------  ---------------------- 
                  December    September   September   September   September 
                   31 2011     30 2012     30 2011     30 2012     30 2011  
                   Audited    Unaudited   Unaudited   Unaudited   Unaudited 
                 ----------  ----------  ----------  ----------  ---------- 
Revenues             14,901       3,967       3,352      12,254      10,168 
Cost of revenues      8,247       2,420       1,951       6,903       5,507 
                 ----------  ----------  ----------  ----------  ---------- 
Gross profit          6,654       1,547       1,401       5,351       4,661 
                 ----------  ----------  ----------  ----------  ---------- 
  Research and                                                              
   development        6,384       1,850       1,952       5,158       4,642 
  Business and                                                              
   development        1,136         316         240         860         727 
  General and                                                               
   administrative     2,313         470         527       1,539       1,650 
                 ----------  ----------  ----------  ----------  ---------- 
                      9,833       2,636       2,719       7,557       7,019 
Loss from                                                                   
 operations          (3,179)     (1,089)     (1,318)     (2,206)     (2,358)
Other expenses           (4)          -          (5)          -          (5)
Financial incomes     1,294         314         329         824       1,035 
 expenses            (1,039)        (83)     (1,308)       (140)       (732)
Financial incomes                                                           
 (expenses) due                                                             
 to revaluation                                                             
 of Options, net      3,729           -           -           -       3,729 
 expenses due                                                               
 to Revaluation                                                            
 of Obligation                                                               
 to the OCS, net       (156)       (142)        (37)       (161)       (118)
                 ----------  ----------  ----------  ----------  ---------- 
  Profit (loss)                                                             
   before tax           645      (1,000)     (2,339)     (1,683)      1,551 
Tax on incomes            -          22           -          74           - 
  Net Profit                                                                
   (loss) and                                                               
   Total                645      (1,022)     (2,339)     (1,757)      1,551 
                 ==========  ==========  ==========  ==========  ========== 
Basic and Diluted                                                           
 profit (loss)                                                              
 and Total per                                                              
 share (in                                                                  
 dollar)               0.02       (0.03)     (0.074)      (0.05)       0.05 
                 ==========  ==========  ==========  ==========  ========== 

Contact Information
Efrat Barak Zadok
IR&PR Associate
E-mail: Email Contact
Tel: +972-8-931-1940

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