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Evogene Reports Third Quarter 2016 Financial Results

REHOVOT, Israel, Nov. 21, 2016 (GLOBE NEWSWIRE) -- Evogene Ltd. (NYSE:EVGN) (TASE:EVGN), a leading company for the improvement of crop productivity and economics for the food, feed and fuel industries, announced today its financial results for the third quarter and nine months ended September 30, 2016.

Ofer Haviv, Evogene's President and CEO, stated: "We continue to be very pleased with the progress we are seeing in both our on-going collaborations with leading agriculture related companies world-wide, and our own internal programs. In this respect, we are particularly pleased to have recently announced positive results in our Ag-biologicals program, focused on bio-stimulants, for more than ten microbial strains that successfully completed the first year of testing and validation in corn for drought resistance. Further ahead, we will look to out-license advanced microbial strains to relevant partners for further development and commercialization, with the view to have a commercial product offering as early as five to six years from today."

"In our seed traits area, where we have active programs for the development of both crop enhancement traits and crop protection traits, we continue to build upon the positive results we announced in several of our most significant programs. These activities include supporting the advancement of our most promising candidate genes further in Monsanto's product development pipeline, and further validation of several successful candidate toxins we identified as part of our insect control program," continued Mr. Haviv.

"In addition, this past quarter we expanded our collaboration pipeline with the signing of an agreement with IMAmt, a leading Brazilian developer and marketer of cotton seeds, for the discovery and validation of novel genomic elements to support IMAmt's product development of insect-resistant cotton varieties."

"Finally, we continue to successfully advance our program for the discovery of novel chemical compounds for herbicides. This past quarter, chemical compounds identified by Evogene have demonstrated herbicidal activity in plant bio-essay tests and were advanced to the next stage of optimization," concluded Mr. Haviv.

Financial results for the period ended September 30, 2016:

Cash position: As of September 30, 2016, Evogene had $93.1 million in cash, short-term bank deposits and marketable securities, representing a net cash usage of $3.9 million for the third quarter and $7.6 million for the nine months ended September 30, 2016. We expect our net annual cash usage for the current calendar year to be slightly below our previously disclosed range of $14 to $16 million.

Revenues primarily consist of research and development payments, reflecting R&D cost reimbursement under certain of our collaboration agreements. The majority of these agreements also provide for development milestone payments and royalties or other forms of revenue sharing from successfully developed products, and therefore, longer term, the Company anticipates that its future revenues and profitability will largely reflect the receipt of such payments from its existing and future collaborations.

Revenues for the third quarter of 2016 were $1.5 million compared to $3.3 million for the same period in 2015. Revenues for the nine months ended September 30, 2016 were $5.4 million, compared to $8.7 million for the same period in 2015. This decline reflects the net decrease in such research and development payments in accordance with the work plans under Evogene's various collaboration agreements. It includes changes in the scope and type of activities undertaken by the Company as part of its yield and stress collaboration with Monsanto, whereby resource intensive activities, such as novel gene discovery and validation, evolved to focus increasingly on optimization activities supporting Monsanto’s ongoing development with respect to advancing Evogene discovered genes.

Cost of revenues include research and development expenses related to the Company’s on-going activities in support of collaboration agreements. Cost of revenues for the third quarter of 2016 were $1.4 million compared to $2.5 million for the same period in 2015. Cost of revenues for the nine months ended September 30, 2016, were $4.5 million, compared to $6.2 million, for the same period in 2015. The net decrease primarily related to the change in the scope and type of activities performed under Evogene's collaboration with Monsanto, as noted above.

R&D expenses for the third quarter of 2016 were $3.9 million compared to $3.1 million for the same period in 2015. R&D expenses for the nine months ended September 30, 2016, were $11.7 million, compared to $10.3 million for the same period in 2015. This increase largely related to the expansion of activities, primarily focused on the development of computational platforms, as well as discovery and validation activities, in our key growth engines – insect control, ag-chemicals and ag-biologicals.

Operating loss for the third quarter of 2016 was $5.2 million compared with $3.8 million for the third quarter of 2015. Operating loss for the nine months ended September 30, 2016, was $14.9 million compared with $12.6 million for the same period in 2015. The increase in operating loss was primarily due to the decrease in revenues discussed above, which were partially offset by the net decline in other expense categories.

Net loss for the third quarter of 2016 was $5.1 million compared with a net loss of $3.4 million in the third quarter of 2015. Net loss for the nine months ended September 30, 2016, was $12.9 million compared with a net loss of $11.7 million for the same period in 2015.

Conference call and webcast details:

Evogene management will host a conference call today at 9:00 am Eastern time, 16:00 Israel time to discuss the results. US-based participants are invited to access the call by dialing 1-888-668-9141, and participants from Israel and other countries are invited to access the call at 972-3-918-0610. A replay of the conference call will be available beginning at approximately 1:00 pm Eastern time, 20:00 Israel time today, and will be accessible through November 23, 2016. US-based participants are invited to access the replay by dialing 1-888-254-7270, and participants from Israel and other countries are invited to access the replay at 972-3-925-5937. A replay of the call may also be accessed as a webcast via Evogene’s website at www.evogene.com and will be available for a period of ten days.

About Evogene Ltd.:
Evogene (NYSE:EVGN) (TASE:EVGN) is a leading biotechnology company for the improvement of crop productivity for the food, feed and fuel industries. The Company operates in three key market segments: improved seed traits (addressing yield increase, tolerance to environmental stresses and resistance to insects and diseases); innovative ag-chemicals (developing novel herbicide solutions for weed control); and ag-biologicals. Evogene has collaborations with world-leading seed and ag-chemical companies. For more information, please visit www.evogene.com or contact the Company at info@evogene.com.

This press release contains "forward-looking statements" relating to future events. These statements may be identified by words such as "may", "could", “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 appropriate 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.


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands (except share and per share data)
As of September 30, As of
December 31,
2016 2015 2015
Unaudited Audited
CURRENT ASSETS:
Cash and cash equivalents $ 5,439 $ 11,847 $ 10,221
Restricted cash 47 47 47
Marketable securities 72,520 79,867 71,807
Short-term bank deposits 15,058 14,591 18,603
Trade receivables 100 963 2,675
Other receivables 1,778 1,083 1,023
94,942 108,398 104,376
LONG-TERM ASSETS:
Long-term deposits 14 25 22
Property, plant and equipment, net 6,829 7,943 8,197
6,843 7,968 8,219
$ 101,785 $ 116,366 $ 112,595
CURRENT LIABILITIES:
Trade payables $ 1,071 $ 1,021 $ 1,771
Other payables 2,695 2,428 3,049
Liabilities in respect of government grants 680 470 259
Deferred revenues and other advances 1,126 824 560
5,572 4,743 5,639
LONG-TERM LIABILITIES:
Liabilities in respect of government grants 2,747 3,054 2,880
Deferred revenues and other advances 154 447 298
Severance pay liability, net 30 31 26
2,931 3,532 3,204
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.02 par value:
Authorized - 150,000,000 ordinary shares; Issued and outstanding – 25,459,809, 25,394,388 and 25,404,362 shares at September 30, 2016 and 2015 and December 31, 2015, respectively 140 140 140
Share premium and other capital reserve 182,693 179,081 180,214
Accumulated deficit (89,551) (71,130) (76,602)
93,282 108,091 103,752
$ 101,785 $ 116,366 $ 112,595


CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands (except share and per share data)
Nine months ended
September 30,
Three months ended
September 30,
Year ended
December 31,
2016 2015 2016 2015 2015
Unaudited Audited
Revenues $5,360 $8,666 $ 1,536 $ 3,309 $ 11,129
Cost of revenues 4,508 6,249 1,418 2,487 8,255
Gross profit 852 2,417 118 822 2,874
Operating expenses:
Research and development, net 11,670 10,326 3,905 3,097 14,449
Business development 1,225 1,505 435 506 1,964
General and administrative 2,894 3,138 950 1,001 4,382
Total operating expenses 15,789 14,969 5,290 4,604 20,795
Operating loss (14,937) (12,552) (5,172) (3,782) (17,921)
Financing income 2,286 2,045 191 768 2,571
Financing expenses (277) (1,234) (112) (368) (1,863)
Loss before taxes on income (12,928) (11,741) (5,093) (3,382) (17,213)
Taxes on income 21 - 21 - -
Net loss $ (12,949) $ (11,741) $ (5,114) $ (3,382) $ (17,213)
Other comprehensive income (loss):
Loss from cash flow hedges $ - $ (45) $ - $ - $ (45)
Amounts transferred to the statement of profit or loss for cash flow hedges - 267 - - 267
Total comprehensive loss $ (12,949) $ (11,519) $ (5,114) $ (3,382) $ (16,991)
Basic and diluted loss per share $ (0.51) $ (0.46) $ (0.20) $ (0.13) $ (0.68)


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
U.S. dollars in thousands
Share
capital
Share premium
and other
capital reserve
Accumulated
deficit
Total
Unaudited
Balance as of January 1, 2016 (audited) $ 140 $ 180,214 $ (76,602) $ 103,752
Net and comprehensive loss - - (12,949) (12,949)
Exercise of options *) - 143 - 143
Share-based compensation - 2,336 - 2,336
Balance as of September 30, 2016 $ 140 $ 182,693 $ (89,551)$ 93,282

*) Represents an amount lower than $1


Share
capital
Share premium
and other
capital reserve
Accumulated
other
comprehensive
loss
Accumulated
deficit
Total
Unaudited
Balance as of January 1, 2015 (audited) $ 140 $ 175,553 $ (222) $ (59,389) $ 116,082
Net loss - - - (11,741) (11,741)
Other comprehensive income - - 222 - 222
Exercise of options *) - 237 - - 237
Share-based compensation - 3,291 - - 3,291
Balance as of September 30, 2015 $ 140 $ 179,081 $ - $ (71,130) $ 108,091

*) Represents an amount lower than $1


Share
capital
Share premium
and other
capital reserve
Accumulated
deficit
Total
Unaudited
Balance as of July 1, 2016 $ 140 $ 181,985 $ (84,437) $ 97,688
Net and comprehensive loss - - (5,114) (5,114)
Exercise of options *) - 29 - 29
Share-based compensation - 679 - 679
Balance as of September 30, 2016 $ 140 $ 182,693 $ (89,551)$ 93,282

*) Represents an amount lower than $1


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
U.S. dollars in thousands
Share
Capital
Share Premium
and other
capital reserve
Accumulated
Deficit
Total
Unaudited
Balance as of July 1, 2015 $ 140 $ 177,962 $ (67,748) $ 110,354
Net and comprehensive loss - - (3,382) (3,382)
Exercise of options *) - 29 - 29
Share-based compensation - 1,090 - 1,090
Balance as of September 30, 2015 $ 140 $ 179,081 $ (71,130) $ 108,091

*) Represents an amount lower than $1


Share
capital
Share premium
and other
capital reserve
Accumulated
other
comprehensive
loss
Accumulated
deficit
Total
Audited
Balance as of January 1, 2015 $ 140 $ 175,553 $ (222) $ (59,389) $ 116,082
Net loss - - - (17,213) (17,213)
Other comprehensive income - - 222 - 222
Exercise of options *) - 296 - - 296
Share-based compensation - 4,365 - - 4,365
Balance as of December 31, 2015 $ 140 $ 180,214 $ - $ (76,602) $ 103,752

*) Represents an amount lower than $1


CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months ended
September 30,
Three months ended
September 30,
Year ended
December 31,
2016 2015 2016 2015 2015
Unaudited Audited
Cash flows from operating activities
Net loss $ (12,949) $ (11,741) $ (5,114) $ (3,382) $ (17,213)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to the profit or loss items:
Depreciation and amortization 1,763 1,849 587 583 2,433
Share-based compensation 2,336 3,291 679 1,090 4,365
Net financing income (2,168) (896) (151) (445) (845)
Loss from sale of property, plant and equipment 17 - - - -
Taxes on income 21 - 21 - -
1,969 4,244 1,136 1,228 5,953
Changes in asset and liability items:
Decrease (increase) in trade receivables 2,575 220 (20) (213) (1,492)
Increase in other receivables (667) (335) (190) (23) (293)
Decrease (increase) in long-term deposits 8 (4) 2 (1) (1)
Decrease in trade payables (359) (546) (118) (146) (68)
Increase (decrease) in other payables (415) (1,303) 181 (57) (640)
Increase (decrease) in severance pay liability, net 4 2 - 3 (3)
Increase (decrease) in deferred revenues and other advances 422 (642) 303 (771) (1,055)
Increase (decrease) in liabilities in respect of government grants 115 - - - (284)
1,683 (2,608) 158 (1,208) (3,836)
Cash received (paid) during the period for:
Interest received 1,838 2,119 684 747 2,689
Taxes paid (2) - (2) - -
Net cash used in operating activities (7,461) (7,986) (3,138) (2,615) (12,407)


CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months ended
September 30,
Three months ended
September 30,
Year ended
December 31,
2016 2015 2016 2015 2015
Unaudited Audited
Cash flows from investing activities
Purchase of property, plant and equipment $ (711) $ (1,397) $ (237) $ (548) $ (2,005)
Proceeds from sale of marketable securities 17,192 22,128 5,568 7,274 38,164
Purchase of marketable securities (17,576) (22,533) (3,826) (8,628) (31,168)
Proceeds from bank deposits, net 3,545 15,455 1,503 8,637 11,443
Decrease (increase) in restricted cash - 953 - (47) 953
Net cash provided by investing activities 2,450 14,606 3,008 6,688 17,387
Cash Flows from Financing Activities
Proceeds from exercise of options 143 237 29 29 296
Proceeds from government grants 404 188 146 - 167
Repayment of government grants (333) (418) (134) (185) (418)
Net cash provided by (used in) financing activities 214 7 41 (156) 45
Exchange rate differences - cash and cash equivalent balances 15 7 (5) (19) (17)
Increase (decrease) in cash and cash equivalents (4,782) 6,634 (94) 3,898 5,008
Cash and cash equivalents, beginning of the period 10,221 5,213 5,533 7,949 5,213
Cash and cash equivalents, end of the period $ 5,439 $ 11,847 $ 5,439 $ 11,847 $ 10,221
Significant non-cash transactions
Acquisition of property, plant and equipment $ 50 $ 119 $ 50 $ 119 $ 349


Contact: Karen Mazor Director, Public and Investor Relations E: IR@evogene.com T: +972 54 22 88 039

Source:Evogene Ltd.