EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
 
Exhibit 99.1
 
 
 

Evogene Reports Third Quarter 2016 Financial Results

Rehovot, Israel – November 21, 2016 – Evogene Ltd. (NYSE; 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.

2
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.
 
3
About Evogene Ltd.:
Evogene (NYSE, 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.
 
Contact:
Karen Mazor
Director, Public and Investor Relations
E: IR@evogene.com
T: +972 54 22 88 039

4
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
  

5
 
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (LOSS)
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
  
                               
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
)

6
 
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

7
 
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

8
 
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
)


9
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
  
 
 
10