Eden Bioscience Announces Second Quarter 2006 Financial ResultsBOTHELL, WA -- 08/03/2006 -- Eden Bioscience Corporation (NASDAQ: EDEN), which develops, manufactures and markets innovative, natural protein-based products for improving crop production and protecting plants, today announced financial results for its second quarter ended June 30, 2006.
Product sales, net of sales allowances, for the second quarter of 2006 were $1,760,000, which compares to net product sales of $1,677,000 in the same period of 2005. Net loss in the second quarter of 2006 was $5.6 million, or $0.69 per weighted average common share, compared to a net loss of $1.4 million, or $0.17 per weighted average common share, in the second quarter of 2005. In the first-half of 2006, Eden continued to incur losses from operations and actual sales and growth rates for the first-half of 2006 were significantly lower than expected. As a result, the carrying value of long-lived assets exceeded estimated future undiscounted cash flows expected from the use of these assets. Consequently, in connection with the preparation of Eden's financial statement for the second quarter, Eden concluded on July 31, 2006 that a charge for impairment to its property and equipment is required and a $4.9 million impairment loss was recognized at June 30, 2006 to write the assets down to their estimated fair value. The impairment charge does not result in cash expenditures.
"This quarter is the first time in our history that our quarter-end cash balance has increased as a result of operations over the proceeding quarter," said Rhett Atkins, President and CEO, "but our net sales increase is below expectations and necessitated an impairment loss be recorded on long-lived assets. Net sales for the quarter are up 5% when compared to the second quarter of 2005 and first-half net sales are up 20% when compared to the first-half of 2005. Net sales in the US agricultural market are up 18% for the second quarter of 2006 compared to 2005 and are up 46% for the first-half of 2006 when compared to the first-half of 2005. Second quarter 2006 sales outside the US are down 42% when compared to 2005 and first-half sales are down 68% when compared to first-half 2005 sales. Second quarter sales of products incorporating our new harpin(AB) protein are up 22% while sales of products using the first generation harpin(EA) protein are down 24% when compared to second quarter 2005. Sales of products incorporating the harpin(AB) protein are up 66% for the first-half of 2006 while sales of products using the harpin(EA) protein are down 16% when compared with the first-half of 2005. The reduction in sales of harpin(EA) products for this year is a result of lower Messenger sales in Spain. Although sales of newer harpin(AB) were in line with our expectations, sales of Messenger in ag markets continues to be below our expectations. The continued poor sales performance of Messenger is not producing the results we need for success and does not justify our current business model. The Board of Directors is examining strategic alternatives for the future."
Cash and investments as of June 30, 2006 totaled $5.4 million, compared with $5.2 million at March 31, 2006 and $6.8 million at December 31, 2005.
About Eden Bioscience
Eden Bioscience is a plant technology company focused on developing, manufacturing and marketing innovative, natural protein-based products for agriculture. We believe that our technology and products provide growers with new tools to improve crop production and plant protection. Our products are based on naturally occurring proteins called "harpins," which activate a plant's intrinsic ability to protect itself through growth and stress-defense responses. These responses enhance overall plant health, improve plant vigor and stamina, and result in improved crop quality, yield, and/or shelf life. Our headquarters are at 11816 North Creek Parkway N., Bothell, WA 98011-8201, 425-806-7300; www.edenbio.com.
(c) 2005 Eden Bioscience Corporation. Always read and follow label instructions before buying or using this product. Messenger® and Eden Bioscience® are registered trademarks of Eden Bioscience Corporation.
FORWARD-LOOKING STATEMENTS: Certain statements contained in this press release may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms or other terminology. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect the Company's actual results include, among others, unsuccessful development and commercialization of our products; inability to develop adequate sales and marketing capabilities; history of losses and expectation that losses will continue; unsuccessful research in specific target crops; economic conditions in agriculture; and unfavorable weather conditions. More information about these and other factors that potentially could affect the Company's financial results is included in Eden Bioscience's most recent annual report on Form 10-K and in its other public filings filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Eden Bioscience undertakes no obligation to update any forward-looking statements.
EDEN BIOSCIENCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2006 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,442,423 $ 6,825,652
Accounts receivable, net of sales allowances 1,213,145 212,213
Inventory, current 785,708 1,713,274
Prepaid expenses and other current assets 381,101 580,938
------------ ------------
Total current assets 7,822,377 9,332,077
Inventory, non-current 1,955,050 1,910,280
Property and equipment, net 752,239 5,967,122
Other assets 288,516 287,704
------------ ------------
Total assets $ 10,818,182 $ 17,497,183
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 117,482 $ 229,667
Accrued liabilities 1,061,025 1,260,405
------------ ------------
Total current liabilities 1,178,507 1,490,072
Other long-term liabilities 344,590 250,428
------------ ------------
Total liabilities 1,523,097 1,740,500
------------ ------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value, 10,000,000
shares authorized; no shares issued and
outstanding at June 30, 2006 and December
31, 2005 - -
Common stock, $.0025 par value, 33,333,333
shares authorized; issued and outstanding
shares - 8,149,554 shares at June 30, 2006
and 8,135,554 shares at December 31, 2005 20,374 20,339
Additional paid-in capital 132,811,522 132,586,598
Accumulated other comprehensive loss (35,268) (42,502)
Accumulated deficit (123,501,543) (116,807,752)
------------ ------------
Total shareholders' equity 9,295,085 15,756,683
------------ ------------
Total liabilities and shareholders' equity $ 10,818,182 $ 17,497,183
============ ============
EDEN BIOSCIENCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
-------------------------- --------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Product sales, net
of sales
allowances $ 1,760,040 $ 1,677,463 $ 3,408,427 $ 2,831,949
Operating expenses:
Cost of goods sold 839,572 646,042 1,855,052 1,174,359
Research and
development 372,937 986,345 689,475 1,929,072
Selling, general
and
administrative 1,379,502 1,514,786 2,938,288 2,969,490
Loss on impairment
of equipment
and leasehold
improvements 4,880,516 - 4,880,516 -
Gain on sale of
equipment (26,979) (6,814) (44,557) (23,224)
------------ ------------ ------------ ------------
Total operating
expenses 7,445,548 3,140,359 10,318,774 6,049,697
------------ ------------ ------------ ------------
Loss from
operations (5,685,508) (1,462,896) (6,910,347) (3,217,748)
------------ ------------ ------------ ------------
Other income
(expense):
Gain on sale of
investment - - 99,884 -
Interest income 55,558 71,421 116,672 139,726
Interest expense - (185) - (466)
------------ ------------ ------------ ------------
Total other
income 55,558 71,236 216,556 139,260
------------ ------------ ------------ ------------
Loss before
income taxes (5,629,950) (1,391,660) (6,693,791) (3,078,488)
Income taxes - - - -
------------ ------------ ------------ ------------
Net loss $ (5,629,950) $ (1,391,660) $ (6,693,791)$ (3,078,488)
============ ============ ============ ============
------------ ------------ ------------ ------------
Basic and diluted
net loss per share $ (0.69) $ (0.17) $ (0.82) $ (0.38)
============ ============ ============ ============
Weighted average
shares outstanding
used to compute
net loss per
share 8,143,950 8,130,418 8,139,752 8,128,854
============ =========== =========== ===========
CONTACT
Bradley S. Powell
Eden Bioscience
425-984-2135
fax: 425-806-7400
investorinfo@edenbio.com
