Philom Bios Inc. is pleased to report its results for the six months ended March 31, 2006.

Highlights:
 

Financial

Net 2nd quarter earnings of $0.49 per share were below last year results but are in the range of normal outcomes for this time of year.

Second quarter cash balances increased by $4.6 million, reflecting the benefit of positive cash inflows due to early customer payment incentives.

On the strength of second quarter sales of $6.9 million (2005 - $6.8 million) year to date earnings are now positive at $0.5 million (2005 - $1.2 million). While year to date sales are ahead of the prior year, the decline in year to date gross margins and earnings over the prior year is due to higher provision for inventory write downs of ‘single season’ products due to higher uncertainty over farmer seeding intentions. In addition, net operating costs for the year to date now total $3.6 million (2005 - $3.4 million), an increase of 6% due to our growing investment in research initiatives primarily related to North American corn and soybean markets, but offset by lower general and administrative costs from the prior year due to reduced legal costs. We caution the reader that interim results are not necessarily indicative of final earnings outcomes.

On a separate matter, subsequent to the quarter, the Company formally announced the creation of the joint venture company Philom Bios (Australia) Pty. Ltd., an Australia based sales and marketing company formed with Grains Research Development Corporation (GRDC) to provide Australian farmers with high value inoculants and to act as a commercialization vehicle for emerging technologies developed by GRDC.

President/CEO Calvin Sonntag comments, “Sales at the time of this writing are similar to last year’s record sales. However, we clearly recognize the remaining and significant level of uncertainty surrounding farmer planting intentions driven by unprecedented challenges farmers face in the current environment. This creates a wide range of possible earnings outcomes in our business. This said, we remain ever diligent in serving the needs of our customers in these difficult times with fertility efficiency tools today and in continuing to invest in innovative solutions that will meet their needs in the future.”

Philom Bios is a world leading Inoculant Company with over 70 employees across North America in a wide range of research, manufacturing, marketing, and management positions. Headquartered in Saskatoon, SK, Philom Bios is a Canadian public company serving the needs of farmers with high-value inoculants. Philom Bios has a 20+ year commitment to farmers through a dynamic partnership with distributors and leading retailers.