| Ecogen
reports first quarter fiscal 1999 results |
Langhorne, Pennsylvania
March 10, 1999Ecogen Inc., a leading developer of
environmentally friendly, microbial biopesticides, today announced financial results for
its first fiscal quarter ended January 31, 1999.
The Company's net product sales for the three-month period ended
January 31, 1999 and 1998 were Iapproximately $1.7 million. The first quarter of fiscal
1998 included approximately $1.0 million 'n pheromone product sales, a product line the
Company sold in the second quarter of fiscal 1998. On a pro forma basis, assuming the sale
of the pheromone product line had taken place at the beginning of fiscal 1998, continuing
product sales increased 133% from $ .7 miuion in the first quarter of fiscal 1998 to $1.7
million in fiscal 1999. The increase in product sales primarily resulted from an increase
in sales of Lepinox*, a Bt bioinsecticide that was newly introduced during the fourth
quarter of fiscal 1998.
Gross margins on continuing product sales doubled from 5% in the
first quarter of fiscal 1998 to 10% in the first quarter of fiscal 1999. Gross margins
improved in the first quarter as a result of an increase in domestic sales. International
sales, which are low mar& sales, traditionally drive down gross margins in the first
quarter.
Total operating expenses, consisting of research and development and
selling, general and administrative expenses, were $2,257,000 in the first quarter of
fiscal 1999 compared to $2,644,000 for the year-ago period, a reduction of 15%. Pro forma
operating expenses, assuming the sale of the pheromone product line had taken place at the
beginning of fiscal 1998, decreased 8%.
"Realizing that the first quarter is typically our slowest
quarter due to the seasonality of our business, we are pleased with the results,"
commented James P. Reilly, Jr., Chairman and CEO. "We are continuing to introduce our
products into new markets and expand our distribution alliances, which have resulted in
the more than doubling of continuing product sales this quarter. Our new relationship with
FMC Corporation contributed to the increase in sales of our Lepinox Bt bioinsecticide in
the first quarter."
"Further, as we grow our product sales,
we continue to control operating expenses in both the research area and in general and
administrative expenses. In the past, we invested significant resources in research and
development; we now look forward to these efforts generating product sales. As we move
forward, we will continue to invest in research and development, but at much lower
levels."
Recently, the Company entered into an exclusive worldwide licensing
agreement with Oregon State University for certain microbial yeasts to control gray and
blue mold on apples and other pome fruit and brown rot on peaches and other stone fi-uit.
'This agreement represents an additional commitment to the post harvest market. We believe
that this agreement will broaden our biofungicide range in a market segment that is
concerned with the level of chemical residues," Mr. Reilly said.
Net loss available to common stockholders was
($1,780,000) in the first quarter of fiscal 1999 compared to net income of $754,000 in the
year-ago period. Basic and diluted net loss per connnon share was ($0.2 1) in fiscal
1999 compared to net income of $0.09 per share in
the first three months of fiscal 1998 on weighted average shares of 8,384,000 and
8,032,000, respectively. The change of $2,534,000 was primarily due to revenue from
Monsanto Company recognized in the first quarter of fiscal 1998 as a result of an
amendment to the Monsanto research and development contract. The Monsanto research and
development agreement expired on January 31, 1999.
Ecogen is a leader in the development of natural microbial pesticide
products for the control of plant disease and insect pests. Ecogen's growing portfolio of
products has been developed to address the concerns of pest management and the issues of
chemical residues on fruits, vegetables and other crops. The Company's products include
two biofungicides--Aspire for post-harvest rot disease and AQ I 00 for powdery mildew--as
well as its Bt bioinsecticides--CRYMAXO, to control caterpillars on fruits and vegetables
-- Condor'@, to control caterpillars on cotton and other row crops, and Lepinox to combat
caterpillars in sweet com, turf and other row crops and bollworm and budworm in cotton and
non-agricultural markets. Additional bioinsecticides under development include Cruiser'o,
an insecticidal nematode product for soil applications and CryStatTm, a Bt bioinsecticide
for mosquito control.
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