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 DAVIS, Calif., Sept. 9 /PRNewswire/ -- Calgene Inc. (NASDAQ: CGNE) today announced a net loss of $25.6 million ($1.13 per share) on revenues of $29.3 million for the fiscal year ended June 30, 1993. This compares with prior year's loss of $19.9 million ($1.42 per share), on revenues of $24.2 million.
 Roger Salquist, Calgene's chairman and chief executive officer said, "The increased loss in fiscal 1993 primarily reflects expenses of Calgene Fresh Inc., a subsidiary formed in January 1992 to commercialize the FLAVR SAVR(TM) tomato. Investments continue to be made in Calgene Fresh as we approach the planned commercialization of the FLAVR SAVR tomato. Test marketing, currently being conducted in over 140 stores in six cities using conventionally developed vine-ripened premium tomatoes, is validating marketing strategies, production methodologies and distribution logistics. These stores represent a potential customer base of over 1,000 stores. Regional launch of the FLAVR SAVR tomato is targeted for this fall pending FDA clearance. The increased loss also reflects cotton seed inventory write downs, and increased selling, general and administrative expenses in anticipation of the planned 1994 launch of BXN(TM) genetically engineered cotton. The loss from Osmotica Foods Inc., a joint venture established in January to develop and commercialize the food-related applications of the natural sugar trehalose, also contributed to the increase. These factors were partly offset by improved financial performance at PGK, Calgene's seed potato tuber joint venture with Kirin Brewery Co., and positive contributions from Calgene Chemical."
 The fiscal 1993 revenue increase reflects the inclusion of product sales from Hodag Chemical Corp., a specialty oleochemical manufacturer acquired in July 1992 and subsequently merged into the company's Calgene Chemical subsidiary. The fiscal 1992 loss included $1.3 million in additional loss reserves for discontinued operations from the fiscal 1991 decision to sell the assets and operations of Calgene's corn seed company and alfalfa seed division. The fiscal 1993 loss reflects a $400,000 additional loss reserve for these discontinued operations. The year-end balance of cash and equivalents and short-term investments was approximately $39.8 million.
 Costs and expenses will continue to be high in the tomato subsidiary, particularly during the period before unit costs benefit from commercial volumes and from the production and distribution economies the company is working to achieve. These costs and expenses are expected to result in substantial fiscal 1994 losses, most notably in the first six months.
 During the past year, significant progress has been made toward commercialization of Calgene's genetically engineered products. Major developments include:
 -- In February, Calgene was granted a U.S. patent on Brassica transformation. This patent covers the most efficient transformation method for Brassica species in the industry and is a key technology of Calgene's proprietary vegetable oils.
 -- Calgene announced the signing of several cross licensing agreements with Monsanto Company in April. The agreements resolve several current and potential patent conflicts and helps to assure timely commercialization of Calgene's first genetically engineered products.
 -- Progress continues to be made toward the introduction of Calgene's herbicide resistant BXN cottons. Counterseasonal seed inventory increases were completed in April. In July 1993, Calgene submitted a petition to USDA for final approval of its genetically engineered BXN cottons. This is an important step toward obtaining the federal agency approvals required before the planned 1994 commercial introduction.
 -- In May, Calgene announced field tests of genetically engineered canola at six locations in Canada and one in Scotland. The tests are the first ever conducted outside of the U.S. to evaluate field performance of plants genetically engineered to produce modified oils. These trials represent the first stage of international commercialization of Calgene's genetically engineered oils products.
 -- In July 1993, Calgene received notification from the U.S. Patent and Trademark Office that Calgene's patent claims to DNA constructs for the expression of the ACCD gene in plant cells would be allowed. ACCD is an enzyme which disrupts or blocks the normal production of ethylene in plants. Control of ethylene is expected to have significant commercial value in the production, sale and distribution of fresh produce including tomatoes, berries, melons, bananas and tree fruit.
 Calgene is an agribusiness biotechnology company that is developing improved plant varieties and plant products for the fresh tomato, cotton seed and special industrial and edible oils markets.
 Condensed Consolidated Statements of Operations
 (In thousands except per share amounts)
 Fiscal Year
 Ended June 30
 1993 1992
 Product sales, net $ 24,675 $ 18,211
 Product development revenues 2,562 3,666
 Interest income 1,577 1,919
 Other income, net 512 403
 Total 29,326 24,199
 Costs and expenses:
 Cost of goods sold 21,918 16,150
 Research and development:
 Contract 4,715 4,166
 Other 10,260 9,256
 License purchase -- 2,000
 Selling, general and administrative 16,494 11,318
 Interest expense 673 816
 Total 54,060 43,706
 Minority interest share of net loss 50 961
 Equity in net losses of affiliates (583) (39)
 Gain from sale of assets 88 30
 Loss from continuing operations
 before income taxes (25,179) (18,555)
 Provision for income taxes 44 61
 Loss from continuing operations (25,223) (18,616)
 Loss on disposal of discontinued operations
 including losses during phase-out period (400) (1,300)
 Net loss $ (25,623) $ (19,916)
 Preferred stock dividends $ -- $ 2,799
 Net loss applicable to common shareholders $ (25,623) $ (22,715)
 Net loss per share:
 Loss from continuing operations $ (1.11) $ (1.34)
 Loss from discontinued operations (0.02) (0.08)
 Net loss $ (1.13) $ (1.42)
 Shares used in per share calculations 22,786,057 15,965,518
 -0- 9/ /93
 /CONTACT: Mike Motroni or Carolyn Hayworth, 916-753-6313, both of Calgene Inc./

CO: Calgene Inc. ST: California IN: FOD MTC SU: ERN

PK -- SF013 -- 0464 09/09/93 16:32 EDT
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Publication:PR Newswire
Date:Sep 9, 1993

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