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.

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.

(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.