Origin Agritech Limited Reports Unaudited Financial Results for the Year Ended September 30, 2012 - Restructuring Program Completed with 26% Headcount Reduction

- Core Business Revenue Increased 23% Year-over-Year

- Operating Cash Flow increased 121% Year-over-Year to RMB82.71 million (US$13.04 million)

- Net Loss per Share Improved Significantly to US$(0.01) in FY2012 from US$(0.16) in FY2011

 

BEIJING, Jan. 8, 2013 /PRNewswire/ -- Origin Agritech Limited (NASDAQ: SEED) ("Origin" or the "Company"), a technology-focused supplier of crop seeds in China, today announced unaudited financial results for the year ended September 30, 2012. These unaudited year end results reflect the Company's financial statements during the period from October 1, 2011 to September 30, 2012. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

FY 2012 Major Corporate Events                                                                             

Changes in Management Team and Board of Directors

The Company has made several major changes in its management and the Board of Directors during the fiscal year 2012. Dr. Gengchen Han, the founder and Chairman of Origin returned to the Company as CEO and President at the end of FY2011. Dr. Han has more than 20 years of experience in research and development of hybrid seed products, particularly corn seed. After receiving his PhD in Plant Breeding and Cytogenics from Iowa State University, Dr Han worked for the International Maize and Wheat Improvement Center, in Mexico and Pioneer Hi-bred International, now a wholly-owned subsidiary of Dupont, before founding Origin in 1997. For the first time in several years, the Company filled the Chief Financial Officer position by hiring Dr. James Chen, who joined Origin in January, 2012. Dr. Chen brings extensive experiences in both the financial industry and global chemical industry after working in Abu Dhabi Investment Authority, BB & T Capital Market, Celanese and Univation Technologies, a joint venture of ExxonMobil and Dow Chemical.

In January, 2012, the Company also recruited and appointed Mr. Larry Kenneth Cordell as a new independent board member and the chairman of the Audit Committee. Mr. Cordell is well qualified as the Audit Committee chairman with his financial and corporate governance expertise from his activities as a chief executive officer and senior executive positions of various companies and his consulting activities in the areas of accounting, corporate finance, capital formation and corporate financial analysis. Mr. Cordell served as Chairman, President and CEO at UAP Holdings ("UAPH") when the company was acquired by Agrium Inc. through a tender offer in May, 2008. Prior to its acquisition, UAPH was the largest independent distributor of agricultural inputs and professional non-crop products in the United States and Canada. Mr. Cordell currently serves as Chief Executive Officer of Pinnacle Agriculture Distribution, a privately held crop input distributor in the United States. He also holds Board of Director positions with Momentive Performance Material Holdings and Taminco, both of which are privately held specialty chemical manufacturers.

Corporate Restructuring

During fiscal year 2012, we initiated a corporate-wide restructuring program, which involved restructuring of our businesses strategy and product lines, revamping of the organization structure and redefining of roles and positions for each employee across our organization. We streamlined our organization structure to improve operational efficiency and performance accountability. With the restructuring program, we refocused our efforts on our core competences in the corn, rice and canola businesses and exited unprofitable cotton and agricultural chemical businesses.

In an effort to improve productivity, we are strengthening our human resource management. At the end of the fiscal year 2012, all employee positions were redefined with new compensation structures. While recruiting high-quality employees to newly defined positions, we were able to reduce the overall headcounts across the organization. The total headcount was reduced by 26% from 888 employees as of September 30, 2011 to 656 employees (excluding 57 employees of Xinjiang Origin) at the end of September, 2012. Our headquarters employee number was reduced from 90 as of September 30, 2011 to 52 at of the end of September 2012.

To improve our technology development, we created a business division to, centralize the activities for the technologies of corn seed development as well as the production of parental lines. While the Breeding Division is involved in the research and development of conventional crop seeds, our Biotech Research Center continues to focus on next-generation crop technologies. Despite the reduction of our overall headcount, the total number of R&D-related employees has increased slightly during fiscal year 2012.

Breed-Produce-Distribute Vertically-Integrated Crop Seed License (BPDVI License)

Beijing Origin received its renewed crop seed license in September 2012 based on the new government regulation for BPDVI license from Ministry of Agriculture (MOA). While vertically-integrated operation has always been Origin's strategy and such vertical integration is a common practice outside of China, BPDVI is now one of the key measures in the comprehensive license review process the MOA used for the award of the seed business licenses. Since the new seed business license policy was introduced in 2011, Beijing Origin was one of the first 32 companies awarded for the BPDVI seed license. In an effort by Chinese government to regulate the seed industry and promote consolidation, the companies with BPDVI license are expected to receive potential ongoing government support and certain incentives including further tax break and financial subsidies to crop seed research and development.

Government supports

The Company received several financial supports from various levels of the government during fiscal year 2012. For a new production line in Linze, Gansu province, we received government subsidies of RMB14 million (US$2.21 million) in the first quarter of fiscal year 2012. For our new Xinjiang Origin plant, we have received a subsidy of RMB10.90 million (US$1.72 million) for the land use right. We also received various subsidies for our research and development activities, totaled RMB2.10 million (US$0.33million).

Xinjiang Origin

Established in July, 2011, Xinjiang Origin started the construction of its state-of-art corn seed processing facility in fiscal year 2012. The construction was completed in August, 2012, and a production trial run started in September. During the 2012 harvest season, this newly constructed facility successfully processed a total of approximately 12,000 metric tons of corn seed from about 5,000 acres of cornfield. Xinjiang Origin was established by Beijing Origin and Xinjiang Jinbo Seed ("Jinbo"). Jinbo is a prominent local seed company affiliated with the Fifth Agricultural Construction Division of the Xinjiang Production and Construction Corp. Origin holds a 51% ownership stake of the RMB100 million registered capital investment as of September 30, 2012 and retains the exclusive business relationship with Jinbo in Xinjiang.

With an expected investment of RMB170 million, the state-of-the-art facility will mainly produce, process, package, and sell high-quality hybrid corn seeds to the domestic Chinese market. Xinjiang Origin will increase the Company's total seed processing capacity and expand marketing channels to distribute Origin's hybrid products to the northwest region in China. The facilities of Xinjiang Origin, along with the seed production land of the Fifth Agricultural Construction Division, deploy modern technologies and full mechanization throughout the entire production process from land preparation and seeding to product packaging. The processing facility employs advanced corn husker system, which is one of the largest corn husker systems in the world. The production base uses modern drip irrigation systems and advanced farming equipment for corn seed production.

UNAUDITED FINANCIAL RESULTS OVERVIEW

Core Business Year-over-Year comparison:

Fiscal year 2012 marks the transition year with a major restructuring program for Origin, and the financial performance has experienced a significant turnaround. Excluding the discontinued businesses and contributions of Jilin Changrong and Changchun subsidiary, revenues of Origin's core business increased by 23% from RMB 377.86 million to RMB 463.50 million mainly due to higher sales volume for the Company's corn seed business, as shown in the table below:

Year-over-Year Comparison of Core Business Performance (unaudited)


2011 (RMB million)

2012 (RMB million)

Year-over-Year Growth

Revenues

377.86

463.50

23%

Gross Profit

146.56

166.20

13%

Operating Expense

144.86

153.79

6%

Operating Profit

1.70

12.41

630%

Data in the above table exclude the discontinued operations of the cotton and agricultural chemical businesses. For comparison purpose, the contributions from Jilin Changrong and Changchun Origin are not included here but will be discussed hereinafter.

The revenues growth in Origin's core business was mainly attributable to 14% sales volume gain and 16% price increase in the corn business. Gross profit of the core business increased by 13% year-over-year to RMB166.20 million. The disparity between the revenue growth and gross profit increase was mainly due to inventory provisions. Excluding the impact of inventory provisions, gross profit of the core business increased 23% year-over-year."

Operating expenses in the core business for fiscal year 2012 were RMB153.79 million, representing an increase of 6% compared with RMB144.86 million in fiscal year 2011. This increase was mainly due to the rise in staff compensation, receivable allowance, advertising and shipping expenses, and restructuring costs.

Income from operations for the core business increased from RMB1.70 million in fiscal year 2011 to RMB12.41 million in fiscal year 2012.

Jilin Changrong/ Changchun Origin Year-over-Year comparison:

Jilin Changrong was a joint venture with its business focus on the Northeast region in China. This joint venture was liquidated in fiscal year 2011, when the joint venture partners agreed that the separation of the joint venture operations fit better with their respective business strategies. After the liquidation of Jilin Changrong, in August 2011, Origin established its operations in the same region through its majority owned Changchun Origin based on the assets obtained from Jilin Changrong. The table below compares the performance of Jilin Changrong in 2011 to the performance of Changchun Origin in 2012.

(Unaudited)


Jilin Changrong (2011)

Changchun Origin (2012)


RMB (million)

RMB (million)

Revenue

140.98

50.03

Gross Profit

59.84

15.23

Operating Expense

35.26

5.96

Operating Profit

27.24

9.27

Net Profit before NCI

20.74

8.83

Origin shareholding ratio

52.85%

97.96%

Net Profit attributable to Origin

10.96

8.65

While the contribution from Northeastern region subsidiary to Origin's consolidated revenues declined from RMB 140.98 million in 2011 to RMB 50.03 million in 2012, the impact of the structure change on the Net Profit attributable to Origin was much less significant. In its first year of operation after the Jilin Changrong liquidation, Changchun Origin contributed a net profit of RMB 8.65 million to Origin, compared to RMB 10.96 million contributed from Jilin Changrong in fiscal year 2011, despite the Changchun Origin's limited seed supplies during the first year of its operation. Changchun Origin significantly increased its seed production during fiscal year 2012 in preparation for the fiscal year 2013 sales season, and the Company expects a solid growth for Changchun Origin in fiscal year 2013.

Overall Analysis

Total revenues for the fiscal year ended September 30, 2012 were RMB552.11 million (US$87.07 million), a slight decrease of 2.70% from RMB567.43 million during the fiscal year ended September 30, 2011. Overall, the slight year-over-year decrease in revenues was mainly due to Jilin Changrong liquidation, the divestment of the cotton and pesticide businesses, and the drop in production of rice in fiscal year 2012; while revenues in the core businesses increased year-over-year.

Corn seed products remained our strongest product line, accounting for 75% of our overall sales, as compared to 74% in the fiscal year ended September 30, 2011. Total revenues from corn seeds were RMB416.73 million in fiscal year 2012, compared with RMB417.09 million in the fiscal year ended September 2011. Revenues from Origin's rice product line for the year ended September 30, 2012 decreased by approximately 4% to RMB88.14 million from RMB91.78 million in the fiscal year ended September 30, 2011. Sales of canola seeds increased by 18.47% to RMB19.94 million in fiscal year 2012, as compared to RMB16.83 million in fiscal year 2011. Since canola seeds are sold during the off season, a substantial amount of canola seed sales are recognized as deferred revenues on the company's balance sheet. Total revenues from cotton seed decreased by 61.69% from RMB18.90 million in fiscal year 2011to RMB7.26 million in fiscal year 2012. With the divestment of Biocentury Transgene in 2010, the Company has scaled back its focus from less profitable cotton business and later withdrew from the cotton seed business operation by the end of fiscal year 2012. In addition, Origin divested its lower margin pesticide business in December, 2011 and scrap sales of the chemicals amounted to RMB19.83 million in fiscal year 2012.

Operating expenses for the fiscal year ended September 30, 2012 were RMB167.80 million (US$ 26.46 million), representing a decrease of 8.42% from RMB183.23 million in the fiscal year 2011, which was mainly due to the liquidation of the Jilin Changrong. Excluding Jilin Changrong and Changchun Origin, operating expenses increased 6% due mainly to the rise in staff compensations, doubtful receivable allowance, and advertising and shipping expenses. Organization restructuring also increased our operating expense, among which employee severance pay was RMB 3.05 million (US$ 0.48 million).

Operating loss for the fiscal year ended September 30, 2012 was RMB3.47 million (US$0.55 million), compared to the operating profit of RMB12.61 million for the fiscal year ended September 30, 2011. The decrease in operating results was mainly due to lower contribution from the Changchun Origin subsidiary in fiscal year 2012, compared to the contribution from Jilin Changrong in fiscal year 2011. The impact of Jilin Changrong liquidation and contribution of Changchun Origin to the operation profits and net profits attributable to Origin have already been discussed above.

Net loss for the fiscal year ended September 30, 2012 was RMB1.43 million (US$0.23 million), representing a significant improvement from the net loss of RMB23.08 million for the fiscal year ended September 30, 2011. The year-over-year improvement was mainly due to the improvement in operating performance of the core businesses and rigorous cost management.

Net loss per share was RMB(0.06) or US$(0.01) for the fiscal year 2012, compared with RMB(1.00) in fiscal year 2011.

Statement of Cash Flow

As of September 30, 2011 and 2012, Origin had approximately RMB129.94 million and RMB152.79 million (US$24.10 million), respectively, in cash and cash equivalents. Total borrowings as of September 30, 2011 and 2012 were RMB20 million and RMB74 million (US$11.67 million), respectively. During fiscal year 2012, Origin's cash flow from operating activities was RMB82.71 million (US$13.04 million), up from RMB37.46 million for the fiscal year ended September 30, 2011, as operating performance improved year-over-year. Net cash used in investing activities was RMB143.38 million (US$22.61 million) for the fiscal year ended September 30, 2012 compared with RMB154.39 million for the fiscal year ended September 30, 2011. Net cash provided by financing activities was RMB83.40 million (US$13.15 million) for the fiscal year ended September 30, 2012 compared with RMB55.74 million for the fiscal year ended September 30, 2011. The increase in borrowing was mainly related to the operations of Xinjiang Origin, which had RMB39.00million (US$6.15 million) bank loan for its new corn seed processing plant construction.

Research and Development Activities

Origin was built on its strong R&D platform and we strongly believe successful R&D is essential to the growth of the Company. During fiscal year 2012, we continue to make significant progress both in our conventional hybrid crop seed development programs and biotechnology R&D activities.

Key developments for Origin's biotechnology corn seeds:

Phytase: Two commercial hybrids with phytase traits have completed the variety production test and are pending the variety approval from the Chinese government. Two additional hybrid varieties with phytase traits are currently under variety production test;

Glyphosate Tolerance: One glyphosate tolerance event (the unique DNA recombination event that took place in one plant cell) passed Phase 3 - Environment Release Test in 2011 and has received MOA's approval to begin Phase 4 - Production Test. Two more glyphosate tolerance events are being submitted for Phase 3 - Environment Release Test. In addition, more than one thousand events are undergoing Phase 1 - Laboratory Research;

Bacillus Thuringiensis (Bt): Two insect tolerant events are going through Phase 2 - Intermediate Test. Over two hundred events are undergoing Phase 1 - Laboratory Research;

Glyphosate + Bacillus Thuringiensis (Bt): As a result of recent successes in Phase 1 - Laboratory Research, six events of the Company's glyphosate and insect tolerant traits have advanced into Phase 2 - Intermediate Test. More than 4,500 events of the stacked traits (inserting more than one gene in a seed via biotechnology) are being screened in Phase 1 - Laboratory Research.

Hybrid Corn Seed Development Program:

In addition to biotechnology crop seeds, Origin has a large R&D program developing conventional hybrid crop seeds. In China, new hybrid seed variety needs to go through an official approval process prior to sales. This approval process typically involves three to four years of registration trials and normally proceeds according to the following sequential steps:

Pre-Registration --> Registration Trial 1 --> Registration Trial 2 --> Field Demo --> Approval

Each step leading up to Approval takes approximately one year unless it needs to be repeated. In some localities Registration Trial 2 and Field Demo are treated as one and the same step.

During fiscal year 2012, we have more than 60 tests going through different stages of the approval process. As the results of multiyear testings, we received registration approval for three of our new varieties. 

"In this fiscal year, we invested US$5.93 million in R&D, equivalent of about 6.8% of our total revenues. We reduced headcounts across the organization except our research organization, which has seen net hiring during this fiscal year. We aim to build upon our current hybrid base where we have accumulated parental seeds with advantageous traits optimized to local soil conditions. We believe biotechnologies will become increasingly important in the future seed industry in China and R&D will be the only way to bring sustainable growth to the Company. With this in mind, we plan to target 8-10% of our total revenue in our R&D activities." Concluded Dr. Han.  

Outlook

With the transitional year behind us and restructuring mostly completed, we believe Origin is ready to be back to the growth trend, reversing the trend of the last several years. We expect our earnings performance to improve as well in FY2013 with the growth of our focused businesses and rigorous cost management.

Dr. James Chen commented, "We are here for the long run. While the Chinese crop seed industry likely continues to experience intensified competition, we remain confident in our vertically integrated crop seed business strategy, strong product pipelines and R&D programs, and expanded production bases. Overtime, both our hybrid and biotechnology products will prove that we are the best crop seed company in China. And we will continue to improve our efficiency to produce stronger earnings and cash flows, and increase our long-term shareholders' value."

About Origin

Founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, Origin Agritech Limited (NASDAQ GS: SEED) is China's leading agricultural biotechnology company, specializing in crop seed breeding and genetic improvement, seed production, processing, distribution, and related technical services. Leading the development of crop seed biotechnologies, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline including products with glyphosate tolerance and pest resistance (Bt) traits. Origin operates production centers, processing centers and breeding stations nationwide with sales centers located in key crop-planting regions. Product lines are vertically integrated for corn, rice and canola seeds. For further information, please log on to the Company's website at: www.originseed.com.cn.

Forward Looking Statement

This release contains forward-looking statements. All forward-looking statements included in this release are based on information available to us on the date hereof. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "targets," "goals," "projects," "continue," or variations of such words, similar expressions, or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Neither we nor any other person can assume responsibility for the accuracy and completeness of forward-looking statements. Important factors that may cause actual results to differ from expectations include, but are not limited to, those risk factors discussed in Origin's filings with the SEC including its annual report on Form 20-F to be filed. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except number of share and per share data)

 



September 30,



2011


2012


2012



RMB


RMB


USD

ASSETS







Current A ssets







Cash and cash equivalents


129,942


152,789


24,095

Accounts receivable, less allowance for doubtful amounts of
       RMB2,714 and RMB6,752 as of September 30, 2011 and
       2012, respectively


6,616


7,065


1,114

Due from related parties


5,183


2,082


328

Advances to suppliers


12,418


7,802


1,230

Advances to growers


78,623


88,194


13,909

Inventories


210,826


282,544


44,558

Income tax recoverable


2,155


2,159


341

Other current assets


65,055


16,407


2,587

Total current assets


510,818


559,042


88,162

Land use rights, net


33,094


32,318


5,097

Plant and equipment, net


190,094


317,085


50,006

Equity investments


20,503


22,433


3,538

Goodwill


11,973


11,973


1,888

Acquired intangible assets, net


29,232


25,585


4,035

Deferred income tax assets


3,028


1,755


277

Other assets


19,640


5,246


827

Total assets


818,382


975,437


153,830

LIABILITIES AND EQUITY







Current liabilities







Short-term borrowings


20,000


35,000


5,520

Current portion of long-term borrowings


-


4,000


630

Accounts payable


5,740


5,031


793

Due to growers


7,947


4,304


679

Due to related parties


1,728


2,769


437

Advances from customers


397,933


435,044


68,608

Deferred revenues


19,812


23,243


3,666

Income tax payable


39,060


39,060


6,160

Other payables and accrued expenses


40,351


56,744


8,949

Total current liabilities


532,571


605,195


95,442

Long-term borrowings


-


35,000


5,520

Other long-term liability


-


21,810


3,439

Total liabilities


532,571


662,005


104,401

Commitments and contingencies














Shareholders' equity:







Preferred stock (no par value; 1,000,000 shares authorized,
      none issued)


-


-


-

Common stock (no par value; 60,000,000 shares authorized,







23,382,812 and 23,382,812 shares issued and outstanding




as of September 30, 2011 and 2012, respectively)

-

-

-

Additional paid-in capital


394,344


397,671


62,714

Accumulated deficit


(99,533)


(100,967)


(15,923)

Treasury stock at cost (498,851 shares)


(29,377)


(29,377)


(4,633)

Accumulated other comprehensive loss


(6,397)


(6,280)


(990)

Total Origin Agritech Limited shareholders' equity


259,037


261,047


41,168








Non-controlling interests


26,774


52,385


8,261

Total equity                                      


285,811


313,432


49,429








Total liabilities and equity


818,382


975,437


153,830

 

 

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except number of share and per share data)

 


Year ended September 30,




2010


2011


2012


2012




RMB


RMB


RMB


USD

Revenues



584,860


567,434


552,111


87,070

Cost of revenues



(353,587)


(371,591)


(387,783)


(61,155)











Gross profit



231,273


195,843


164,328


25,915

Operating expenses










Selling and marketing



(52,227)


(56,831)


(56,437)


(8,900)

General and administrative



(78,708)


(86,748)


(77,585)


(12,236)

Research and development



(38,356)


(44,771)


(37,629)


(5,934)

Other income, net



2,340


5,120


3,852


608











Total operating expenses, net



(166,951)


(183,230)


(167,799)


(26,462)











Income (loss) from operations



64,322


12,613


(3,471)


(547)











Interest expense



(8,539)


(1,469)


(4,029)


(635)

Share of net income of equity investments



9,370


1,616


4,030


636

Gain on disposal of an equity investment



8,883


-


-


-

Loss on liquidation of a subsidiary



-


(13,582)


-


-

Interest income



1,634


1,771


2,547


401











Income (loss) before income taxes



75,670


949


(923)


(145)











Income tax expense










Current



(4,046)


(6,991)


(589)


(93)

Deferred



(5,273)


(6,739)


(1,273)


(201)

Income tax expense



(9,319)


(13,730)


(1,862)


(294)











Net i ncome (loss)



66,351


(12,781)


(2,785)


(439)

Less: Net income (loss) attributable to non-controlling interests



17,298


10,298


(1,351)


(213)











Net income (loss) attributable to Origin Agritech Limited



49,053


(23,079)


(1,434)


(226)











Other comprehensive income (loss)










Net income (loss)



66,351


(12,781)


(2,785)


(439)

Foreign currency translation difference                                                                 



1,067


2,939


117


19

Comprehensive income (loss)



67,418


(9,842)


(2,668)


(420)

Less: Comprehensive income (loss) attributable to non-controlling interests



17,298


10,298


(1,351)


(213)

Comprehensive income (loss) attributable to Origin Agritech Limited



50,120


(20,140)


(1,317)


(207)











Net income (loss) attributable to Origin Agritech Limited per share - basic



2.12


(1.00)


(0.06)


(0.01)











Net income (loss) attributable to Origin Agritech Limited per share - diluted



2.10


(1.00)


(0.06)


(0.01)











Shares used in calculating basic net income (loss) per share



23,189,464


23,351,615


23,382,812


23,382,812











Shares used in calculating diluted net income (loss) per share



23,337,265


23,351,615


23,382,812


23,382,812

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


Year ended September 30,




2010


2011


2012


2012




RMB


RMB


RMB


USD











Operating activities:                                                                             










Net income (loss) attributable to Origin Agritech Limited



49,053


(23,079)


(1,434)


(226)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:










Depreciation and amortization



21,712


23,307


19,541


3,082

Loss (gain) on disposal of plant and equipment



(26)


6,252


1,401


221

Gain on disposal of a land use right



-


-


(825)


(130)

Gain on disposal of an equity investment



(8,883)


(1)


-


-

Loss on disposal of Kunfeng's assets



-


-


1,814


286

Loss on liquidation of a subsidiary



-


13,583


-


-

Impairment on receivables



-


1,872


4,038


637

Inventory write down



14,971


12,978


27,453


4,329

Deferred income tax assets



5,274


6,739


1,273


201

Non-controlling interests



17,298


10,298


(1,351)


(213)

Share-based compensation expense



4,868


4,638


3,327


525

Share of net income of equity investments



(9,370)


(1,616)


(4,030)


(636)

Changes in operating assets and liabilities:










    Accounts receivable, net



(4,356)


1,560


(4,486)


(708)

    Due from related parties



1,897


(76)


3,101


489

    Advances to growers



(16,010)


(37,932)


(9,571)


(1,509)

    Advances to suppliers



2,940


(8,432)


4,616


728

    Inventories



45,783


15,175


(102,230)


(16,122)

    Income tax recoverable



(1,020)


590


(4)


(1)

    Other current assets



98


4


48,648


7,672

    Other assets



3,193


(3,010)


14,394


2,270

    Accounts payable



(5,137)


(3,220)


(709)


(112)

    Due to growers



32,567


(34,239)


(3,643)


(574)

    Due to related parties



(7,773)


984


1,041


164

    Advances from customers



128,834


49,136


37,111


5,853

    Deferred revenues



4,831


(3,299)


3,431


541

    Income tax payable



4,414


4,113


-


-

    Other long-term liabilities



9,426


(7,003)


21,810


3,439

    Other payables and accrued expenses



4,020


8,135


17,997


2,838











Net cash provided by operating activities



298,604


37,457


82,713


13,044











Investing activities:










Dividends received



1,200


2,467


2,100


331

Purchase of plant and equipment



(15,839)


(56,332)


(104,214)


(16,435)

Liquidation of a subsidiary



-


(67,980)


-


-

Proceeds from disposal of an equity investment



50,000


-


-


-

Additional capital injection to an equity investment



-


(600)


-


-

Proceeds from disposal of land use right



-


-


1,140


180

Proceeds from disposal of plant and equipment



247


-


5,495


867

Deposits for purchase of acquired technology and

land use rights



(39)


(1,280)


-


-

Deposits for purchase of plant and equipment



(3,044)


(11,468)


(43,874)


(6,919)

Business acquisition, net of cash acquired



(10,540)


-


-


-

Purchase of land use rights



-


-


(431)


(68)

Purchase of intangible assets



(6,880)


(19,197)


(3,599)


(568)

Net cash provided by(used in) investing activities



15,105


(154,390)


(143,383)


(22,612)











Financing activities:










Restricted bank deposits



500


-


-


-

Proceeds from short-term borrowings



191,900


20,000


105,000


16,559

Repayment of short-term borrowings



(186,290)


(85,900)


(90,000)


(14,193)

Proceeds from long-term borrowings







39,000


6,150

Repurchase of convertible notes                                                                 



(117,896)


-


-


-

Acquisition of additional equity interest from non-controlling shareholders



(24,200)


-


-


-

Capital injection from a non-controlling shareholder



-


19,600


29,400


4,636

Dividends paid to non-controlling shareholders



(6,908)


(12,090)


-


-

Proceeds from exercise of share options



6,535


2,654


-


-

Net cash (used in)provided by financing activities



(136,359)


(55,736)


83,400


13,152











Net increase (decrease) in cash and cash equivalents



177,350


(172,669)


22,730


3,584

Cash and cash equivalents, beginning of year



121,255


299,672


129,942


20,492

Effect of exchange rate changes on cash and cash equivalents



1,067


2,939


117


19

Cash and cash equivalents, end of year



299,672


129,942


152,789


24,095











Supplemental disclosures of cash flow information:










Income taxes paid



652


6,990


589


93











Interest paid



8,539


1,469


4,029


635











Supplemental disclosure of non-cash investing activities:










Disposal of assets in lieu of payment for liabilities



-


-


1,814


286

Other current assets to be received from liquidation of a subsidiary



-


45,236


-


-






















CONTACT:

Origin Agritech Limited
Dr. James Chen
Chief Financial Officer
james.chen@originseed.com.cn

or
Grayling
Shiwei Yin, 646-284-9474
shiwei.yin@grayling.com

 

SOURCE Origin Agritech Limited



RELATED LINKS
http://www.originseed.com.cn

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