Origin Agritech Limited Reports Unaudited Financial Results For Three Months Ended December 31, 2015

29 Jan, 2016, 06:00 ET from Origin Agritech Limited

BEIJING, Jan. 29, 2016 /PRNewswire/ -- Origin Agritech Limited (NASDAQ GS: SEED) ("Origin" or the "Company"), a technology-focused supplier of crop seeds in China, today announced unaudited financial results for the first quarter ended December 31, 2015. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

FINANCIAL RESULTS OVERVIEW

During the first quarter of fiscal year 2016, the Company generated revenues of RMB8.6 million (US$1.3 million), compared with revenues of RMB 15.6 million in the three months ended December 31, 2014. The revenues of this quarter largely represented the sales from canola seeds and the decrease was mainly due to exit of market for certain major canola seeds products as the result of increasing competition in the canola seed business

Deferred revenues were RMB306.1 million (US$47.1 million) as of December 31, 2015 compared with RMB329.0 million as of December 31, 2014. Deferred revenues mainly reflect the value of Origin's crop seeds after: a) sales arrangement is confirmed; b) delivery to the customer is made; and c) pre-payment from the customer is received, but before the final sales price is fixed and determined. The final sales price is primarily determined by sales incentives that Origin offers to its customers. It is expected that the majority of these deferred revenues will be recorded on the income statement in the third to fourth fiscal quarters.

Gross profit for the three months ended December 31, 2015 was RMB 3.7 million (US$0.6 million), compared with RMB7.8 million in the same period of the prior year. The decrease was in line with the decrease of sales of canola seeds.

Total operating expenses for the first quarter ended December 31, 2015 were RMB25.9 million (US$4.0 million) compared with RMB 30.3 million reported for the same period in fiscal year 2015. Selling and marketing expenses were RMB11.4 million (US$1.8 million) for the first quarter of fiscal year 2016, a significant decrease of 19.4% from RMB14.2 million for the same period last year due mainly to the decline in advertisement and transportation. General and administrative expenses were RMB9.6 million (US$1.5 million) for the first quarter ended December 31, 2015 compared with RMB8.9 million one year ago. Research and development expenses were RMB10.4 million (US$1.6 million) in the first quarter of fiscal year 2016 compared with RMB11.8 million for the same quarter last year.

Operating loss for the first quarter of fiscal year 2016 was RMB22.2 million (US$3.4million), compared with operating loss of RMB 22.5 million for the same period in fiscal year 2015,This reduction in operating loss reflects our efforts to improve our operating efficiency and cost reduction.

Net loss attributable to Origin Agritech Limited for the first quarter of fiscal year 2016 was RMB28.8 million (US$4.4 million), or net loss per basic and diluted share of RMB1.26 (US$0.19), compared with net loss of RMB29.5 million, or net loss per basic and diluted share of RMB1.30 in the same period one year ago.

BALANCE SHEET

As of December 31, 2015, cash and cash equivalents were RMB85.3 million (US$13.1 million) and shareholders' equity was RMB211.0 million (US$32.5 million). The Company had short-term loans of RMB230.0 million (US$35.4 million) and total long-term borrowing of RMB53.8 million (US$8.3 million). Short-term loans were mainly used for settlement of seed purchases, while long-term borrowings of bank loans were used for the corn seed production facilities in Xinjiang Origin and the Company's working capital.

Advances from customers were RMB104.2 million (US$16.0 million) as of December 31, 2015. These advances represent cash receipts for orders in the upcoming selling season.

MANAGEMENT CHANGE

Effective as of today, the Company appointed Mr. Song Xu as its Chief Financial Officer, replacing Mr. James Chen, who has resigned to pursue other opportunities.

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 reasons.


 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share data)






    Three Months ended December 31,



2014



2015




RMB



RMB



USD











Revenues



15,590



8,553



1,318

Cost of revenues



(7,788)



(4,855)



(748)

Gross profit



7,802



3,698



570

Operating expenses:










Selling and marketing



(14,183)



(11,434)



(1,761)

General and administrative



(8,862)



(9,627)



(1,483)

Research and development



(11,775)



(10,432)



(1,607)

Other operating income, net



4,553



5,590



861

Total operating expenses, net



(30,267)



(25,903)



(3,990)











Loss from operations



(22,465)



(22,205)



(3,420)


Interest expense



(4,574)



(4,632)



(713)

Interest income



26



49



8

Loss before income taxes



(27,013)



(26,788)



(4,125)

Income tax expense










Current



(1,203)



(1,414)



(218)

Deferred



-



-



-

Income tax expense



(1,203)



(1,414)



(218)


Net loss



(28,216)



(28,202)



(4,343)

Less: Net income attributable to the non-controlling interests



1,287



572



88











Net loss attributable to Origin Agritech Limited



(29,503)



(28,774)



(4,431)


Other comprehensive loss










Net loss



(28,216)



(28,202)



(4,343)

Foreign currency translation difference



401



(1,675)



(258)

Comprehensive loss



(27,815)



(29,877)



(4,601)

Less: Comprehensive income attributable to non-controlling interests



1,287



572



88

Comprehensive loss attributable to Origin Agritech Limited



(29,102)



(30,449)



(4,689)











Net loss attributable to Origin Agritech Limited per share – basic



(1.30)



(1.26)



(0.19)

Net loss attributable to Origin Agritech Limited per share – diluted



(1.30)



(1.26)



(0.19)











Shares used in calculating basic and diluted net loss per share



22,738,541



22,813,541



22,813,541











 

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



12/31/2014


9/30/2015


12/31/2015


12/31/2015



RMB


RMB


RMB


US$

ASSETS









Current Assets









Cash and cash equivalents


82,250


66,025


85,307


13,137

Restricted cash


14,350


-


20,280


3,123

Accounts receivable


2,965


2,051


5,087


783

Due from related parties


5,200


-


3,718


572

Advances to suppliers


10,625


10,484


8,264


1,273

Advances to growers


1,903


20,796


1,370


211

Inventories


636,787


439,562


554,035


85,320

Income tax recoverable


48


48


48


7

Other current assets


4,323


4,793


4,587


706

Total current assets


758,451


543,759


682,696


105,132

Restricted cash


-


20,280


-


-

Land use rights, net


32,130


31,722


31,421


4,839

Plant and equipment, net


334,899


324,905


319,322


49,175

Equity investments


23,721


18,721


18,721


2,883

Goodwill


11,973


11,973


11,973


1,844

Acquired intangible assets, net


33,882


31,390


31,589


4,865

Other assets


3,502


3,079


2,345


361

Total assets


1,198,558


985,829


1,098,067


169,099

LIABILITIES AND EQUITY









Current liabilities









Short-term borrowings


245,000


220,000


230,000


35,419

Current portion of long-term borrowings


32,488


24,000


26,981


4,155

Accounts payable


15,514


4,389


16,196


2,494

Due to growers


57,862


17,337


49,268


7,587

Due to related parties


11,469


42,284


11,612


1,788

Advances from customers


126,201


264,547


104,204


16,047

Deferred revenues


328,975


11,248


306,143


47,145

Income tax payable


1,203


37


1,377


212

Other payables and accrued expenses


58,926


50,298


44,769


6,894

Total current liabilities


877,638


634,140


790,550


121,741

Long-term borrowings


19,523


40,972


26,773


4,123

Other long-term liability


18,689


19,939


19,604


3,020

Total liabilities


915,850


695,051


836,927


128,884

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,
  24,016,163, 24,091,163 and 24,091,163 shares issued as of December 31,
  2014, September 30, 2015 and December 31, 2015, respectively;
  22,738,541, 22,813,541 and 22,813,541 shares outstanding as of
  December 31, 2014, September 30, 2015 and December 31, 2015,
  respectively)


-


-





Additional paid-in capital


401,824


402,500


402,739


62,021

Accumulated deficit


(132,503)


(116,808)


(145,582)


(22,419)

Treasury stock at cost (1,277,622, 1,277,672 and 1,277,622 shares
as of December 31, 2014, September 30, 2015 and December 31, 2015,
respectively)


(37,445)


(37,445)


(37,445)


(5,766)

Accumulated other comprehensive loss


(4,045)


(7,053)


(8,728)


(1,345)

Total Origin Agritech Limited shareholders' equity 


227,831


241,194


210,984


32,491










Non-controlling interests


54,877


49,584


50,156


7,724

Total equity


282,708


290,778


261,140


40,215










Total liabilities and equity


1,198,558


985,829


1,098,067


169,099










 


UNAUDITED SEGMENT INFORMATION


Contributions of the major activities and profitability information of the Company's reportable segments for the three months ended
December 31, 2014 and 2015 are as follows:




 (In thousands)


    Three Months ended December 31,



2014



2015




RMB



RMB



US$

Segment net revenues










Seed Production & Distribution



15,590



8,553



1,318

Biotech & Product Development



469



391



60

Segment total net revenues



16,059



8,944



1,378

Inter-segment sales eliminations



(469)



(391)



(60)

Reconciliation to consolidated revenues



15,590



8,553



1,318











Segment operating loss










Seed Production & Distribution



16,676



14,777



2,276

Biotech & Product Development



4,037



5,317



819

Total segment operating loss



20,713



20,094



3,095

Unallocated corporate operating expenses, net



1,752



2,111



325

Reconciliation to consolidated income (loss) from operations



22,465



22,205



3,420

Contact:

Investor Relations
ir@originseed.com.cn
+86 10 5890-7506

SOURCE Origin Agritech Limited



RELATED LINKS

http://www.originseed.com.cn