Origin Agritech Limited Reports Unaudited Financial Results For Three Months Ended June 30, 2015

Aug 05, 2015, 06:00 ET from Origin Agritech Limited

BEIJING, Aug. 5, 2015 /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 third quarter ended June 30, 2015. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

FINANCIAL RESULTS OVERVIEW

For the third quarter of fiscal 2015, the Company reported revenues of RMB73.7 million (US$12.0 million) compared with RMB92.9 million for the three months ended June 30, 2014. Lower revenues this quarter resulted from the deferral of recognizing revenue for the corn seed business as the final sales price is not yet determined and due to lower revenues from rice seed business.

Deferred revenues were RMB373.4 million (US$61.1 million) as of June 30, 2015 compared with RMB342.1 million on June 30, 2014. It is expected that the majority of deferred revenues will be recorded in the income statement during the fiscal fourth quarter of 2015. Deferred revenues mainly reflect the value of Origin's crop seeds after: a) the 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.

The sum of recognized revenues for the first nine months ended June 30, 2015 and deferred revenues as of June 30, 2015 was RMB466.5 million (US$76.1 million) compared with RMB460.1 million for the same period one year ago.

Unit: RMB million

As of June 30, 2014

As of June 30, 2015

Year-over-Year Change, %

Deferred revenues (1)

342.1

373.4

9.1

Year-to-date recognized

revenues (2)

118.0

93.1

-21.1

(1) + (2)

460.1

466.5

1.4

Gross profit for the third quarter of fiscal 2015 was RMB10.3 million (US$1.7 million) compared to RMB21.2 million in the third quarter of fiscal 2014. Gross margin for the third quarter of fiscal 2015 decreased to 14.0% from 22.9% for the same period of fiscal 2014 was mainly due to scrap sales in the rice business.

Total operating expenses for the three months ended June 30, 2015 were RMB18.7 million (US$3.1 million) compared with RMB27.5 million during the same quarter in fiscal 2014. The decrease was mainly due to lower transportation expenses, higher other operating income and continuous cost controls. Specifically, selling and marketing expenses were RMB6.8 million (US$1.1 million) for the third quarter of fiscal 2015 compared with RMB10.5 million a year ago. The decrease in selling expenses was mainly due to lower transportation expenses this quarter. General and administrative expenses were RMB9.7 million (US$1.6 million), which was slightly down from RMB10.6 million for the third quarter of fiscal 2014. Research and development expenses were RMB8.8 million (US$1.4 million) in the third quarter of fiscal 2015, which was consistent with RMB8.8 million for the same period last year.

Total operating expenses for the first nine months in fiscal 2015 were RMB68.8 million, compared with the total operating expenses of RMB98.7 million a year ago. Excluding other operating income, the total operating expenses for the first nine months ended June 30, 2015 were RMB84.4 million, a decline of 18.5% year-over-year.  

Unit: RMB million

Fiscal year 2014

Fiscal year 2015

Year-over-Year Change, %

    Selling and marketing

43.9

27.2

-38.1%

    General and administrative

31.9

27.8

-12.9%

    Research and development

27.8

29.4

5.8%

    Total operating expenses,

excluding other operating income

103.6

84.4

-18.5%

Loss from operations for the third quarter of fiscal 2015 amounted to RMB8.4 million (US$1.4 million) compared with RMB6.3 million for the same quarter in fiscal 2014.

Net loss attributable to Origin Agritech for the third quarter of fiscal 2015 was RMB11.9 million (US$1.9 million), or net loss per basic and diluted share of RMB0.52 (US$0.09), compared to a net loss attributable to Origin Agritech of RMB14.7 million or net loss per basic and diluted share of RMB0.65 in the same period one year ago.

BALANCE SHEET

As of June 30, 2015, cash and cash equivalents were RMB22.4 million (US$3.7 million) and shareholders' equity attributable to the Company was RMB190.3 million (US$31.1 million). The Company had short-term borrowings of RMB210.0 million (US$34.4 million) and long-term borrowings of RMB64.4 million (US$10.5 million). Short-term borrowings were mainly for working capital, while long-term borrowing was mainly used for the corn seed production facilities in Xinjiang Origin and the Company's working capital.

Advances from customers were RMB128.1 million (US$21.0 million) as of June 30, 2015. These advances represent cash receipts for orders in the upcoming selling season.

CONFERENCE CALL INFORMATION

The Company will host a teleconference on August 5, 2015, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the results. To participate in the call, please dial the following numbers approximately 5 minutes prior to the scheduled start time. 

US Toll Free:

1-888-346-8982

International Toll:

1-412-902-4272

Mainland China Toll Free:

4001-201203

Hong Kong Toll Free:

800-905945

A replay of the call will be available shortly after the conference call through August 12, 2015. The dial-in numbers for the replay are:

US Toll Free:

1-877-344-7529

International Toll:

1-412-317-0088

Replay Access Code:

10070114

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 in China, 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. 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 June 30,



2014



2015



RMB



RMB


USD









Revenues


92,935



73,697


12,022

Cost of revenues


(71,686)



(63,384)


(10,339)

Gross profit


21,249



10,313


1,683

Operating expenses:








Selling and marketing


(10,549)



(6,771)


(1,105)

General and administrative


(10,561)



(9,748)


(1,590)

Research and development


(8,778)



(8,804)


(1,436)

Other operating income, net


2,372



6,592


1,075

Total operating expenses


(27,516)



(18,731)


(3,056)









Loss from operations


(6,267)



(8,418)


(1,373)


Interest expense


(5,276)



(4,695)


(766)

Share of net loss of equity investment


(279)



-


-

Loss on disposal of a subsidiary


(2,666)



-


-

Interest income


63



93


15

Loss before income taxes


(14,425)



(13,020)


(2,124)

Income tax expense








Current


(677)



(24)


(4)

Deferred


-



-


-

Income tax expense


(677)



(24)


(4)


Net loss


(15,102)



(13,044)


(2,128)

Less: Net loss attributable to the non-controlling interests


(432)



(1,147)


(187)









Net loss attributable to Origin Agritech Limited


(14,670)



(11,897)


(1,941)


Other comprehensive loss








Net loss


(15,102)



(13,044)


(2,128)

Foreign currency translation difference


12



329


54

Comprehensive loss


(15,090)



(12,715)


(2,074)

Less: Comprehensive loss attributable to non-controlling interests


(432)



(1,147)


(187)

Comprehensive loss attributable to Origin Agritech Limited


(14,658)



(11,568)


(1,887)









Net loss per share - basic


(0.65)



(0.52)


(0.09)

Net loss per share - diluted


(0.65)



(0.52)


(0.09)









Shares used in calculating basic net loss per share


22,743,853



22,738,541


22,738,541

Shares used in calculating diluted net loss per share


22,743,853



22,738,541


22,738,541

 

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



6/30/2014


9/30/2014

6/30/2015


6/30/2015



RMB


RMB

RMB


US$

ASSETS








Current Assets








Cash and cash equivalents


90,398


46,268

22,414


3,666

Restricted cash


-


15,670

-


-

Accounts receivable


4,209


1,021

6,590


1,078

Due from related parties


2,400


2,698

4,750


777

Advances to suppliers


19,826


17,751

14,865


2,431

Advances to growers


22,784


20,759

18,727


3,063

Inventories


698,395


516,368

595,577


97,418

Income tax recoverable


49


48

48


8

Other current assets


5,111


4,368

6,377


1,043

Total current assets


843,172


624,951

669,348


109,484

Restricted cash


14,350


-

20,000


3,271

Land use rights, net


31,071


31,799

30,061


4,917

Plant and equipment, net


341,481


338,526

325,353


53,218

Equity investments


21,119


18,721

18,721


3,062

Goodwill


11,973


11,973

11,973


1,958

Acquired intangible assets, net


25,236


34,891

36,266


5,932

Other assets


2,299


4,009

2,579


422

Total assets


1,290,701


1,064,870

1,114,301


182,264

LIABILITIES AND EQUITY








Current liabilities








Short-term borrowings


285,000


225,000

210,000


34,350

Current portion of long-term borrowings


21,500


33,805

16,750


2,740

Accounts payable


13,069


4,525

10,817


1,769

Due to growers


16,665


17,943

8,829


1,444

Due to related parties


16,230


11,711

11,468


1,876

Advances from customers


209,897


324,645

128,083


20,951

Deferred revenues


342,146


19,029

373,383


61,074

Income tax payable


39,060


-

-


-

Other payables and accrued expenses


52,928


67,953

45,624


7,463

Total current liabilities


996,495


704,611

804,954


131,667

Long-term borrowings


43,329


31,023

47,679


7,799

Other long-term liability


19,468


19,649

18,201


2,977

Total liabilities


1,059,292


755,283

870,834


142,443









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, 24,016,163 and 24,016,163 shares issued as of June
   30, 2014, September 30, 2014 and June 30, 2015;
   22,738,541, 22,738,541 and 22,738,541 shares outstanding as of
   June 30, 2014, September 30, 2014 and June 30, 2015)


-


-

-


-

Additional paid-in capital


400,606


400,888

402,272


65,799

Accumulated deficit


(183,511)


(103,000)

(170,316)


(27,859)

Treasury stock at cost (1,277,622, 1,277,622 and 1,277,622 shares as
of June 30, 2014, September 30, 2014 and June 30, 2015)


(37,445)


(37,445)

(37,445)


(6,125)

Accumulated other comprehensive loss


(4,450)


(4,446)

(4,199)


(689)

Total Origin Agritech Limited shareholders' equity 


175,200


255,997

190,312


31,126









Non-controlling interests


56,209


53,590

53,155


8,695

Total equity


231,409


309,587

243,467


39,821









Total liabilities and equity


1,290,701


1,064,870

1,114,301


182,264










 

 

CONTACT:

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

Investor Relations
ir@originseed.com.cn
+86 10 5890-7536

SOURCE Origin Agritech Limited



RELATED LINKS

http://www.originseed.com.cn