Origin Agritech Limited Reports Unaudited Financial Results For Six Months Ended March 31, 2019

BEIJING, July 16, 2019 /PRNewswire/ -- Origin Agritech Limited (NASDAQ GS: SEED) ("Origin" or the "Company"), an agriculture technology and rural e-commerce company in China, today announced its unaudited financial results for the first half of FY2019 ended March 31, 2019. Origin prepares its financial statements in accordance with United States generally accepted accounting principles ("GAAP").

FINANCIAL RESULTS OVERVIEW

The Company reported net revenue of RMB82.2 million (US$12.2 million) during the first half year of FY2019, compared to RMB3.6 million for the first half year of FY2018. The cancellation of the second closing of the seed business sales announced in July, 2018 means that the company is now back to the commercial corn seed business. This seed business reported the total gross profit of RMB19.0 million (US$2.8 million) for the first half of FY2019.

Total operating expenses for the first half year of FY2019 was RMB18.1 million (US$2.7 million), down 57% from RMB42.0 million for the same period a year ago. The decrease was mainly due to the turnaround effort over the last year, especially in the general and administrative expenses. Selling and marketing expense for the first half year of FY2019 was RMB2.5 million (US$0.4 million), compared to RMB0.7 million a year ago as the result of the Company's returning to the seed business. General and administrative expenses declined 70% to RMB8.4 million (US$1.3 million), down from RMB28.2 million a year ago. The significant decline in G&A expenses resulted from the efforts to turn around the business through strategic redirection and organization restructuring. Research and development expenses for the first half year of FY2019 was RMB7.1 million (US$1.0 million), down from RMB13.1 million a year ago as we have been refocusing our R&D efforts during our turnaround effort.

Total operating income for the first half year of FY2019 was RMB0.9 million (US$0.1 million), a significant turnaround from the operating loss of RMB42.8 million reported a year ago.

Interest expense was RMB2.3 million (US$0.3 million) during the first half year of FY2019, down from RMB4.1 million a year ago. Other income of RMB2.3 million (US$0.3 million) was mainly the rentals the Company received. The Company rents out portion of its headquarters building. The other income of RMB18.4 million reported for the first half year of FY2018 includes mainly the gain from an asset sales, government subsidies, and the office rental income.

Net income attributable to the Company for the first half year of FY2019 was RMB1.2 million (US$0.2 million), compared to the net loss of RMB25.3 million, representing a significant turnaround, especially in the operating expenses control as well as the gross profit from the seed business.

Diluted earnings per share for the first half of FY2019 was RMB0.30 (or US$0.044), compared to the loss per share of RMB10.18 during the same period a year ago.

Balance Sheet

As of March 31, 2019, cash and cash equivalents were RMB5.8 million (US$0.8 million), an increase of RMB3.8 million from the cash and cash equivalents of RMB2.0 million as of September 30, 2018.

The current portion of long-term debt is RMB78.6 million (US$11.7 million), which is secured with the Company's headquarters' building. The advances from customers increased to RMB59.4 million (US$8.8 million), compared to RMB6.3 million as of September 30, 2018. The increase in the advances from customers was due to the Company's return to the seed business.

During the first half year of FY2019, the Company improved its overall balance sheet by completing an equity financing of US$7.74 million through the announced deals with Longhan Investment Management Co and Tiger Capital Fund SPC. The equity financing includes the issuance of 1,397,680 ordinary shares and warrants to purchase 1 million of the Company's ordinary shares. The total equity of the Company increased to RMB43.6M (US$6.5 million), compared to the negative equity of RMB23.3 million as of September 30, 2018. Regarding the earlier equity financing with L2 Capital, the Company has withdrawn the F3 registration statement filing with SEC dated November, 2018 and there are no further outstanding shares or warrants relating to the equity financing with L2 Capital.

As of March 31, 2019, total current assets of RMB75.1 million (US$11.2 million) largely were comprised of the inventories of RMB64.4 million (US$9.6 million) and non-current assets of RMB208.1 million (US$30.9 million) mainly comprised of plant and equipment of RMB167.9 million (US$24.9 million), long-term investment of RMB16.3 million (US$2.4 million), and land use rights of RMB14.9 million (US$2.2 million).

As of March 31, 2019, total current liabilities of RMB218.2 million (US$32.4 million) were mainly the balance of the current portion of long-term debt of RMB78.6 million (US$11.7 million), which was secured by the Company's headquarter building, and advances from customers of RMB59.4 million (US$8.8 million).

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.

Contact:

Lin Peng
Phone: +86-10-58907597
Email: [email protected]

SOURCE Origin Agritech Limited

Related Links

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