Origin Agritech Limited (NASDAQ: SEED) ("Origin" or the "Company"),
a technology-focused supplier of hybrid and genetically modified crop
seeds in China, today announced unaudited financial results for the
first quarter ended December 31, 2011. 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 2012, the Company generated revenues
of RMB26.9 million (US$4.3 million), an increase of 57% from RMB17.2
million (US$2.6 million) generated in the three months ended December
31, 2010. The revenues were mainly from the sales of higher margin
canola seed products for the three months ended December 31, 2011.
Gross profit for the three-months ended December 31, 2011 was RMB10.9
million (US$1.7 million) compared to RMB8.6 (US$1.3 million) in the same
period of the prior year. Gross margins for this quarter were 40% versus
50% for Q1 2011. This decline of gross margins was a result of scrap
sales of some corn and rice seed products, pesticide during this quarter.
Total operating expenses for the three-months ended December 31, 2011
were RMB 44.6 million (US$7.1 million) compared with RMB 39.0 million
(US$5.9million) reported for the same period in 2010. Selling and
marketing expenses were RMB 18.2 million (US$2.9 million) for the first
quarter of 2012, an increase of 70.8% from RMB 10.6 million (US$1.6
million) for the same period of the last year. Selling and marketing
expense increased year-on-year as certain transportation costs were
booked in the first quarter this year while these costs were booked in
the second quarter during fiscal year 2011. General and administrative
expenses were RMB 19.8 million (US$3.1 million) for the first quarter
ended December 31, 2011, decreased by 4.4% from RMB 20.8million (US$3.1
million) for the three months ended December 31, 2010. The research and
development expenses decreased to RMB7.7 million (US$1.2 million) this
quarter from RMB12.3 million (US$1.9 million) for the same quarter last
year as certain R&D projects didn't happen this quarter. These
differences in expense categories are a result of slight changes across
a broad variety of smaller sub-categories and represents small
variations year over year. On an annual comparison, we still expect
operating expenses to be relatively flat annually, across all operating
expenses and within each separate category.
Operating loss for the first quarter of fiscal 2012 amounted to RMB 33.8
million (US$5.3million) compared with an operating loss of RMB 30.4
million (US$4.6 million) for the same period in fiscal 2011.
Net loss for the first quarter of fiscal 2012 was RMB34.5 million
(US$5.5 million), or RMB 1.48 (US$0.23) per share, as compared to a net
loss of RMB 21.8 million (US$3.3 million), or RMB 0.94 (US$0.14) per
share in the same period one year ago.
BALANCE SHEET
Origin's balance sheet at December 31, 2011 included cash and cash
equivalents of RMB 192 million (US$30.5 million) and shareholders'
equity of RMB 226.1 million (US$35.9 million).
Deferred revenue was RMB270.1 million (US$ 42.9 million) for the
three-months ended December 31, 2011 as compared to RMB211.1 million
(US$31.8 million) for the same period last year. This mainly represents
our orders received and shipped already for products this upcoming
selling season. Additionally, we received government subsidy amounted to
RMB24.9 million (US$ 4.0 million) in December 2011, which was recorded
in the balance of deferred revenue as of December 31, 2011.
The Company received Advances from Customers of RMB 377.2 million
(US$59.9 million) as of December 31, 2011 period as compared to RMB
385.7 million (US$58.2 million) as of December 31, 2010. This represents
our cash receipts for products to be ordered this upcoming selling
season.
About Origin
Founded in 1997 and headquartered in Beijing, Origin Agritech Limited
(NASDAQ GS: SEED) is China's leading, vertically-integrated agricultural
biotechnology company specializing in research, development and
production to supply the growing populations of China. Origin develops,
grows, processes, and markets high quality, hybrid crop seeds to farmers
throughout China and parts of Southeast Asia via a network of
approximately 3,800 first-level distributors and 65,000 second-level
distributors and retailers, and possesses a pipeline of genetically
modified seed products including glyphosate resistant corn and Bt Corn.
The first genetically modified corn seed product for China, Phytase
corn, was approved in November 2009 of which Origin possesses exclusive
rights. For further information, please log on to the Company's website
at: www.originagritech.com.
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 reason.
|
|
| |
|
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| | | |
|
(In thousands, except share data)
| | | |
|
|
| Three Months ended December 31, | | | |
| | | 2010 | |
|
|
| 2011 | | | | |
| | | RMB |
|
|
| US$ | | | | RMB |
|
|
| US$ | | | |
| | | | | | | | | | | | | | | | | |
|
|
Revenues
| | |
17,193
| | | | |
2,596
| | | | |
26,931
| | | | |
4,258
| | | | |
|
Cost of revenues
| | |
(8,581
|
)
|
|
|
|
(1,296
|
)
| | | |
(16,058
|
)
|
|
|
|
(2,539
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
|
Gross profit
| | |
8,612
|
|
|
|
|
1,300
|
| | | |
10,873
|
|
|
|
|
1,719
|
| | | |
| | | | | | | | | | | | | | | | | |
|
|
Operating expenses:
| | | | | | | | | | | | | | | | | | |
|
Selling and marketing
| | |
(10,643
|
)
| | | |
(1,607
|
)
| | | |
(18,183
|
)
| | | |
(2,875
|
)
| | | |
|
General and administrative
| | |
(20,763
|
)
| | | |
(3,135
|
)
| | | |
(19,844
|
)
| | | |
(3,138
|
)
| | | |
|
Research and development
| | |
(12,264
|
)
| | | |
(1,852
|
)
| | | |
(7,724
|
)
| | | |
(1,221
|
)
| | | |
|
Other operating income, net
| | |
4,648
| | | | |
702
| | | | |
1,121
| | | | |
177
| | | | |
|
Total operating expenses
| | |
(39,022
|
)
|
|
|
|
(5,892
|
)
| | | |
(44,630
|
)
|
|
|
|
(7,057
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | |
|
|
Loss from operations
| | |
(30,410
|
)
|
|
|
|
(4,592
|
)
| | | |
(33,757
|
)
|
|
|
|
(5,338
|
)
| | | |
Interest expense
| | |
(536
|
)
| | | |
(81
|
)
| | | |
(942
|
)
| | | |
(149
|
)
| | | |
Share of net income of equity
investment
| | |
2,022
| | | | |
305
| | | | |
664
| | | | |
105
| | | | |
|
Interest income
| | |
495
| | | | |
75
| | | | |
628
| | | | |
99
| | | | |
| | |
|
|
|
|
| | | |
|
|
|
|
| | | |
| | | | | | | | | | | | | | | | | |
|
Loss before income taxes and
noncontrolling interests
| | |
(28,429
|
)
| | | |
(4,293
|
)
| | | |
(33,407
|
)
| | | |
(5,282
|
)
| | | |
|
Income tax expense
| | | | | | | | | | | | | | | | | | |
|
Current
| | |
(28
|
)
| | | |
(4
|
)
| | | |
(152
|
)
| | | |
(24
|
)
| | | |
|
Deferred
| | |
3,311
|
|
|
|
|
500
|
| | | |
-
|
|
|
|
|
-
|
| | | |
| | | | | | | | | | | | | | | | | |
|
|
Income tax expense
| | |
3,283
|
|
|
|
|
496
|
| | | |
(152
|
)
|
|
|
|
(24
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
|
Net loss
| | |
(25,146
|
)
| | | |
(3,797
|
)
| | | |
(33,559
|
)
| | | |
(5,306
|
)
| | | |
Less: Net income (loss)
attributable to the
noncontrolling
interests
| | |
(3,359
|
)
|
|
|
|
(507
|
)
| | | |
934
|
|
|
|
|
148
|
| | | |
| | | | | | | | | | | | | | | | | |
|
Net loss attributable to
Origin Agritech Limited
| | |
(21,787
|
)
|
|
|
|
(3,290
|
)
| | | |
(34,493
|
)
|
|
|
|
(5,454
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
Other comprehensive
income (loss) | | | | | | | | | | | | | | | | | | |
|
Net loss
| | |
(25,146
|
)
| | | |
(3,797
|
)
| | | |
(33,559
|
)
| | | |
(5,306
|
)
| | | |
Foreign currency translation
difference
| | |
678
| | | | |
86
| | | | |
492
| | | | |
78
| | | | |
| Comprehensive loss | | |
(24,468
|
)
|
|
|
|
(3,711
|
)
| | | |
(33,067
|
)
|
|
|
|
(5,229
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
Less: Comprehensive income
(loss) attributable to
noncontrolling
interests
| | |
(3,359
|
)
|
|
|
|
(507
|
)
| | | |
934
|
|
|
|
|
148
|
| | | |
Comprehensive loss
attributable to Origin
Agritech
Limited | | |
(21,109
|
)
|
|
|
|
(3,204
|
)
| | | |
(34,001
|
)
|
|
|
|
(5,376
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
|
Net loss per share – basic
| | |
(0.94
|
)
|
|
|
|
(0.14
|
)
| | | |
(1.48
|
)
|
|
|
|
(0.23
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
|
Net loss per share – diluted
| | |
(0.94
|
)
|
|
|
|
(0.14
|
)
| | | |
(1.48
|
)
|
|
|
|
(0.23
|
)
| | | |
| | | | | | | | | | | | | | | | | |
|
Shares used in calculating
basic net loss per share
| | |
23,292,412
|
|
|
|
|
23,292,412
|
| | | |
23,382,812
|
|
|
|
|
23,382,812
|
| | | |
| | | | | | | | | | | | | | | | | |
|
Shares used in calculating
diluted net loss per share
| | |
23,292,412
|
|
|
|
|
23,292,412
|
| | | |
23,382,812
|
|
|
|
|
23,382,812
|
| | | |
| | | | | | | | | | | | | | | | | |
|
|
UNAUDITED CONSOLIDATED BALANCE SHEETS
| |
|
(In thousands, except share data)
| |
|
|
|
| December 31 |
|
| September 30 |
|
| December 31 | |
| | | | 2010 |
|
| |
|
| 2011 |
|
| |
|
| 2011 |
|
|
| 2011 | |
| | | | RMB | | | | | | RMB | | | | | | RMB | | | | US$ | |
|
Assets
| | | | | | | | | | | | | | | | | | | | | |
|
Current assets:
| | | | | | | | | | | | | | | | | | | | | |
Cash and cash
equivalents
| | | |
184,032
| | | | | |
129,942
| | | | | |
192,003
| | | |
30,472
| |
| | | | | | | | | | | | | | | | | | | | |
|
Accounts
receivable
| | | |
12,659
| | | | | |
6,616
| | | | | |
8,654
| | | |
1,373
| |
| | | | | | | | | | | | | | | | | | | | |
|
Due from related
parties
| | | |
7
| | | | | |
5,183
| | | | | |
207
| | | |
33
| |
| | | | | | | | | | | | | | | | | | | | |
|
Advances to
suppliers
| | | |
19,005
| | | | | |
12,418
| | | | | |
11,132
| | | |
1,767
| |
| | | | | | | | | | | | | | | | | | | | |
|
Advances to
growers
| | | |
16,780
| | | | | |
78,623
| | | | | |
6,646
| | | |
1,055
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Inventories
| | | |
528,515
| | | | | |
210,826
| | | | | |
552,998
| | | |
87,763
| |
| | | | | | | | | | | | | | | | | | | | |
|
Income tax
recoverable
| | | |
2,745
| | | | | |
2,155
| | | | | |
2,155
| | | |
342
| |
| | | | | | | | | | | | | | | | | | | | |
|
Other current
assets
| | | |
14,230
| | | | | |
65,055
| | | | | |
13,597
| | | |
2,158
| |
| | | | | | | | | | | | | | | | | | | | |
|
Total current
assets
| | | |
777,973
| | | | | |
510,818
| | | | | |
787,382
| | | |
124,963
| |
| | | | | | | | | | | | | | | | | | | | |
|
Land use rights,
net
| | | |
20,784
| | | | | |
33,094
| | | | | |
32,914
| | | |
5,224
| |
| | | | | | | | | | | | | | | | | | | | |
|
Plant and
equipment, net
| | | |
166,516
| | | | | |
190,094
| | | | | |
202,571
| | | |
32,150
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Equity investments
| | | |
24,527
| | | | | |
20,503
| | | | | |
21,167
| | | |
3,359
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Goodwill
| | | |
16,665
| | | | | |
11,973
| | | | | |
11,973
| | | |
1,900
| |
| | | | | | | | | | | | | | | | | | | | |
|
Acquired
intangible assets,
net
| | | |
33,600
| | | | | |
29,232
| | | | | |
27,642
| | | |
4,387
| |
| | | | | | | | | | | | | | | | | | | | |
|
Deferred income
tax assets
| | | |
13,077
| | | | | |
3,028
| | | | | |
3,028
| | | |
481
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Other assets
| | | |
3,510
| | | | | |
19,640
| | | | | |
45,109
| | | |
7,159
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Total assets
| | | |
1,056,652
| | | | | |
818,382
| | | | | |
1,131,786
| | | |
179,623
| |
| | | | | | | | | | | | | | | | | | | | |
|
Liabilities and
equity
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
|
Current liabilities:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
Short-term
borrowings
| | | |
20,000
| | | | | |
20,000
| | | | | |
105,000
| | | |
16,664
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Accounts payable
| | | |
26,307
| | | | | |
5,740
| | | | | |
21,645
| | | |
3,435
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Due to growers
| | | |
12,270
| | | | | |
7,947
| | | | | |
10,170
| | | |
1,614
| |
| | | | | | | | | | | | | | | | | | | | |
|
Due to related
parties
| | | |
8,840
| | | | | |
1,728
| | | | | |
6,826
| | | |
1,083
| |
| | | | | | | | | | | | | | | | | | | | |
|
Advances from
customers
| | | |
385,654
| | | | | |
397,933
| | | | | |
377,234
| | | |
59,870
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Deferred revenues
| | | |
211,072
| | | | | |
19,812
| | | | | |
270,060
| | | |
42,861
| |
| | | | | | | | | | | | | | | | | | | | |
|
Income tax
payable
| | | |
42,275
| | | | | |
39,060
| | | | | |
39,059
| | | |
6,199
| |
| | | | | | | | | | | | | | | | | | | | |
|
Other payables
and accrued
expenses
| | | |
37,895
| | | | | |
40,351
| | | | | |
47,985
| | | |
7,616
| |
| | | | | | | | | | | | | | | | | | | | |
|
Total current
liabilities
| | | |
744,313
| | | | | |
532,571
| | | | | |
877,979
| | | |
139,342
| |
| | | | | | | | | | | | | | | | | | | | |
|
Other long-term
liabilities
| | | |
6,409
| | | | | |
-
| | | | | |
-
| | | |
-
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Total liabilities
| | | |
750,722
| | | | | |
532,571
| | | | | |
877,979
| | | |
139,342
| |
| | | | | | | | | | | | | | | | | | | | |
|
Shareholders'
equity:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
Preferred stock
(no par value;
1,000,000 shares
authorized,
none
issued)
| | | |
-
| | | | | |
-
| | | | | |
-
| | | |
-
| |
| | | | | | | | | | | | | | | | | | | | |
|
Common stock (no
par value;
60,000,000 shares
authorized,
23,292,412,
23,382,812
and
23,382,812 shares
issued and
outstanding as of
December
31,
2010, September
30, 2011 and
December 31, 2011
respectively)
| | | |
-
| | | | | |
-
| | | | | |
-
| | | |
-
| |
| | | | | | | | | | | | | | | | | | | | |
|
Additional paid-in
capital
| | | |
388,478
| | | | | |
394,344
| | | | | |
395,402
| | | |
62,753
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Retained deficit
| | | |
(98,241)
| | | | | |
(99,533)
| | | | | |
(134,025)
| | | |
(21,271)
| |
| | | | | | | | | | | | | | | | | | | | |
|
Treasury stock at
cost (498,851
shares)
| | | |
(29,377)
| | | | | |
(29,377)
| | | | | |
(29,377)
| | | |
(4,662)
| |
| | | | | | | | | | | | | | | | | | | | |
|
Accumulated
other
comprehensive
loss
| | | |
(8,659)
| | | | | |
(6,397)
| | | | | |
(5,905)
| | | |
(937)
| |
| | | | | | | | | | | | | | | | | | | | |
|
Total Origin
Agritech Limited
shareholders'
equity
| | | |
252,201
| | | | | |
259,037
| | | | | |
226,095
| | | |
35,883
| |
| | | | | | | | | | | | | | | | | | | | |
|
Noncontrolling
interests
| | | |
53,729
| | | | | |
26,774
| | | | | |
27,712
| | | |
4,398
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Total equity
| | | |
305,930
| | | | | |
285,811
| | | | | |
253,807
| | | |
40,281
| |
| | | | | | | | | | | | | | | | | | | | |
|
Total liabilities and
equity
| | | |
1,056,652
| | | | | |
818,382
| | | | | |
1,131,786
| | | |
179,623
| |
