BEIJING, February 5, 2013 /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, 2012. 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 2013, the Company generated revenues of RMB22.7 million (US$3.6 million) compared with RMB26.9 million in the three months ended December 31, 2011. The decrease in revenues was mainly due to a restructuring of the pesticide business last year. Revenues from the higher-margin canola seed business were RMB21.7 million (US$3.5 million) in the first quarter, up 9.1% from the same quarter one year ago.
Deferred revenues increased 17.5% year-over-year to RMB317.4 million (US$50.5 million) as of December 31, 2012. Deferred revenues for the first quarter of fiscal 2013 included deferred revenues from corn seed toll production of RMB23.9 million from Xinjiang Origin, while the deferred revenues reported a year ago included RMB24.9 million of deferred government subsidies. Excluding these two items, deferred revenues from the Company's core businesses increased by 19.7% year-over-year, mainly due to an increase in the corn seed volume shipped during the 2013 selling season.
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 quarter ending June 30, 2013.
Gross profit for the three months ended December 31, 2012 was RMB11.9 million (US$1.9 million), up 9.2% from RMB10.9 million in the same period of the prior year.
Total operating expenses for the first quarter ended December 31, 2012 were RMB34.1 million (US$5.4 million), representing a 23.5% decrease from the RMB 44.6 million reported for the same period in 2011. The corporate restructuring, as discussed in the Company's 20-F filing with SEC, has led to lower operating expenses. Selling and marketing expenses were RMB16.8 million (US$2.7 million) for the first quarter of fiscal 2013, a decrease of 7.7% from RMB18.2 million for the same period last year mainly due to lower transportation costs. General and administrative expenses were RMB12.6 million (US$2.0 million) for the first quarter ended December 31, 2012, down 36.4% from RMB19.8 million one year ago. The decline was mainly due to the expense control measures adopted since last year. Research and development expenses increased to RMB10.1 million (US$1.6 million) in the first quarter of fiscal 2013 from RMB7.7 million for the same quarter last year, mainly due to higher staff compensation and addition of research personnel during this period.
Operating loss for the first quarter of fiscal 2013 decreased to RMB22.2 million (US$3.5 million) from an operating loss of RMB 33.8 million for the same period in fiscal 2012.
Net loss for the first quarter of fiscal 2013 decreased to RMB23.0 million (US$3.7 million), or net loss per share of RMB0.98 (US$0.16), from a net loss of RMB34.5 million, or net loss per share of RMB1.48 in the same period one year ago.
BALANCE SHEET
As of December 31, 2012, cash and cash equivalents were RMB222.8 million (US$35.4 million) and shareholders' equity was RMB239.3 million (US$38.1 million). The Company had short-term loans of RMB153.0 million (US$24.3 million) and long-term borrowing of RMB56.0 million (US$8.9 million). Short-term loans were mainly for the working capital, while long-term borrowing of bank loans were used for the Xinjiang Origin corn seed production facilities.
Advances from customers were RMB366.2 million (US$58.2 million) as of December 31, 2012. These advances represent cash receipts for orders in the upcoming selling season.
GOVERNMENT SUPPORT
The Chinese government has recently increased its efforts to support leading crop seed companies, especially companies with national Breed-Produce-Distribute Vertically-Integrated Crop Seed Licenses (BPDVI License). As one of the first 32 companies nationwide to have been awarded the BPDVI seed license, Origin has received RMB13.6 million (US$2.2 million) in government subsidies from various levels of the government during the first quarter. These subsidiaries are booked under "other payables and accrued expenses" on the balance sheets. With increasing government attention focused on crop seed technologies, further government supports are expected to help strengthen the Company's leading position in seed technology, production, and distribution.
About Origin
Founded in 1997 and headquartered in the 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 visit the Company's website at: http://www.originseed.com.cn/
Forward Looking Statement
This press 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, forward-looking statements can be identified by terminologies 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 negation of these terms or other comparable terminologies. 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 the forward-looking statements herein. 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, | ||||||||||
2011 | 2012 | |||||||||
RMB | RMB | USD | ||||||||
Revenues | 26,931 | 22,683 | 3,607 | |||||||
Cost of revenues | (16,058) | (10,810) | (1,719) | |||||||
Gross profit | 10,873 | 11,873 | 1,888 | |||||||
Operating expenses: | ||||||||||
Selling and marketing | (18,183) | (16,817) | (2,674) | |||||||
General and administrative | (19,844) | (12,588) | (2,002) | |||||||
Research and development | (7,724) | (10,061) | (1,600) | |||||||
Other operating income, net | 1,121 | 5,367 | 854 | |||||||
Total operating expenses | (44,630) | (34,099) | (5,422) | |||||||
Loss from operations | (33,757) | (22,226) | (3,534) | |||||||
Interest expense | (942) | (2,143) | (341) | |||||||
Share of net income of equity investment | 664 | 150 | 24 | |||||||
Interest income | 628 | 540 | 86 | |||||||
Loss before income taxes | (33,407) | (23,679) | (3,765) | |||||||
Income tax expense | ||||||||||
Current | (152) | (217) | (35) | |||||||
Deferred | - | - | - | |||||||
Income tax expense | (152) | (217) | (35) | |||||||
Net loss | (33,559) | (23,896) | (3,800) | |||||||
Less: Net income (loss) attributable to the non-controlling interests | 934 | (900) | (143) | |||||||
Net loss attributable to Origin Agritech Limited | (34,493) | (22,996) | (3,657) | |||||||
Other comprehensive income (loss) | ||||||||||
Net loss | (33,559) | (23,896) | (3,800) | |||||||
Foreign currency translation | 492 | 499 | 79 | |||||||
Comprehensive loss | (33,067) | (23,397) | (3,721) | |||||||
Less: Comprehensive income | 934 | (900) | (143) | |||||||
Comprehensive loss | (34,001) | (22,497) | (3,578) | |||||||
Net loss per share - basic | (1.48) | (0.98) | (0.16) | |||||||
Net loss per share - diluted | (1.48) | (0.98) | (0.16) | |||||||
Shares used in calculating basic and diluted net loss per share | 23,382,812 | 23,382,812 | 23,382,812 | |||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||||
(In thousands, except share data) | ||||||||||
December 31 | September 30 | December 31 | ||||||||
2011 | 2012 | 2012 | 2012 | |||||||
RMB | RMB | RMB | USD | |||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 192,003 |
152,789 | 222,805 | 35,431 | ||||||
Accounts receivable | 8,654 | 7,065 | 7,200 | 1,145 | ||||||
Due from related parties | 207 | 2,082 | 2,000 | 318 | ||||||
Advances to suppliers | 11,132 | 7,802 | 6,940 | 1,104 | ||||||
Advances to growers | 6,646 | 88,194 | 2,254 | 358 | ||||||
Inventories | 552,988 | 282,544 | 649,227 | 103,240 | ||||||
Income tax recoverable | 2,155 | 2,159 | 2,159 | 343 | ||||||
Other current assets | 13,597 | 16,407 | 7,891 | 1,255 | ||||||
Total current assets | 787,382 |
559,042 | 900,476 | 143,194 | ||||||
Land use rights, net | 32,914 | 32,318 | 32,341 | 4,808 | ||||||
Plant and equipment, net | 202,571 | 317,085 | 340,282 | 54,112 | ||||||
Equity investments | 21,167 | 22,433 | 22,584 | 3,591 | ||||||
Goodwill | 11,973 | 11,973 | 11,973 | 1,904 | ||||||
Acquired intangible assets, net | 27,642 | 25,585 | 25,093 | 4,325 | ||||||
Deferred income tax assets | 3,028 | 1,755 | 1,755 | 279 | ||||||
Other assets | 45,109 | 5,246 | 12,787 | 2,033 | ||||||
Total assets | 1,131,786 |
975,437 | 1,347,291 | 214,246 | ||||||
| ||||||||||
Current liabilities: | ||||||||||
Short-term borrowings | 105,000 | 35,000 | 145,000 | 23,058 | ||||||
Current portion of long-term borrowings | 4,000 | 8,000 | 1,272 | |||||||
Accounts payable | 21,645 | 5,031 | 13,217 | 2,102 | ||||||
Due to growers | 10,170 | 4,304 | 19,486 | 3,099 | ||||||
Due to related parties | 6,826 | 2,769 | 15,400 | 2,449 | ||||||
Advances from customers | 377,234 | 435,044 | 366,162 | 58,227 | ||||||
Deferred revenues | 270,060 | 23,243 | 317,424 | 50,477 | ||||||
Income tax payable | 39,059 | 39,060 | 39,060 | 6,211 | ||||||
| 47,985 | 56,744 | 55,282 | 8,791 | ||||||
Total current liabilities | 877,979 | 605,195 | 979,031 | 155,686 | ||||||
Long-term borrowings | 35,000 | 56,000 | 8,905 | |||||||
Other long-term liabilities | - | 21,810 | 21,475 | 3,415 | ||||||
Total liabilities | 877,979 | 662,005 | 1,056,506 | 168,006 | ||||||
Shareholders' equity: | ||||||||||
Preferred stock (no par value; | - | - | - | - | ||||||
Common stock (no par value; | - | - | - | - | ||||||
Additional paid-in capital | 395,402 |
397,671 | 398,421 | 63,357 | ||||||
Retained deficit | (134,025) |
(100,967) | (123,963) | (19,713) | ||||||
Treasury stock at cost (498,851 shares) | (29,377) |
(29,377) | (29,377) | (4,672) | ||||||
Accumulated other comprehensive loss | (5,905) |
(6,280) | (5,781) | (919) | ||||||
Total Origin Agritech Limited shareholders' equity | 226,095 | 261,047 | 239,300 | 38,053 | ||||||
Non-controlling interests | 27,712 | 52,385 | 51,485 | 8,187 | ||||||
Total equity | 253,807 | 313,432 | 290,785 | 46,240 | ||||||
Total liabilities and equity | 1,131,786 | 975,437 | 1,347,291 | 214,246 | ||||||
CONTACT:
Origin Agritech Limited
James Chen,
Chief Financial Officer
james.chen@originseed.com.cn
Grayling
Shiwei Yin, 646-284-9474
shiwei.yin@grayling.com
