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

2015-05-05 06:00 ET - News Release

Net loss per share was RMB1.14, compared to net loss per share of RMB1.95 one year ago
Operating expenses decreased 46% year-over-year

BEIJING, May 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 second quarter ended March 31, 2015. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

FINANCIAL RESULTS OVERVIEW

The Company reported a net loss per share of RMB1.14, representing a significant improvement from the net loss per share of RMB1.95 in the same period last year. Since the Company doesn't recognize the majority of its revenues until the third and fourth fiscal quarters, the improvement this quarter was mainly the result of operating expense control. Operating expenses were RMB 19.8 million in the second quarter of fiscal year 2015, a decline of 46% year-over-year, which was mainly due to decreased marketing expenses and other expense controls. 

During the second quarter of fiscal year 2015, the Company generated revenues of RMB3.8 million (US$0.6 million) compared with RMB4.7 million for the three months ended March 31, 2014. Revenues generated this quarter were mainly from scrap sales. Again, as a reminder, the majority of Origin's revenues are recorded in the third and fourth fiscal quarters as a result of our revenue recognition policy.

Deferred revenues were RMB423.1 million (US$68.9 million) as of March 31, 2015, compared with RMB426.8 million on March 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 loss for the second quarter of fiscal 2015 was RMB1.7 million (US$0.3 million) compared with a gross loss of RMB2.4 million in the second quarter of fiscal 2014. Negative gross margin was a result of scrap sales of some corn and rice seed products during this quarter.

Total operating expenses for the second quarter ended March 31, 2015, were RMB19.8 million (US$3.2 million), down 46% from RMB36.8 million for the same period in fiscal 2014. The decrease was mainly due to decreased marketing spending and cost controls over other operating activities. Specifically, selling and marketing expenses were RMB6.2 million (US$1.0 million) for the second quarter of fiscal 2015, a decrease of 64% from RMB17.1 million for the same period last year due mainly to decreased marketing spending and continued expense control measures. General and administrative expenses were RMB9.2 million (US$1.5 million) for the second quarter ended March 31, 2015, down 15% from RMB10.8 million one year ago as our cost control efforts continued. Research and development expenses were RMB8.9 million (US$1.4 million) in the second quarter of fiscal 2015, which was consistent with RMB8.9 million for the same period last year.

Operating loss for the second quarter of fiscal 2015 amounted to RMB21.5 million (US$3.5 million) compared with an operating loss of RMB39.1 million for the same period in fiscal 2014. The lower operating loss was mainly due to operating cost control efforts.

Net loss attributable to the Company for the second quarter of fiscal 2015 was RMB25.9 million (US$4.2 million), or net loss per basic and diluted share of RMB1.14(US$0.19), compared to a net loss of RMB44.3 million, or net loss per basic and diluted share of RMB1.95 in the same period one year ago.

BALANCE SHEET

As of March 31, 2015, cash and cash equivalents were RMB37.3 million (US$6.1 million) and shareholders' equity attributable to the Company was RMB201.6 million (US$32.8 million). The Company had short-term borrowings of RMB225 million (US$36.6 million) and long-term borrowing of RMB72.7 million (US$11.8 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 RMB100 million (US$16.3 million) as of March 31, 2015. These advances represent cash receipts for orders in the upcoming selling season.

CONFERENCE CALL INFORMATION

The Company will host a teleconference on May 5th, 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

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 May 12th, 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:

10064885

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 March 31,




2014




2015




RMB




RMB




USD













Revenues



4,668




3,838




625

Cost of revenues



(7,018)




(5,501)




(896)

Gross loss



(2,350)




(1,663)




(271)

Operating expenses:












Selling and marketing



(17,089)




(6,217)




(1013)

General and administrative



(10,808)




(9,190)




(1,497)

Research and development



(8,861)




(8,868)




(1,445)

Other operating income, net



6




4,467




728

Total operating expenses



(36,752)




(19,808)




(3,227)













Loss from operations



(39,102)




(21,471)




(3,498)


Interest expense



(5,027)




(5,571)




(908)

Share of net loss of equity investment



(217)




-




-

Interest income



104




582




95

Loss before income tax expense



(44,242)




(26,460)




(4,311)

Income tax expense












Current



-




(31)




(5)

Deferred



-




-




-

Income tax expense



-




(31)




(5)


Net loss



(44,242)




(26,491)




(4,316)

Less: Net income (loss) attributable to the non-controlling interests



97




(575)




(94)













Net loss attributable to Origin Agritech Limited



(44,339)




(25,916)




(4,222)


Other comprehensive loss












Net loss



(44,242)




(26,491)




(4,316)

Foreign currency translation difference



(643)




(483)




(79)

Comprehensive loss



(44,885)




(26,974)




(4,395)

Less: Comprehensive income (loss) attributable to non-controlling interests



97




(575)




(94)

Comprehensive loss attributable to Origin Agritech Limited



(44,982)




(26,399)




(4,301)













Net loss per share – basic



(1.95)




(1.14)




(0.19)

Net loss per share – diluted



(1.95)




(1.14)




(0.19)













Shares used in calculating basic and diluted net loss per share



22,743,853




22,738,541




22,738,541



 

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)




3/31/2014


9/30/2014

3/31/2015


3/31/2015



RMB


RMB

RMB


US$

ASSETS








Current Assets








Cash and cash equivalents


70,235


46,268

37,302


6,073

Restricted cash


-


15,670

-


-

Accounts receivable


5,128


1,021

6,243


1,016

Due from related parties


4,200


2,698

8,200


1,335

Advances to suppliers


8,554


17,751

13,207


2,150

Advances to growers


15,736


20,759

1,777


289

Inventories


748,182


516,368

645,591


105,107

Income tax recoverable


1,163


48

48


8

Other current assets


5,840


4,368

5,870


956

Total current assets


859,038


624,951

718,238


116,934

Restricted cash


14,350


-

20,000


3,256

Land use rights, net


34,780


31,799

31,921


5,197

Plant and equipment, net


347,518


338,526

330,706


53,842

Equity investments


24,398


18,721

23,721


3,862

Goodwill


11,973


11,973

11,973


1,949

Acquired intangible assets, net


25,537


34,891

36,066


5,872

Other assets


6,026


4,009

2,838


462

Total assets


1,323,620


1,064,870

1,175,463


191,374

LIABILITIES AND EQUITY








Current liabilities








Short-term borrowings


277,304


225,000

225,000


36,632

Current portion of long-term borrowings


16,500


33,805

25,500


4,152

Accounts payable


12,480


4,525

7,933


1,292

Due to growers


13,891


17,943

6,659


1,084

Due to related parties


6,229


11,711

11,475


1,868

Advances from customers


180,598


324,645

100,052


16,289

Deferred revenues


426,821


19,029

423,067


68,879

Income tax payable


39,060


-

-


-

Other payables and accrued expenses


39,402


67,953

54,347


8,848

Total current liabilities


1,012,285


704,611

854,033


139,044

Long-term borrowings


42,523


31,023

47,172


7,680

Other long-term liability


22,482


19,649

18,322


2,983

Total liabilities


1,077,290


755,283

919,527


149,707









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 March
       31, 2014, September 30, 2014 and March 31, 2015;
       22,738,541, 22,738,541 and 22,738,541 shares outstanding as of   
       March 31, 2014, September 30, 2014 and March 31, 2015 )

-

-

-

-

Additional paid-in capital


400,276


400,888

402,026


65,453

Accumulated deficit


(168,841)


(103,000)

(158,419)


(25,792)

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


(37,429)


(37,445)

(37,445)


(6,096)

Accumulated other comprehensive loss


(4,461)


(4,446)

(4,528)


(739)

Total Origin Agritech Limited shareholders' equity 


189,545


255,997

201,634


32,826









Non-controlling interests


56,785


53,590

54,302


8,841

Total equity


246,330


309,587

255,936


41,667









Total liabilities and equity


1,323,620


1,064,870

1,175,463


191,374










CONTACT:

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

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

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/origin-agritech-limited-reports-unaudited-financial-results-for-three-months-ended-march-31-2015-300077513.html

SOURCE Origin Agritech Limited

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