BEIJING, August 4, 2014 /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, 2014. 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 2014, the Company reported revenues of RMB92.9 million (US$15.1 million) compared with RMB128.3 million for the three months ended June 30, 2013. Lower revenues this quarter were mainly due to the lower sales volume of the rice seed business as the result of increasing competition.
Deferred revenues were RMB342.1 million (US$55.6 million) as of June 30, 2014 compared with RMB338.4 million on June 30, 2013. It is expected that the majority of deferred revenues will be recorded on the income statement in the fiscal fourth quarter of 2014. 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.
Gross profit for the third quarter of fiscal 2014 was RMB21.2 million (US$3.5 million) compared to RMB36.9 million in the third quarter of fiscal 2013. Gross margin for the third quarter of fiscal 2014 decreased to 22.9% from 28.7% for the same period of fiscal 2013 due to higher production cost and unfavorable product mix.
Total net operating expenses for the three months ended June 30, 2014 were RMB27.5 million (US$4.5 million) compared with RMB28.4 million during the same quarter in fiscal 2013. Specifically, selling and marketing expenses were RMB10.5 million (US$1.7 million) for the third quarter of fiscal 2014 compared with RMB13.5 million a year ago. The decrease in selling expenses was mainly due to lower transportation expenses this quarter. General and administrative expenses were RMB10.6 million (US$1.7 million) compared with RMB13.6 million for the third quarter of fiscal 2013. The decrease was mainly due to the continued implementation of expense control measures. Research and development expenses were RMB8.8 million (US$1.4 million) in the third quarter of fiscal 2014, which was slightly down from RMB10.0 million for the same period last year.
Loss from operations for the third quarter of fiscal 2014 amounted to RMB6.3 million (US$1.0 million) compared with profit of RMB8.4 million for the same quarter in fiscal 2013.
Net loss for the third quarter of fiscal 2014 was RMB14.7 million (US$2.4 million), or net loss per basic and diluted share of RMB0.65 (US$0.11), compared to a net profit of RMB6.1 million, or net profit per basic and diluted share of RMB0.26 in the same period one year ago.
BALANCE SHEET
As of June 30, 2014, cash and cash equivalents were RMB90.4 million (US$14.7 million) and shareholders' equity attributable to the Company was RMB175.2 million (US$28.5 million). The Company had short-term borrowings of RMB285 million (US$46.3 million) and long-term borrowings of RMB64.8 million (US$10.5 million). Short-term borrowings were mainly for working capital, while long-term borrowings were mainly used for the Xinjiang Origin corn seed production facilities. Advances from customers were RMB209.9 million (US$34.1 million) as of June 30, 2014.
In June 2014, the Company disposed of the subsidiary, Kunfeng, for the amount of RMB 12 million (US$1.9 million), and the realized loss from this disposition was RMB 2.7 million (US$0.4 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.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||
Three Months ended June 30, | |||||
2013 | 2014 | ||||
RMB | RMB | USD | |||
Revenues | 128,337 | 92,935 | 15,139 | ||
Cost of revenues | (91,465) | (71,686) | (11,677) | ||
Gross profit | 36,872 | 21,249 | 3,462 | ||
Operating expenses: | |||||
Selling and marketing | (13,475) | (10,549) | (1,718) | ||
General and administrative | (13,558) | (10,561) | (1,720) | ||
Research and development | (10,028) | (8,778) | (1,430) | ||
Other operating income, net | 8,628 | 2,372 | 386 | ||
Total operating expenses | (28,434) | (27,516) | (4,482) | ||
Income (loss) from operations | 8,438 | (6,267) | (1,020) | ||
| (4,720) | (5,276) | (859) | ||
Share of net loss of equity investment | (649) | (279) | (46) | ||
Loss on liquidation of a subsidiary | - | (2,666) | (434) | ||
Interest income | 974 | 63 | 10 | ||
Income (loss) before income taxes | 4,043 | (14,425) | (2,349) | ||
Income tax expense | |||||
Current | (972) | (677) | (110) | ||
Deferred | - | - | - | ||
Income tax expense | (972) | (677) | (110) | ||
| 3,071 | (15,102) | (2,459) | ||
Less: Net loss attributable to the non-controlling interests | (3,054) | (432) | (70) | ||
Net income (loss) attributable to Origin Agritech Limited | 6,125 | (14,670) | (2,389) | ||
| |||||
Net income (loss) | 3,071 | (15,102) | (2,459) | ||
Foreign currency translation difference | 891 | 12 | 2 | ||
Comprehensive income (loss) | 3,962 | (15,090) | (2,457) | ||
Less: Comprehensive loss attributable to non-controlling interests | (3,054) | (432) | (70) | ||
Comprehensive income (loss) attributable to Origin Agritech Limited | 7,016 | (14,658) | (2,387) | ||
Net loss per share - basic | 0.26 | (0.65) | (0.11) | ||
Net loss per share - diluted | 0.26 | (0.65) | (0.11) | ||
Shares used in calculating basic net loss per share | 23,199,700 | 22,743,853 | 22,743,853 | ||
Shares used in calculating diluted net loss per share | 23,241,541 | 22,743,853 | 22,743,853 | ||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except share data) | |||||||
6/30/2013 | 9/30/2013 | 6/30/2014 | 6/30/2014 | ||||
RMB | RMB | RMB | US$ | ||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | 131,999 | 131,978 | 90,398 | 14,692 | |||
Accounts receivable | 8,260 | 1,949 | 4,209 | 684 | |||
Due from related parties | 2,000 | 3,400 | 2,400 | 390 | |||
Advances to suppliers | 18,745 | 9,768 | 19,826 | 3,222 | |||
Advances to growers | 48,026 | 58,473 | 22,784 | 3,703 | |||
Inventories | 591,322 | 470,811 | 698,395 | 113,509 | |||
Income tax recoverable | 1,163 | 1,163 | 49 | 8 | |||
Other current assets | 7,146 | 7,000 | 5,111 | 831 | |||
Total current assets | 808,661 | 684,542 | 843,172 | 137,039 | |||
Restricted cash | - | 14,350 | 14,350 | 2,332 | |||
Land use rights, net | 31,739 | 33,205 | 31,071 | 5,050 | |||
Plant and equipment, net | 346,171 | 354,735 | 341,481 | 55,500 | |||
Equity investments | 21,594 | 24,894 | 21,119 | 3,432 | |||
Goodwill | 11,973 | 11,973 | 11,973 | 1,946 | |||
Acquired intangible assets, net | 24,343 | 23,117 | 25,236 | 4,102 | |||
Deferred income tax assets | 1,755 | - | - | - | |||
Other assets | 3,468 | 11,256 | 2,299 | 374 | |||
Total assets | 1,249,704 | 1,158,072 | 1,290,701 | 209,775 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Short-term borrowings | 97,440 | 205,000 | 285,000 | 46,320 | |||
Current portion of long-term borrowings | 8,000 | 16,500 | 21,500 | 3,495 | |||
Accounts payable | 13,691 | 4,590 | 13,069 | 2,124 | |||
Due to growers | 7,605 | 37,875 | 16,665 | 2,709 | |||
Due to related parties | 16,766 | 1,530 | 16,230 | 2,638 | |||
Advances from customers | 337,382 | 371,571 | 209,897 | 34,114 | |||
Deferred revenues | 338,359 | 22,069 | 342,146 | 55,608 | |||
Income tax payable | 39,060 | 39,060 | 39,060 | 6,348 | |||
Other payables and accrued expenses | 46,501 | 53,783 | 52,928 | 8,602 | |||
Total current liabilities | 904,804 | 751,978 | 996,495 | 161,958 | |||
Long-term borrowings | 58,828 | 64,819 | 43,329 | 7,042 | |||
Other long-term liability | 20,805 | 21,030 | 19,468 | 3,164 | |||
Total liabilities | 984,437 | 837,827 | 1,059,292 | 172,164 | |||
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, 2013, September 30, 2013 and June 30, 2014; | |||||||
23,151,980, 22,905,926 and 22,738,541 shares outstanding as of June 30, 2013, September 30, 2013 and June 30, 2014) | - | - | - | - | |||
Additional paid-in capital | 399,188 | 399,564 | 400,606 | 65,110 | |||
Accumulated deficit | (145,672) | (93,473) | (183,511) | (29,826) | |||
Treasury stock at cost (864,183, 1,110,237 and 1,277,622 shares as of June 30, 2013, September 30, 2013 and June 30, 2014) | (33,314) | (35,659) | (37,445) | (6,086) | |||
Accumulated other comprehensive loss | (4,699) | (4,390) | (4,450) | (722) | |||
Total Origin Agritech Limited shareholders' equity | 215,503 | 266,042 | 175,200 | 28,476 | |||
Non-controlling interests | 49,764 | 54,203 | 56,209 | 9,135 | |||
Total equity | 265,267 | 320,245 | 231,409 | 37,611 | |||
Total liabilities and equity | 1,249,704 | 1,158,072 | 1,290,701 | 209,775 | |||
CONTACT:
Origin Agritech Limited
James Chen,
Chief Financial Officer
james.chen@originseed.com.cn
Kay Liu
Investor Relations
ke.liu@originseed.com.cn
+86 10 5890-7536