omniture

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

2019-07-16 20:00 12590

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: lin.peng@originseed.com.cn

 

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share data)




Six Months ended March 31,


2018


2019


RMB


RMB


US$







Revenues


3,588



82,185



12,205

Cost of revenues


(4,358)



(63,173)



(9,382)

Gross profit


(770)



19,012



2,823

Operating expenses:









Selling and marketing


(726)



(2,520)



(374)

General and administrative


(28,191)



(8,482)



(1,260)

Research and development


(13,131)



(7,066)



(1,049)

Total operating expenses


(42,048)



(18,068)



(2,683)










Profit (loss) from operations


(42,818)



944



140

  Interest expense


(4,123)



(2,340)



(348)

Interest income


4



2



0

Other operating income, net


18,396



2,267



337

Profit (loss) before income taxes from operations


(28,541)



873



130

 Income tax expense from operations:









Current









Deferred









Income tax expense from operations


















Net income (loss) from operations


(28,541)



873



130










Net income (loss)


(28,541)



873



130

Less: Loss attributable to the non-controlling interests


(3,202)



(343)



(51)

Net income (loss) attributable to Origin Agritech Limited


(25,339)



1,216



181

 Other comprehensive loss









Net income (loss)


(28,541)



873



130

Foreign currency translation difference


14,046



(2,178)



(323)

Comprehensive loss


(14,495)



(1,305)



(194)

Less: Comprehensive loss attributable to non-controlling interests


(3,202)



(343)



(51)

Comprehensive loss attributable to Origin Agritech Limited


(11,293)



(962)



(143)










Net income (loss) per share - basic


(10.18)



0.34



0.051

Net income (loss) per share - diluted


(10.18)



0.3



0.044










Shares used in computing earnings per share


2,488,644



3,559,783



3,559,783


Basic

Diluted 


2,488,644



4,058,413



4,058,413

 

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)







3/31/2018

9/30/2018

3/31/2019

3/31/2019


RMB

RMB

RMB

US$

ASSETS









Current Assets









Cash and cash equivalents


3,812


1,990


5,779


858

Account receivables






944


140

Due from related parties


55,940


129,506


45


7

Advances to suppliers


6,236


1,188


2,571


382

Inventories


849


81,947


64,418


9,567

Other current assets


1,401


247


1,344


200

Total current assets


95,125


214,878


75,101


11,154

Land use rights, net


16,961


16,564


14,897


2,212

Plant and equipment, net


162,443


172,748


167,890


24,934

Long-term investments


18,721


16,347


16,347


2,428

Acquired intangible assets, net


12,775


8,362


7,972


1,184

Other assets


4,440


1,202


948


141

Total assets


310,465


430,101


283,155


42,053

LIABILITIES AND EQUITY









Current liabilities









Current portion of long-term borrowings


34,504


78,235


78,611


11,675

Accounts payable


1,594


7,955


7,609


1,130

Due to growers


8,097


7,984


7,514


1,116

Due to related parties


52,369


293,732


20,577


3,056

Advances from customers


2,894


6,338


59,432


8,826

Other payables and accrued expenses


29,590


37,927


44,413


6,596

Total current liabilities


129,048


432,171


218,155


32,398

Long-term borrowings


56,769







Other long-term liability


17,895


21,278


21,391


3,177

Total liabilities


203,712


453,449


239,547


35,576

Shareholders' equity:









Preferred stock (no par value; 1,000,000 shares authorized, none issued)


-


-


-



Common stock (no par value; 60,000,000 shares authorized,









24,151,163, 24,634,503 and 29,658,350 shares issued as of March 31, 2017,
September 30, 2017 and March 31, 2018, respectively;









23,173,541, 23,856,881 and 27,872,728 shares outstanding as of









March 31, 2017, September 30, 2017 and March 31, 2018, respectively)


-


-


-



Additional paid-in capital


420,382


428,311


484,673


71,979

Accumulated deficit


(283,352)


(411,723)


(410,507)


(60,965)

Treasury stock at cost (977,622, 777,622 and 777,622 shares









as of March 31, 2017, September 30, 2017 and March 31, 2018, respectively)


(22,791)


(19,163)


(19,163)


(2,846)

Accumulated other comprehensive loss


(4,774)


(22,136)


(24,314)


(3,611)

Total Origin Agritech Limited shareholders' equity


109,465


(24,711)


30,689


4,558

Non-controlling interests


(2,712)


1,363


12,919


1,919

Total equity


106,753


(23,348)


43,608


6,477

Total liabilities and equity


310,465


430,101


283,155


42,053

 

 

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Source: Origin Agritech Limited
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