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Origin Agritech Limited Reports Third Quarter Unaudited Financial Results for Three Months ended June 30, 2011

^{Published on 2011-09-14 03:22:47 - Market Wire}
 

BEIJING--([ BUSINESS WIRE ])--Origin Agritech Limited (NASDAQ: SEED) (aOrigina or the aCompanya), a technology-focused supplier of crop seeds in China, today announced unaudited financial results for the third quarter ended June 30, 2011. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

FINANCIAL RESULTS OVERVIEW

During the third quarter of fiscal 2011, the Company generated revenues of RMB244.7 million (US$37.4 million), compared with RMB462.2 million (US$68.1 million) generated in the three months ended June 30, 2010. The goods already sold and delivered to customers can be seen as Deferred Revenue line on the balance sheet and the Advances from Customers records the advance cash receipts from customers this selling season. The lower amount of revenues this quarter is in part due to a later application of the distributor discount this 2011 selling season resulting in a later recognition of revenue this year.

Gross profit for the three months ended June 30, 2011 was RMB85.8 million (US$13.1 million) compared to RMB190.9 million (US$28.1 million) in the same period of the prior year.

Total net operating expenses for the three months ended June 30, 2011 were RMB51.8 million (US$7.9 million) compared with RMB37.5 million (US$5.5 million) reported for the same period in 2010. Selling and marketing expenses were RMB12.6 million (US$1.9 million) for the third quarter of 2011, compared with RMB9.4 million (US$1.4 million) for the same period of the last year. General and administrative (aG&Aa) expenses of RMB23.8 million (US$3.6 million) for the third quarter ended June 30, 2011, compared with RMB17.6 million (US$2.6 million) for the same period one year ago. Research and development (aR&Da) expenses increased by 46.4% to RMB15.5 million (US$2.4 million) for the three months ended June 30, 2011 from RMB10.6 million (US$1.6 million) for the same quarter last year. The increase in operational expenses, spread throughout the three sub-categories, was in part due RMB15.6 million (US$2.35 million) in bonus charges and staff benefits from Changrong awarded in this current quarter which usually occur in the fourth quarter.

Income from operations for the third quarter of 2011 amounted to RMB34.0 million (US$5.2 million) compared with an operating income of RMB153.4 million (US$22.6 million) for the same period in 2010.

Net income attributable to Origin for the third quarter of 2011 was RMB13.9 million (US$2.1 million), or RMB 0.60 (US$0.09) per share - both basic and diluted, as compared to a net income of RMB105.2 million (US$15.5 million), or RMB 4.57 (US$0.67) per share - both basic and diluted in the same period one year ago.

BALANCE SHEET

Origina™s balance sheet at June 30, 2011 included cash and cash equivalents of RMB220.0 million (US$34.0 million), and shareholders' equity of RMB238.2 million (US$36.8 million). Short term borrowings decreased from RMB 136.9 million (US$20.2 million) at June 30, 2010 to RMB 20.0 million (US$ 3.1 million) at June 30, 2011.

Deferred revenue was RMB287.2 million (US$44.4 million) at June 30, 2011 as compared to RMB42.1 million (US$6.2 million) at the same period-end date as of last year. This represents a portion of our orders received and goods delivered for this selling season.

Advances from customers was RMB290.8 million (US$44.9 million) at June 30, 2011 period as compared to RMB275.4 million (US$40.6 million) a year ago. This represents our cash receipts for future orders.

FISCAL 2011 GUIDANCE

Based on its current outlook, and existing and anticipated business conditions, Origin lowers the revenue guidance for FY 2011 in the range of RMB 530 million to RMB 550 million.

About Origin

Founded in 1997 and headquartered in Beijing, Origin Agritech Limited (NASDAQ GS: SEED) is Chinaa™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 [ 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 to be filed. 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)

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)