Origin Agritech Limited (NASDAQ: 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, 2011. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.
FINANCIAL RESULTS OVERVIEW
During the second quarter of fiscal 2011, the Company generated revenues of RMB1.09 million (US$0.17 million), a decrease of 32.31% from RMB 1.60 million (US$0.24 million) generated in the three months ended March 31, 2010. The small amount of revenues this quarter is generated as a result of scrap sales. As a reminder, the majority of Origin’s revenues are recorded in the fiscal third quarter as a result of our revenue recognition policy. The goods already sold and shipped 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.
Gross loss for the three months ended March 31, 2011 was RMB7.04 million (US$1.07 million) compared to RMB5.94 (US$0.87 million) in the same period of the prior year.
Total net operating expenses for the three months ended March 31, 2011 were RMB31.99 million (US$4.88 million) compared with RMB31.41 million (US$4.60 million) reported for the same period in 2010. Selling and marketing expenses were RMB7.71 million (US$1.18 million) for the second quarter of 2011, representing a decrease of 15.28% from RMB9.10 million (US$1.33 million) for the same period of the last year. General and administrative (“G&A”) expenses of RMB16.78 million (US$2.56 million) for the second quarter ended March 31, 2011, increased 13.17% from RMB14.83 million (US$2.17 million) for the three months ended March 31, 2010. Research and development (“R&D”) expenses increased by 30.8% to RMB9.80 million (US$1.49 million) for the three months ended March 31, 2011 from RMB7.49 million (US$1.10 million) for the same quarter last year. The increase in G&A expenses was in part due to the increase in non-cash charges this quarter, such as depreciation charges and fees related to stock option expense, as other major expenses within the G&A expenses category remained relatively flat. Meanwhile R&D expenses increased in line with our corporate goals of expansion of our biotechnology competencies in-house.