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Origin Agritech Limited Reports Unaudited Second Quarter Financial Results For Three Months Ended March 31, 2012

Stocks in this article: SEED

About Origin

Founded in 1997 and headquartered in Beijing, Origin Agritech Limited (NASDAQ GS: SEED) is China’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. 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)
     

Three Months ended March 31,

2011   2012
RMB   US$ RMB   US$
 
Revenues

 

1,085

 

165

 

14,736

 

2,339

Cost of revenues   (8,124 )   (1,239 )   (17,684 )   (2,807 )
 
Gross profit   (7,039 )   (1,074 )   (2,948 )   (468 )
Operating expenses:
Selling and marketing (7,708 ) (1,176 ) (10,340 ) (1,641 )
General and administrative (16,778 ) (2,559 ) (17,959 ) (2,851 )
Research and development (9,797 ) (1,494 ) (7,567 ) (1,201 )
Other operating income, net 2,298 350 540 87
       
Total operating expenses   (31,985 )   (4,879 )   (35,326 )   (5,606 )
 
Loss from operations   (39,024 )   (5,953 )   (38,274 )   (6,074 )

Interest expense

(290 ) (44 ) (1,779 ) (282 )
Share of net income of equity investment (492 ) (75 ) 2,366 376

Interest income

  197     30       839     133  

Loss before income taxes

(39,609 ) (6,042 ) (36,848 ) (5,847 )
Income tax credit (expense)

Current

(2,521 ) (385 ) (222 ) (35 )

Deferred

  7,001     1,068     -     -  
Income tax credit (expense)   4,480     683     (222 )   (35 )
Net loss (35,129 ) (5,359 ) (37,070 ) (5,882 )
Less: Net loss attributable to the non-controlling interests   (3,404 )   (519 )   (21 )   (3 )
 
Net loss attributable to Origin Agritech Limited   (31,725 )   (4,840 )   (37,049 ) (5,879 )
Other comprehensive income (loss)
Net loss (35,129 ) (5,359 ) (37,070 ) (5,882 )

Foreign currency translation difference

  559     72     375     60  
Comprehensive loss (34,570 ) (5,287 ) (36,695 ) (5,822 )
Less: Comprehensive loss attributable to non-controlling interests   (3,404 )   (519 )  

(21

)

  (3 )
Comprehensive loss attributable to Origin Agritech Limited   (31,166 )   (4,768 )   (36,674 )   (5,819 )
Net loss per share – basic

(1.36

)

(0.21 )

(1.58

)

(0.25 )
 
Net loss per share – diluted   (1.36 )   (0.21 )   (1.58 )   (0.25 )
Shares used in calculating basic net loss per share 23,313,970 23,313,970 23,382,812 23,382,812
       
Shares used in calculating diluted net loss per share 23,313,970 23,313,970 23,382,812 23,382,812

   
UNAUDITED CONSOLIDATED BALANCE SHEETS(In thousands, except share data)
 
  March 31     September 30     March 31

2011 RMB

  2011 RMB   2012 RMB   2012 US$
Assets

 

Current assets:
Cash and cash equivalents

 

230,684

 

129,942

 

165,245

 

26,253

Accounts receivable 12,793 6,616 10,111 1,606
Dividend Receivable - - 2,100 334
Due from related parties 167 5,183 - -
Advances to suppliers 6,265 12,418 16,796 2,668
Advances to growers 10,257 78,623 17,257 2,742
Inventories 569,639 210,826 569,826 90,531
Income tax recoverable 2,745 2,155 2,138 340
Other current assets   15,831     65,055     13,606     2,162  
Total current assets 848,381 510,818 797,079 126,636
Land use rights, net 20,656 33,094 31,400 4,989
Plant and equipment, net 169,230 190,094 196,819 31,269
Equity investments 24,035 20,503 21,433 3,405
Goodwill 16,665 11,973 11,973 1,902
Acquired intangible assets, net 33,581 29,232 29,507 4,688
Deferred income tax assets 20,079 3,028 3,028 481
Other assets   10,741     19,640     61,417     9,757  
Total assets   1,143,368     818,382     1,152,656     183,127  
Liabilities and equity
Current liabilities:
Short-term borrowings 20,000 20,000 41,000 6,514
Accounts payable 14,828 5,740 12,518 1,989
Due to growers 6,644 7,947 4,878 775
Due to related parties 4,308 1,728 3,461 550
Advances from customers 301,096 397,933 283,997 45,120
Deferred revenues 443,560 19,812 480,698 76,370
Income tax payable 44,075 39,060 39,060 6,205
Other payables and accrued expenses   30,395     40,351     39,563     6,286  
Total current liabilities 864,906 532,571 905,175 143,809
Other long-term liabilities   6,247     -     -     -  
Total liabilities 871,153 532,571 905,175 143,809

 

Shareholders’ equity:

Preferred stock (no par value; 1,000,000 shares authorized, none issued) - - - -
Common stock (no par value; 60,000,000 shares authorized, 23,357,612, 23,382,812 and 23,382,812 shares issued and outstanding as of March 31, 2011, September 30, 2011 and March 31, 2012 respectively) - - - -
Additional paid-in capital 389,331 394,344 396,371 62,973
Retained deficit (129,966 ) (99,533 ) (171,073 ) (27,179 )
Treasury stock at cost (498,851 shares) (29,377 ) (29,377 ) (29,377 ) (4,667 )
Accumulated other comprehensive loss   (8,099 )   (6,397 )   (5,530 )   (879 )
Total Origin Agritech Limited shareholders' equity 221,889 259,037 190,391 30,248
Non-controlling interests 50,326 26,774 57,090 9,070
Total equity   272,215     285,811     247,481     39,318  
Total liabilities and equity   1,143,368     818,382     1,152,656     183,127  




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