Deferred Revenues increases 24.8% from RMB 176.6 million to RMB 220.4 million
Advances from Customers increases 213.2% from RMB 138.5 million to RMB 295.3 million
Gross Profit increases 33.6% from RMB 15.40 million to RMB 20.58 million
BEIJING–(BUSINESS WIRE)–February 2, 2010– Origin Agritech Limited (NASDAQ: SEED) (“Origin” or the “Company”) , a technology-focused supplier of hybrid and genetically modified crop seeds in China, today announced unaudited financial results for the first quarter ended December 31, 2009. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.
FINANCIAL RESULTS OVERVIEW
During the first quarter of fiscal 2010, the Company generated revenues of RMB 38.60 million (US.65 million), a decrease of 31.5% from RMB 56.33 million (US.24 million) generated in the three months ended December 31, 2008. The revenues were mainly from the sales of higher margin canola seed products for the three months ended December 31, 2009. In Q110, a lower amount of scrap seed sales were recorded.
Gross profit for the three-months ended December 31, 2009 was RMB 20.58 million (US.01million) compared to RMB 15.40 (US.25million) in the same period of the prior year. Gross margins for this quarter were 53.3% versus 47.9% for the canola seed sales for Q109 (exclusive of scrap sales). This is a result of the higher pricing structure of our canola seed products this year.
Total operating expenses for the three-months ended December 31, 2009 were RMB 38.96 million (US.71 million) compared with RMB 39.96 million (US.85 million) reported for the same period in 2008. Selling and marketing expenses were RMB 10.48 million (US.53 million) for the first quarter of 2009, representing a decrease of 20.8% from RMB 13.24 million (US.94 million) for the same period of the last year. General and administrative expenses of RMB 20.41 million (US.99 million) for the first quarter ended December 31, 2009, increased 14.0% from RMB 17.91 million (US.62 million) for the three months ended December 31, 2008. The research and development expenses decreased to RMB 8.08 million (US.18 million) for the three-months ended December 31, 2009 from RMB 8.82 million (US.29million) for the same quarter last year, with a decrease of 8.4%. These differences in expense categories are a result of slight changes across a broad variety of smaller sub-categories and represents small variations year over year. On an annual comparison, we still expect operating expenses to be relatively flat annually, across all operating expenses and within each separate category.
Operating loss for the first quarter of 2009 amounted to RMB 18.38million (US.69 million) compared with an operating loss of RMB 24.56 million (US.59 million) for the same period in 2008.
Net loss for the first quarter of 2010 was RMB 13.49 million (US.98 million), or RMB 0.59 (US.09) per diluted share, as compared to a net loss of RMB 19.72 million (US.87 million), or RMB 0.86 (US.13) per diluted share in the same period one year ago.
Origin’s balance sheet at December 31, 2009 included cash and cash equivalents of RMB 213.69 million (US.30 million) and shareholders’ equity of RMB 197.47 million (US.92 million).
Deferred revenue was RMB220.38 million (US$ 32.28 million) for the three-months ended December 31, 2009 as compared to RMB176.63 million (US$ 25.84 million) for the same period last year. This represents our orders received and shipped already for products this upcoming selling season.
The Company received Advances from Customers of RMB 295.30 million (US.25 million) as of December 31, 2009 period as compared to RMB 138.53 million (US.27 million) as of December 31, 2008. This represents our cash receipts for products to be ordered this upcoming selling season.
FISCAL 2010 GUIDANCE
Based on its current outlook, and existing and anticipated business conditions, Origin reiterates the revenue guidance for FY 2010 in the range of RMB 630 million to RMB 660 million.
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 to be filed. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
|CONSOLIDATED STATEMENTS OF OPERATIONS
|(In thousands, except share data)
|Three months ended December 31