Beijing,China – August 11, 2009 – 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 third quarter ended June 30, 2009. 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 2009, the Company generated revenues of RMB 477.17 million (US.84 million), a decrease of 2.76% from RMB 490.71 million (US.54 million) generated in the three months ended June 30, 2008. However, this 3Q09 revenue figure is exclusive of the RMB 53.69 million (US.86 million) in Deferred Revenue for the three-months ended June 30, 2009, carried as a liability on the balance sheet, which should be recognized in Q409 pending a price confirmation. These fluctuations in the timing of the pricing of our seed shipments are common in the industry and are dependant upon the schedule of the shipment based on customer preferences.
Gross profit for the three-months ended June 30, 2009 was RMB151.56 million (US.18 million) compared to RMB144.09 million (US.01 million) in the same period of the prior year, mainly due to increased demand and pricing across all product categories this season.
Total operating expenses for the three-months ended June 30, 2009 were RMB 32.61 million
(US.77 million) compared with RMB 45.71 million (US.66 million) reported for the same period in 2008. Selling and marketing expenses were RMB 12.08 million (US.77 million) for the third quarter of 2009, representing a decrease of 28.18% from RMB 16.82 million (US.45 million) for the same period of the last year. This decrease was mainly due to a lower transportation costs. General and administrative expenses of RMB 14.25 million (US.09 million) for the third quarter ended June 30, 2009, decreased 25.24% from RMB 19.06 million (US.78 million) for the three months ended June 30, 2008, mainly due to the lower consulting fees. Research and development expenses decreased to RMB 6.28 million (US.92 million) for the three-months ended June 30, 2009 from RMB 9.83 million (US.43 million) for the same quarter last year, with a decrease of 36.11%. This decrease was mainly due to a lower amount of charges for scientific cooperation projects this year. With the completion of 3Q09 season, this marks the third consecutive quarter of lower year over year expenses for Origin.
Income from operations for the third quarter of 2009 amounted to RMB 118.95million (US.41 million) compared with the income from operations of RMB 98.38 million (US.34 million) for the same period in 2008.
Net income for the third quarter of 2009 was RMB 74.97 million (US.98 million), or RMB 3.26 (US.48) per diluted share, as compared to a net income of RMB 60.12 million (US.77 million), or RMB 2.62 (US.38) per diluted share in the same period one year ago.
For the nine months ended June 30, 2009, the Company generated revenues of RMB 534.66 million (US.26 million), an increase of 3.09% from RMB 518.63 million (US.61 million) generated in the three months ended June 30, 2008.
Gross profit for the nine-months ended June 30, 2009 was RMB163.59 million (US.94 million) compared to RMB144.13 million (US.01 million) in the same period of the prior year. Both the gains in revenue and gross profit for the year to date were a result of stronger product demand and pricing in the revenue recognized in 3Q09 across all product categories.
Total operating expenses for the nine-months ended June 30, 2009 were RMB 103.85 million (US$ 15.20 million) compared with RMB 126.56 million (US$ 18.45 million) reported for the same period in 2008.
In Q209, the company repurchased their outstanding convertible notes from Citadel Investment Group (CIG). While this event had no material impact on our Q309 financial results, the repurchase event does affect our year-to-date financial figures. As a result, a GAAP vs. Non GAAP calculation has been calculated for reference.
On a non-GAAP basis, excluding non-recurring charges related to the convertible notes charged mainly in the second quarter of 2009, net income for the nine months ended 2009 was US.98 million, or US.17 per diluted share, as compared to a net income of US.7 million, or US.03 per diluted share in the same period one year ago.
(1) Reflects operating results in accordance with U.S. generally accepted accounting principles (or GAAP).
(2) Non-GAAP amounts exclude repurchase-related special items, the amortization of the discount of the convertible notes and the gains from the write-downs of the fair value of embedded derivatives.
Origin’s balance sheet at June 30, 2009 included cash and cash equivalents of RMB 156.30 million (US.88 million), and shareholders’ equity of RMB 241.03 million (US.28 million)
Deferred revenue was RMB 53.69 million (US.86 million) as of June 30, 2009 as compared to RMB 3.28 million (US$ 0.48 million) as of June 30, 2008.
The Company received advances from customers of RMB 163.48million (US.93 million) as of June 30, 2009 as compared to RMB 130.92 million (US.09 million) as of June 30, 2008.
FISCAL 2009 GUIDANCE
Based on its current outlook, and existing and anticipated business conditions, Origin reiterates the revenue guidance for FY 2009 in the range of RMB 560 million to RMB 580 million and operating cash flow range of RMB 80 million for the fiscal year ending September 30, 2009.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
Vice President, Finance
Origin Agritech Limited
Tel: 949.726.8101 or 011.86.136.8108.0243