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Origin Agritech Limited (SEED) Reports Improved Second Quarter Financial Results for Three Months ended March 31, 2010

BEIJING--(BUSINESS WIRE)--May 11, 2010--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, 2010. Headquartered in Beijing, Origin Agritech Limited is China’s leading, vertically-integrated agricultural biotechnology company specializing in research, development and production to supply the growing populations of China. Origin holds the exclusive rights to the first transgenic (GM) commercial corn for China and 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 2010, the Company generated revenues of RMB 1.60 million (US .24 million), an increase of 38.55% from RMB 1.16 million (US .17 million) generated in the three months ended March 31, 2009. While the majority of our revenues are recognized in the third quarter, Origin does possess limited revenue mainly from the sale of non-standard seed contracts which may fluctuate from year to year. These generally do not comprise any significant portion of our overall annual revenues.

 
 

 

Gross loss for the three-months ended March 31, 2010 was RMB 5.94 million (US .87million) compared to RMB 3.37 (US .49 million) in the same period of the prior year.

Total operating expenses for the three-months ended March 31, 2010 were RMB 31.41 million (US .60 million) compared with RMB 31.29 million (US .58 million) reported for the same period in 2009. Selling and marketing expenses were RMB 9.10 million (US .33 million) for the second quarter of 2010, representing a decrease of 5.64% from RMB 9.64 million (US .41 million) for the same period of the last year. General and administrative expenses of RMB 14.83 million (US .17 million) for the second quarter ended March 31, 2010, decreased 3.88% from RMB 15.42 million (US .26 million) for the three months ended March 31, 2009 . Research and development expenses increased to RMB 7.49 million (US .10 million) for the three-months ended March 31, 2010 from RMB 6.22 million (US .91million) for the same quarter last year, with an increase of 20.44%, as a result of our increased spending to our genetic research efforts.

Operating loss for the second quarter of 2010 amounted to RMB 37.36million (US .47 million) compared with an operating loss of RMB 34.66 million (US .07 million) for the same period in 2009.

Net loss for the second quarter of 2010 was RMB 28.20 million (US .13 million), or RMB 1.23 (US .18) per diluted share, as compared to a net loss of RMB81.32 million (US.89 million), or RMB 3.53 (US .52) per diluted share in the same period one year ago.

BALANCE SHEET

Origin's balance sheet at March 31, 2010 included cash and cash equivalents of RMB392.13 million (US.44 million), an increase of 68.31% from RMB 232.99 million as of March 31, 2009. Our current cash and cash equivalents position is inclusive of the fact that as of March 31, 2010, we had repaid our note payable position of RMB118,015 million as of March 31, 2009. If these liabilities had remained outstanding, our cash position would be significantly higher. Origin Agritech Limited shareholders' equity of RMB161.82 million (US.70 million).

Deferred revenue was RMB 464.31 million (US .02 million) as at March 31, 2010 as compared to RMB 443.40 million (US .86million) as at the same period end date of last year.

The Company received advances from customers of RMB 270.41 million (US .61 million) as at March 31, 2010 as compared to RMB 165.21 million (US .17million) as at March 31, 2009.

 
 

 

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.

ORIGIN DEVELOPMENTS

  • In March 2010, Origin Agritech Limited announced the development of a strategic business unit for premium branded chemical products to complement their premium seed products. The company intends to continue the development into the agricultural chemical space with expansion into further agricultural products and geographies.
  • In November 2009, Origin Agritech Limited announced the approval of the first transgenic commercial corn for China. This GM phytase corn is set for commercial release for the 2011 selling season. The company intends to continue market expansion of this phytase product.
  • Since late 1990s, Origin Agritech Limited has developed its non-GM and GM genetic technology programs both internally and through joint programs with research entities in China. As a result, Origin has developed traits in corn including phytase, glyphosate tolerance, Bt, drought tolerance, and nitrogen efficiency in various stages of regulatory approval. The company intends to continue the development and market expansion of these genetic technology seed products, again, both internally and/or through various partnership arrangements. The company possesses the global exclusive rights to the glyphosate-resistant trait.

CONFERENCE CALL INFORMATION

The Company will host a teleconference on May 11, 2010, at 8:00 a.m. EDT /8:00 p.m. Beijing time to discuss the quarter end results. To participate in the call, please dial +1-877-407-9210 in North America, or +1-201-689-8049 internationally, approximately 15 minutes prior to the scheduled start time.