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Origin Agritech Limited Reports Third Quarter Unaudited Financial Results for Three Months ended June 30, 2011

BEIJING--(BUSINESS WIRE)--September 14, 2011--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, 2011. 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 2011, the Company generated revenues of RMB244.7 million (US.4 million), compared with RMB462.2 million (US.1 million) generated in the three months ended June 30, 2010. The goods already sold and delivered 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. The lower amount of revenues this quarter is in part due to a later application of the distributor discount this 2011 selling season resulting in a later recognition of revenue this year.

Gross profit for the three months ended June 30, 2011 was RMB85.8 million (US.1 million) compared to RMB190.9 million (US.1 million) in the same period of the prior year.

Total net operating expenses for the three months ended June 30, 2011 were RMB51.8 million (US.9 million) compared with RMB37.5 million (US.5 million) reported for the same period in 2010. Selling and marketing expenses were RMB12.6 million (US.9 million) for the third quarter of 2011, compared with RMB9.4 million (US.4 million) for the same period of the last year. General and administrative (“G&A”) expenses of RMB23.8 million (US.6 million) for the third quarter ended June 30, 2011, compared with RMB17.6 million (US.6 million) for the same period one year ago. Research and development (“R&D”) expenses increased by 46.4% to RMB15.5 million (US.4 million) for the three months ended June 30, 2011 from RMB10.6 million (US.6 million) for the same quarter last year. The increase in operational expenses, spread throughout the three sub-categories, was in part due RMB15.6 million (US.35 million) in bonus charges and staff benefits from Changrong awarded in this current quarter which usually occur in the fourth quarter.

 
 

 

Income from operations for the third quarter of 2011 amounted to RMB34.0 million (US.2 million) compared with an operating income of RMB153.4 million (US.6 million) for the same period in 2010.

Net income attributable to Origin for the third quarter of 2011 was RMB13.9 million (US.1 million), or RMB 0.60 (US.09) per share - both basic and diluted, as compared to a net income of RMB105.2 million (US.5 million), or RMB 4.57 (US.67) per share - both basic and diluted in the same period one year ago.

BALANCE SHEET

Origin’s balance sheet at June 30, 2011 included cash and cash equivalents of RMB220.0 million (US.0 million), and shareholders' equity of RMB238.2 million (US.8 million). Short term borrowings decreased from RMB 136.9 million (US.2 million) at June 30, 2010 to RMB 20.0 million (US$ 3.1 million) at June 30, 2011.

Deferred revenue was RMB287.2 million (US.4 million) at June 30, 2011 as compared to RMB42.1 million (US.2 million) at the same period-end date as of last year. This represents a portion of our orders received and goods delivered for this selling season.

Advances from customers was RMB290.8 million (US.9 million) at June 30, 2011 period as compared to RMB275.4 million (US.6 million) a year ago. This represents our cash receipts for future orders.

FISCAL 2011 GUIDANCE

Based on its current outlook, and existing and anticipated business conditions, Origin lowers the revenue guidance for FY 2011 in the range of RMB 530 million to RMB 550 million.