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Origin Agritech Limited Reports Unaudited First Quarter Financial Results For Three Months Ended December 31, 2011

BEIJING--(BUSINESS WIRE)--February 23, 2012--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, 2011. 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 2012, the Company generated revenues of RMB26.9 million (US.3 million), an increase of 57% from RMB17.2 million (US.6 million) generated in the three months ended December 31, 2010. The revenues were mainly from the sales of higher margin canola seed products for the three months ended December 31, 2011.

Gross profit for the three-months ended December 31, 2011 was RMB10.9 million (US.7 million) compared to RMB8.6 (US.3 million) in the same period of the prior year. Gross margins for this quarter were 40% versus 50% for Q1 2011. This decline of gross margins was a result of scrap sales of some corn and rice seed products, pesticide during this quarter.

Total operating expenses for the three-months ended December 31, 2011 were RMB 44.6 million (US.1 million) compared with RMB 39.0 million (US.9million) reported for the same period in 2010. Selling and marketing expenses were RMB 18.2 million (US.9 million) for the first quarter of 2012, an increase of 70.8% from RMB 10.6 million (US.6 million) for the same period of the last year. Selling and marketing expense increased year-on-year as certain transportation costs were booked in the first quarter this year while these costs were booked in the second quarter during fiscal year 2011. General and administrative expenses were RMB 19.8 million (US.1 million) for the first quarter ended December 31, 2011, decreased by 4.4% from RMB 20.8million (US.1 million) for the three months ended December 31, 2010. The research and development expenses decreased to RMB7.7 million (US.2 million) this quarter from RMB12.3 million (US.9 million) for the same quarter last year as certain R&D projects didn’t happen this quarter. 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 fiscal 2012 amounted to RMB 33.8 million (US.3million) compared with an operating loss of RMB 30.4 million (US.6 million) for the same period in fiscal 2011.

Net loss for the first quarter of fiscal 2012 was RMB34.5 million (US.5 million), or RMB 1.48 (US.23) per share, as compared to a net loss of RMB 21.8 million (US.3 million), or RMB 0.94 (US.14) per share in the same period one year ago.

BALANCE SHEET

Origin's balance sheet at December 31, 2011 included cash and cash equivalents of RMB 192 million (US.5 million) and shareholders' equity of RMB 226.1 million (US.9 million).

Deferred revenue was RMB270.1 million (US$ 42.9 million) for the three-months ended December 31, 2011 as compared to RMB211.1 million (US.8 million) for the same period last year. This mainly represents our orders received and shipped already for products this upcoming selling season. Additionally, we received government subsidy amounted to RMB24.9 million (US$ 4.0 million) in December 2011, which was recorded in the balance of deferred revenue as of December 31, 2011.

The Company received Advances from Customers of RMB 377.2 million (US.9 million) as of December 31, 2011 period as compared to RMB 385.7 million (US.2 million) as of December 31, 2010. This represents our cash receipts for products to be ordered this upcoming selling season.