Beijing, China
August 30, 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 third quarter ended June 30, 2010. 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 2010, the Company generated revenues of RMB 462.23 million (US$68.07 million), a decrease of 3.13% from RMB 477.17 million (US$69.84 million) generated in the three months ended June 30, 2009.
Gross profit for the three-months ended June 30, 2010 was RMB190.90 million (US$28.11 million) compared to RMB151.56 million (US$22.18 million) in the same period of the prior year. Gross margin for the quarter increased from 31.76% in the same period of prior year to 41.30% for the three months ended June 30, 2010. This is an increase of 9.54% over the three months ended June 30, 2009 as a result of increased pricing in corn seed this quarter. Corn comprises the vast majority of our recognized revenues in this current quarter and a significant portion of the rice seed sales will be recognized later this year.
Total operating expenses for the three-months ended June 30, 2010 were RMB37.54 million (US$5.53 million) compared with RMB32.61 million (US$4.77 million) reported for the same period in 2009. Selling and marketing expenses were RMB9.40 million (US$1.38 million) for the third quarter of 2010, representing a decrease of 22.23% from RMB 12.08 million (US$1.77 million) for the same period of the last year, as a result of lower spending this quarter in large part due to lower transportation costs. General and administrative expenses of RMB17.56 million (US$2.59 million) for the third quarter ended June 30, 2010, increased 23.22% from RMB14.25 million (US$2.09million) for the three months ended June 30, 2009 as a result of higher seasonal salary expense along with Origin’s charitable donations. Research and development expenses increased to RMB10.59 million (US$1.60million) for the three-months ended June 30, 2010 from RMB6.28 million (US$0.92million) for the same quarter last year, with an increase of 68.73% due to higher salary, generic scientific research expenses, and variant transfer fees for the quarter. This is part of our plan to continue ramp up of research and development spend.
Operating profit for the third quarter of 2010 amounted to RMB153.36million (US$22.58 million) compared with an operating profit of RMB118.95 million (US$17.41 million) for the same period in 2009.
Net income attributable to Origin Agritech Limited for the third quarter of 2010 was RMB105.16 million (US$15.49million), or RMB 4.52 (US$0.67) per diluted share, as compared to a net income attributable to Origin Agritech Limited of RMB74.97 million (US$10.98million), or RMB3.26 (US$0.48)per diluted share in the same period one year ago.
Balance sheet
Origin's balance sheet at June 30, 2010 included cash and cash equivalents of RMB307.21 million (US$45.24 million), and total equity of RMB347.92 million (US$51.23 million).
Deferred revenue was RMB42.12million (US$6.20 million) at June 30, 2010 as compared to RMB53.69million (US$ 7.86 million) at the same period end last year.
The Company received advances from customers of RMB275.40 million (US$40.55 million) at June 30, 2010 as compared to RMB163.48 million (US$23.93 million) at June 30, 2009.
Fiscal 2010 guidance
Based on its current outlook, and existing and anticipated business conditions, Origin believes the revenue guidance for FY 2010 to be in the range of RMB 580 million to RMB 600 million.
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