Beijing, China
August 5, 2015
Origin Agritech Limited (NASDAQ GS: 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, 2015. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.
FINANCIAL RESULTS OVERVIEW
For the third quarter of fiscal 2015, the Company reported revenues of RMB73.7 million (US$12.0 million) compared with RMB92.9 million for the three months ended June 30, 2014. Lower revenues this quarter resulted from the deferral of recognizing revenue for the corn seed business as the final sales price is not yet determined and due to lower revenues from rice seed business.
Deferred revenues were RMB373.4 million (US$61.1 million) as of June 30, 2015 compared with RMB342.1 million on June 30, 2014. It is expected that the majority of deferred revenues will be recorded in the income statement during the fiscal fourth quarter of 2015. Deferred revenues mainly reflect the value of Origin's crop seeds after: a) the sales arrangement is confirmed; b) delivery to the customer is made; and c) pre-payment from the customer is received, but before the final sales price is fixed and determined. The final sales price is primarily determined by sales incentives that Origin offers to its customers.
The sum of recognized revenues for the first nine months ended June 30, 2015 and deferred revenues as of June 30, 2015 was RMB466.5 million (US$76.1 million) compared with RMB460.1 million for the same period one year ago.
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Unit: RMB million
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As of June 30, 2014
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As of June 30, 2015
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Year-over-Year Change, %
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Deferred revenues (1)
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342.1
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373.4
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9.1
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Year-to-date recognized
revenues (2)
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118.0
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93.1
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-21.1
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(1) + (2)
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460.1
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466.5
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1.4
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Gross profit for the third quarter of fiscal 2015 was RMB10.3 million (US$1.7 million) compared to RMB21.2 million in the third quarter of fiscal 2014. Gross margin for the third quarter of fiscal 2015 decreased to 14.0% from 22.9% for the same period of fiscal 2014 was mainly due to scrap sales in the rice business.
Total operating expenses for the three months ended June 30, 2015 were RMB18.7 million (US$3.1 million) compared with RMB27.5 million during the same quarter in fiscal 2014. The decrease was mainly due to lower transportation expenses, higher other operating income and continuous cost controls. Specifically, selling and marketing expenses were RMB6.8 million (US$1.1 million) for the third quarter of fiscal 2015 compared with RMB10.5 million a year ago. The decrease in selling expenses was mainly due to lower transportation expenses this quarter. General and administrative expenses were RMB9.7 million (US$1.6 million), which was slightly down from RMB10.6 million for the third quarter of fiscal 2014. Research and development expenses were RMB8.8 million (US$1.4 million) in the third quarter of fiscal 2015, which was consistent with RMB8.8 million for the same period last year.
Total operating expenses for the first nine months in fiscal 2015 were RMB68.8 million, compared with the total operating expenses of RMB98.7 million a year ago. Excluding other operating income, the total operating expenses for the first nine months ended June 30, 2015 were RMB84.4 million, a decline of 18.5% year-over-year.
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Unit: RMB million
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Fiscal year 2014
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Fiscal year 2015
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Year-over-Year Change, %
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Selling and marketing
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43.9
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27.2
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-38.1%
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General and administrative
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31.9
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27.8
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-12.9%
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Research and development
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27.8
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29.4
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5.8%
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Total operating expenses,
excluding other operating income
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103.6
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84.4
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-18.5%
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Loss from operations for the third quarter of fiscal 2015 amounted to RMB8.4 million (US$1.4 million) compared with RMB6.3 million for the same quarter in fiscal 2014.
Net loss attributable to Origin Agritech for the third quarter of fiscal 2015 was RMB11.9 million (US$1.9 million), or net loss per basic and diluted share of RMB0.52 (US$0.09), compared to a net loss attributable to Origin Agritech of RMB14.7 million or net loss per basic and diluted share of RMB0.65 in the same period one year ago.
BALANCE SHEET
As of June 30, 2015, cash and cash equivalents were RMB22.4 million (US$3.7 million) and shareholders' equity attributable to the Company was RMB190.3 million (US$31.1 million). The Company had short-term borrowings of RMB210.0 million (US$34.4 million) and long-term borrowings of RMB64.4 million (US$10.5 million). Short-term borrowings were mainly for working capital, while long-term borrowing was mainly used for the corn seed production facilities in Xinjiang Origin and the Company's working capital.
Advances from customers were RMB128.1 million (US$21.0 million) as of June 30, 2015. These advances represent cash receipts for orders in the upcoming selling season.
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