Beijing, China
January 29, 2016
Origin Agritech Limited ("Origin" or the "Company"), a technology-focused supplier of crop seeds in China, today announced unaudited financial results for the first quarter ended December 31, 2015. 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 year 2016, the Company generated revenues of RMB8.6 million (US$1.3 million), compared with revenues of RMB 15.6 million in the three months ended December 31, 2014. The revenues of this quarter largely represented the sales from canola seeds and the decrease was mainly due to exit of market for certain major canola seeds products as the result of increasing competition in the canola seed business
Deferred revenues were RMB306.1 million (US$47.1 million) as of December 31, 2015 compared with RMB329.0 million as of December 31, 2014. Deferred revenues mainly reflect the value of Origin's crop seeds after: a) 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. It is expected that the majority of these deferred revenues will be recorded on the income statement in the third to fourth fiscal quarters.
Gross profit for the three months ended December 31, 2015 was RMB 3.7 million (US$0.6 million), compared with RMB7.8 million in the same period of the prior year. The decrease was in line with the decrease of sales of canola seeds.
Total operating expenses for the first quarter ended December 31, 2015 were RMB25.9 million (US$4.0 million) compared with RMB 30.3 million reported for the same period in fiscal year 2015. Selling and marketing expenses were RMB11.4 million (US$1.8 million) for the first quarter of fiscal year 2016, a significant decrease of 19.4% from RMB14.2 million for the same period last year due mainly to the decline in advertisement and transportation. General and administrative expenses were RMB9.6 million (US$1.5 million) for the first quarter ended December 31, 2015 compared with RMB8.9 million one year ago. Research and development expenses were RMB10.4 million (US$1.6 million) in the first quarter of fiscal year 2016 compared with RMB11.8 million for the same quarter last year.
Operating loss for the first quarter of fiscal year 2016 was RMB22.2 million (US$3.4million), compared with operating loss of RMB 22.5 million for the same period in fiscal year 2015,This reduction in operating loss reflects our efforts to improve our operating efficiency and cost reduction.
Net loss attributable to Origin Agritech Limited for the first quarter of fiscal year 2016 was RMB28.8 million (US$4.4 million), or net loss per basic and diluted share of RMB1.26(US$0.19), compared with net loss of RMB29.5 million, or net loss per basic and diluted share of RMB1.30 in the same period one year ago.
BALANCE SHEET
As of December 31, 2015, cash and cash equivalents were RMB85.3 million (US$13.1 million) and shareholders' equity was RMB211.0 million (US$32.5 million). The Company had short-term loans of RMB230.0 million (US$35.4 million) and total long-term borrowing of RMB53.8 million (US$8.3 million). Short-term loans were mainly used for settlement of seed purchases, while long-term borrowings of bank loans were used for the corn seed production facilities in Xinjiang Origin and the Company's working capital.
Advances from customers were RMB104.2 million (US$16.0 million) as of December 31, 2015. These advances represent cash receipts for orders in the upcoming selling season.
MANAGEMENT CHANGE
Effective as of today, the Company appointed Mr. Song Xu as its Chief Financial Officer, replacing Mr. James Chen, who has resigned to pursue other opportunities.
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