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| Agria Reports Third Quarter 2008 Financial Results |
| BEIJING, Dec 10, 2008 (MARKET WIRE via COMTEX News Network) -- Agria Corporation (NYSE: GRO) (the "Company" or "Agria"), an
innovative China-based agri-solutions provider, today announced its
financial results for the third quarter ended September 30, 2008.
Revenues for the third quarter of 2008 were RMB 87.8 million (US$12.9 million), as compared to revenues of RMB 73.3 million for the third quarter of 2007. In the third quarter of 2008, gross profit was RMB 50.1 million (US$7.4 million) as compared to RMB 55.5 million in the third quarter of 2007. In the third quarter of 2008, gross margins were 57.3% and 56.1% from the Company's sheep breeding and seedling segments, respectively. As noted in prior press releases, due to normal seasonality of the industry, corn seed revenue is typically nil in the third quarter with the major selling season occurring in the fourth quarter. For the third quarter of 2008, net income was RMB 4.5 million (US$0.66 million) or net income of RMB 0.08 (US$0.01) per basic and diluted ADS, as compared to net income of RMB 41.1 million in same period last year, or net income of RMB 0.82 and RMB 0.78 per basic and diluted ADS respectively. The net income in the third quarter of 2008 is primarily attributable to strength in the Company's sheep segment. The third quarter of 2008 includes RMB 22.1 million (US$3.25 million) in non-cash compensation expenses (see "Reconciliation of Non-GAAP measures" in financial tables that follow below). Excluding non-cash compensation expenses, net income for the third quarter of 2008 (non-GAAP) was RMB 26.6 million (US$3.9 million) or net income of RMB 0.42 (US$0.06) per basic and diluted ADS. As of September 30, 2008, the Company has repurchased 200,000 of its ADSs since the announcement of its repurchase program on August 12, 2008. As of September 30, 2008, the Company had cash and cash equivalents of RMB 1.19 billion (US$175 million), with total bank borrowings remaining at RMB 8.8 million (US$1.3 million). Alan Lai, Agria's chairman and chief executive officer, commented, "We expect Agria's operating environment will remain difficult for the foreseeable future. We will be evaluating implications on our business and strategy as part of the company's recent senior management changes. Given the above, Agria is withdrawing its prior forecast for the fourth quarter of 2008, as provided in the company's press release on November 11, 2008. We plan to hold a conference call as soon as possible to update investors on the results of our evaluation." Convenience Currency Translation The conversion of RMB into U.S. dollars in this release, made solely for the convenience of the reader, is based on the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. For the third quarter of 2008, the rate is as of September 30, 2008, which was RMB 6.7899 to US$1.0000. No representation contained herein is intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on September 30, 2008, or at any other date. The percentages stated in this press release are calculated based on RMB. About Agria Corporation Agria Corporation (NYSE: GRO) is an innovative China-based agri-solutions provider focusing on research and development, production and distribution of three different types of upstream agricultural products. Its diversified portfolio of products comprises corn seeds, sheep breeding and seedlings, including proprietary products. The Company has access to approximately 27,000 acres of farmland in seven provinces and its extensive distribution network provides direct or third party distribution in 14 provinces. For more information about Agria Corporation, please visit www.agriacorp.com. Safe Harbor Statement: This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Agria may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Agria's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, those risks outlined in Agria's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this announcement unless otherwise stated, and Agria does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Non-GAAP Financial Measures To supplement our consolidated financial information prepared in accordance with U.S. GAAP, Agria Corporation uses non-GAAP measures of net income and earnings per share and per ADS, which are adjusted to exclude non-cash compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP Measures" set forth at the end of this release. Agria believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding non-cash compensation expenses that may not be indicative of its operating performance from a cash perspective. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Agria's historical performance and liquidity. Agria intends to compute its non-GAAP financial measures using the same consistent method from quarter to quarter. We believe these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income and earnings per share and per ADS excluding non-cash compensation expenses is that these non-GAAP measures exclude non-cash compensation charge that has been and may continue to be for the foreseeable future a significant recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
-- Tables Attached --
Agria Corporation
Consolidated Statements of Operations
(In thousands of RMB, except per share and per ADS data)
(Unaudited)
Three months ended Nine months ended
30-Sep 30-Sep 30-Sep 30-Sep
2007 2008 2007 2008
Revenue:
Corn seeds -- -- 133,853 164,897
Sheep breeding products 61,482 71,621 172,081 122,832
Seedlings 11,814 16,129 46,769 57,730
----------- ----------- ----------- -----------
Total revenue 73,296 87,750 352,703 345,459
----------- ----------- ----------- -----------
Cost of revenue:
Corn seeds -- (27) (80,395) (105,799)
Sheep breeding products (14,046) (30,566) (44,589) (57,887)
Seedlings (3,717) (7,076) (14,396) (24,612)
----------- ----------- ----------- -----------
Total cost of revenue (17,763) (37,669) (139,380) (188,298)
----------- ----------- ----------- -----------
Gross profit 55,533 50,081 213,323 157,161
Operating expense (Note
1):
Selling expenses (2,971) (3,501) (10,908) (12,107)
General and
administrative
expenses (7,554) (31,342) (11,116) (853,502)
Research and
development expenses (642) (3,767) (1,667) (10,129)
----------- ----------- ----------- -----------
Total operating
expenses (11,167) (38,610) (23,691) (875,738)
----------- ----------- ----------- -----------
Operating profit/(loss) 44,366 11,471 189,632 (718,577)
Interest income 693 7,817 843 26,243
Interest expense (3,183) (393) (6,272) (1,223)
Exchange loss (850) (799) -- (11,072)
Other income 123 701 297 1,695
Other expense -- (5,620) -- (9,949)
----------- ----------- ----------- -----------
Income/(loss) before
income tax 41,149 13,177 184,500 (712,883)
Income tax -- (8,692) -- (27,942)
----------- ----------- ----------- -----------
Net income/(loss) 41,149 4,485 184,500 (740,825)
=========== =========== =========== ===========
Earnings/(loss) per
share:
-Basic RMB0.41 RMB0.04 RMB1.85 RMB(5.86)
-Diluted RMB0.39 RMB0.04 RMB1.81 RMB(5.86)
=========== =========== =========== ===========
Weighted average number
of ordinary shares
outstanding:
-Basic 100,000,000 126,289,758 100,000,000 126,362,984
-Diluted 105,603,039 126,289,758 101,955,592 126,375,972
Earnings/(loss) per ADS
(Note 2):
-Basic RMB0.82 RMB0.08 RMB3.69 RMB(11.72)
-Diluted RMB0.78 RMB0.08 RMB3.62 RMB(11.72)
=========== =========== =========== ===========
Note 1:
P3A cash payment
included in G&A
expense -- -- -- 126,992
=========== =========== =========== ===========
Share based
compensation expense
is included in:
General and
administrative
expenses 4,365 21,741 4,365 680,064
Research and
development expenses -- 27 -- 40
Cost of revenue -- 315 -- 471
----------- ----------- ----------- -----------
Total (Note a) 4,365 22,083 4,365 807,567
=========== =========== =========== ===========
Note a: Included in share-based compensation expense for the nine months
ended Sept 30, 2008 is an amount of RMB639,649 thousands, which relates to
the P3A Payment as noted in prior press release
Note 2:
Each ADS represents two ordinary shares.
Agria Corporation
Consolidated Statements of Operations
(In thousands of US$, except per share and per ADS data)
(Unaudited)
Three Nine
months months
ended ended
30-Sep 30-Sep
2008 2008
Revenue:
Corn seeds -- 24,286
Sheep breeding products 10,548 18,090
Seedlings 2,376 8,502
----------- -----------
Total revenue 12,924 50,878
----------- -----------
Cost of revenue:
Corn seeds (4) (15,582)
Sheep breeding products (4,502) (8,525)
Seedlings (1,042) (3,625)
----------- -----------
Total cost of revenue (5,548) (27,732)
----------- -----------
Gross profit 7,376 23,146
Operating expense (Note 1):
Selling expenses (516) (1,783)
General and administrative expenses (4,616) (125,702)
Research and development expenses (555) (1,492)
----------- -----------
Total operating expenses (5,687) (128,977)
----------- -----------
Operating loss 1,689 (105,831)
Interest income 1,151 3,865
Interest expense (58) (180)
Exchange loss (117) (1,631)
Other income 103 250
Other expense (828) (1,465)
----------- -----------
Income/(Loss) before income tax 1,940 (104,992)
Income tax (1,280) (4,115)
----------- -----------
Net Income/(loss) 660 (109,107)
=========== ===========
Earnings/(Loss) per share:
-Basic US$0.005 US$(0.86)
-Diluted US$0.005 US$(0.86)
=========== ===========
Weighted average number of ordinary shares
outstanding:
-Basic 126,289,758 126,362,984
-Diluted 126,289,758 126,375,972
Earnings/(Loss) per ADS (Note 2):
-Basic US$0.01 US$(1.72)
-Diluted US$0.01 US$(1.72)
=========== ===========
Note 1:
P3A cash payment included in G&A expense -- 18,703
Share based compensation expense is
included in:
General and administrative expenses 3,202 100,158
Research and development expenses 4 6
Cost of revenue 46 69
Total (Note a) 3,252 118,936
Note a: Included in share-based
compensation expense for the nine months
ended Sept 30, 2008 is an amount of
RMB94,206 thousands, which relates to
the P3A Payment as noted in prior
press release
Note 2:
Each ADS represents two ordinary shares.
Agria Corporation
Reconciliation of Non-GAAP measures
(In thousands of RMB, except per share and per ADS data)
(Unaudited)
Three months ended Nine months ended
30-Sep 30-Sep 30-Sep 30-Sep
2007 2008 2007 2008
Net income/(loss) 41,149 4,485 184,500 (740,825)
Non-cash compensation
expense (Note 1) 4,365 22,083 4,365 807,567
----------- ----------- ----------- ----------
Non-GAAP net income 45,514 26,568 188,865 66,742
=========== =========== =========== ==========
Net income/(loss) per ADS
- basic RMB0.82 RMB0.08 RMB3.69 RMB(11.72)
Net income/(loss) per ADS
- diluted RMB0.78 RMB0.08 RMB3.62 RMB(11.72)
=========== =========== =========== ==========
Non-GAAP net income per ADS
- basic RMB0.91 RMB0.42 RMB3.78 RMB1.06
Non-GAAP net income per ADS
- diluted RMB0.86 RMB0.42 RMB3.7 RMB1.06
=========== =========== =========== ==========
Weighted average shares
used in calculating
non-GAAP basic net income
per ADS 50,000,000 63,144,879 50,000,000 63,181,492
Weighted average shares
used in calculating
non-GAAP diluted net
income per ADS 52,801,520 63,144,879 50,977,796 63,187,986
Agria Corporation
Reconciliation of Non-GAAP measures
(In thousands of US$, except per share and per ADS data)
(Unaudited)
Three Nine
months months
ended ended
30-Sep 30-Sep
2008 2008
Net income/(loss) 660 (109,107)
Non-cash compensation expense (Note 1) 3,252 118,936
----------- ----------
Non-GAAP net income 3,912 9,829
=========== ==========
Net income/(loss) per ADS - basic US$0.01 US$(1.73)
Net income/(loss) per ADS - diluted US$0.01 US$(1.73)
=========== ==========
Non-GAAP net income per ADS - basic US$0.06 US$0.16
Non-GAAP net income per ADS - diluted US$0.06 US$0.16
=========== ==========
Weighted average shares used in calculating
non-GAAP basic net income per ADS 63,144,879 63,181,492
Weighted average shares used in calculating
non-GAAP diluted net income per ADS 63,144,879 63,187,986
Note 1: Non-cash compensation in the 3 and 9 month periods of 2008 includes
compensation charge of RMB 0 (US$0) and RMB 766,641 thousands (US$112,909
thousands), respectively, related to the P3A Payment as noted in prior
press release
Note 2: Each ADS represents two common shares.
Agria Corporation
Consolidated Balance Sheets
(In thousands)
(Audited) (Unaudited) (Unaudited)
31-Dec 30-Sep 30-Sep
2007 2008 2008
(RMB) (RMB) (US$)
ASSETS
Current assets:
Cash and cash equivalents 1,387,153 1,190,240 175,296
Accounts receivable (net of
allowance for doubtful accounts) 200,757 193,832 28,547
Inventories 59,937 39,954 5,884
Prepayments and other current assets 48,626 46,919 6,910
Amounts due from related parties 557 3,866 569
----------- ----------- -----------
Total current assets 1,697,030 1,474,811 217,206
----------- ----------- -----------
Non-current assets:
Property, plant and equipment, net 65,680 84,725 12,478
Investment 205 205 30
Intangible assets, net 189,499 386,397 56,908
Non-current prepayments 14,127 20,660 3,043
Deferred tax assets 529 529 78
Other assets, net 104,466 115,699 17,040
----------- ----------- -----------
Total non-current assets 374,506 608,215 89,577
----------- ----------- -----------
Total assets 2,071,536 2,083,026 306,783
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings 15,160 8,800 1,296
Long-term bank borrowing, current
portion -- -- --
Accounts payable 9,011 10,150 1,495
Accrued expenses and other
liabilities 31,471 31,126 4,584
Deferred revenue 1,122 518 76
Amount due to a shareholder -- -- --
Amounts due to related parties 212 -- --
----------- ----------- -----------
Total current liabilities 56,976 50,594 7,451
----------- ----------- -----------
Non-current liabilities:
Deferred tax liability 157,561 185,503 27,320
Amounts due to related parties 8,792 8,792 1,295
----------- ----------- -----------
Total non-current liabilities 166,353 194,295 28,615
----------- ----------- -----------
Total liabilities 223,329 244,889 36,066
----------- ----------- -----------
Shareholders' equity:
Paid-up capital -- -- --
Additional paid-in capital 1,561,933 2,376,289 349,974
Statutory reserves 76,953 76,953 11,334
Accumulated other comprehensive loss (9,421) (93,022) (13,700)
Retained earnings / (accumulated
loss) 218,742 (522,083) (76,891)
----------- ----------- -----------
Total shareholders' equity 1,848,207 1,838,137 270,717
----------- ----------- -----------
Total liabilities and shareholders'
equity 2,071,536 2,083,026 306,783
=========== =========== ===========
Contacts: In China: Matt Feng Investor Relations China Tel: 133-1130-0320 matt.feng@agriacorp.com In the U.S.: David Pasquale Senior Vice President U.S. Tel: +914-337-1117 david.pasquale@agriacorp.com SOURCE: Agria Corporation mailto:matt.feng@agriacorp.com mailto:david.pasquale@agriacorp.com |