Origin Agritech Limited Reports Unaudited Financial Results For Three Months Ended June 30, 2015

BEIJING, August 5, 2015 /PRNewswire/ -- 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.

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.

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.

CONFERENCE CALL INFORMATION

The Company will host a teleconference on August 5, 2015, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the results. To participate in the call, please dial the following numbers approximately 5 minutes prior to the scheduled start time.

A replay of the call will be available shortly after the conference call through August 12, 2015. The dial-in numbers for the replay are:

About Origin

Founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, Origin Agritech Limited (NASDAQ GS: SEED) is China's leading agricultural biotechnology company, specializing in crop seed breeding and genetic improvement, seed production, processing, distribution, and related technical services. Leading the development of crop seed biotechnologies in China, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline including products with glyphosate tolerance and pest resistance (Bt) traits. Origin operates production centers, processing centers and breeding stations nationwide with sales centers located in key crop-planting regions. Product lines are vertically integrated for corn, rice and canola seeds. For further information, please log on to the Company's website at: www.originseed.com.cn.

Forward Looking Statement

This release contains forward-looking statements. All forward-looking statements included in this release are based on information available to us on the date hereof. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "targets," "goals," "projects," "continue," or variations of such words, similar expressions, or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Neither we nor any other person can assume responsibility for the accuracy and completeness of forward-looking statements. Important factors that may cause actual results to differ from expectations include, but are not limited to, those risk factors discussed in Origin's filings with the SEC including its annual report on Form 20-F. We undertake no obligation to revise or update publicly any forward-looking statements for any reasons.

CONTACT:

Origin Agritech Limited
James Chen
Chief Financial Officer
james.chen@originseed.com.cn

Investor Relations
ir@originseed.com.cn
+86 10 5890-7536

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