EX-99.1 2 v400515_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

Origin Agritech Limited Reports Unaudited Financial Results For Three Months

Ended December 31, 2014 and Announces its First United States Patent Application

BEIJING--/PRNewswire/--February 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 first quarter ended December 31, 2014. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

BIOTECHNOLOGY PROGRESS

During the first quarter of fiscal year 2015, we submitted a patent application to the United States Patent and Trademark Office for our glyphosate-resistant technologies. In addition, we have also applied for a patent in Brazil for similar biotechnologies. The patent applications are listed below. We believe these patents will strengthen further our leading position in the genetically modified seed technologies in China and will allow us to expand our biotechnology position in the international seed market.

Patent/Patent Application number	Patent/Patent application title	Date applied	Country
14/391,948	SYNTHETIC GLYPHOSATE-RESISTANT GENE AND USE THEREOF	Oct 10, 2014	US
1120140255296	GENE DE RESISTÊNCIA AO GLIFOSATO SINTÉTICO E USO DO MESMO	Oct 13, 2014	Brazil

FINANCIAL RESULTS OVERVIEW

During the first quarter of fiscal year 2015, the Company generated revenues of RMB15.6 million (US$2.5 million), compared with revenues of RMB 20.4 million in the three months ended December 31, 2013. The revenues of this quarter largely represented the sales from canola seeds and the decrease was mainly due to increasing competition in the canola seed business and our short supply of a main canola seed product. .

Deferred revenues were RMB329.0 million (US$53.8 million) as of December 31, 2014, compared with RMB312.6 million as of December 31, 2013. 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, 2014 was RMB 7.8 million (US$1.3 million), compared with RMB10.1 million in the same period of the prior year.

Total operating expenses for the first quarter ended December 31, 2014 were RMB30.3 million (US$4.9 million), compared with RMB 34.4 million reported for the same period in fiscal year 2014. Selling and marketing expenses were RMB14.2 million (US$2.3 million) for the first quarter of fiscal 2015, compared to RMB16.3 million for the same period last year. General and administrative expenses were RMB8.9 million (US$1.4 million) for the first quarter ended December 31, 2014, down by 16.0% from RMB10.5 million one year ago. The decline was mainly due to the continued implementation of measures to control our expenses. Research and development expenses were RMB11.8 million (US$1.9 million) in the first quarter of fiscal 2015, compared with RMB10.2 million for the same quarter last year, which in part reflects our efforts to expand our intellectual property portfolio.

Operating loss for the first quarter of fiscal 2015 was RMB22.5 million (US$3.7million), compared with operating loss of RMB 24.3 million for the same period in fiscal 2014.

Net loss attributable to Origin Agritech Limited for the first quarter of fiscal 2014 was RMB29.5 million (US$4.8 million), or net loss per basic and diluted share of RMB1.30 (US$0.21), compared with net loss of RMB31.0 million, or net loss per basic and diluted share of RMB1.36 in the same period one year ago.

BALANCE SHEET

As of December 31, 2014, cash and cash equivalents were RMB82.3 million (US$13.4 million) and shareholders' equity was RMB227.8 million (US$37.2 million). The Company had short-term loans of RMB245 million (US$40.0 million) and total long-term borrowing of RMB52.0 million (US$8.5 million). Short-term loans were mainly used for the working capital, while long-term borrowings of bank loans were used for financing the construction of the Xinjiang Origin corn seed production facilities.

Advances from customers were RMB126.2 million (US$20.6 million) as of December 31, 2014. These advances represent cash receipts for orders in the upcoming selling season.

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 to be filed. We undertake no obligation to revise or update publicly any forward-looking statements for any reasons.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share data)

		Three Months ended December 31,
		2013				2014
		RMB				RMB				USD
Revenues			20,368				15,590				2,542
Cost of revenues			(10,317	)			(7,788	)			(1,270	)
Gross profit			10,051				7,802				1,272
Operating expenses:
Selling and marketing			(16,269	)			(14,183	)			(2,313	)
General and administrative			(10,547	)			(8,862	)			(1,445	)
Research and development			(10,185	)			(11,775	)			(1,920	)
Other operating income, net			2,604				4,553				742
Total operating expenses			(34,397	)			(30,267	)			(4,936	)
Loss from operations			(24,346	)			(22,465	)			(3,664	)
Interest expense			(4,177	)			(4,574	)			(746	)
Share of net loss of equity investment			(279	)			-				-
Interest income			258				26				4
Loss before income taxes			(28,544	)			(27,013	)			(4,406	)
Income tax expense
Current			-				(1,203	)			(196	)
Deferred			-				-				-
Income tax expense			-				(1,203	)			(196	)
Net loss			(28,544	)			(28,216	)			(4,602	)
Less: Net income attributable to the non-controlling interests			2,485				1,287				210
Net loss attributable to Origin Agritech Limited			(31,028	)			(29,503	)			(4,812	)
Other comprehensive loss
Net loss			(28,544	)			(28,216	)			(4,602	)
Foreign currency translation difference			572				401				65
Comprehensive loss			(27,972	)			(27,815	)			(4,537	)
Less: Comprehensive income attributable to non-controlling interests			2,485				1,287				210
Comprehensive loss attributable to Origin Agritech Limited			(30,457	)			(29,102	)			(4,747	)
Net loss attributable to Origin Agritech Limited per share – basic			(1.36	)			(1.30	)			(0.21	)
Net loss attributable to Origin Agritech Limited per share – diluted			(1.36	)			(1.30	)			(0.21	)
Shares used in calculating basic and diluted net loss per share			22,743,853				22,738,541				22,738,541

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

		12/31/2013				9/30/2014				12/31/2014				12/31/2014
		RMB				RMB				RMB				US$
ASSETS
Current Assets
Cash and cash equivalents			146,075				46,268				82,250				13,442
Restricted cash			-				15,670				14,350				2,345
Accounts receivable			2,835				1,021				2,965				484
Due from related parties			3,200				2,698				5,200				850
Advances to suppliers			9,751				17,751				10,625				1,736
Advances to growers			9,243				20,759				1,903				311
Inventories			733,102				516,368				636,787				104,067
Income tax recoverable			1,163				48				48				8
Other current assets			5,873				4,368				4,323				707
Total current assets			911,242				624,951				758,451				123,950
Restricted cash			14,350				-				-				-
Land use rights, net			35,101				31,799				32,130				5,251
Plant and equipment, net			353,300				338,526				334,899				54,731
Equity investments			24,615				18,721				23,721				3,877
Goodwill			11,973				11,973				11,973				1,957
Acquired intangible assets, net			22,139				34,891				33,882				5,537
Other assets			9,609				4,009				3,502				572
Total assets			1,382,329				1,064,870				1,198,558				195,875
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings			267,194				225,000				245,000				40,039
Current portion of long-term borrowings			16,500				33,805				32,488				5,309
Accounts payable			15,499				4,525				15,514				2,535
Due to growers			99,362				17,943				57,862				9,456
Due to related parties			6,216				11,711				11,469				1,874
Advances from customers			221,584				324,645				126,201				20,625
Deferred revenues			312,561				19,029				328,975				53,763
Income tax payable			39,060				-				1,203				197
Other payables and accrued expenses			48,370				67,953				58,926				9,630
Total current liabilities			1,026,346				704,611				877,638				143,428
Long-term borrowings			42,523				31,023				19,523				3,191
Other long-term liability			22,573				19,649				18,689				3,054
Total liabilities			1,091,442				755,283				915,850				149,673
Commitments and contingencies
Shareholders’ equity:
Preferred stock (no par value; 1,000,000 shares authorized, none issued)			-				-				-				-
Common stock (no par value; 60,000,000 shares authorized,
24,016,163, 24,016,163 and 24,016,163 shares issued as of December 31, 2013, September 30, 2014 and December 31, 2014;
22,738,541, 22,738,541 and 22,738,541 shares outstanding as of
December 31, 2013, September 30, 2014 and December 31, 2014)			-				-				-				-
Additional paid-in capital			399,947				400,888				401,824				65,668
Accumulated deficit			(124,501	)			(103,000	)			(132,503	)			(21,654	)
Treasury stock at cost (1,277,622, 1,277,622 and 1,277,622 shares as of December 31, 2013, September 30, 2014 and December 31, 2014)			(37,429	)			(37,445	)			(37,445	)			(6,119	)
Accumulated other comprehensive loss			(3,818	)			(4,446	)			(4,045	)			(661	)
Total Origin Agritech Limited shareholders’ equity			234,199				255,997				227,831				37,234
Non-controlling interests			56,688				53,590				54,877				8,968
Total equity			290,887				309,587				282,708				46,202
Total liabilities and equity			1,382,329				1,064,870				1,198,558				195,875

CONTACT:

Kay Liu

Investor Relations

ke.liu@originseed.com.cn

+86 10 5890-7536