EX-99.1 2 v417225_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

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

BEIJING--/PRNewswire/--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.

Unit: RMB million		As of June 30, 2014				As of June 30, 2015				Year-over-Year Change, %
Deferred revenues (1)			342.1				373.4				9.1
Year-to-date recognized revenues (2)			118.0				93.1				-21.1
(1) + (2)			460.1				466.5				1.4

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.

Unit: RMB million		Fiscal year 2014				Fiscal year 2015				Year-over-Year Change, %
Selling and marketing			43.9				27.2				-38.1	%
General and administrative			31.9				27.8				-12.9	%
Research and development			27.8				29.4				5.8	%
Total operating expenses, excluding other operating income			103.6				84.4				-18.5	%

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.

US Toll Free:	1-888-346-8982
International Toll:	1-412-902-4272
Mainland China Toll Free:	4001-201203
Hong Kong Toll Free:	800-905945

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:

US Toll Free:	1-877-344-7529
International Toll:	1-412-317-0088
Replay Access Code:	10070114

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.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share data)

		Three Months ended June 30,
		2014				2015
		RMB				RMB				USD
Revenues			92,935				73,697				12,022
Cost of revenues			(71,686	)			(63,384	)			(10,339	)
Gross profit			21,249				10,313				1,683
Operating expenses:
Selling and marketing			(10,549	)			(6,771	)			(1,105	)
General and administrative			(10,561	)			(9,748	)			(1,590	)
Research and development			(8,778	)			(8,804	)			(1,436	)
Other operating income, net			2,372				6,592				1,075
Total operating expenses			(27,516	)			(18,731	)			(3,056	)
Loss from operations			(6,267	)			(8,418	)			(1,373	)
Interest expense			(5,276	)			(4,695	)			(766	)
Share of net loss of equity investment			(279	)			-				-
Loss on disposal of a subsidiary			(2,666	)			-				-
Interest income			63				93				15
Loss before income taxes			(14,425	)			(13,020	)			(2,124	)
Income tax expense
Current			(677	)			(24	)			(4	)
Deferred			-				-				-
Income tax expense			(677	)			(24	)			(4	)
Net loss			(15,102	)			(13,044	)			(2,128	)
Less: Net loss attributable to the non-controlling interests			(432	)			(1,147	)			(187	)
Net loss attributable to Origin Agritech Limited			(14,670	)			(11,897	)			(1,941	)
Other comprehensive loss
Net loss			(15,102	)			(13,044	)			(2,128	)
Foreign currency translation difference			12				329				54
Comprehensive loss			(15,090	)			(12,715	)			(2,074	)
Less: Comprehensive loss attributable to non-controlling interests			(432	)			(1,147	)			(187	)
Comprehensive loss attributable to Origin Agritech Limited			(14,658	)			(11,568	)			(1,887	)
Net loss per share – basic			(0.65	)			(0.52	)			(0.09	)
Net loss per share – diluted			(0.65	)			(0.52	)			(0.09	)
Shares used in calculating basic net loss per share			22,743,853				22,738,541				22,738,541
Shares used in calculating diluted net loss per share			22,743,853				22,738,541				22,738,541

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)      

		6/30/2014				9/30/2014				6/30/2015				6/30/2015
		RMB				RMB				RMB				US$
ASSETS
Current Assets
Cash and cash equivalents			90,398				46,268				22,414				3,666
Restricted cash			-				15,670				-				-
Accounts receivable			4,209				1,021				6,590				1,078
Due from related parties			2,400				2,698				4,750				777
Advances to suppliers			19,826				17,751				14,865				2,431
Advances to growers			22,784				20,759				18,727				3,063
Inventories			698,395				516,368				595,577				97,418
Income tax recoverable			49				48				48				8
Other current assets			5,111				4,368				6,377				1,043
Total current assets			843,172				624,951				669,348				109,484
Restricted cash			14,350				-				20,000				3,271
Land use rights, net			31,071				31,799				30,061				4,917
Plant and equipment, net			341,481				338,526				325,353				53,218
Equity investments			21,119				18,721				18,721				3,062
Goodwill			11,973				11,973				11,973				1,958
Acquired intangible assets, net			25,236				34,891				36,266				5,932
Other assets			2,299				4,009				2,579				422
Total assets			1,290,701				1,064,870				1,114,301				182,264
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings			285,000				225,000				210,000				34,350
Current portion of long-term borrowings			21,500				33,805				16,750				2,740
Accounts payable			13,069				4,525				10,817				1,769
Due to growers			16,665				17,943				8,829				1,444
Due to related parties			16,230				11,711				11,468				1,876
Advances from customers			209,897				324,645				128,083				20,951
Deferred revenues			342,146				19,029				373,383				61,074
Income tax payable			39,060				-				-				-
Other payables and accrued expenses			52,928				67,953				45,624				7,463
Total current liabilities			996,495				704,611				804,954				131,667
Long-term borrowings			43,329				31,023				47,679				7,799
Other long-term liability			19,468				19,649				18,201				2,977
Total liabilities			1,059,292				755,283				870,834				142,443
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 June 30, 2014, September 30, 2014 and June 30, 2015;
22,738,541, 22,738,541 and 22,738,541 shares outstanding as of
June 30, 2014, September 30, 2014 and June 30, 2015 )			-				-				-				-
Additional paid-in capital			400,606				400,888				402,272				65,799
Accumulated deficit			(183,511	)			(103,000	)			(170,316	)			(27,859	)
Treasury stock at cost (1,277,622, 1,277,622 and 1,277,622 shares as of June 30, 2014, September 30, 2014 and June 30, 2015)			(37,445	)			(37,445	)			(37,445	)			(6,125	)
Accumulated other comprehensive loss			(4,450	)			(4,446	)			(4,199	)			(689	)
Total Origin Agritech Limited shareholders’ equity			175,200				255,997				190,312				31,126
Non-controlling interests			56,209				53,590				53,155				8,695
Total equity			231,409				309,587				243,467				39,821
Total liabilities and equity			1,290,701				1,064,870				1,114,301				182,264

CONTACT:

Origin Agritech Limited

James Chen,

Chief Financial Officer

james.chen@originseed.com.cn

Investor Relations

ir@originseed.com.cn

+86 10 5890-7536