Origin Agritech Limited Reports Unaudited Financial Results For Three Months Ended March 31, 2015

BEIJING, May 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 second quarter ended March 31, 2015. Origin prepares its financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.

FINANCIAL RESULTS OVERVIEW

The Company reported a net loss per share of RMB1.14, representing a significant improvement from the net loss per share of RMB1.95 in the same period last year. Since the Company doesn't recognize the majority of its revenues until the third and fourth fiscal quarters, the improvement this quarter was mainly the result of operating expense control. Operating expenses were RMB 19.8 million in the second quarter of fiscal year 2015, a decline of 46% year-over-year, which was mainly due to decreased marketing expenses and other expense controls. 

During the second quarter of fiscal year 2015, the Company generated revenues of RMB3.8 million (US$0.6 million) compared with RMB4.7 million for the three months ended March 31, 2014. Revenues generated this quarter were mainly from scrap sales. Again, as a reminder, the majority of Origin's revenues are recorded in the third and fourth fiscal quarters as a result of our revenue recognition policy.

Deferred revenues were RMB423.1 million (US$68.9 million) as of March 31, 2015, compared with RMB426.8 million on March 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 loss for the second quarter of fiscal 2015 was RMB1.7 million (US$0.3 million) compared with a gross loss of RMB2.4 million in the second quarter of fiscal 2014. Negative gross margin was a result of scrap sales of some corn and rice seed products during this quarter.

Total operating expenses for the second quarter ended March 31, 2015, were RMB19.8 million (US$3.2 million), down 46% from RMB36.8 million for the same period in fiscal 2014. The decrease was mainly due to decreased marketing spending and cost controls over other operating activities. Specifically, selling and marketing expenses were RMB6.2 million (US$1.0 million) for the second quarter of fiscal 2015, a decrease of 64% from RMB17.1 million for the same period last year due mainly to decreased marketing spending and continued expense control measures. General and administrative expenses were RMB9.2 million (US$1.5 million) for the second quarter ended March 31, 2015, down 15% from RMB10.8 million one year ago as our cost control efforts continued. Research and development expenses were RMB8.9 million (US$1.4 million) in the second quarter of fiscal 2015, which was consistent with RMB8.9 million for the same period last year.

Operating loss for the second quarter of fiscal 2015 amounted to RMB21.5 million (US$3.5 million) compared with an operating loss of RMB39.1 million for the same period in fiscal 2014. The lower operating loss was mainly due to operating cost control efforts.

Net loss attributable to the Company for the second quarter of fiscal 2015 was RMB25.9 million (US$4.2 million), or net loss per basic and diluted share of RMB1.14 (US$0.19), compared to a net loss of RMB44.3 million, or net loss per basic and diluted share of RMB1.95 in the same period one year ago.

BALANCE SHEET

As of March 31, 2015, cash and cash equivalents were RMB37.3 million (US$6.1 million) and shareholders' equity attributable to the Company was RMB201.6 million (US$32.8 million). The Company had short-term borrowings of RMB225 million (US$36.6 million) and long-term borrowing of RMB72.7 million (US$11.8 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 RMB100 million (US$16.3 million) as of March 31, 2015. These advances represent cash receipts for orders in the upcoming selling season.

CONFERENCE CALL INFORMATION

The Company will host a teleconference on May 5th, 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 May 12th, 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
[email protected]

Origin Agritech Investor Relations
[email protected]
+86 10 5890-7536

SOURCE Origin Agritech Limited