Origin Agritech Limited Reports Unaudited Financial Results For The Third Quarter Fiscal 2016

BEIJING, Aug. 11, 2016 /PRNewswire/ --

--3Q16 Total Net Revenue Increases 12.1% YoY--
--3Q16 Non-GAAP Operating Loss Narrows YoY--
--Achieves Positive Operating Cash Flow in 3Q16--

Origin Agritech Limited (NASDAQ: SEED, "Origin" or the "Company"), a technology-focused supplier of crop seeds in China today announced its unaudited financial results for the third quarter of fiscal 2016 ended June 30, 2016 ("GAAP").

Mr. Shashank Aurora, Chief Financial Officer of Origin, commented, "The sum of recognized revenue and deferred revenue as of June 30, 2016 was RMB473.9 million, or US$71.5 million, an increase of 6.0% compared to RMB447.1 million for the same period one year ago, driven by ongoing development and strong interest in our corn seed products and biotechnologies. The majority of deferred revenue will be recognized in the fourth fiscal quarter of 2016. Excluding one-time items, we narrowed both our loss from operations and net loss compared to last quarter as well as to the prior year. In our Seed Production & Distribution segment, we managed our inventory downward in the quarter as we improved our forecasting capabilities and better aligned seed production with demand. This helped generate healthy cash flow from operations, freed up working capital and reduced our debt. We continue to optimize our cost structure based on the exciting market opportunities that lie ahead."

Dr. William S. Niebur, Chief Executive Officer of Origin, commented, "We are making steady progress with our efforts to become a more globally focused seed and biotechnology company that bases its development in China and provides solutions to farmers around the world. We have recently added several important executive team members, including a new Chief Financial Officer and a new Chief Technology Officer who will drive the evolution of our current business model to enable expansion globally. Additionally, as a part of our strategic partnership approach, we announced a collaboration and commercial licensing agreement with a major multinational seed company in the third fiscal quarter to develop new GM crops for farmers in China. This agreement has great potential to modernize China's agricultural system and enhance food security, both major priorities for the government. We have a healthy pipeline of new seed products and traits for future release and are committed to pursuing new domestic and international partnership opportunities to maximize revenue and profit growth in the years ahead."

Third Quarter Fiscal 2016 Financial Results

Total net revenue for the third fiscal quarter of 2016 increased by 12.1% to RMB82.6 million (US$12.5 million) from RMB73.7 million in the prior year period. The increase in seed revenue was primarily driven by increased sales of corn seed hybrid Liyu-16 and was also partially impacted by lower discard sales from the rice business. While the total planted corn acres in China are expected to decline by 10% in the calendar year of 2016, which may affect the Company's full year volume and revenue, the Company has been able to maintain a consistent market share in the corn seed business in China.

The following table shows the Company's year-over-year change in net revenue for each segment:

Net revenue from the Seed Production and Distribution segment increased 11.7% to RMB82.3 million (US$12.4 million), compared to RMB73.7 million in the prior year period.

Net revenue from the Biotech and Product Development segment was RMB0.3 million in the third fiscal quarter of 2016, while there was no such segment recognized in the prior year period. The revenue from this segment represents fees for services from the Company's collaborators.

Deferred revenues increased 4.8% to RMB391.3 million (US$59.0 million) as of June 30, 2016, compared with RMB373.4 million as of June 30, 2015. 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.

To read full press release, please click here.