Provides Fiscal Year 2009 Q2 Revenue Guidance of $5.8 million to $6.9 million, EPS Guidance of $0.09 to $0.13
XI'AN, China, Nov. 10 /Xinhua-PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (OTC Bulletin Board: CGAG) ("China Green Agriculture" or "the Company"), a leading producer and distributor of humic acid ("HA") based liquid compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., today announced its financial results for the first quarter ended September 30, 2008.
First Quarter 2009 Highlights
-- Net revenues totaled $8.9 million, up 23.5% year-over-year
-- Gross profit was $4.9 million, or 55.7% of revenues, up 12.0% year-
over-year
-- Operating income was $4.3 million, up 4.4% year-over-year
-- Net income was $3.5 million, down 13.2% year-over-year, or $0.19 per
basic and fully diluted share
-- Four new fertilizer products were developed and released to the market
-- Ms. Ying Yang was appointed as chief financial officer
"We are pleased that we have started with strong sales growth in our top line in the first quarter of fiscal year 2009," stated Mr. Tao Li, chairman, president and chief executive officer of China Green Agriculture. "After a brief slow down due to one time weather related issues in the previous quarter, our margins have improved and we have resumed an accelerated pace of expansion. The year over year decline in net income for Q1 2009 was primarily due to an increase in taxes. We are confident that China Green Agriculture will be able to achieve strong earnings growth for our current fiscal year."
First Quarter 2009 Results
Net revenues for the first quarter of fiscal 2009 totaled $8.9 million, up 23.5% from $7.2 million in the same quarter of fiscal year 2008. The increase in revenues was primarily due to an increase in sales volume of humic acid organic liquid compound fertilizer which is driven by our expanded sales network and greater product offerings. In the first quarter of fiscal year 2009, fertilizer products accounted for $7.6 million, or 85.9% of total revenues, while products from the greenhouse facility accounted for $1.3 million, or 14.1% of total revenues. The decrease in revenue growth from the greenhouse facility compared with previous quarters was primarily due to the earthquake in Sichuan province and widespread regional flooding which disrupted the Company's distribution network. In addition, a one time project in the first quarter of fiscal year 2008 boosted revenues for that comparable period.
Gross profit for the first quarter of fiscal year 2009 totaled $4.9 million, an increase of 12.0% from $4.4 million in the same quarter of 2007. Gross profit margin was 55.7% for the first quarter of fiscal year 2009, compared to 61.4% in the first quarter of 2008 and 52.7% during the last quarter in 2008. The decline in gross margin was mainly due to higher costs of packaging materials for the Company's fertilizer products. Compared to the fourth quarter of fiscal year 2008, gross margin improved three percentage points.
Operating expenses for the first quarter of 2009 were $0.7 million, up from $0.3 million in the same quarter of 2008. This increase was primarily due to higher selling and administrative expenses associated with being a public company, including legal and auditor fees, and expansion of the board of directors and management team. Operating expenses were 7.4% of net revenues in the first quarter of fiscal year 2009, up from 4.2% of net revenues in the corresponding quarter of fiscal year 2008.
Operating income for the first quarter of fiscal year 2009 was $4.3 million, up 4.4% from $4.1 million in the first quarter of fiscal year 2008. Operating margin was 48.4%, compared to 57.2% in the same quarter of 2008.
Net income for the first quarter of fiscal year 2009 was $3.5 million, or $0.19 per basic and fully diluted share, down 13.2% compared to net income of approximately $4.0 million, or $0.37 per basic and fully diluted share, during the same period in fiscal year 2008. In the first quarter of 2009, the average weighted shares outstanding were 18.4 million shares versus 10.8 million shares in the first quarter of fiscal year 2008. The decrease in net income was mainly due to an increase in taxes from $0 in the first quarter of fiscal year 2008 to $0.6 million in the first quarter of fiscal year 2009 as the Company previously enjoyed tax exempt status.
Financial Condition
As of September 30, 2008, the Company had $16.9 million in cash and cash equivalents with working capital of $17.2 million. The Company had $20.8 million in shareholders' equity compared to $17.3 million as of June 30, 2008. The Company generated $0.4 million in cash flows from operating activities for the quarter ended September 30, 2008. China Green Agriculture's capital expenditures were approximately $0.04 million due to ongoing projects to upgrade the Company's manufacturing facilities. The Company expects additional capital expenditures of roughly $8.0 million in the second and third quarter of this fiscal year for the completion of its expanded facilities.
Business Outlook
China Green Agriculture would like to provide revenue guidance for the second quarter of fiscal year 2009 of $5.8 million to $6.9 million and EPS guidance of $0.09 to $0.13. The Company expects to achieve its make good provision of earnings per share $0.609 for the fiscal year 2009.
"Despite the recent global economic slow down that affected the various countries including China, we remain confident that the agriculture industry in China will stay strong as the government implements several innovative green agricultural policies. Combined with our leading-edge production technology, an improved distribution network for high-quality finished products and an increased production capacity in fiscal year 2009, we are well positioned to steadily increase our customer base and become the green fertilizer industry leader," concluded Mr. Li.
Conference Call
The Company will conduct a conference call at 9:00 AM Eastern Time on Monday, November 10, 2008 to discuss results for first quarter of 2009. To participate in the live conference call, please dial the following number approximately 15 minutes prior to the scheduled conference call time: 1-888-339-2688. International callers should dial 1-617-847-3007. When prompted by the operator, please mention conference passcode 110 865 16. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Monday, November 10, 2008, 11:00 AM Eastern Time. To access the replay, please dial 1-888-286-8010 and enter the passcode 14011232. International callers should dial 1-617-801-6888 and enter the same passcode 14011232.
About China Green Agriculture, Inc.
China Green Agriculture, Inc. produces and distributes humic acid ("HA") based liquid compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., ("TechTeam"). TechTeam produces and sells approximately 10,000 metric tons of over 100 different kinds of fertilizer products per year. All of TechTeam's fertilizer products are certified by the PRC government as green products and suitable for growing Grade AA "green" foods, also known as green products that contain little or no chemical materials, as stated by the China Green Food Research Center. TechTeam's fertilizers are highly concentrated liquids which require an application of approximately 120 ml per mu per application. Its average end user has approximately four mu of land (one mu = .165 acres).
Cautionary Statement
This press release contains forward-looking statements concerning the Company's business, products and financial results. The Company's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Green Agriculture undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
-- FINANCIAL TABLES FOLLOW --
CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Unaudited)
2008 2007
Net sales $8,880,002 $7,191,021
Cost of goods sold 3,930,893 2,773,761
Gross profit 4,949,109 4,417,260
Operating expenses
Selling expenses 216,376 151,705
General and administrative
expenses 437,129 150,617
Total operating expenses 653,505 302,322
Income from operations 4,295,604 4,114,938
Other income (expense)
Other income(expense) 4,655 9,301
Interest income 140,395 124
Interest expense (320,864) (92,569)
Bank charges (380) (22)
Total other expense (176,194) (83,166)
Income before income taxes 4,119,410 4,031,772
Provision for income taxes 621,483 --
Net income 3,497,927 4,031,772
Other comprehensive items
Foreign currency translation
gain/(loss) (6,179) 174,461
Comprehensive income $3,491,748 $4,206,233
Basic and diluted weighted
average shares outstanding 18,381,702 10,770,669
Basic and diluted net earnings
per share $0.19 $0.37
CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2008 AND JUNE 30, 2008
ASSETS
September 30,
2008 June 30, 2008
(Unaudited)
Current Assets
Cash and cash equivalents $16,919,102 $16,612,416
Restricted cash 165,081 193,392
Accounts receivable, net 6,340,147 3,590,552
Inventories 6,572,248 3,988,979
Other assets 104,926 128,091
Due from related parties -- --
Advances to suppliers 579,582 512,845
Total Current Assets 30,681,086 25,026,275
Plant, Property and
Equipment, Net 17,829,481 18,199,456
Construction In Progress 5,155,894 5,115,492
Intangible Assets, Net 1,153,538 1,180,159
Long-term asset, Net
Total Assets $54,819,998 $49,521,382
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable 263,332 232,417
Unearned revenue 180,924 88,950
Other payables and accrued expenses 439,015 455,228
Registration rights liability 704,494 506,142
Advances from other unrelated
companies 336,151 344,628
Amount due to related parties 31,121 31,121
Taxes payable 7,480,835 5,878,275
Short term loans 4,084,550 4,201,925
Total Current Liabilities 13,520,422 11,738,686
Common Stock, $.001 par
value, 6,313,617 shares
subject to redemption 20,519,255 20,519,255
Commitment -- --
Stockholders' Equity
Preferred Stock, $.001
par value, 20,000,000
shares authorized, Zero shares
issued and outstanding -- --
Common stock, $.001 par
value, 780,000,000 shares
authorized, 12,068,085 shares
issued and outstanding 12,068 12,068
Additional paid-in capital 1,225,209 1,200,077
Statutory reserve 2,280,394 1,882,797
Retained earnings 14,864,409 11,764,079
Accumulated other
comprehensive income 2,398,240 2,404,419
Total Stockholders' Equity 20,780,321 17,263,442
Total Liabilities and
Stockholders' Equity 54,819,998 49,521,382
CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Unaudited)
2008 2007
Cash flows from operating activities
Net income $3,497,927 $4,031,772
Adjustments to reconcile net income
to net cash provided by operating
activities
Share capital contribution - rental
and interest paid by shareholders -- 14,337
Issuance of stock options for
compensation 25,133
Depreciation 368,094 208,898
Amortization 26,740 24,253
Decrease / (Increase) in current
assets
Accounts receivable (2,750,170) (4,095,432)
Other receivables 8,258 69,214
Inventories (2,583,908) (150,870)
Advances to suppliers (66,825) (318,984)
Other assets 15,756 (2,374)
(Decrease) / Increase in current
liabilities
Accounts payable 30,941 287,180
Unearned revenue 91,989 94,036
Tax payables 1,603,503 757,460
Advances from unrelated parties (341,719)
Other payables and accrued expenses 174,431 (16,975)
Net cash provided by operating
activities 441,868 560,796
Cash flows from investing activities
Acquisition of plant, property, and
equipment (897) --
Additions to construction in
progress (41,223) --
Net cash used in investing
activities (42,120) --
Cash flows from financing activities
Repayment of loan (116,701) --
Restricted cash 28,311 --
(Payments)/proceeds to/from related
parties -- (536,621)
Net cash used in financing
activities (88,391) (536,621)
Effect of exchange rate change on
cash and cash equivalents (4,671) 1,509
Net increase in cash and cash
equivalents 306,686 25,684
Cash and cash equivalents, beginning
balance 16,612,416 81,716
Cash and cash equivalents, ending
balance $16,919,102 $107,400
Supplement disclosure of cash flow
information
Interest expense paid $(122,511) $(92,674)
Income taxes paid $-- $--
For more information, please contact:
Company Contact:
Ms. Ying Yang
Chief Financial Officer
China Green Agriculture, INC.
Tel: +1-626-623-2575
Email: yingyang@techteam.com.cn
Investor Relations Contact:
Mr. Crocker Coulson, President
CCG Investor Relations
Tel: +1-646-213-1915 (NY Office)
Email: crocker.coulson@ccgir.com
Graham Reed, Financial Writer
Email: graham.reed@ccgir.com
Web: http://www.ccgirasia.com