EX-99.1 2 v139702_ex99-1.htm Unassociated Document
 
Company Contact:
Investor Relations Contact:
Ms. Ying Yang
Mr. Crocker Coulson
Chief Financial Officer
President
China Green Agriculture, Inc.
CCG Investor Relations
Tel: +1-626-623-2575
Tel: +1-646-213-1915 (NY Office)
E-mail: yangying@techteam.com.cn
E-mail: crocker.coulson@ccgir.com
 
Graham Reed, Financial Writer
 
E-mail: graham.reed@ccgir.com
 
FOR IMMEDIATE RELEASE
 
China Green Agriculture, Inc. Announces
Second Quarter 2009 Results

·
Provides fiscal year 2009 Q3 revenue guidance of $7.7 million to $8.2 million, EPS guidance of $0.14 to $0.17
·
Updates fiscal year 2009 full year revenue guidance to $31.6 million to $32.8 million, EPS guidance to $0.61 to $0.66
 

Xi’an, China – February 11, 2009 – 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. (“Techteam”), today announced its financial results for the second quarter of fiscal 2009 ended December 31, 2008.

Second Quarter 2009 Highlights

·
Net revenues totaled $7.0 million, up 86.4% year-over-year
·
Gross profit was $4.1 million, or  58.6% of revenues, up 92.0% year-over-year
·
Operating income was $3.1 million, up 297.5% year-over-year
·
Net income was $2.7 million, up 264.1% year-over-year, or $0.14 per basic and fully diluted share
·
Introduced two new fertilizer products under its high-end brand, Jinong
·
Completed technical upgrades to existing production line, capacity increased 50% to 15,000 metric tons
 

 
“We are pleased to announce an outstanding quarter of growth in revenue and earnings per share, both of which exceeded our guidance despite the challenging global economic environment,” stated Mr. Tao Li, chairman, president and chief executive officer of China Green Agriculture. “With the Chinese government’s strong support for the agriculture industry and China Green Agriculture’s continual stream of new products to satisfy the local agriculture market, we are confident that our performance will continue to be strong in the coming quarters.”

Second Quarter 2009 Results

Net revenues for the second quarter of fiscal 2009 totaled $7.0 million, up 86.4% from $3.8 million in the same quarter of fiscal year 2008.  The increase was the result of an increase in sales volume due to expansion of the Companys sales network, the launch of new products and an increase in demand for agricultural byproducts, namely top-grade fruit, vegetables, flowers and colored seedlings, from the Companys greenhouse R&D facility, namely, Xian Jintai Agriculture Technology Development Company (Jintai), Techteams wholly owned subsidiary. In the second quarter of fiscal year 2009, fertilizer products increased 80.2% year-over-year and accounted for $4.9 million, or 70.6% of total revenues, while products from Jintai increased 103.0% and accounted for $2.1 million, or 29.4% of total revenues. The increase in revenue growth from Jintai when compared with previous quarters was primarily due to an increase in demand for agricultural products during the holiday season.

Gross profit for the second quarter of fiscal year 2009 totaled $4.1 million, an increase of 92.0% from $2.1 million in the same quarter of 2008. Gross profit margin was 58.6% for the second quarter of fiscal year 2009, up slightly from 56.8% in the second quarter of 2008.

Operating expenses for the second quarter of 2009 were $1.0 million, down from $1.3 million in the same quarter of 2008. This decrease was primarily due to one-time costs incurred in the second quarter of fiscal year 2008 related to listing as a public company. Operating expenses were 13.6% of net revenues in the second quarter of fiscal year 2009, down from 35.8% of net revenues in the corresponding quarter of fiscal year 2008.

Operating income for the second quarter of fiscal year 2009 was $3.1 million, up 297.5% from $0.8 million in the second quarter of fiscal year 2008. Operating margin was 44.9%, compared to 21.1% in the same quarter of 2008.

Net income for the second quarter of fiscal year 2009 was $2.7 million, or $0.14 per basic and fully diluted share, up 264.1% compared with net income of approximately $0.7 million, or $0.06 per basic and fully diluted share, during the same period in fiscal year 2008. In the second quarter of 2009, the average weighted shares outstanding were 18.4 million shares versus 11.4 million shares in the second quarter of fiscal year 2008.
 

 
Six Months Results

For the first half of fiscal year 2009, revenues were $15.9 million, up 45.1% from $10.9 million in the corresponding period of 2008. Gross profit increased 38.1% to $9.0 million in the first six months of 2009, versus $6.6 million in the same period a year ago. Gross margin was 57.0% in the first half of fiscal 2009 compared to 59.9% during the first half of fiscal 2008. Operating income in the first half of fiscal 2009 rose 51.7% to $7.4 million compared to $4.9 million in the first half of fiscal 2008. Net income, was $6.2 million, or $0.33 per basic and fully diluted share, based on 18.4 million weighted average shares.  Net income in the year ago period was $4.8 million, or $0.43 per basic and fully diluted shares, based on 11.1 million weighted average shares.

Financial Condition

As of December 31, 2008, the Company had $15.1 million in cash and cash equivalents with working capital of $18.3 million. The Company had short term loans of $3.8 million and shareholders’ equity of $23.5 million. The Company had no long term debt as of December 31, 2008. In the first half of fiscal 2009, the Company had $0.7 million in cash flows for operating activities. China Green Agriculture’s capital expenditures were approximately $1.9 million in the first half of the 2009 fiscal year due to the purchase of equipment for its new facility.

Business Outlook

China Green Agriculture provided revenue guidance for the third quarter of fiscal year 2009 of $7.7 million to $8.2 million and basic and fully diluted EPS guidance of $0.14 to $0.17.  For the fiscal year ending June 30, 2009, China Green Agriculture expects to meet or exceed its “make good” provision of $0.61 per fully diluted share with expected revenues of $31.6 million to $32.8 million and EPS of $0.61 to $0.66 per fully diluted share.

“We have built our business based on a vision to promote sustainable development of the agriculture industry in China through the use of green fertilizer products. We believe our continuous effort in research and development of new fertilizers and further expansion of our sales network will position us to become one of the nation’s leading green fertilizer producers,” stated Mr. Li.
 

 
“Through our recent capacity upgrade to 15,000 metric tons per year, we expect to continue to grow.  We anticipate continued strong performance from our greenhouse R&D center with strong growth toward the end of our fiscal year in fertilizer sales as we move into the peak growing season.  With the completion of our new, 40,000 metric ton facility, which will come online in the first quarter of our 2010 fiscal year, we expect to maintain our expansion well into the future.”
 
 
Conference Call

The Company will conduct a conference call at 9:00 a.m. eastern time on Thursday, February 12, 2009 to discuss results for second quarter of fiscal 2009. To participate in the live conference call, please dial the following number approximately 15 minutes prior to the scheduled conference call time: 1-800-688-0796. International callers should dial +1-617-614-4070. When prompted by the operator, please mention conference passcode 601 411 34.  If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, February 12, 2009, 11:00 a.m. eastern time. To access the replay, please dial 1-888-286-8010 and enter the passcode 10200202. International callers should dial +1-617-801-6888 and enter the same passcode 10200202.


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 15,000 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).

China Green Agriculture currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products in 27 provinces in the PRC. The leading five provinces by revenue for the three months ended December 31, 2008 are Shannxi (21.6%), Shandong (7.1%), Xinjiang (5.0%), Fujian (5.0%) and Guangdong (4.7%). For more information, visit http://www.cgagri.com.
 

 
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 AND SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited)
 
   
Six Months Ended December 31,
   
Three Months Ended December 31,
 
   
2008
   
2007
   
2008
   
2007
 
 Net sales
  $ 15,880,128     $ 10,947,163     $ 7,000,126     $ 3,756,142  
 Cost of goods sold
    6,832,199       4,394,981       2,901,306       1,621,220  
 Gross profit
    9,047,929       6,552,182       4,098,820       2,134,923  
 Operating expenses
                               
 Selling expenses
    582,537       471,838       366,161       320,133  
 General and administrative expenses
    1,023,774       1,173,962       586,645       1,023,345  
 Total operating expenses
    1,606,311       1,645,800       952,806       1,343,478  
 Income from operations
    7,441,618       4,906,382       3,146,014       791,445  
 Other income (expense)
                               
 Other income
    4,655       38,992       -       29,691  
 Interest income
    143,019       15,526       2,624       15,402  
 Interest expense
    (447,923 )     (197,600 )     (127,059 )     (105,031 )
 Bank charges
    (1,430 )     (1,504 )     (1,050 )     (1,482 )
 Total other income (expense)
    (301,679 )     (144,585 )     (125,485 )     (61,420 )
 Income before income taxes
    7,139,939       4,761,797       3,020,529       730,025  
 Provision for income taxes
    984,159       -       362,676       -  
 Net income
    6,155,780       4,761,797       2,657,852       730,025  
 Other comprehensive items
                               
 Foreign currency translation gain/(loss)
    (8,321 )     553,997       (2,142 )     379,536  
 Comprehensive income
  $ 6,147,459     $ 5,315,794     $ 2,655,711     $ 1,109,561  
                                 
Basic and diluted weighted average shares outstanding
    18,381,702       11,080,077       18,381,702       11,392,886  
Basic and diluted net earnings per share *
  $ 0.33     $ 0.43     $ 0.14     $ 0.06  
 

 
CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2008 AND JUNE 30, 2008
 
ASSETS
 
   
December 31, 2008
 
June 30, 2008
 
   
(Unaudited)
     
Current Assets
         
Cash and cash equivalents
  $ 15,079,265   $ 16,612,416  
Restricted cash
    134,478     193,392  
Accounts receivable, net
    4,540,866     3,590,552  
Inventories
    7,294,456     3,988,979  
Other assets
    87,863     128,091  
Advances to suppliers
    584,835     512,845  
Total Current Assets
    27,721,763     25,026,275  
               
Plant, Property and Equipment, Net
    17,922,298     18,199,456  
               
Construction In Progress
    6,579,564     5,115,492  
               
Intangible Assets, Net
    1,126,638     1,180,159  
               
Total Assets
  $ 53,350,263   $ 49,521,382  
               
LIABILITIES AND SHAREHOLDERS' EQUITY
 
               
Current Liabilities
             
Accounts payable
  $ 206,217   $ 232,417  
Unearned revenue
    342,711     88,950  
Other payables and accrued expenses
    504,828     455,228  
Registration rights liability
    704,494     506,142  
Advances from other unrelated companies
    340,089     344,628  
Amount due to related parties
    31,120     31,121  
Taxes payable
    3,393,308     5,878,275  
Short term loans
    3,822,474     4,201,925  
Total Current Liabilities
    9,345,240     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
    1,268,766     1,200,077  
Statury reserve
    2,578,042     1,882,797  
Retained earnings
    17,224,614     11,764,079  
Accumulated other comprehensive income
    2,402,277     2,404,419  
Total Stockholders' Equity
    23,485,768     17,263,441  
               
Total Liabilities and Stockholders' Equity
  $ 53,350,263   $ 49,521,382  
 

CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited)
 
   
2008
   
2007
 
Cash flows from operating activities
           
Net income
  $ 6,155,780     $ 4,761,797  
Adjustments to reconcile net income to net cash
               
provided by operating activities
               
                 
Share capital contribution - rental and interest paid by shareholders
    -       32,177  
                 
Stock options granted for compensation
    68,690       -  
Depreciation
    737,464       402,782  
Amortization
    53,494       48,909  
Decrease / (Increase) in current assets
               
Accounts receivable
    (950,555 )     766,758  
Other receivables
    32,262       -  
Inventories
    (3,306,067 )     (1,718,529 )
Advances to suppliers
    (72,015 )     131,916  
Other assets
    9,508       (731,007 )
(Decrease) / Increase in current liabilities
               
Accounts payable
    (26,200 )     74,928  
Unearned revenue
    253,800       174,534  
Tax payables
    (2,485,151 )     1,067,900  
Advances from unrelated parties
    -       762,443  
Other payables and accrued expenses
    243,560       (456,670 )
Net cash provided by operating activities
    714,571       5,317,938  
                 
Cash flows from investing activities
               
Acquisition of plant, property, and equipment
    (460,797 )     (247 )
Advances for construction in progress
    -       (5,178,556 )
Additions to construction in progress
    (1,464,432 )     (20,352 )
Cash paid to acquire china operation
    -       (4,096,100 )
Net cash used in investing activities
    (1,925,229 )     (9,295,255 )
                 
Cash flows from financing activities
               
Repayment of loan
    (379,384 )     (133,411 )
Shares issuance cost
    -       18,602,720  
Proceeds issuance of shares subject to redemption
    -       (4,250,000 )
Restricted cash
    58,914       -  
(Payments)/proceeds to/from related parties
    -       (632,926 )
Net cash provided by (used in) financing activities
    (320,470 )     13,586,383  
                 
Effect of exchange rate change on cash and cash equivalents
    (2,024 )     34,412  
Net increase (decrease) in cash and cash equivalents
    (1,533,151 )     9,643,478  
                 
Cash and cash equivalents, beginning balance
    16,612,416       81,716  
Cash and cash equivalents, ending balance
  $ 15,079,265     $ 9,725,194  
                 
Supplement disclosure of cash flow information
               
Interest expense paid
  $ 242,459     $ 178,095  
Income taxes paid
  $ 621,367     $ -  
 
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