EXHIBIT 99.1
China Green Agriculture, Inc. Reports Second Quarter Fiscal Year 2010 Financial Results
XI'AN, China, February 8 /PRNewswire-Asia-FirstCall/ --
| · | Company Exceeds Second Quarter FY2010 Revenue and Net Income Guidance |
| · | Q2 FY2010 Sales Increase 60% to $11.2 Million, Net Income Increases 78% to $4.7 Million with EPS of $0.20 |
| · | Q2 FY2010 Gross Margin Increases to 61% from 59% Y-O-Y; Operating Margin Increases to 49% from 45% Y-O-Y |
| · | Company Increases Fiscal Year 2010 Guidance: Revenue, Net Income and EPS of at least $48.9 Million, $20.3 Million, and $0.87, respectively |
| · | Management to Host Earnings Conference Call at 9:00 am ET |
China Green Agriculture, Inc. (NYSE: CGA; "China Green Agriculture" or "the Company"), a leading producer and distributor of humic acid ("HA") based compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., today announced its financial results for the second fiscal quarter ending December 31, 2009.
| Q2 FY2010 Results | |||
| Q2 FY2010 | Q2 FY2009 | CHANGE (%) | |
| Net Sales | $11.2 million | $7.0 million | +60% |
| Gross Profit | $6.8 million | $4.1 million | +65% |
| Net Income | $4.7 million | $2.7 million | +78% |
EPS (Basic and Diluted) | $0.20 | $0.14 | +41% |
| Weighted Shares Outstanding | 23.3 million | 18.4 million | +27% |
| Six Months FY2010 Results | |||
| Six Months FY2010 | Six Months FY2009 | CHANGE (%) | |
| Net Sales | $22.4 million | $15.9 million | +41% |
| Gross Profit | $13.7 million | $9.0 million | +52% |
| Net Income | $10.0 million | $6.2 million | +62% |
EPS (Basic and Diluted) | $0.44 | $0.33 | +33% |
| Weighted Shares Outstanding | 22.5 million | 18.4 million | +22% |
Second Quarter FY2010 Results
Net sales for the second quarter of fiscal year 2010 totaled $11.2 million, up 60% from $7.0 million in the same quarter of fiscal year 2009. Jinong, which is the division that sells humic acid based compound fertilizers, accounted for 81.5% of our total net sales. The top three selling products accounted for 21% of the fertilizer sales. For the second quarter of fiscal year 2010, Jinong's net sales increased $4.2 million, or 84%, to $9.1 million from $4.9 million for the same quarter of fiscal year 2009. This increase was primarily due to the increase in production capacity and the sales from more high-end products including our new highly-concentrated powdered fertilizer products. Sales volume increased 771 tons, or 25% to 3,836 tons in the second quarter of fiscal year 2010, versus 3,065 tons in the same period of fiscal year 2009. Sales from our Jintai division, namely top-grade fruits, vegetables, flowers and colored seedlings, decreased 0.3% from a year ago and accounted for $2.1 million, or 18.5% of total net sales.
Gross profit for the second quarter of fiscal year 2010 totaled $6.8 million, an increase of 65% from $4.1 million in the same quarter of fiscal year 2009. Gross profit margin was 61% for the second quarter of fiscal year 2010, up from 59% a year ago.
Operating income for the second quarter of fiscal year 2010 was $5.4 million, up 73% from $3.1 million in the second quarter of fiscal year 2009. Operating margin was 49%, compared to 45% in the same quarter of fiscal year 2009.
Net income for the second quarter of fiscal year 2010 was $4.7 million, or $0.20 per basic and fully diluted share, up 78% compared with net income of $2.7 million, or $0.14 per basic and fully diluted share, during the same period in fiscal year 2009. In the second quarter of 2010, the weighted average shares outstanding were 23.3 million shares (which includes shares issued in our public offering in November/December 2009) versus 18.4 million shares in the year ago period.
"We are very pleased that our financial results have exceeded both our revenue and net income guidance for the second quarter of fiscal year 2010 which were driven by sales of more high-end products, notably our highly-concentrated powdered fertilizer products," stated Mr. Tao Li, Chairman, President and Chief Executive Officer of China Green Agriculture. "Rising demand for our green fertilizer products coupled with our growing nationwide distribution network should allow us to experience robust revenue and earnings growth for the remainder of the year as we build on being one of the leading organic compound fertilizer producers in China."
Six Months FY2010 Results
For the six months ending December 31, 2009, net sales increased 41% to $22.4 million, up from $15.9 million for the six months ended December 31, 2008. For the first six months in fiscal year 2010, Jinong's net sales, which accounted for 86% of total net sales, increased $6.7 million, or 53%, to $19.3 million from $12.6 million for the six months ended December 31, 2008. Sales volume increased 9.6% to 8,151 tons for the six months ended December 31, 2009 from 7,435 tons for the six months ended December 31, 2008. This increase was attributable to production capacity upgrades, the introduction of 7 new products and the net addition of 10 new distributors. Jintai's net sales, which include sales of agricultural products, namely top-grade fruits, vegetables, flowers and colored seedlings, by using our existing and new fertilizers, decreased $0.15 million or 4.5%, to $3.2 million for the six months ended December 31, 2009 from $3.3 million for the same period in 2008. Gross profit increased 52% to $13.7 million in the first six months of fiscal year 2010, versus $9.0 million in the same period a year ago. Gross margin was 61% and 57% for the six months ended December 31, 2009 and 2008, respectively. Operating income for the first six months of fiscal year 2010 rose 56% to $11.6 million compared to $7.4 million for the first six months of fiscal year 2009. Net income, was $10.0 million, or $0.44 per basic and fully diluted share, based on 22.5 million weighted average shares. Net income in the year ago period was $6.2 million, or $0.33 per basic and fully diluted share, based on 18.4 million weighted average shares.
Financial Condition
As of December 31, 2009, the Company had $61.2 million in cash and cash equivalents, an increase of $43.4 million from June 30, 2009, primarily due to the net proceeds from the public offerings. The Company maintained short term loans of $2.2 million and had no long term debt as of December 31, 2009. Net accounts receivable stood at $11.0 million as of December 31, 2009 with trailing twelve month days sales outstanding (“DSO”) of 67 compared to DSO of 86 three months ago. For the first six months ended December 31, 2009, the Company had $6.0 million in cash flows from operating activities, while capital expenditures amounted to approximately $13.1 million primarily due to the purchase of land use rights for the expansion of the new greenhouse facility.
Revised 2010 Guidance
China Green Agriculture's second 2010 fiscal quarter revenue of $11.2 million and net income of $4.7 million exceeded the high end of its previously announced revenue and net income guidance for the second 2010 fiscal quarter of $10.4 million to $11.0 million and $4.2 million to $4.6 million, respectively, due to strong sales from its green fertilizer products.
- 2 - -
For the third fiscal quarter ending March 31, 2010, management expects revenues of $12.4 million to $13.0 million, net income of $5.1 million to $5.4 million, and EPS of $0.21 to $0.22 based on 24.3 million outstanding shares, respectively. For the fiscal year ending June 30, 2010, management increased guidance and now expects revenues of $48.9 million to $50.1 million, net income of $20.3 million to $20.9 million, and EPS of $0.87 to $0.89 based on 23.4 million weighted average shares, respectively. This guidance reflects the anticipated strong sales resulting from our increased production capacity as well as the expanded margins on high-end fertilizer products.
"Supported by our expanded production capacity and state-of-the-art R&D facilities, we will continue to capitalize on the market opportunities within China's highly fragmented organic fertilizer industry," stated Mr. Li. "Our goal is to continue to introduce new high margin products to the market quickly with our marketing efforts focused on promoting the quality image of the 'Jinong' brand through both distributors and retail stores. With our annualized production utilization rate at 29.6%, we feel our recent initiatives will provide sustainable growth while expanding both gross and operating margins and give us the capability to reach full utilization of our 55,000 metric ton capacity over the next three years. We remain on schedule in meeting our construction goals for our additional 12 new greenhouses as we continue to gain market share in China's green fertilizer industry," Mr. Li concluded.
Conference Call
The Company will conduct a conference call at 9:00 a.m. ET on Monday, February 8, 2010. Interested participants should call 1-877-407-9210 when calling within the United States or 1-201-689-8049 when calling internationally. When prompted by the operator, please mention "China Green Agriculture's Second Quarter Fiscal Year 2010 Financial Results" to join the call.
| Event: | CGA Second Quarter Fiscal Year 2010 Conference Call |
| Date: | February 8, 2010 |
| Time: | 9:00 a.m. ET |
| US Dial In: | 1-877-407-9210 |
| Int'l Dial In: | 1-201-689-8049 |
| Conference ID#: | 343803 |
The call is being webcast by Vcall and can be accessed at China Green Agriculture's website at http://www.ir-site.com/cgagri/events.asp. Investors can also access the webcast at http://www.InvestorCalendar.com.
A playback will be available through February 25, 2010. To listen, please call 1-877-660-6853 within the United States or 1-201-612-7415 when calling internationally. Replay Passcodes (both required for playback): Account #: 286; Conference ID #: 343803.
About China Green Agriculture, Inc.
China Green Agriculture, Inc. produces and distributes humic acid ("HA") based compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., ("Jinong"). Jinong produces and sells over 140 different kinds of fertilizer products per year. All of Jinong's fertilizer products are certified by the PRC government as green food production materials, as stated by the China Green Food Research Center. Jinong's liquid based 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). Jinong also has the capacity to produce highly concentrated powdered fertilizers. China Green Agriculture currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products in 21 provinces, 4 autonomous regions and 3 municipal cities in the PRC. The leading five provinces which collectively accounted for 34.7% of the Company's fertilizer revenue for the three months ended December 31, 2009 are Shaanxi (9.1%), Shandong (6.8%), Guangdong (6.7%), Heilongjiang (6.2%) and Hebei (5.9%). For more information, visit http://www.cgagri.com.
- 3 - -
Safe Harbor 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.
For more information, please contact:
In the US:
China Green Agriculture, Inc.
Ms. Ying Yang, Chief Financial Officer
Tel: +1-626-623-2575
Email: yangying@cgagri.com
OR
HC International, Inc.
Ted Haberfield, Executive VP
Tel: +1-760-755-2716
Email: thaberfield@hcinternational.net
In China:
China Green Agriculture, Inc.
Mr. Jonnie Wang, Secretary of Board, Investor Relations Officer
Tel: +86-29-8826-6368
Email: wangxilong@cgagri.com
- 4 - -
| CONSOLIDATED BALANCE SHEETS |
| AS OF DECEMBER 31, 2009 AND JUNE 30, 2009 |
| (UNAUDITED) |
| ASSETS | ||||||||
| December 31, 2009 | June 30, 2009 | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 61,183,492 | $ | 17,795,447 | ||||
| Restricted cash | 36,897 | 83,579 | ||||||
| Accounts receivable, net | 10,993,124 | 8,167,715 | ||||||
| Inventories | 9,906,700 | 7,162,249 | ||||||
| Other assets | 166,305 | 129,213 | ||||||
| Deferred offering cost | — | 160,500 | ||||||
| Advances to suppliers | 238,277 | 95,255 | ||||||
| Total Current Assets | 82,524,795 | 33,593,958 | ||||||
| Plant, Property and Equipment, Net | 28,482,504 | 17,341,654 | ||||||
| Construction In Progress | 4,738 | 9,609,649 | ||||||
| Intangible Assets, Net | 11,592,769 | 1,073,165 | ||||||
| Total Assets | $ | 122,604,806 | $ | 61,618,426 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 533,021 | $ | 926,883 | ||||
| Unearned revenue | 165,732 | 24,000 | ||||||
| Other payables and accrued expenses | 1,599,455 | 1,091,168 | ||||||
| Advances from other unrelated companies | 301,605 | 326,970 | ||||||
| Amount due to related parties | 68,164 | 31,160 | ||||||
| Taxes payable | 3,288,349 | 2,887,828 | ||||||
| Short term loans | 2,197,512 | 3,170,290 | ||||||
| Total Current Liabilities | 8,153,838 | 8,458,299 | ||||||
| Common Stock, $.001 par value, 6,313,617 shares subject to redemption | — | 20,519,255 | ||||||
| Stockholders' Equity | ||||||||
| Preferred Stock, $.001 par value, 20,000,000 shares authorized, Zero shares issued and outstanding | — | — | ||||||
| Common stock, $.001 par value, 115,197,165 shares authorized, 24,283,989 shares issued and outstanding (12,281,569 as of June 30, 2009) | 24,284 | 12,282 | ||||||
| Additional paid-in capital | 73,883,634 | 2,060,162 | ||||||
| Statuary reserve | 4,525,550 | 3,468,530 | ||||||
| Retained earnings | 33,554,015 | 24,642,768 | ||||||
| Accumulated other comprehensive income | 2,463,485 | 2,457,130 | ||||||
| Total Stockholders' Equity | 114,450,968 | 32,640,872 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 122,604,806 | $ | 61,618,426 | ||||
| The accompanying notes are an integral part of these consolidated financial statements. | ||||||||
- 5 - -
| CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||||
| FOR THE SIX MONTHS AND THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008 | ||||||||
| (UNAUDITED) |
Six Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Sales | ||||||||||||||||
| Jinong | $ | 19,289,446 | $ | 12,570,527 | $ | 9,110,797 | $ | 4,945,026 | ||||||||
| Jintai | 3,159,490 | 3,309,601 | 2,061,319 | 2,055,100 | ||||||||||||
| Net sales | $ | 22,448,936 | $ | 15,880,128 | $ | 11,172,116 | $ | 7,000,126 | ||||||||
| Cost of goods sold | ||||||||||||||||
| Jinong | 7,002,486 | 5,106,321 | 3,267,122 | 1,880,375 | ||||||||||||
| Jintai | 1,717,718 | 1,725,877 | 1,135,221 | 1,020,930 | ||||||||||||
| Cost of goods sold | 8,720,204 | 6,832,199 | 4,402,343 | 2,901,306 | ||||||||||||
| Gross profit | 13,728,732 | 9,047,929 | 6,769,773 | 4,098,820 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling expenses | 735,767 | 582,537 | 520,096 | 366,161 | ||||||||||||
| General and administrative expenses | 1,348,730 | 1,023,774 | 814,551 | 586,645 | ||||||||||||
| Total operating expenses | 2,084,497 | 1,606,311 | 1,334,647 | 952,806 | ||||||||||||
| Income from operations | 11,644,235 | 7,441,618 | 5,435,126 | 3,146,014 | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Other income (expense) | 553 | 4,275 | (413 | ) | — | |||||||||||
| Interest income | 81,922 | 143,019 | 52,656 | 2,624 | ||||||||||||
| Interest expense | (105,644 | ) | (447,923 | ) | (44,335 | ) | (127,059 | ) | ||||||||
| Total other income (expense) | (23,169 | ) | (301,679 | ) | 7,908 | (125,485 | ) | |||||||||
| Income before income taxes | 11,621,066 | 7,139,939 | 5,443,034 | 3,020,529 | ||||||||||||
| Provision for income taxes | 1,652,798 | 984,159 | 722,041 | 362,676 | ||||||||||||
| Net income | 9,968,268 | 6,155,780 | 4,720,993 | 2,657,852 | ||||||||||||
| Other comprehensive income | ||||||||||||||||
| Foreign currency translation gain/(loss) | 6,354 | (8,321 | ) | 31,284 | (2,142 | ) | ||||||||||
| Comprehensive income | $ | 9,974,622 | $ | 6,147,459 | $ | 4,752,277 | $ | 2,655,711 | ||||||||
| Basic weighted average shares outstanding | 22,450,562 | 18,381,702 | 23,266,097 | 18,381,702 | ||||||||||||
| Basic net earnings per share | $ | 0.44 | $ | 0.33 | �� | $ | 0.20 | $ | 0.14 | |||||||
| Diluted weighted average shares outstanding | 22,471,118 | 18,381,702 | 23,286,653 | 18,381,702 | ||||||||||||
| Diluted net earnings per share | 0.44 | 0.33 | 0.20 | 0.14 | ||||||||||||
| The accompanying notes are an integral part of these consolidated financial statements. | ||||||||||||||||
- 6 - -
| CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES |
| STATEMENTS OF CASH FLOWS |
| FOR THE SIX MONTHS ENDED DECEMBER 31, 2009 AND 2008 |
| (UNAUDITED) |
| 2009 | 2008 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 9,968,268 | $ | 6,155,780 | ||||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by operating activities | ||||||||
| Issuance of stock options for compensation | — | 68,690 | ||||||
| Depreciation | 986,663 | 737,464 | ||||||
| Amortization | 150,318 | 53,494 | ||||||
| Decrease / (Increase) in current assets | ||||||||
| Accounts receivable | (2,797,999 | ) | (950,555 | ) | ||||
| Other receivables | (321 | ) | 32,262 | |||||
| Inventories | (2,719,957 | ) | (3,306,067 | ) | ||||
| Advances to suppliers | (142,513 | ) | (72,015 | ) | ||||
| Other assets | (35,952 | ) | 9,508 | |||||
| (Decrease) / Increase in current liabilities | ||||||||
| Accounts payable | (395,573 | ) | (26,200 | ) | ||||
| Unearned revenue | 141,422 | 253,800 | ||||||
| Tax payables | 391,854 | (2,485,151 | ) | |||||
| Other payables and accrued expenses | 436,338 | 243,560 | ||||||
| Net cash provided by operating activities | 5,982,548 | 714,571 | ||||||
| Cash flows from investing activities | ||||||||
| Acquisition of plant, property, and equipment | (2,440,748 | ) | (460,797 | ) | ||||
| Acquisition of intangible assets | (10,703,302 | ) | — | |||||
| Additions to construction in progress | (4,730 | ) | (1,464,432 | ) | ||||
| Net cash used in investing activities | (13,148,780 | ) | (1,925,229 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repayment of loan | (979,876 | ) | (379,384 | ) | ||||
| Proceeds issuance of shares | 51,373,234 | |||||||
| Restricted cash | 46,683 | 58,914 | ||||||
| Net cash provided by / (used in) financing activities | 50,440,041 | (320,470 | ) | |||||
| Effect of exchange rate change on cash and cash equivalents | 114,236 | (2,024 | ) | |||||
| Net increase in cash and cash equivalents | 43,388,045 | (1,533,151 | ) | |||||
| Cash and cash equivalents, beginning balance | 17,795,447 | 16,612,416 | ||||||
| Cash and cash equivalents, ending balance | $ | 61,183,492 | $ | 15,079,265 | ||||
| Supplement disclosure of cash flow information | ||||||||
| Interest expense paid | $ | (88,936 | ) | $ | 242,459 | |||
| Income taxes paid | $ | — | $ | 621,367 | ||||
| The accompanying notes are an integral part of these consolidated financial statements. | ||||||||
- 7 -