China Green Agriculture, Inc. Reports First Quarter Fiscal Year
2013 Financial Results, Reaffirms the Fiscal Year 2013 Guidance,
and Provides the Second Quarter Fiscal Year 2013 Guidance
XI'AN, China, Nov. 20, 2012
/PRNewswire-FirstCall/ --
- Total net sales for the three months ended September 30, 2012 decreased 25.6%
to $39.5 million, net income decreased 17.4% to $8.9
million with EPS of $0.32
- Company Reaffirms the Fiscal Year 2013 Guidance: Revenue, Net
Income and EPS of at least $238.0 million, $46.2 million,
and $1.68, respectively
- Company Provides the Second Quarter Fiscal Year 2013 Guidance:
Revenue, Net Income and EPS of at least $47.2 million, $8.0
million, and $0.29,
respectively
- Management to Host Earnings Conference Call at 8:00 am EST, November 20,
2012
China Green Agriculture, Inc. (NYSE: CGA; "China Green
Agriculture" or the "Company"), a company mainly produces and
distributes humic acid-based compound fertilizers, other varieties
of compound fertilizers and agricultural products through its
wholly-owned subsidiaries in China, today announced its
financial results for the three months ended September 30, 2012.
Financial Summary
First Quarter FY 2013
Results (USD)
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(Three months ended
September 30, 2012)
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Q1 FY2013
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Q1 FY2012
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CHANGE
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Net Sales
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$39.5 million
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$53.1 million
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-25.6%
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Gross Profit
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$16.9 million
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$18.9 million
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-10.4%
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Net Income
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$8.9
million
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$10.7 million
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-17.4%
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EPS (Basic and Fully
Diluted)
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$0.32
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$0.40
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-19.0%
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Basic Weighted Average
Shares Outstanding
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27.5 million
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26.9 million
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+2.3%
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Fully Diluted Weighted
Average Shares Outstanding
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27.5 million
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26.9 million
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+2.3%
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"Compared to the first fiscal quarter of 2012, we saw a decrease
in the sales and net income in the first quarter of 2013, which was
largely due to the decrease in Gufeng's net sales and gross profit.
For the three months ended September 30,
2012, our revenue exceeded the high end of the previously
announced revenue guidance and net income fell short of the
corresponding guidance. However, we had approximately $6.4 million in operating cash flow as of
September 30, 2012," said Mr.
Li Tao, Chairman and Chief Executive
Officer of China Green Agriculture. "We believe that we are
well-positioned to generate substantial returns on our investment
and are confident in our track towards achieving our ten-year
growth plan, enhancing our strong position in the fertilizer
industry and finally maximizing our shareholders' and employees'
benefits. With the termination of SEC investigation and an
aggregate amount of $500,000 stock purchase by the executive,
we are committed to grow the company's business and thrive to
increase the enterprise value for the shareholders."
First Quarter of FY2013 Results of Operations
Total net sales for the three months ended September 30, 2012 were $
39.5 million, a decrease of $13.6
million, or 25.6%, from $53.1
million for the three months ended September 30, 2011. This decrease was largely due
to the decrease in Gufeng's net sales.
For the three months ended September 30,
2012, Jinong's net sales increased $5.6 million, or 25.2%, to $27.9 million from $22.2
million for the three months ended September 30, 2011. This increase was mainly
attributable to the greater sales of humic acid fertilizer products
including our liquid and powder fertilizers during this period as a
result of our increased distributors and the aggressive marketing
strategy.
For the three months ended September 30,
2012, net sales at Gufeng were $10.9
million, a decrease of $18.7
million, or 63.1%, from $29.6
million for the three months ended September 30, 2011. The fiscal quarter ended
September 30, 2012 fell in the
"export window" in which no special tariff tax applied, however,
due to the lower demand on Nitrogen-Phosphorous elemented compound
fertilizer by importing countries which is arising from the backlog
of their imported compound fertilizers in previous quarters, which
also led to lower-than-before profit margin over the export
contracts, Gufeng had no export contract in the quarter ended
September 30, 2012. Despite of that,
Gufeng has been expanding and penetrating the domestic market
particularly since the fiscal quarter ended March 31, 2012, during which period no revenue
was generated from fertilizer exportation either due to special
tariff tax levied by China
authority or due to weak demand by importing countries. Net
domestic sales at Gufeng for the three months ended September 30, 2012 was $10.9 million, an increase of $1.8 million, or 19.1%, from $9.2 million for the same period in 2011.
Jintai's net sales decreased by $1.2
million, or 100.0%, to zero for the three months ended
September 30, 2012 from $1.2 million for the same period in 2011. The
decrease was attributable to Jintai's relocation, which commenced
on March 1, 2012 and is still on
going. Therefore, Jintai did not generate any sales revenue since
March 1, 2012.
For the three months ended September 30,
2012, Yuxing's net sales were $0.7
million, an increase of $0.7
million, from $0.05 million
during the three months ended September 30,
2011. The increase was mainly attributable to the strong
sales of Yuxing's top-grade flowers and the proxy sales of certain
inventory from Jintai.
Total cost of goods sold for the three months ended September 30, 2012 was $22.6 million, a decrease of $11.6 million, or 34.0%, from $34.2 million for the three months ended
September 30, 2011. This decrease was
proportional to the decrease in sales, which was mainly due to
Gufeng's decreased exported sales for the three months ended
September 30, 2012.
Cost of goods sold by Jinong for the three months ended
September 30, 2012 was $12.8 million, an increase of $4.7 million, or 58.3%, from $8.1 million for the same period in 2011. The
increase was primarily attributable to (i) the 110% increase in the
cost of raw materials and (ii) 25.2% increases in packaging
materials as a result of our strong sales of fertilizer
products.
Cost of goods sold by Gufeng for the three months ended
September 30, 2012 was $9.2 million, a decrease of $16.1 million, or 63.6%, from $25.3 million for the same period in 2011. The
decrease was proportional to Gufeng's sales for the three months
ended September 30, 2012.
Cost of goods sold by Jintai for the three months ended
September 30, 2012 was zero,
comparing to $0.7 million for fiscal
year 2011 because Jintai's had no operation during the past quarter
as a result of ongoing relocation.
For three months ended September 30,
2012, cost of goods sold by Yuxing was $0.6 million, an increase of $0.5 million, or 743.3%, from $0.07 million for the three months ended
September 30, 2011. The increase was
proportional to Yuxing's sales for the three months ended
September 30, 2012.
Total gross profit for the three months ended September 30, 2012 decreased by $2.0 million, or 10.4%, to $16.9 million, as compared to $18.9 million for the three months ended
September 30, 2011. Gross profit
margin was approximately 42.9% and 35.6% for the three months ended
September 30, 2012 and 2011,
respectively.
Our selling expenses consisted primarily of salaries of sales
personnel, advertising and promotion expenses, freight-out costs
and related compensation. Selling expenses were $3.0 million, or 7.7%, of net sales for the three
months ended September 30, 2012, as
compared to $2.5 million, or 4.7% of
net sales for the three months ended September 30, 2011, an increase of $0.5 million, or 21.8%. The selling expenses of
Gufeng were $0.2 million, or 2.1% of
Gufeng's net sales for the three months ended September 30, 2012, as compared to $0.8 million, or 2.8% of Gufeng's net sales for
the three months ended September 30,
2011. The selling expenses of Jinong for the three months
ended September 30, 2012 were
$2.8 million, or 10.0% of Jinong's
net sales, as compared to selling expenses of $1.6 million, or 7.4% of Jinong's net sales in
the same period of 2011. Most of this increase was due to
Jinong's expanded marketing efforts and the increase in shipping
costs.
General and administrative expenses consisted primarily of
related salaries, rental expenses, business development,
depreciation and travel expenses incurred by our general and
administrative departments and legal and professional expenses
including expenses incurred and accrued for certain litigations.
General and administrative expenses were $2.9 million, or 7.3% of net sales, for the three
months ended September 30, 2012, as
compared to $3.1 million, or 5.9%, of
net sales for the three months ended September 30 2011, a decrease of $0.3 million, or 8.4%. This decrease was
primarily the result of the decrease of legal fees incurred in
connection with certain litigations.
Total operating expenses as a percentage of sales for the first
quarter of fiscal year 2013 was 15.0% compared to 10.6% for the
same period of last year.
Operating income for the first quarter of fiscal year 2013 was
$11.0 million, decreased by 17.0%
from $13.3 million in the first
quarter of fiscal year 2012. Operating margin for the first quarter
of fiscal year 2013 was 27.9%, compared to 25.0% in the same
quarter of fiscal year 2012.
Net income for the three months ended September 30, 2012 was $8.9 million, a decrease of $1.9 million, or 17.4%, compared to $10.7 million, for the three months ended
September 30, 2011. The decrease was
attributable to the decrease in gross profit, primarily Gufeng's
gross profit. Net income as a percentage of total net sales was
approximately 22.4% and 20.2 % for the three months ended
September 30, 2012 and 2011,
respectively.
For the three month period ended September 30, 2012 diluted net income per share
was $0.32 as compared to $0.40 for the same period in 2011, based on
diluted weighted average shares outstanding of 27.5 million and
26.9 million, respectively.
Financial Condition
As of September 30, 2012, cash and
cash equivalents were $74.2 million,
an increase of $2.2 million or 3.1%,
from $72.0 million as of June 30, 2012. The Company had $14.5 million in short-term loans as of
September 30, 2012, an increase of
0.5 million, or 3.8% from 13.9 million as of June 30, 2012. Net accounts receivable stood at
$67.7 million as of September 30, 2012, as compared to $62.0 million as of June
30, 2012, an increase of $5.6
million or 9.2%, which is mainly attributable to the
implementation of 180 days credit policy. In order to respond to
the cash flow shortage caused by the tightening financing
encountered by some of our distributors, the company launched such
a policy since the third quarter of fiscal year 2012 enabling such
distributors take full advantage of the 180-day credit terms. For
the first quarter ended September 30,
2012, cash flow provided by operating activities was
$6.4 million, an increase of
$8.4 million, or 418.0% from
$2.0 million, as cash flow used in
operating activities for the same period in 2011. The increase was
mainly attributable to the significantly decreased inventories by
99%, which contributed to the 143.9% cash flow increase comparing
to the same period in 2011.
Capital Expenditure
For the first quarter ended September 30,
2012, the capital expenditure stood at approximately
$4.6 million, an increase of
$3.7 million, or 399.4% from
$0.9 million for the three months
ended September 30, 2011. The
increase was attributable to the purchases of plant, property and
equipment, and increase in construction in progress.
Fiscal Year 2013 and the Second Quarter Guidance
For the fiscal year ended June 30,
2013, management expects net sales of $238.0 million to $255.9 million, net income of
$46.2 million to $49.2 million, and
an EPS of $1.68 to $1.79 based on
27.5 million weighted average shares. For the second quarter ended
December 31, 2012, management expects
net sales of $47.2 to $50.8 million,
net income of $8.0 to $9.0 million,
and EPS of $0.29 to $0.33 based on
27.5 million weighted average shares.
Conference Call
The Company will hold a conference call at 8:00 a.m. EST on Tuesday,
November 20, 2012. Any interested participants are welcome
to join in the call by following the dial-in details as set out
below. When prompted by the operator, please indicate "China Green
Agriculture's First Quarter Fiscal Year 2013 Financial Results" to
join the call.
Event:
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CGA First Quarter Fiscal
Year 2013 Conference Call
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Date:
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November 20,
2012
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Time:
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8:00 a.m. EST
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US Dial In:
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1-
877-407-8033
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Int'l Dial
In:
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1-
201-689-8033
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Conference
ID#:
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404065
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This conference call will be broadcast live over the Internet.
To listen to the live webcast, go
to 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 December 4, 2012. To listen, please call 1-
877-660-6853 within the United
States or 1-201-612-7415 when calling internationally.
About China Green Agriculture, Inc.
The Company mainly produces and distributes humic acid-based
compound fertilizers, other varieties of compound fertilizers and
agricultural products through its wholly-owned subsidiaries, i.e.:
Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd.
("Jinong"), Beijing Gufeng Chemical Products Co., Ltd., a
wholly-owned subsidiary of Jinong in the PRC ("Gufeng"),
Xi'an Jintai Agriculture Technology Development
Company ("Jintai") and Xi'an Hu County Yuxing Agriculture
Technology Development Co., Ltd. ("Yuxing"). Jinong produced
and sold 129 different kinds of fertilizer products as
of September 30, 2012, all of which are certified by the PRC
government as Green Food Production Materials, as stated by
the China Green Food Development Center. Jinong currently
markets its fertilizer products to private wholesalers and
retailers of agricultural farm products in 22 provinces, four
autonomous regions, and three central-government-controlled
municipalities in the PRC. Jinong had 779 distributors
in China as of September 30, 2012. Gufeng, and its
wholly-owned subsidiary, Beijing Tianjuyuan Fertilizer Co.,
Ltd., are Beijing-based producers of compound fertilizer,
blended fertilizer, organic compound fertilizer, and mixed
organic-inorganic compound fertilizer. As of September 30,
2012, Gufeng produced and sold 317 different kinds of fertilizer
products, and had 187 distributors in China. For more
information, visit http://www.cgagri.com. The Company
routinely posts important information on its website.
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, business and environment conditions, development,
shipment, market acceptance, additional competition from existing
and new competitors, changes in technology, the execution of its
ten-year growth plan and various other factors beyond the Company's
control. All forward-looking statements are expressly qualified in
their entirety by this Safe Harbor Statement and the risk factors
detailed in the Company's reports filed with the SEC. 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, except as required by applicable law or
regulation.
For more information,
please contact:
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China Green Agriculture,
Inc.
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Ms. Jane Zuo (English
and Chinese)
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Investor Relations
Manager
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Tel:
+86-186-1842-8899
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Email: jane.zuo@cgagri.com
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SOURCE China Green Agriculture, Inc.