With Net income Meeting the Guidance
Provides Guidance on the Third Fiscal Quarter 2017 and
Confirms Guidance on Full Year Revenues and Net Incomes
XI'AN, China, Feb. 14, 2017
/PRNewswire/ -- China Green Agriculture, Inc. (NYSE: CGA) ("China Green Agriculture" or the
"Company"), a company mainly produces and distributes humic
acid-based compound fertilizers, varieties of compound fertilizers
and agricultural products through its subsidiaries in China,
today announced its financial results for the second quarter
ended December 31, 2016 and provided guidance on revenues and
net incomes of the Third Fiscal Quarter 2017 and Fiscal Year
2017.
Highlights:
- Net sales increased 3.1% to $59 million; Net income
increased 29% to $5.5 million with EPS of $0.15.
- Guidance for Third Quarter of Fiscal Year 2017: Revenue of
$72 million to $82 million; Net
Income of $4 million to $7 million;
EPS of $0.1 to $0.18 based on 38.5
million fully diluted shares.
- Guidance for Fiscal Year 2017: Revenue of $277 million to $300 million; Net Income of
$20 million to $27 million; EPS of
$0.52 to $0.7 based on 38.5 million
fully diluted shares.
Financial Summary
Financial
Summary
|
Second Quarter 2017
Results (USD)
|
(Three
Months ended December 31,2016)
|
|
|
|
|
|
Q2
FY2017
|
Q2
FY2016
|
CHANGE
(%)
|
Net Sales
|
$59
million
|
$57
million
|
3.1%
|
Gross
Profit
|
$19.2
million
|
$22.6
million
|
(15.3)%
|
Net Income
|
$5.5
million
|
$4.3
million
|
29%
|
EPS
(Diluted)
|
$0.15
|
$0.12
|
26.5%
|
Weighted Average
Shares Outstanding (Diluted)
|
$37.7 million
|
$36.9 million
|
2%
|
|
|
|
|
(Six Months ended
December 31, 2016)
|
|
|
|
|
Q2
FY2017
|
Q2
FY2016
|
CHANGE
(%)
|
Net Sales
|
$120.6
million
|
$111.2
million
|
8.5%
|
Gross
Profit
|
$42.6
million
|
$46.8
million
|
(9)%
|
Net Income
|
$12.9
million
|
$11.5
million
|
11.7%
|
EPS
(Diluted)
|
$0.34
|
$0.32
|
8.1%
|
Weighted Average
Shares Outstanding (Diluted)
|
$37.7
million
|
$36.4
million
|
3.3%
|
"We had successfully closed a new round of strategic
acquisitions at the beginning of 2017. We welcome our new team
members, the founders of Xiangrong and Fengnong, on board. Let's
work together to unlock the intrinsic value of our Company. " said
Mr. Zhuoyu Li, President of the Company. " I'm also happy with the
performance of the other six companies we acquired last year, which
contributed approximately $8.4
million, representing 14.3% of the total sales during the
three months ended December 31, 2016.
These six companies had formed a solid base for Company's
transformational growth strategy."
Mr. Tao Li, Chairman and Chief Executive Officer of the Company,
stated, "We are very pleased with our performance in business
operation, generating $4.3 million
net income in the second quarter ended December 31, 2016," he concluded. "Looking ahead to the Fiscal Year 2017, we
expect revenue of $277 to $300
million; net income of $20 to $27
million; and EPS of $0.52 to
$0.7 based on 38.5 million fully diluted shares.
I
believe Zhuoyu Li and
his team will continue to execute
the Company's transformational
growth strategy successfully."
Second Quarter of FY2017 Results of Operations
Total net sales for the three months ended December 31, 2016 were $58,745,013, an increase of $1,779,013, or 3.1%, from $56,966,000 for the three months ended
December 31, 2015. During
the last quarter, the currency value of the Chinese RMB
against the US dollar had decreased by 5%. Such
depreciation was more rapid than our expectation from the
beginning of the fiscal year.
While the revenue reported in US dollars is lowered by the depreciation in currency
exchange, the revenue earned in RMB is in line with our
expectations.
The year-over year increase
of net sales was largely due to the
inclusion of variable interest entities' (the "VIEs") net sales
during the three months ended December 31,
2016, which contributed approximately $8.4 million, or 14.3%, of the total net sales.
The total net sales without including VIEs' net sales for the three
months ended December 31, 2016 were
$50,346,547, a decrease of
$6,619,453, or 11.6%, from the same
period a year ago.
For the three months ended December 31,
2016, Jinong's net sales decreased by $4,476,887, or 14.3%, to $26,825,674 from $31,302,561 for the three months ended
December 31, 2015. This decrease was
mainly attributable to the decrease in Jinong's sales volume, which
was result of Jinong's implementation of its new sales strategy
that further focuses on producing high-margin liquid fertilizer
during the last three months.
For the three months ended December 31,
2016, Gufeng's net sales were $21,066,559, a decrease of $2,513,115 or 10.7% from $23,579,674 for the three months ended
December 31, 2015. This decrease was
mainly attributable to Gufeng's lowering selling prices to answer
to market demand during the three months ended December 31, 2016.
For the three months ended December 31,
2016, Yuxing's net sales were $2,454,314, an increase of $370,549 or 17.8%, from $2,083,765 during the three months ended
December 31, 2015. The increase was
mainly attributable to the increase in market demand and the higher
prices on Yuxing's top-grade flowers.
Total cost of goods sold for the three months ended December 31, 2016 was $39,564,772, an increase of $5,234,340, or 15.2%, from $34,330,432 for the three months ended
December 31, 2015. The increase was
mainly due to the production and sale of VIEs' products, which
accounted for $7,159,707, or 18.1% of
total cost of goods sold. The total cost of goods sold without
including VIEs' cost of goods sold for the three months ended
December 31, 2016 was $32,405,065, a decrease of $1,925,367, or 5.6%, from the same period a year
ago.
Cost of goods sold by Jinong for the three months ended
December 31, 2016 was $12,332,360, a decrease of $1,102,326, or 8.2%, from $13,434,686 for the three months ended
December 31, 2015. The decrease in
cost of goods sold was primarily attributable to the decreased in
net sales during the last three months.
Cost of goods sold by Gufeng for the three months ended
December 31, 2016 was $18,138,659, a decrease of $1,574,189, or 8.0%, from $19,712,848 for the three months ended
December 31, 2015. This decrease was
primarily attributable to the less products sold during the last
three months.
For the three months ended December 31,
2016, cost of goods sold by Yuxing was $1,934,046, an increase of $751,148, or 63.5%, from $1,182,898 for the three months ended
December 31, 2015. This increase was
mainly due to the increase in Yuxing's net sales and the labor
cost.
Total gross profit for the three months ended December 31, 2016 decreased by $3,455,327 to $19,180,241, as compared to $22,635,568 for the three months ended
December 31, 2015. Gross profit
margin was 32.6% and 39.7% for the three months ended December 31, 2016 and 2015, respectively. The
decrease in gross profit margin was mainly due to the Jinong,
Gufeng and Yuxing's decreased gross margins for the three months
ended December 31, 2016, compared to
the same period last year.
Gross profit generated by Jinong decreased by $3,374,561, or 18.9%, to $14,493,314 for the three months ended
December 31, 2016 from $17,867,875 for the three months ended
December 31, 2015. Gross profit
margin from Jinong's sales was approximately 54.0% and 57.1% for
the three months ended December 31,
2016 and 2015, respectively. The decrease in gross profit
margin was mainly due to the higher raw material cost and packaging
cost.
For the three months ended December 31,
2016, gross profit generated by Gufeng was $2,927,900, a decrease of $938,926, or 24.3%, from $3,866,826 for the three months ended
December 31, 2015. Gross profit
margin from Gufeng's sales was approximately 13.9% and 16.4% for
the three months ended December 31,
2016 and 2015, respectively. The decrease in gross profit
percentage was mainly due to the increased weight for lower-margin
products sales in Gufeng's total sales answering to market
demand.
For the three months ended December 31,
2016, gross profit generated by Yuxing was $520,268, a decrease of $380,599, or 42.2% from $900,867 for the three months ended December 31, 2015. The gross profit margin
was approximately 21.2% and 43.2% for the three months ended
December 31, 2016 and 2015,
respectively. The decrease in gross profit margin was mainly due to
the higher labor cost during the three months ended December 31, 2016.
Gross profit generated by VIEs were $1,238,759 with a gross profit margin of
approximately 14.7% for the three months ended December 31, 2016.
Our selling expenses consisted primarily of salaries of sales
personnel, advertising and promotion expenses, freight-out costs
and related compensation. Selling expenses were $3,965,382, or 6.8%, of net sales for the three
months ended December 31, 2016, as
compared to $5,285,103 or 9.3% of net
sales for the three months ended December
31, 2015, a decrease of $1,319,721, or 25.0%. The selling expenses of
VIEs were $248,248, or 3.0%, of VIEs'
net sales. The selling expenses of Yuxing were $11,264 or 0.5% of Yuxing's net sales for the
three months ended December 31, 2016,
as compared to $135,466, or 6.5% of
Yuxing's net sales for the three months ended December 31, 2015. The selling expenses of Gufeng
were $68,080 or 0.3% of Gufeng's net
sales for the three months ended December
31, 2016, as compared to $110,972, or 0.5% of Gufeng's net sales for the
three months ended December 31, 2015.
The selling expenses of Jinong for the three months ended
December 31, 2016 were $3,637,790 or 13.6% of Jinong's net sales, as
compared to selling expenses of $5,038,665, or 16.1% of Jinong's net sales for
the three months ended December 31,
2015.
Our selling expenses - amortization of our deferred assets were
$3,475,438, or 5.9%, of net sales for
the three months ended December 31,
2016, as compared to $8,664,752 or 15.2% of net sales for the three
months ended December 31, 2015, a
decrease of $5,189,314, or 59.9%.
This decrease was due to the fact that some of the deferred assets
were fully amortized and therefore no amortization was recorded on
the fully amortized assets during the three months ended
December 31, 2016.
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 $4,633,905, or 7.9% of net sales for the three
months ended December 31, 2016, as
compared to $2,905,982, or 5.1%, of
net sales for the three months ended December 31, 2015, an increase of $1,727,923, or 59.5%. The increase in
general and administrative expenses was mainly due to VIEs, which
had $208,164 general and
administrative expenses during the last three months.
Net income for the three months ended December 31, 2016 was $5,506,011, an increase of $1,238,476, or 29.0%, compared to $4,267,535 for the three months ended
December 31, 2015. Net income as a
percentage of total net sales was approximately 9.4% and 7.5% for
the three months ended December 31,
2016 and 2015, respectively.
For the Six Months Ended December 31,
2016
Total net sales for the six months ended December 31, 2016 were $120,629,635, an increase of $9,479,364, or 8.5%, from $111,150,271 for the six months ended
December 31, 2015.
This increase was largely due to the inclusion of VIEs' net
sales during the six months ended December
31, 2016, which contributed approximately $21.7 million, or 18.0%, of the total net sales.
The total net sales without including VIEs' net sales for the six
months ended December 31, 2016 were
$98,939,192, a decrease of
$12,211,079, or 11.0%, from the same
period a year ago.
For the six months ended December 31,
2016, Jinong's net sales decreased of $7,756,971, or 11.8%, to $58,253,394 from $66,010,365 for the six months ended December 31, 2015. This decrease was mainly
attributable to the decrease in Jinong's sales volume, which was
result of Jinong's implementation of its new sales strategy that
further focuses on producing high-margin liquid fertilizer during
the last six months.
For the six months ended December 31,
2016, Gufeng's net sales were $36,876,073, a decrease of $4,938,433 or 11.8% from $41,814,506 for the six months ended December 31, 2015. This decrease was mainly
attributable to Gufeng's lowering selling prices to answer to
market demand during the six months ended December 31, 2016.
For the six months ended December 31,
2016, Yuxing's net sales were $3,809,725, an increase of $484,325 or 14.6%, from $3,325,400 during the six months ended
December 31, 2015. The increase was
mainly attributable to the increase in market demand and higher
prices on Yuxing's top-grade flowers.
Total cost of goods sold for the six months ended December 31, 2016 was $78,018,366, an increase of $13,691,825, or 21.3%, from $64,326,541 for the six months ended December 31, 2015. This increase was mainly due
to the production and sale of VIEs' products, which accounted for
$17,913,386, or 23.0% of total cost
of goods sold. The total cost of goods sold without including VIEs'
cost of goods sold for the three months ended December 31, 2016 was $60,104,980, a decrease of $4,221,561, or 6.6%, from the same period a year
ago.
Cost of goods sold by Jinong for the six months ended
December 31, 2016 was $25,601,590, a decrease of $2,373,481, or 8.5%, from $27,975,071 for the six months ended December 31, 2015. The decrease was primarily
attributable to its lower net sales.
Cost of goods sold by Gufeng for the six months ended
December 31, 2016 was $31,523,736, a decrease of $2,934,786, or 8.5%, from $34,458,522 for the six months ended December 31, 2015. This decrease was primarily
attributable to the less products sold during the last six months.
.
For the six months ended December 31,
2016, cost of goods sold by Yuxing was $2,979,654, an increase of $1,086,706, or 57.4%, from $1,892,948 for the six months ended December 31, 2015. This increase was mainly due
to the increase in Yuxing's net sales and the higher labor
costs.
Total gross profit for the six months ended December 31, 2016 decreased by $4,212,461 to $42,611,269, as compared to $46,823,730 for the six months ended December 31, 2015. Gross profit margin was 35.3%
and 42.1% for the six months ended December
31, 2016 and 2015, respectively.
Gross profit generated by Jinong decreased by $5,383,490, or 14.2%, to $32,651,804 for the six months ended December 31, 2016 from $38,035,294 for the six months ended December 31, 2015. Gross profit margin from
Jinong's sales was approximately 56.1% and 57.6% for the six months
ended December 31, 2016 and 2015,
respectively. The decrease in gross profit margin was mainly due to
higher raw material cost and higher packaging cost.
For the six months ended December 31,
2016, gross profit generated by Gufeng was $5,352,337, a decrease of $2,003,647, or 27.2%, from $7,355,984 for the six months ended December 31, 2015. Gross profit margin from
Gufeng's sales was approximately 14.6% and 17.6% for the six months
ended December 31, 2016 and 2015,
respectively. The decrease in gross profit percentage was mainly
due to the increased weight for lower-margin products sales in
Gufeng's total sales answering to market demand.
For the six months ended December 31,
2016, gross profit generated by Yuxing was $830,071, a decrease of $602,381, or 42.1% from $1,432,452for the six months ended December 31, 2015. The gross profit margin
was approximately 21.8% and 43.1% for the six months ended
December 31, 2016 and 2015,
respectively. The decrease in gross profit margin was mainly due to
the higher labor cost during the six months ended December 31, 2016.Gross profit generated by VIEs
were $3,777,057 with a gross profit
margin of approximately 17.4% for the six months ended December 31, 2016.
Net income for the six months ended December 31, 2016 was $12,857,591, an increase of $1,344,384, or 11.7%, compared to $11,513,207 for the six months ended December 31, 2015. Net income as a percentage of
total net sales was approximately 10.7% and 10.4 % for the six
months ended December 31, 2016 and
2015, respectively.
Financial Condition
As of December 31, 2016, cash and
cash equivalents were $116,574,852,
an increase of $13,678,366, or 13.3%,
from $102,896,486 as of June 30, 2016. Net cash provided by operating
activities was $18,178,990 for the
six months ended December 31, 2016,
an increase of $2,492,170, or 15.9%,
compared to $15,686,820 for
the six months ended December 31,
2015. Net cash used in investing activities for the six
months ended December 31, 2016 was
$74,353, an increase of $58,688, or 374.6% from $15,665 for the six months ended December 31, 2015. Net cash provided by financing
activities for the six months ended December
31, 2016 was $300,000,
compared to cash used in financing activities of $3,276,000 for the six months ended December 31, 2015.
Third Quarter Fiscal Year
2017 and Confirmed Fiscal Year
2017 Guidance
For the ongoing third quarter ending March 31, 2017, amid
the marketing efforts both online and
offline, management has expectation of net sales
of $72 to $82 million, net
income of $4 to $7 million, and
EPS of $0.1 to $0.18 based on 38.5 million
fully diluted shares. For the fiscal year ended June 30, 2017,
management has expectation of net sales of $277 million
to $300 million, net income of $20 million to $27
million, and an EPS of $0.52 to $0.7 based on
38.5 million fully diluted shares.
Conference Call
The Company will hold a conference call at 7:30 a.m.
ET on Tuesday, February 14, 2017. 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 Second Quarter of Fiscal
Year 2017 Financial Results" to join the call.
Participant Dial In
(Toll Free):
|
1-888-346-8982
|
Participant
International Dial In:
|
1-412-902-4272
|
Hong Kong-Local
Toll
|
852-301-84992
|
|
|
China Toll
Free
|
86-4001-201203
|
To access the replay, please dial any of the following
numbers:
US Toll Free:
|
1-877-344-7529
|
International
Toll:
|
1-412-317-0088
|
Canada Toll
Free:
|
1-855-669-9658
|
Replay Access
Code:
|
10101570
|
The replay will be available 1 hour after the end of the
conference.
About China Green Agriculture, Inc.
The Company 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. ("Gufeng") and a
variable interest entities: Xi'an Hu County Yuxing Agriculture
Technology Development Co., Ltd. ("Yuxing"), Shaanxi Lishijie
Agrochemical Co., Ltd. ("Lishijie"), Songyuan Jinyangguang Sannong
Service Co., Ltd. (Jinyangguang"), Shenqiu County Zhenbai
Agriculture Co., Ltd. ("Zhenbai Argi"), Weinan City Linwei District
Wangtian Agricultural Materials Co., Ltd. ("Wangtian"), Aksu
Xindeguo Agricultural Materials Co., Ltd. ("Xindeguo"), Xinjiang
Xinyulei Eco-agriculture Science and Technology Co., Ltd.
("Xinyulei"), Sunwu Xiangrong Agricultural Materials Co., Ltd.
("Xiangrong"), and Anhui Fengnong Seed Co. Ltd.
("Fengnong"). 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 within
the meaning of the Private Securities Litigation Reform Act of 1995
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, a satisfactory conclusion of the pending
securities class action litigation 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
regulations.
For more information, please contact:
China Green Agriculture, Inc.
Mr. Fang Wang (English and Chinese)
Tel: +86-29-88266500
Email: liuran@cgagri.com
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SOURCE China Green Agriculture, Inc.