XI'AN, China, Feb. 9, 2015
/PRNewswire/ --
- Second Quarter of FY 2015 net sales increased 33.0% to
$54.1million; net income increase
41.9% to $5.2million with EPS of
$0.16.
- The Company provided third quarter of fiscal year 2015 guidance
range: Revenue, Net Income and EPS of between $75 million and $80 million, $8 million and $10 million, and $0.23 and $ 0.28 based on 35.2 million fully
diluted shares, respectively.
- The Company Updated Guidance Range of Fiscal Year 2015 as the
following: Revenue, Net Income and EPS of between $255 million and $269 million, $26 million
and $ 35 million, and $0.74 and
$0.99based on 35.2 million fully diluted shares,
respectively.
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
subsidiaries in China, today announced its financial results
for the quarter ended December 31, 2014, i.e., the second
quarter of Fiscal Year 2015.
Financial Summary
Second Quarter
2015 Results (USD)
|
(Three
months ended December 31, 2014)
|
|
|
|
|
|
Q2
FY2015
|
Q2
FY2014
|
CHANGE
(%)
|
Net Sales
|
$54.1
million
|
$40.6
million
|
33.0%
|
Gross
Profit
|
$22.9
million
|
$18.9
million
|
21.5%
|
Net Income
|
$5.2
million
|
$3.7
million
|
41.9%
|
EPS
(Diluted)
|
$0.16
|
$0.12
|
35.6%
|
Weighted Average
Shares Outstanding (Diluted)
|
$33.3 million
|
$31.8 million
|
4.6%
|
|
(Six months ended
December 31, 2014)
|
|
|
|
|
|
Q2
FY2015
|
Q2
FY2014
|
CHANGE
(%)
|
Net Sales
|
$105.4
million
|
$91.0
million
|
15.9%
|
Gross
Profit
|
$47.6
million
|
$41.3
million
|
15.2%
|
Net Income
|
$13.3
million
|
$14.1
million
|
(5.3)%
|
EPS
(Diluted)
|
$0.41
|
$0.45
|
(10.8)%
|
Weighted Average
Shares Outstanding (Diluted)
|
$32.8
million
|
$30.9
million
|
6.3%
|
"We are very pleased with our performance of business operation,
generating $5.2 million net income in
the second quarter ended December 31,
2014," said Mr. Li Tao,
Chairman and Chief Executive Officer of China Green Agriculture."
Looking ahead to the third quarter of fiscal year 2015, we expect
net sales of $75 to $80 million,
net income of $8 to $10 million,
and EPS of $0.23 and $0.28 based on 35.2 million fully diluted
weighted average shares outstanding for the third quarter
ended March 31, 2015. With our track-record history and
incredible momentum in our fertilizer business, we are confident in
achieving our target for the third quarter of fiscal year 2015.
"
Second Quarter of FY2015 Results of Operations
Total net sales for the three months ended December 31, 2014 were $54,051,174, an increase of $13,416,573, or 33.0%, from $40,634,601 for the three months ended
December 31, 2013. This increase was
principally due to an increase in Jinong's and Gufeng's net
sales.
For the three months ended December 31,
2014, Jinong's net sales increased $4,904,071, or 18.7%, to $31,192,693 from $26,288,622 for the three months ended
December 31, 2013. This increase was
mainly attributable to Jinong's implementation of the sales
strategy that focus on promoting the sales of high-margin liquid
fertilizer despite the decrease in its sales volume during the
three months ended December 31,
2014.
For the three months ended December 31,
2014, Gufeng's net sales were $21,778,807, an increase of $8,296,791 or 61.5% from $13,482,016 for the three months ended
December 31, 2013. The increase was
mainly attributable to the fact that Gufeng had developed more
large clients from northeast area in mainland China and completed a large amount sale to
China National Agricultural Means of Production Group Corporation
("Sino-agri Group") during the three months ended December 31, 2014 compared with the same period a
year before.
For the three months ended December 31,
2014, Yuxing's net sales were $1,079,674, an increase of $215,711 or 25.0%, from $863,963 during the three months ended
December 31, 2013. The increase was
mainly attributable to the increase in sales demand on Yuxing's
top-grade flowers.
Total cost of goods sold for the three months ended December 31, 2014 was $31,141,180, an increase of $9,358,094, or 43.0%, from $21,783,086 for the three months ended
December 31, 2013. This increase was
mainly due to the 33.0% increase in net sales.
Cost of goods sold by Jinong for the three months ended
December 31, 2014 was $12,314,040, an increase of $1,444,778, or 13.3%, from $10,869,262 for the three months ended
December 31, 2013. Although Jinong
lowered the product costs for the mix of products being sold, the
increase in cost of goods was primarily attributable to Jinong's
higher net sales.
Cost of goods sold by Gufeng for the three months ended
December 31, 2014 was $18,034,979, an increase of $7,743,867, or 75.2%, from $10,291,112 for the three months ended
December 31, 2013. This
increase was primarily attributable to an increase in the cost of
raw materials and an increase in the sales of fertilizer
products.
For the three months ended December 31,
2014, cost of goods sold by Yuxing was $792,161, an increase of $169,449, or 27.2%, from $622,712 for the three months ended December 31, 2013. This increase was mainly due
to the 25.0% increase in Yuxing's net sales.
Total gross profit for the three months ended December 31, 2014 increased by $4,058,479 to $22,909,994, as compared to $18,851,515 for the three months ended
December 31, 2013. Gross profit
margin was 42.4% and 46.4% for the three months ended December 31, 2014 and 2013, respectively.
Gross profit generated by Jinong increased by $3,459,293, or 22.4%, to $18,878,653 for the three months ended
December 31, 2014 from $15,419,360 for the three months ended
December 31, 2013. Gross profit
margin from Jinong's sales was approximately 60.5% and 58.7% for
the three months ended December 31,
2014 and 2013, respectively. The increase in gross profit
margin was mainly due to the increased weight for higher-margin
products sales in Jinong's total sales due to Jinong's sales
strategy. Jinong has adjusted its production process to focus on
producing the high-margin liquid fertilizer during the three months
ended December 31, 2014.
For the three months ended December 31,
2014, gross profit generated by Gufeng was $3,743,828, an increase of $552,924, or 17.3%, from $3,190,904 for the three months ended
December 31, 2013. Gross profit
margin from Gufeng's sales was approximately 17.2% and 23.7% for
the three months ended December 31,
2014 and 2013, 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,
2014, gross profit generated by Yuxing was $287,513, an increase of $46,262, or 19.2% from $241,251 for the three months ended December 31, 2013. The gross profit margin
was approximately 26.6% and 27.9% for the three months ended
December 31, 2014 and 2013,
respectively.
This decrease in gross profit margin was mainly due to an
increase in the cost of raw materials for the three months ended
December 31, 2014, compared to the
same period in 2013.
Our selling expenses consisted primarily of salaries of
sales personnel, advertising and promotion expenses, freight-out
costs and related compensation. Selling expenses were $1,981,065, or 3.7%, of net sales for the three
months ended December 31, 2014, as
compared to $752,642 or 1.9% of net
sales for the three months ended December
31, 2013, an increase of $1,228,423, or 163.2%. The selling expenses of
Yuxing were $13,935 or 1.3% of
Yuxing's net sales for the three months ended December 31, 2014, as compared to $13,119, or 1.5% of Yuxing's net sales for the
three months ended December 31, 2013.
The selling expenses of Gufeng were $228,488 or 1.0% of Gufeng's net sales for the
three months ended December 31, 2014,
as compared to $314,138, or 2.3% of
Gufeng's net sales for the three months ended December 31, 2013. The selling expenses of Jinong
for the three months ended December 31,
2014 were $1,738,642 or 5.6%
of Jinong's net sales, as compared to selling expenses of
$425,386, or 1.6% of Jinong's net
sales for the three months ended December
31, 2013. The increase in Jinong's selling expenses was due
to Jinong's expanded marketing efforts and the increase in shipping
costs.
Our selling expenses - amortization of our deferred assets
were $10,651,432, or 19.7%, of net
sales for the three months ended December
31, 2014, as compared to $8,054,453 or 19.8% of net sales for the three
months ended December 31, 2013, an
increase of $2,596,979, or 32.2%.
This increase was due to the increased amortization of the deferred
tax assets for the three months ended December 31, 2014 related to our business
strategy implemented since the first quarter of fiscal year of 2014
that assists distributors in certain marketing efforts and develops
standard stores to expand our competitive advantages and market
shares.
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 $3,193,979, or 5.9% of net sales for the three
months ended December 31, 2014, as
compared to $4,565,932, or 11.2%, of
net sales for the three months ended December 31, 2013, a decrease of $1,371,953, or 30.0%. The decrease in
general and administrative expenses was mainly due to the related
expenses in the stock compensation awarded to the employees
which amounted to $1,786,225 for the
three months ended December 31, 2014
as compared to $2,852,155 for the
three months ended December 31,
2013.
Net income for the three months ended December 31, 2014 was $5,215,437, an increase of $1,539,700, or 41.9%, compared to $3,675,737 for the three months ended
December 31, 2013. The increase was
attributable to the significant increase in sales offset by an
increase in selling expenses. Net income as a percentage of total
net sales was approximately 9.6% and 9.0% for the three months
ended December 31, 2014 and 2013,
respectively.
The First Six Months of FY2015 Results of Operations
Total net sales for the six months ended December 31, 2014 were $105,352,964, an increase of $14,415,016, or 15.9%, from $90,937,948 for the six months ended December 31, 2013. This increase was principally
due to an increase in Jinong's and Gufeng's net sales.
For the six months ended December 31,
2014, Jinong's net sales increased $7,606,234, or 13.1%, to $65,656,858 from $58,050,624 for the six months ended December 31, 2013. This increase was mainly
attributable to Jinong's implementation of the sales strategy that
focus on promoting the sales of high-margin liquid fertilizer
despite the decrease in its sales volume during the last six
months.
For the six months ended December 31,
2014, Gufeng's net sales were $37,764,881, an increase of $6,526,783 or 20.9% from $31,238,098 for the six months ended December 31, 2013. The increase was mainly
attributable to Gufeng had more large clients from northeast area
in mainland China and one large
amount sale to Sino-agri Group during the six months ended
December 31, 2014 compared with the
same period a year before.
For the six months ended December 31,
2014, Yuxing's net sales were $1,931,225, an increase of $281,999 or 17.1%, from $1,649,226 during the six months ended
December 31, 2013. The increase was
mainly attributable to the increase in sales demand on Yuxing's
top-grade flowers.
Total cost of goods sold for the six months ended December 31, 2014 was $57,769,536, an increase of $8,152,791, or 16.4%, from $49,616,745 for the six months ended December 31, 2013. This increase was mainly due
to the 15.9% increase in net sales.
Cost of goods sold by Jinong for the six months ended
December 31, 2014 was $25,694,663, an increase of $855,570, or 3.4%, from $24,839,093 for the six months ended December 31, 2013. Although Jinong lowered the
product costs for the mix of products being sold, the increase was
primarily attributable to its higher net sales.
Cost of goods sold by Gufeng for the six months ended
December 31, 2014 was $30,634,164, an increase of $7,133,420, or 30.4%, from $23,500,744 for the six months ended December 31, 2013. This increase was
primarily attributable to an increase in the cost of raw materials
and an increase in the sales of fertilizer products.
For the six months ended December 31,
2014, cost of goods sold by Yuxing was $1,440,709, an increase of $163,801, or 12.8%, from $1,276,908 for the six months ended December 31, 2013. This increase was mainly due
to the 17.1% increase in Yuxing's net sales.
Net income for the six months ended December 31, 2014 was $13,314,519, a decrease of $739,675, or 5.3%, compared to $14,054,194 for the six months ended December 31, 2013. The decrease was attributable
to the increase in selling expenses offset by an increase in our
gross margin. Net income as a percentage of total net sales was
approximately 12.6% and 15.5% for the six months ended December 31, 2014 and 2013, respectively.
Financial Condition
As of December 31, 2014, cash and
cash equivalents were $59,364,446, an
increase of $32,474,125, or 120.8%,
from $26,890,321 as of June 30, 2014. Net cash provided in operating
activities was $38,908,479 for the
six months ended December 31, 2014,
an increase of $38,491,193 compared
to $417,286 for the six months
ended December 31, 2013. The increase
was mainly attributable to the decrease in accounts receivable and
advances to suppliers, increase in customer deposits and tax
payable and an increase in depreciation and amortization, offset by
an increase in inventories during the six months ended December 31, 2014 as compared to the same period
in 2013. We had accounts receivable of $71,065,640 as of December
31, 2014, as compared to $88,781,608 as of June 30,
2014, a decrease of $17,715,968 or 20.0%.
Third Quarter Fiscal Year 2015 and Fiscal Year 2015
Guidance
"For the third quarter ending March 31,
2015, management expects net sales of $75 to $80million, net income of $8 to $10 million, and EPS of $0.23 to $0.28 based on 35.2million fully diluted
shares. For the fiscal year ended June 30, 2015, management
expects net sales of $255 million to $269 million, net income of $26 million to
$35 million, and an EPS of
$0.74 to $0.99based on 35.2 million fully diluted
shares.
Conference Call
The Company will hold a conference call at 8:30 AM Eastern
Time on Monday, February 9, 2015. 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 Fiscal
Year 2015 Financial Results" to join the call.
Event:
|
CGA Second Quarter
Fiscal Year 2015Conference Call
|
Date:
|
February 9,
2015
|
Time:
|
8:30a.m.
ET
|
To participate in the conference call, please dial any of the
following numbers:
Participate dial in
(Toll free):
|
1-877-870-4263
|
Participate
international dial in:
|
1-412-317-0790
|
Hong Kong-Local
Toll
|
852-301-84992
|
Beijing-Local
Toll
|
86-10-535-73132
|
China Toll
Free
|
86-4001-201203
|
Canada Toll
Free
|
1-855-669-9657
|
Hong Kong Toll
Free
|
852-800-905945
|
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:
|
10060450
|
The replay will be available 1 hour after the end of the
conference.
Teleconference Replay Available Until: Feb 16, 2015
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 entity, Xi'an Hu County Yuxing Agriculture
Technology Development Co., Ltd. ("Yuxing"). Jinong produced and
sold 120 different kinds of fertilizer products as of December 31, 2014, all of which are certified by
the government of the People's Republic
of China (the "PRC") 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 27 provinces, four
autonomous regions, and three central-government-controlled
municipalities in the PRC. Jinong had 972 distributors in the PRC
as of December 31, 2014. Gufeng, and
its wholly-owned subsidiary, Beijing Tianjuyuan Fertilizer Co.,
Ltd., are Beijing-based producers
of compound fertilizers, blended fertilizers, organic compound
fertilizers, and mixed organic-inorganic compound fertilizers. As
of December 31, 2014, Gufeng produced
and sold 332 different kinds of fertilizer products, and had 271
distributors in the PRC. 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.
Ms. Ran Liu (English and Chinese)
Tel: +86-29-88266500
Email: liuran@cgagri.com
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SOURCE China Green Agriculture, Inc.