XI'AN, China, Nov. 14, 2016
/PRNewswire/ --
With Revenue, Net income Beating the
Guidance, Provides Guidance of Revenue and Net Income for the
Second Quarter of Fiscal Year 2017 and confirms the Guidance of
Fiscal Year 2017
- Net sales of first quarter of Fiscal
Year 2017 increased 14.2% to $61.9
million, beating guidance $1.9
million; net income increased 1.5% to $7.4 million, beating guidance $0.4 million; with EPS of $0.20, beating guidance $0.01.
- The Company provides guidance range for second quarter of
Fiscal Year 2017: Revenue, Net Income and EPS of between
$60 million and $65 million, $5
million and $7 million,
and $0.13 and $ 0.19 based on
approximately 37.6 million fully diluted shares, respectively.
- The Company confirms guidance range for Fiscal Year 2017 as the
following: Revenue, Net Income and EPS of between $277 million and $300 million, $20 million
and $27 million, and $0.53 and
$0.72 based on approximately 37.6
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 September 30, 2016.
Financial Summary
First Quarter 2017
Results (USD)
|
|
(three
months ended September 30, 2016)
|
|
|
|
|
|
|
|
Q1 FY2017
|
Q1 FY2016
|
CHANGE (%)
|
|
Net Sales
|
$61.9
million
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$54.2
million
|
14.2%
|
|
Gross
Profit
|
$23.4
million
|
$24.2
million
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(3.1)%
|
|
Net Income
|
$7.4
million
|
$7.2
million
|
1.5%
|
|
EPS
(Diluted)
|
$0.20
|
$0.20
|
0%
|
|
Weighted Average
Shares Outstanding (Diluted)
|
$37.6 million
|
$35.9 million
|
4.8%
|
|
The Company's results for the current fiscal quarter include the
operating results of Shaanxi Lishijie Agrochemical Co.,
Ltd.("Lishijie"), a VIE in the PRC controlled by Jinong; Songyuan
Jinyangguang Sannong Service Co., Ltd., ("Jinyangguang"), a VIE in
the PRC controlled by Jinong; Shenqiu County Zhenbai Agriculture
Co., Ltd. ("Zhenbai"), a VIE in the PRC controlled by Jinong;
Weinan City Linwei District Wangtian Agricultural Materials Co.,
Ltd. ("Wangtian"), a VIE in the PRC controlled by Jinong; Aksu
Xindeguo Agricultural Materials Co., Ltd. ("Xindeguo"), a VIE in
the PRC controlled by Jinong; Xinjiang Xinyulei Eco-agriculture
Science and Technology co., Ltd. ("Xinyulei"), a VIE in the PRC
controlled by Jinong. Lishijie, Jinyangguang, Zhenbai, Wangtian,
Xindeguo, and Xinyulei may also collectively be referred to as the
"the VIE Companies", which we acquired on June 30 2016 and whose results were not included
in our results for any period prior to the acquisition.
"We are pleased with our strong performance on business
operation in the first quarter. As the VIE Companies added
$13.3 million to our net sales. Our
total net sales increased 14.2% to $61.9
million and net income increased 1.5% to $7.4 million, compared to those of the same
period last year," stated Mr. Tao Li, Chairman and Chief Executive
Officer of Company. "Looking ahead to the second quarter of fiscal
year 2017, we expect net sales between $60 and $65 million, net income between $5 and
$7 million, and EPS
between $0.13 and $0.19 based on approximately 37.6 million
fully diluted weighted average shares outstanding for the second
quarter ended December 31, 2016. We are confident about
achieving our target for the second quarter of fiscal year
2017."
Results of Operations for the First Three Months of Fiscal
Year 2017
Net Sales
Total net sales for the three months ended September 30, 2016 were $61.9 million, an increase of $7.7 million or 14.2%, from $54.2 million for the three months ended
September 30, 2015. This increase was
largely due to the inclusion of VIEs' net sales during the three
months ended September 30, 2016,
which contributed approximately $13.3
million, or 21.5%, of the total net sales. The total net
sales without including VIEs' net sales for the three months ended
September 30, 2016 were $48.6 million, a decrease of $5.6 million, or 10.3%, from the same period a
year ago.
For the three months ended September 30,
2016, Jinong's net sales decreased $3.3 million, or 9.5%, to $31.4 million from $34.7
million for the three months ended September 30, 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 September 30,
2016, Gufeng's net sales were $15.8
million, a decrease of $2.4
million, or 13.3% from $18.2
million for the three months ended September 30, 2015. This decrease was mainly
attributable to Gufeng's lower selling prices to answer market
demand during the three months ended September 30, 2016.
For the three months ended September 30,
2016, Yuxing's net sales were $1.4
million, an increase of $0.2
million or 9.2%, from $1.2
million for the three months ended September 30, 2015. The increase was mainly
attributable to the increase in market demand and the higher prices
on Yuxing's top grade flowers during the three months ended
September 30, 2016.
Cost of Goods Sold
Total cost of goods sold for the three months ended September 30, 2016 was $38.5 million, an increase of $8.5 million, or 28.2%, from $30 million for the three months ended
September 30, 2015. The increase was
mainly due to the production and sale of VIEs' products, which
accounted for $10.8 million, or 28.0%
of total cost of goods sold. The total cost of goods sold without
including VIEs' cost of goods sold for the three months ended
September 30, 2016 was $27.7 million, a decrease of $2.3 million, or 7.7%, from the same period a
year ago.
Cost of goods sold by Jinong for the three months ended
September 30, 2016 was $13.3 million, a decrease of $1.2 million, or 8.7%, from $14.5 million for the three months ended
September 30, 2015. The decrease in
cost of goods sold was primarily attributable to the 9.5% decrease
in net sale during the last three months.
Cost of goods sold by Gufeng for the three months ended
September 30, 2016 was $13.4 million, a decrease of $1.3 million, or 9.2%, from $14.7 million for the three months ended
September 30, 2015. This decrease was
primarily attributable to the less products sold during the last
three months.
For three months ended September 30,
2016, cost of goods sold by Yuxing was $1 million, an increase of $0.3 million, or 47.3%, from $0.7 million for the three months ended
September 30, 2015. This increase was
mainly due to the increase in Yuxing's net sales and the labor
costs.
Gross Profit
Total gross profit for the three months ended September 30, 2016 decreased by $0.8 million, or 3.1%, to $23.4 million, as compared to $24.2 million for the three months ended
September 30, 2015. Gross profit
margin was 37.9% and 44.6% for the three months ended September 30, 2016 and 2015, respectively. The
decrease in gross profit margin was mainly due to the recent
acquisition of VIEs, which mainly sells low-margin fertilizer
products. The gross profit without including VIE's gross profit was
$20.9 million with a gross profit
margin of 43.0%.
Gross profit generated by Jinong decreased by $2 million, or 10.0%, to $18.2 million for the three months ended
September 30, 2016, from $20.2 million for the three months ended
September 30, 2015. Gross profit
margin from Jinong's sales was approximately 57.8% and 58.1% for
the three months ended September 30,
2016 and 2015, respectively. The decrease in gross profit
margin was mainly due to higher raw material cost and higher
packaging cost.
For the three months ended September 30,
2016, gross profit generated by Gufeng was $2.4 million, a decrease of $1.1 million, or 30.5%, from $3.5 million for the three months ended
September 30, 2015. Gross profit
margin from Gufeng's sales was approximately 15.3% and 19.1% for
the three months ended September 30,
2016 and 2015, respectively. The decrease in gross profit
percentage was mainly due to the further increased weight for sales
of lower-margin products in Gufeng's total sales to answering the
market demand.
For the three months ended September 30,
2016, gross profit generated by Yuxing was $0.3 million, a decrease of $0.2 million, or 41.7% from $0.5 million for the three months ended
September 30, 2015. The gross
profit margin was approximately 22.9% and 42.8% for the three
months ended September 30, 2016 and
2015, respectively. The decrease in gross profit margin was mainly
due to the higher labor cost during the three months ended
September 30, 2016.
Gross profit generated by VIEs were $2.5
million with a gross profit margin of approximately 19.1%
for the three months ended September 30,
2016.
Selling Expenses
Our selling expenses consisted primarily of salaries of sales
personnel, advertising and promotion expenses, freight-out costs
and related compensation. Selling expenses were $5 million, or 8.1%, of net sales for the three
months ended September 30, 2016, as
compared to $2.3 million or 4.3% of
net sales for the three months ended September 30, 2015, an increase of $2.7 million, or 113.8%. This increase was
primarily due to Jinong, and the inclusion of VIEs' selling
expenses for the three months ended September 30, 2016.
General and Administrative Expenses
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 $3.3 million, or 5.2% of net sales for the three
months ended September 30, 2016, as
compared to $2.8 million, or 5.1%, of
net sales for the three months ended September 30, 2015, an increase of $0.5 million, or 17.4%. The increase in general
and administrative expenses was mainly due to VIEs, which had
$0.5 million general and
administrative expenses during the last three months.
Net Income
Net income for the three months ended September 30, 2016 was $7.4 million, an increase of $0.2 million, or 1.5%, compared to $7.2 million for the three months ended
September 30, 2015. Net income as a
percentage of total net sales was approximately 11.9% and 13.4% for
the three months ended September 30,
2016 and 2015, respectively.
Financial Condition
As of September 30, 2016, cash and
cash equivalents were $108 million,
an increase of $5 million, or 5.1%,
from $103 million as of June 30, 2016. Net cash provided in operating
activities was $5.1 million for the
three months ended September 30,
2016, a decrease of $2
million, or 27.1% from cash provided by operating activities
of $7.1 million for the three
months ended September 30, 2015.
Company had $4.6 million in short-term loans as of
September 30, 2016, compared to
$4.7 million in short-term loans
as of June 30, 2016. We had accounts receivable of
$116.5 million as of September 30, 2016, as compared to $117 million as of June
30, 2016, a decrease of $0.5
million or 0.4%.
Second Quarter Fiscal Year 2017 and Confirmed Fiscal
Year 2017 Guidance
For the ongoing second quarter ending December 31, 2016, management expects net sales
between $60 and $65 million, net
income between $5 and $7 million, and
EPS between $0.13 and $0.19 based on
approximately 37.6 million fully diluted shares. For the fiscal
year ended June 30, 2017, management expects net sales
between $277 million and $300
million, net income between $20 million and
$27 million, and an EPS between
$0.53 and $0.72 based on approximately 37.6 million
fully diluted shares.
Conference Call
The Company will hold a conference call at 7:30 a.m.
ET on Monday, November 14, 2016. Any interested
participants are welcome to join in the call by following the
dial-in details as set out below.
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
|
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:
|
10096583
|
The replay will be available 1 hour after the end of the
conference.
Teleconference Replay Available Until: November 21, 2016
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 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"), and Xinjiang Xinyulei
Eco-agriculture Science and Technology co., Ltd.
("Xinyulei"). 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: +86-29-88266383
Email: wangfang@cgagri.com
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SOURCE China Green Agriculture, Inc.