China Green Agriculture, Inc. Announces Solid Third Quarter Fiscal Year 2008 Results

XI'AN, China, May 15 /Xinhua-PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (BULLETIN BOARD: CGAG) ("China Green Agriculture" or "the Company"), a leading producer and distributor of humic acid ("HA") based liquid compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., today announced its financial results for the third quarter of fiscal year 2008 ended on March 31, 2008.

Third Quarter 2008 Highlights
-- Net revenues totaled $4.4 million, up 101.7% year-over-year
-- Gross profit was $2.5 million, up 105.2% year-over-year
-- Operating income was $2.1 million, up 108.7% year-over-year
-- Net income was $1.7 million, up 86.7% year-over-year, or $0.17 per
basic and fully diluted share

"We are pleased with our triple-digit growth in revenues and net income in the third quarter of fiscal year 2008, due in large part to an expanded sales network and growth in sales of fertilizer and greenhouse products. As there is increasingly strong emphasis in the Chinese agricultural industry placed on efficient land use, we have seen an unrelenting demand for our humic acid- based fertilizers which increase output while maintaining healthy and balanced soil conditions," said Mr. Tao Li, chairman and CEO of China Green Agriculture. "To meet with demand, we are continuing to increase our production capacity through a strategic expansion of our facilities."

Third Quarter of 2008 Results

Net revenues for the third quarter of fiscal 2008 totaled $4.4 million, up 101.7% from $2.2 million in the same quarter of fiscal year 2007. The increase in revenues was primarily due to an increase in sales volume of humic acid organic liquid compound fertilizer resulting from an expanded sales network and an increase in sales of agricultural products produced from the Company's greenhouse facility. In the third quarter of fiscal year 2008, fertilizer products accounted for $3.5 million, or 79.4% of total revenues, while products from the greenhouse facility accounted for $0.9 million, or 20.6% of total revenues.

Gross profit for the third quarter of fiscal year 2008 totaled $2.5 million, an increase of 105.2% from $1.2 million in the same quarter of 2007. Gross profit margin was 55.3% for the third quarter of fiscal year 2008, compared to 54.4% during the same period last year.

Operating expenses for the third quarter of 2008 were $0.4 million, up from $0.2 million in the same quarter of 2006. This increase was primarily due to higher selling and administrative expenses associated with being a public company, including legal and auditor fees, as well as corresponding growth in revenue. Operating expenses were 9.0% of net revenues in the third quarter of fiscal year 2008, down from 9.6 % of net revenues in the corresponding quarter of fiscal year 2007.

Operating income for the third quarter of fiscal year 2008 was $2.1 million, up from $1.0 million in the third quarter of fiscal year 2007. Operating margin was 46.3%, compared to 44.8% in the same quarter of 2007.

Net income for the third quarter of fiscal year 2008 increased to $1.7 million, or $0.17 per basic and fully diluted share, up 86.7% compared to net income of approximately $0.9 million, or $0.08 per basic and fully diluted share, during the same period in 2007.

Nine Month Results

In the nine months ended March 31, 2008, net revenues were $15.4 million, up 69.6% from $9.1 million in the same period of the prior year. Gross profit was $9.0 million, up 67.3% from $5.3 million in the same period of the prior year. Gross margin was 58.5%, down from 59.3% in the year ago period. Operating income rose 54.0% to $7.0 million, and operating margin was 45.2%, compared to 49.8% during the same period a year ago. Net income increased 60.8% to $6.4 million, or $0.63 per basic and fully diluted share, compared to $4.0 million, or $0.37 per basic and fully diluted share, a year ago.

Financial Condition

As of March 31, 2007, the Company had $14.0 million in cash and cash equivalents, as well as $4.2 million in restricted cash, working capital of $16.4 million and a current ratio of 2.69. The Company has $14.8 million in shareholders' equity compared to $28.4 million in the last quarter. The Company generated $5.5 million in cash flows from operating activities in the nine months ended March 31, 2008.

Recent Events
-- In April, 2008, China Green Agriculture appointed two independent
directors, completing its majority independent board
-- In April, 2008, China Green Agriculture appointed Mr. Henry Chen as the
Company's new chief financial officer

Business Outlook

We plan to continue facilitating growth at China Green Agriculture with the expansion of our facilities," stated Mr. Li. "We have recently completed upgrades to our greenhouse R&D space and have obtained all prerequisite approvals to break ground on an additional production line before the end of our financial year. We are confident that with this expansion, we will be able to develop, launch, and efficiently manufacture more new fertilizer products to better serve farmers from a diverse array of geographical regions and climatic conditions throughout China."

About China Green Agriculture, Inc.

China Green Agriculture, Inc. produces and distributes humic acid ("HA") based liquid compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., ("TechTeam"). TechTeam produces and sells approximately 10,000 metric tons of over 100 different kinds of fertilizer products per year. All of TechTeam's fertilizer products are certified by the PRC government as green products and suitable for growing Grade AA "green" foods, also known as green products that contain little or no chemical materials, as stated by the China Green Food Research Center. TechTeam's fertilizers are highly concentrated liquids which require an application of approximately 120 ml per mu per application. Its average customer has approximately four mu of land (one mu = .165 acres).

China Green Agriculture currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products in 27 provinces in the PRC. The leading five provinces by revenue for the fiscal year ended June 30, 2007 include Heilongjiang (9.99%), Guangdong (7.81%), Xinjiang (6.59%), Shandong (5.81%), and Henan (5.80%).

Cautionary 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.

-- FINANCIAL TABLES FOLLOW --

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2008 AND 2007
(UNAUDITED)

Nine Months Ended March31, Three Months Ended March 31,
2008 2007 2008 2007

Net sales $ 15,382,089 $ 9,070,972 $ 4,434,926 $ 2,198,615
Cost of
goods sold 6,377,066 3,687,416 1,982,084 1,003,035
Gross profit 9,005,023 5,383,555 2,452,841 1,195,580

Operating
expenses
Selling
expenses 614,646 400,108 142,808 27,428
Operating and
administrative
expenses 1,430,762 463,482 256,800 184,130
Total
operating
expenses 2,045,408 863,590 399,608 211,558
Income from
operations 6,959,615 4,519,965 2,053,233 984,022

Other income
(expense)
Other income
(expense) 39,647 (1,457) 655 1,514
Interest
income 27,224 20,559 11,697 122
Interest
expense (284,361) (270,551) (86,761) (90,190)
Bank charges (6,442) (425) (4,939) (63)
Total other
income
(expense) (223,933) (251,875) (79,348) (88,618)
Income before
income taxes 6,735,682 4,268,090 1,973,886 895,405
Provision
for income
taxes 301,841 266,006 301,841 -- Net income 6,433,842 4,002,084 1,672,045 895,405

Other
comprehensive
income
Foreign
currency
translation
gain 1,511,242 20,041 957,245 9,465
Comprehensive
income $ 7,945,084 $ 4,022,125 $ 2,629,290 $ 904,869

Basic and
diluted
weighted
average
shares
outstanding 10,201,325 10,770,669 9,625,724 10,770,669
Basic and
diluted
net earnings
per share* $ 0.63 $ 0.37 $ 0.17 $ 0.08

CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF March 31, 2008
(UNAUDITED)
ASSETS

Current Assets
Cash and cash equivalents $13,986,395
Restricted cash 4,228,641
Accounts receivable, net 1,729,049
Inventories 5,819,014
Other assets 137,327
Advances to suppliers 273,289
Total Current Assets 26,173,715
Plant, Property and Equipment,
net 17,202,971
Advances for Construction In
Progress 431,689
Construction In Progress 68,118
Intangible Assets, net 1,179,708
Total Assets $45,056,201

LIABILITIES AND SHAREHOLDERS'
EQUITY

Current Liabilities
Accounts payable $443,191
Unearned revenue 123,651
Other payables and accrued
expenses 340,800
Advances from other unrelated
companies 304,279
Amount due to related parties 1,300
Taxes payable 4,410,059
Short term loans 4,107,245
Total Current Liabilities 9,730,525

Common Stock, $.001 par value,
6,313,617 shares subject to
redemption 20,519,255
Commitment -- Stockholders' Equity
Preferred Stock, $.001 par
value, 20,000,000 shares
authorized, Zero shares issued
and outstanding -- Common stock, $.001 par value,
780,000,000 shares authorized,
12,000,400 shares issued and
outstanding 12,000
Additional paid-in capital 737,270
Retained earning 12,302,191
Accumulated other comprehensive
income 1,754,960
Total Stockholders' Equity 14,806,421

Total Liabilities and
Stockholders' Equity $45,056,201

CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 2008 AND 2007
(UNAUDITED)

2008 2007
Cash flows from operating activities
Net income $6,433,842 $4,002,084
Adjustments to reconcile net
income to net cash provided
by operating activities
Share capital contribution - rental and interest paid by
shareholders 32,656 43,224
Depreciation 703,271 266,556
Amortization 78,693 73,921
Decrease / (Increase) in
current assets
Accounts receivable 256,854 77,917
Other receivables 79,100 -- Inventories (3,696,399) (1,028,026)
Advances to suppliers (45,061) (22,200)
Other assets (16,581) 206,762
(Decrease) / Increase in
current liabilities
Accounts payable 131,130 (186,446)
Unearned revenue 33,561 52,726
Tax payables 1,855,704 930,634
Other payables and accrued
expenses (365,254) 4,964,995
Net cash provided by operating
activities 5,481,516 9,382,146

Cash flows from investing
activities
Acquisition of plant, property,
and equipment (4,917,610) (9,677,692)
Advances for construction in
progress (409,841) -- Additions to construction in
progress (20,655) (22,527)
Net cash used in investing
activities (5,348,106) (9,700,220)

Cash flows from financing
activities
Repayment of loan (1,827,836) (1,907,759)
Borrows of loan 1,353,952 1,716,983
Proceeds from private placement 18,602,720 -- Restricted cash put in escrow (4,228,641) -- (Payments)/proceeds to/from
related parties (642,342) 511,744
Net cash provided by
financing activities 13,257,854 320,968

Effect of exchange rate change
on cash and cash equivalents 513,415 20,041
Net increase in cash and cash
equivalents 13,904,679 22,935

Cash and cash equivalents,
beginning balance 81,716 45,623
Cash and cash equivalents,
ending balance $13,986,395 $68,558

Supplement disclosure of cash
flow information
Interest expense paid $(222,260) $(231,572)
Income taxes paid $ -- $ --

For more information, please contact:

Company Contact:
Mr. Tao Li
Chief Executive Officer
China Green Agriculture, Inc.
Tel: +86-29-8826-6386
Email: kingtone@techteam.com.cn

Investor Relations Contact:
Mr. Crocker Coulson
President
CCG Elite Investor Relations
Tel: +1-646-213-1915 (NY Office)
Email: crocker.coulson@ccgir.com

Source: China Green Agriculture, Inc.

CONTACT: Company Contact: Mr. Tao Li, Chief Executive Officer of China
Green Agriculture at +86-29-8826-6386 or kingtone@techteam.com.cn; Or Investor
Relations Contact: Mr. Crocker Coulson, President of CCG Elite Investor
Relations at +1-646-213-1915 (NY Office) or crocker.coulson@ccgir.com

Web site: http://www.ccgelite.com/

2008-05-15 18:42:09 0363547 PRNEWSWIRE