China Green Agriculture, Inc. Reports Third Quarter Fiscal Year 2010 Financial Results; Increases Fiscal-Year 2010 Revenue and Net Income Guidance

XI'AN, China, May 13 /PRNewswire-Asia/ --

-- Company Exceeds Third Quarter FY2010 Revenue Guidance

-- Q3 FY2010 Sales Increase 52.0% to $13.4 Million, Net Income Increases

37.1% to $5.3 Million with EPS of $0.22

-- Q3 FY2010 Gross Margin Increases to 60.3% from 59.0% Y-O-Y; Operating

Margin Increases to 49.7% from 48.1% Y-O-Y

-- Company Increases Fiscal Year 2010 Guidance: Revenue, Net Income and

EPS of at least $50.6 Million, $21.1 Million, and $0.90, respectively

-- Management to Host Earnings Conference Call at 9:00 am ET May 13

China Green Agriculture, Inc. (NYSE: CGA) ("China Green Agriculture" or the "Company"), a leading producer and distributor of humic acid ("HA") based compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., today announced its financial results for the third fiscal quarter ended March 31, 2010.

Summary Results

Third Quarter FY 2010 Results (USD) (unaudited)

(three months ended March 31,) 2010 2009 CHANGE

Net Sales $13.4 million $8.8 million +52.0%

Gross Profit $8.1 million $5.1 million +60.1%

Net Income $5.3 million $3.9 million +37.1%

EPS (Basic and Fully

Diluted) $0.22 $0.21 +4.2%

Weighted Average Shares

Outstanding 24.4 million 18.6 million +31.6%

Nine Months FY 2010 Results (USD) (unaudited)

(nine months ended March 31,) 2010 2009 CHANGE

Net Sales $35.9 million $24.7 million +45.2%

Gross Profit $21.8 million $14.1 million +54.7%

Net Income $15.3 million $10.0 million +52.3%

EPS (Basic and Fully

Diluted) $0.66 $0.54 +21.7%

Weighted Average Shares

Outstanding 23.1 million 18.4 million +25.3%

Third Quarter FY2010 Results

Total net sales for the three months ended March 31, 2010 were $13.4 million, an increase of 52% from $8.8 million for the three months ended March 31, 2009. Net sales of Jinong, which is the Company's division that sells humic acid based compound fertilizers, accounted for 83.8% of total net sales. Jinong's net sales increased 64.1%, to $11.3 million for the three months ended March 31, 2010, from $6.9 million for the three months ended March 31, 2009. Sales volume increased 67.6% to 5,369 tons for the three months ended March 31, 2010 from 3,364 tons for the three months ended March 31, 2009. These increases were mainly attributable to the increased production due to greater capacity from the Company's new production line and to increased sales of granular based fertilizer products. The net sales of Jintai, the Company's division that sells agricultural products such as top-grade fruits, vegetables, flowers and colored seedlings, increased 10.1%, to $2.2 million for the three months ended March 31, 2010 from $2.0 million for the same period in 2009.

Gross profit for the third quarter of fiscal year 2010 totaled $8.1 million, an increase of 60.1% from $5.1 million in the same quarter of fiscal year 2009. Gross profit margin was 60.3% for the third quarter of fiscal year 2010, up from 57.3% a year ago.

Operating income for the third quarter of fiscal year 2010 was $6.2 million, up 39.4% from $4.5 million in the third quarter of fiscal year 2009. Operating margin was 49.7%, compared to 48.1% in the same quarter of fiscal year 2009.

Net income for the third quarter of fiscal year 2010 was $5.3 million, up 37.1% compared with net income of $3.9 million during the same period in fiscal year 2009. For the three month period ended March 31, 2010, basic and fully diluted net income per share were both $0.22 as compared to $0.21 for the same period in 2009, based on weighted average shares outstanding of 24.4 million and 18.6 million, respectively. The increase in net income was largely due to the increase in net sales of fertilizer products which provide higher profit margins than that of the Company's agriculture products. Net income margin approximated 39.7% and 44.0% for the three months ended March 31, 2010 and 2009, respectively.

"We are very pleased that our financial results, driven in large part by increased sales of higher margin products, met or exceeded our revenue and net income guidance for the third quarter of fiscal year 2010," stated Mr. Tao Li, Chairman, President and Chief Executive Officer of China Green Agriculture. "During the quarter, we took a number of initiatives to achieve our objectives of increasing our brand awareness and geographic footprint, expanding our product line, and increasing our production capacity. Among these, we achieved key milestones in the construction of our new $38 million research and development center, expected to further expand our product line offering and lead to the development and commercialization of new customized, high margin fertilizer products. We plan to complete the first phase of construction, consisting of one hundred sun-light greenhouses, by the end of June 2010. We also launched seven new liquid-based fertilizer products and added 12 new distributors during the quarter, and opened 16 directly-owned retail stores and selected 308 stores as a "China Green Agriculture Authorized Retailer" of our Jinong branded HA compound fertilizer products. We believe that the growing demand for our green fertilizer products, coupled with our increased marketing efforts, growing product line and expanding R&D platform, will enable us to strengthen our leadership position, and drive incremental sales and profitability."

Nine Months FY2010 Results

Total net sales for the nine months ended March 31, 2010 were $35.9 million, an increase of 45.2%, from $24.7 million for the nine months ended March 31, 2009. Jinong's net sales, driven mainly by the sales of humic acid-based compound fertilizers, accounted for 85.1% of total net sales in the nine months ended March 31, 2010. Jinong's net sales increased 57.2%, to $30.6 million for the nine months ended March 31, 2010, from $19.4 million for the nine months ended March 31, 2009. This increase was mainly attributable to the commencement of the Company's new production line in August 2009 and the sale of more high-end products, including the Company's recently introduced powdered fertilizer products. Jintai's net sales totaled $5.3 million for the nine months ended March 31, 2010 compared to $5.3 million for the same period in 2009, relatively flat year-to-year mainly because the greenhouses in Jintai have reached their full capacity.

Gross profit increased 54.7% to $21.8 million in the first nine months of fiscal year 2010, versus $14.1 million in the same period a year ago. Gross margin was 60.8% and 57.1% for the nine months ended March 31, 2010 and 2009, respectively.

Operating income for the first nine months of fiscal year 2010 rose 50.1% to $17.9 million compared to $11.9 million for the first nine months of fiscal year 2009.

Net income for the nine months ended March 31, 2010 was $15.3 million, an increase of 52.3%, from $10.0 million for the nine months ended March 31, 2009. For the nine month period ended March 31, 2010, net income per share was $0.66 as compared to net income per share of $0.54 for the same period in 2009, based on weighted average shares outstanding of 23.1 million and 18.4 million, respectively. The increase was mainly a result of increased net sales by Jinong. Net margin approximated 42.6% and 40.6% for the nine months ended March 31, 2010 and 2009, respectively.

Financial Condition

As of March 31, 2010, the Company had cash and cash equivalents of $58.2 million, an increase of $40.4 million from June 30, 2009, primarily due to the net proceeds from public offerings in 2009. The Company had no short-term loans or long-term debt as of March 31, 2010. Net accounts receivable stood at $13.3 million as of March 31, 2010 with trailing twelve-month days sales outstanding ("DSO") of 78 compared to DSO of 67 three months ago. For the first nine months ended March 31, 2010, the Company had $7.4 million in cash flow from operating activities, while capital expenditures amounted to approximately $14.7 million primarily due to the purchase of land use rights for the expansion of the Company's new greenhouse facility.

2010 Guidance

China Green Agriculture's third quarter fiscal year 2010 revenue of $13.4 million exceeded the high end of its previously announced revenue guidance for the quarter of $12.4 million to $13.0 million. Net income of $5.3 million or $0.22 per share met the Company's third quarter fiscal year 2010 net income guidance of $5.1 million to $5.4 million, or $0.21 to $0.22 per share.

For the fiscal year ending June 30, 2010, management increased revenue guidance to $50.6 million to $51.2 million, net income to $21.1 million to $21.4 million, and EPS to $0.90 to $0.91 based on 23.4 million weighted average shares. For the fourth quarter ending June 30, 2010, management increased revenue guidance to $14.8 million to $15.4 million, net income to $5.9 million to $6.2 million, and EPS to $0.24 to $0.25 based on 24.4 million weighted average shares. This guidance reflects the anticipated strong sales resulting from the Company's increased production capacity as well as expanded margins on high-end fertilizer products.

"With our expanded production capacity and state-of-the-art R&D facilities coming on line in June, we will continue to introduce new high-margin products to the market quickly, and support sales growth with marketing programs focused on building our high quality brand through both distributors and retail stores. In April, we signed a Memorandum of Understanding ("MOU") to purchase 100% interest in a 300,000 metric-ton fertilizer production facility in China for approximately $22 million in a combination of cash and equity. The facility, if acquired, could contribute at least $8 million in net income in fiscal year 2011. It also would further extend our distribution network and broaden our product mix to meet the growing demand for both traditional and organic fertilizers in China. With our strong working capital position, growing product offering and expanding R&D capabilities, we feel we are well positioned to gain market share and build on being one of the leading fertilizer producers in China," concluded Mr. Li.

Conference Call

The Company will conduct a conference call at 9:00 a.m. ET on Thursday May 13, 2010. Interested participants should call when calling within the United States or when calling internationally. When prompted by the operator, please mention "China Green Agriculture's Third Quarter Fiscal Year 2010 Financial Results" to join the call.

Event: CGA Third Quarter Fiscal Year 2010 Conference Call

Date: May 13, 2010

Time: 9:00 a.m. ET

US Dial In: 1-877-407-9210

Int'l Dial In: 1-201-689-8049

Conference ID#: 350202

The call is being webcast by Vcall and can be accessed at China Green Agriculture's website at 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 May 28, 2010. To listen, please call 1-877-660-6853 within the United States or 1-201-612-7415 when calling internationally. Replay Passcodes (both required for playback): Account #: 286; Conference ID #: 350202.

About China Green Agriculture, Inc.

China Green Agriculture, Inc. currently offers 148 different HA-based compound fertilizers, which are distributed via 552 individual distributors covering 21 provinces, 4 autonomous regions and 3 municipal cities in China. Its fertilizer products are certified by the Chinese government as "Green Food Production Materials." The leading five provinces which collectively accounted for 40.4% of the Company's fertilizer revenue for the three months ended March 31, 2010 are Shaanxi (11.2%), Shandong (10.8%), Anhui (7.9%), Henan (5.6%), and Sichuan (4.9%). For more information, visit http://www.cgagri.com .

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 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.

For more information, please contact:

In the US:

HC International, Inc.

Ted Haberfield, Executive VP

Tel: +1-760-755-2716

Email: thaberfield@hcinternational.net

In China:

China Green Agriculture, Inc.

Mr. Jonnie Wang, Secretary of Board, Investor Relations Officer

Tel: +86-29-8826-6368

Email: wangxilong@cgagri.com

Financial Tables Follow

CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2010 AND JUNE 30, 2009

(UNAUDITED)

ASSETS

March 31, June 30,

2010 2009

Current Assets

Cash and cash equivalents $58,233,311 $17,795,447

Restricted cash 431 83,579

Accounts receivable, net 13,316,354 8,167,715

Inventories 10,883,919 7,162,249

Other assets 342,339 129,213

Deferred offering cost -- 160,500

Advances to suppliers 161,800 95,255

Total Current Assets 82,938,154 33,593,958

Plant, Property and Equipment,

Net 29,009,241 17,341,654

Construction In Progress 31,859 9,609,649

Advances to suppliers - Non

Current 392,695 --

Intangible Assets, Net 11,592,939 1,073,165

Total Assets $123,964,888 $61,618,426

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable $1,096,241 $926,883

Unearned revenue 61,238 24,000

Other payables and accrued

expenses 745,368 1,091,168

Advances from other unrelated

companies 297,783 326,970

Amount due to related parties 68,164 31,160

Taxes payable 1,170,707 2,887,828

Short term loans -- 3,170,290

Total Current Liabilities 3,439,501 8,458,299

Commitments

Common Stock, $.001 par value,

6,313,617 shares subject to

redemption -- 20,519,255

Stockholders' Equity

Preferred Stock, $.001 par

value, 20,000,000 shares

authorized, zero shares

issued and outstanding -- --

Common stock, $.001 par value,

115,197,165 shares authorized,

24,564,328 shares issued and

outstanding 12,281,569 as of

June (30, 2009) 24,565 12,282

Additional paid-in capital 74,648,807 2,060,162

Statuary reserve 5,168,773 3,468,530

Retained earnings 38,243,589 24,642,768

Accumulated other

comprehensive income 2,439,653 2,457,130

Total Stockholders' Equity 120,525,387 32,640,872

Total Liabilities and

Stockholders' Equity $123,964,888 $61,618,426

CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED MARCH 31, 2010 AND 2009

(UNAUDITED)

Nine Months Ended Three Months Ended

March 31, March 31,

2010 2009 2010 2009

Net Sales

Jinong $30,554,200 $19,435,021 $11,264,754 $6,864,494

Jintai 5,337,013 5,286,782 2,177,523 1,977,180

Net sales $35,891,213 $24,721,802 $13,442,277 $8,841,675

Cost of goods

sold -- -- -- --

Jinong 11,209,185 7,667,116 4,206,699 2,560,795

Jintai 2,842,736 2,941,221 1,125,017 1,215,343

Cost of goods

sold 14,051,921 10,608,337 5,331,717 3,776,138

Gross profit 21,839,292 14,113,466 8,110,560 5,065,537

Operating expenses

Selling expenses 1,302,733 786,462 566,966 203,925

General and

administrative

expenses 2,683,959 1,432,514 1,335,229 408,740

Total operating

expenses 3,986,692 2,218,976 1,902,195 612,665

Income from

operations 17,852,601 11,894,490 6,208,366 4,452,872

Other income

(expense) 1,045 4,482 492 207

Other income

(expense) 200,461 306,359 118,539 163,340

Interest income

Interest expense (112,457) (560,257) (6,813) (112,334)

Total other

income (expense) 89,049 (250,596) 112,218 51,083

Income before

income taxes 17,941,649 11,643,894 6,320,584 4,503,955

Provision for

income taxes 2,640,584 1,597,833 987,786 613,673

Net income 15,301,066 10,046,061 5,332,798 3,890,282

Other comprehensive

income

Foreign currency

translation

gain/(loss) (17,478) 49,570 (23,832) 57,891

Comprehensive

income $15,283,588 $10,095,631 $5,308,966 $3,948,173

Basic weighted

average shares

outstanding 23,098,783 18,439,569 24,418,325 18,559,206

Basic net earnings

per share $0.66 $0.54 $0.22 $0.21

Diluted weighted

average shares

outstanding 23,105,783 18,439,569 24,425,325 18,559,206

Diluted net

earnings per

share 0.66 0.54 0.22 0.21

CHINA GREEN AGRICULTURE INC. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2010 AND 2009

(UNAUDITED)

2010 2009

Cash flows from operating

activities

Net income $15,301,066 10,046,061

Adjustments to reconcile net

income to net cash

provided by operating

activities

Issuance of equity for

compensation 1,259,992 112,247

Depreciation 1,545,413 1,121,989

Amortization 205,018 80,267

Decrease / (Increase) in

current assets

Accounts receivable (5,125,905) (3,269,466)

Other receivables (158,415) 12,465

Inventories (3,701,733) (4,261,570)

Advances to suppliers (66,279) 372,837

Other assets (73,784) 6,528

(Decrease) / Increase in

current liabilities

Accounts payable 166,957 1,002,165

Unearned revenue 37,171 (30,100)

Tax payables (1,725,159) (4,411,497)

Other payables and

accrued expenses (282,450) 199,071

Net cash provided by

operating activities 7,381,891 980,997

Cash flows from investing

activities

Acquisition of plant,

property, and equipment (3,528,331) (465,648)

Acquisition of intangible

assets (10,776,152) --

Additions to construction

in progress (31,859) (3,059,913)

Advances to suppliers -

non current (392,695) --

Net cash used in investing

activities (14,729,037) (3,525,561)

Cash flows from financing

activities

Repayment of loan (3,179,115) (525,475)

Shares issuance cost (2,232,302) --

Proceeds from issuance of

shares 53,063,824 --

Restricted cash 83,148 75,074

Net cash provided by /

(used in) financing

activities 47,735,555 (450,401)

Effect of exchange rate

change on cash and cash

equivalents 49,455 15,509

Net increase in cash and cash

equivalents 40,437,864 (2,979,455)

Cash and cash equivalents,

beginning balance 17,795,447 16,612,416

Cash and cash equivalents,

ending balance $58,233,311 13,632,961

Supplement disclosure of cash

flow information

Interest expense paid $(95,740) (339,203)

Income taxes paid $(3,081,381) (2,112,985)

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