China Agritech, Inc. Announces Preliminary 2008 Financial Re
BEIJING, Jan. 22 /PRNewswire-Asia/ -- China Agritech, Inc.
(OTC Bulletin Board: CAGC) ("China Agritech" or "the Company"), a leading
national-level liquid and granular organic compound fertilizer manufacturer and distributor in China, today announced its preliminary financial results for the year ended December 31, 2008, with revenue expected to be approximately $47 million (unaudited) compared with $39 million in 2007, or 20% year-over-year growth. In 2008, net income iAAAApected to be approximately $8.7 million (unaudited), compared with $8.5 million in 2007.
The preliminary revenue is now lower than the previous guidance of $54 million and the preliminary net income remains unchanged from guidance. The reason for the lower revenue was mainly due to price decline and high sourcing costs for granular fertilizers in the fourth quarter.
In addition, in the fourth quarter of 2008, the Company successfully collected $10 million of back payments. As a result, as of December 31, 2008, the Company’s accounts receivable were approximately $36 million (unaudited) as compared to $45 million (unaudited) at the end of September 2008.
"I am pleased with our preliminary 2008 results, especially with our improvement on the balance sheet and our success in meeting our previous net income target," said Mr. Yu Chang, Chairman and Chief Executive Officer of China Agritech. "Entering into 2009, we will continue to tighten our credit sales policy and improve receivable management. On the demand side, so far this year we have not seen any slowdown in our granular fertilizer demand, and all of our three granular facilities have been fully prepared for the commercial launch of our internally produced granular fertilizer production. I am confident that granulars will lead us into a much larger market, and with our current nationwide sales network and our established distribution contract with Sinochem we will be well-positioned to expand our market shares in the $1.5-billion green food market in China."
Mr. Chang continued, "In addition, the Chinese government recently introduced policies to raise the government purchase price of crops from farmers, and increase in financial incentives and tax reduction for farmers who purchase farm equipment and fertilizers. We believe this works in our favor as we are already a leading producer of green fertilizers."
About China Agritech, Inc.
China Agritech, Inc. is engaged in the development, manufacturing and distribution of liquid organic compound fertilizers and related products in China. The Company has developed proprietary formulas that provide a continuous supply of high-quality agricultural products while maintaining soil fertility. The Company sells its products to farmers located in 26 provinces of China.
For more information about the Company, please visit http://www.chinaagritechinc.com .
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to the business of China Agritech and its subsidiary companies, which can be identified by the use of forward-looking terminology such as "believeAAAAApects" or similar expressions, including but not limited to, statements regarding the continued demand for China Agritech’s products, China Agritech’s ability to sustain growth for the balance of the year and China Agritech’s ability to generally meet all of its objectives. Such forward-looking statements involve known and unknown risks and uncertainties, including all business uncertainties relating to product development, marketing, concentration in a single customer, raw material costs, market acceptance, future capital requirements, and competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the SEC. Except as required by law, China Agritech is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.