BEIJING, Aug. 22, 2005 (PRIMEZONE) -- China Agritech, Inc. (OTCBB:CAGC), China's leading developer, manufacturer and distributor of organic compound fertilizers, announced its financial results for the second quarter ended June 30, 2005.
The Company's sales increased 104% to $10.2 million for the quarter ended June 30, 2005 from $4.9 million during the first quarter of 2005. Sales grew 85% from $5.5 million for the second quarter of 2004.
Gross Profit for the second quarter 2005 increased 122% to $4.6 million from $2.1 million for the same period in 2004. Additionally, the Company's Gross Profit Margin expanded from 38% in the first quarter of 2005 to 46% in the second quarter.
Net Income from Operations rose 106% from $1.5 million in the second quarter of 2004 to $3.2 million in the second quarter of 2005.
After-tax Net Income rose from $.02 per share in the first quarter of 2005 to $.13 in the second quarter. The first quarter 2005 results included non-recurring costs associated with the Company's reverse merger transaction of $640,000 or approximately ($.05) per share.
Commenting on the second quarter results Mr. Chang Yu, Chief Executive Officer of China Agritech, said: "The Company's recent financial growth is the result of several factors. These factors include becoming publicly traded in the United States, signing our agreement with The Chinese Academy of Agricultural Sciences, expanding our marketing and sales to the southern part of China and aggressively increasing our spending for marketing, advertising and sales compensation. We continue our efforts to achieve profitable growth through expansion of our existing operations, exploration of export opportunities, research and development of new fertilizer products, evaluation of other agricultural products that we might distribute through our existing marketing and sales channels as well as acquisitions that fit our current business model and distribution capabilities."
The market for the Company's products is somewhat seasonal with the first and second quarter comprising approximately 60% of annual sales. Therefore, the third and fourth quarter sales will not be as high as sales in the first two quarters. However, the Company believes that it is positioned to achieve record sales and profits for 2005.
About China Agritech, Inc.
China Agritech, Inc. and its wholly-owned direct subsidiary, China Tailong Holdings Company Limited ("Tailong"), and Tailong's 90% owned subsidiary, Pacific Dragon Fertilizer Co., Ltd. ("Pacific Dragon") develops, produces and markets various organic liquid compound fertilizers which are made from a combination of organic elements such as humic acid and amino acid, inorganic elements such as nitrogen, phosphorus and potassium, microelements such as boron, iron, zinc, manganese and molybdenum, and other active and stimulative agents. Since its establishment, Pacific Dragon has developed, tested, and produced various types of organic liquid compound fertilizers, all of which obtained the Interim Registration Certificates issued by the PRC Ministry of Agriculture in 1999 and the formal Registration Certificates in 2002. Pacific Dragon's products are proven to be innocuous, harmless, and residue and hormone free by the Report issued by Heilongjiang Quarantine Station in China, and can be effectively used in green agricultural production.
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements to the future financial performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development and acceptance, the impact of competitive services and pricing, or general economic risks and uncertainties.