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/C O R R E C T I O N -- China Green Agriculture, Inc./

Tuesday, September 30, 2008 7:25 PM

In the news release, China Green Agriculture, Inc. Announces Fourth Quarter and Year End Fiscal Year 2008 Results, issued Sept. 25 by China Green Agriculture, Inc. over PR Newswire, we are advised by the Company that the pro forma net income for the fourth quarter ended June 30, 2008 was $2.4 million rather than $3.0 million. The full, corrected release follows:

  China Green Agriculture, Inc. Announces Fourth Quarter and Year End Fiscal
                              Year 2008 Results

XI'AN, China, Sept. 25 /Xinhua-PRNewswire-FirstCall/ -- China Green Agriculture, Inc. (OTC 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 fourth quarter and year ended June 30, 2008.

    Fourth Quarter 2008 Highlights
    -- Net revenues totaled $7.2 million, up 18.1% year-over-year
    -- Gross profit was $3.8 million, or 52.7% of revenues, up 18.9% year-
       over-year
    -- Operating income was $2.4 million, down 22.8% year-over-year
    -- Net income was $1.3 million, down 53.9% year-over-year, or $0.07 per
       basic and fully diluted share
    -- Pro forma net income was $2.4 million, up 4.4% year-over-year, or $0.16
       per basic and fully diluted share
    Full Year 2008 Highlights
    -- Net revenues totaled $22.6 million, up 48.9% year-over-year
    -- Gross profit was $12.8 million, or 56.7% of revenues, up 49.2% year-
       over-year
    -- Operating income was $9.3 million, up 23.0% year-over-year
    -- Net income was $7.7 million, up 12.4% year-over-year, or $0.53 per
       basic and fully diluted share
    -- Pro forma net income was $9.5 million, up 37.0% year-over-year, or
       $0.65 per basic and fully diluted share
    -- Became a publicly traded company through a share exchange transaction
       in December 2007 (the 'Share Exchange')
    -- Commenced construction on new facilities to increase production
       capacity by 40,000 metric tons per year
    -- Gained a net increase of 30 distributors throughout the fiscal year,
       increasing the total to roughly 480

'We are pleased to complete China Green Agriculture's first year as a publicly listed company with solid top line growth,' stated Mr. Tao Li, chairman, president and chief executive officer of the company. 'Due to the high demand of our products, we have expanded our distributor network over the last year and have continued to develop highly effective, specialized fertilizers based on market demand. During the year, we also broke ground on our new manufacturing facilities which will expand our output capabilities by 40,000 metric tons.'

Fourth Quarter 2008 Results

Net revenues for the fourth quarter of fiscal 2008 totaled $7.2 million, up 18.1% from $6.1 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 greater product offerings as well as an increase in sales of agricultural products from the Company's greenhouse facility. In the fourth quarter of fiscal year 2008, fertilizer products accounted for $6.8 million, or 94.2% of total revenues, while products from the greenhouse facility accounted for $0.4 million, or 5.8% of total revenues. The decrease in revenue growth from previous quarters was primarily due to the earthquake in Sichuan of May 2008 and the floods in 14 provinces of June 2008 which disrupted the Company's distribution network.

Gross profit for the fourth quarter of fiscal year 2008 totaled $3.8 million, an increase of 18.9% from $3.2 million in the same quarter of 2007. Gross profit margin was 52.7% for the fourth quarter of fiscal year 2008, compared to 52.4% during the same period last year.

Operating expenses for the fourth quarter of 2008 were $1.4 million, up from $0.1 million in the same quarter of 2007. This increase was primarily due to higher selling and administrative expenses associated with being a public company, including legal and auditor fees. Operating expenses also included one time non cash stock-based compensation expenses of $0.5 million and a one time charge of approximately $0.7 million in connection with the Share Exchange. Operating expenses were 20.1% of net revenues in the fourth quarter of fiscal year 2008, up from 2.4 % of net revenues in the corresponding quarter of fiscal year 2007.

Operating income for the fourth quarter of fiscal year 2008 was $2.4 million, down 22.8% from $3.1 million in the fourth quarter of fiscal year 2007. Operating margin was 32.6%, compared to 50.0% in the same quarter of 2007.

Net income for the fourth quarter of fiscal year 2008 was $1.3 million, or $0.07 per basic and fully diluted share, down 53.9% compared to net income of approximately $2.9 million, or $0.27 per basic and fully diluted share, during the same period in 2007.

Pro forma net income in the fourth quarter of 2008 was $3.0 million or $0.16 per fully diluted share, a 4.4% increase from the fourth quarter of 2007.

Full Year Results

In the fiscal year ended June 30, 2008, net revenues were $22.6 million, up 48.9% from $15.2 million in fiscal year 2007. Gross profit was $12.8 million, up 49.2% from $8.6 million in the prior year. Gross margin was 56.7%, roughly unchanged from 56.5% one year ago. Operating income rose 23.0% to $9.3 million, while operating margin was 41.2%, compared to 49.9% in fiscal year 2007. Net income increased 12.4% to $7.8 million, or $0.53 per basic and fully diluted share, compared to $6.9 million, or $0.64 per basic and fully diluted share, a year ago. The financial year 2008 net income was impacted by non cash employee compensation, a one time charge in connection with the Share Exchange in December 2007, and liquidated damages resulting from the late effectiveness of the Company's registration statement. Pro forma net income in 2008 was $9.5 million or $0.65 per fully diluted share, a 37.0% increase from 2007.

Financial Condition

As of June 30, 2008, the Company had $16.6 million in cash and cash equivalents, working capital of $13.3 million and a current ratio of 2.13. The Company had $17.3 million in shareholders' equity compared to $8.8 million in fiscal year 2007.