Sales Performance - For the six months ended December 31, 2021, the company sold approximately 128,276 metric tons of fertilizer products, a decrease of 13.8% compared to 148,788 metric tons for the same period in 2020[160]. - Jinong sold approximately 30,498 metric tons of fertilizer products for the six months ended December 31, 2021, representing a decrease of 17.8% from 37,099 metric tons in the same period of 2020[160]. - Gufeng sold approximately 97,778 metric tons of fertilizer products for the six months ended December 31, 2021, a decrease of 12.5% from 111,689 metric tons in the same period of 2020[160]. - Total net sales for the three months ended December 31, 2021 were $42,826,589, a decrease of $912,382 or 2.1% from $43,738,971 for the same period in 2020[180]. - Jinong's net sales increased by $64,644, or 0.4%, to $14,966,519, primarily due to higher sales prices, with revenue per ton rising to $997, an increase of $307 or 44.6% compared to the previous year[180]. - Gufeng's net sales decreased by $862,980 or 3.8% to $21,573,414, attributed to a lower sales volume of approximately 59,007 metric tons, down 11.8% from 66,865 metric tons in the prior year[181]. - Yuxing's net sales increased by $137,008 or 5.1% to $2,819,203, driven by increased market demand[181]. - Total net sales for the six months ended December 31, 2021 were $77,266,037, a decrease of 4.6% from $81,004,048 for the same period in 2020[199]. - Jinong's net sales decreased by 2.4% to $30,128,261 for the six months ended December 31, 2021, with revenue per ton increasing by 19.2% to $989[199]. - Gufeng's net sales for the six months ended December 31, 2021 were $36,361,666, a decrease of 5.0% from $38,264,597 in the previous year[200]. Revenue Generation - The fertilizer business conducted by Jinong and Gufeng generated approximately 85.3% and 85.4% of total revenues for the six months ended December 31, 2021 and 2020, respectively[154]. - Sales of fertilizer products to customers in five provinces within China accounted for approximately 69.3% of fertilizer revenue for the three months ended December 31, 2021[161]. - The company’s agricultural products revenue for the three months ended December 31, 2021, was primarily generated from Shaanxi (83.5%), Shanghai (6.3%), and Beijing (3.7%) provinces[163]. Product Development - The company launched 3 new fertilizer products during the three months ended December 31, 2021, while Gufeng did not launch any new products during the same period[163]. Financial Performance - Total gross profit for the six months ended December 31, 2021 decreased by 3.6% to $14,067,795, with a gross profit margin of 18.2%[203]. - Jinong's gross profit increased by 2.8% to $8,045,334 for the six months ended December 31, 2021, maintaining a gross profit margin of approximately 26.7%[203]. - Gross profit for the three months ended December 31, 2021 decreased by $276,314 or 3.7% to $7,276,085, with a gross profit margin of 17.0% compared to 17.3% in the previous year[186]. - For the three months ended December 31, 2021, Gufeng's gross profit was $2,428,526, a decrease of 6.2% from $2,589,971 for the same period in 2020[187]. - Yuxing's gross profit for the three months ended December 31, 2021 was $444,982, down 17.8% from $541,339 in the previous year, with a gross profit margin decrease from 20.2% to 15.8%[187]. Expenses and Losses - Operating expenses decreased by $10,491,338 or 22.8% to $35,603,272, primarily due to a significant reduction in general and administrative expenses[186]. - Net loss from continuing operations was $(28,417,291), an improvement of $11,656,081 or 29.1% compared to the net loss of $(40,073,372) in the prior year[180]. - Comprehensive loss for the three months ended December 31, 2021 was $(28,720,323), a slight increase of $611,351 or 2.2% compared to $(28,108,972) in the same period of 2020[186]. - Net loss for the three months ended December 31, 2021 was $(31,982,936), a decrease in loss of 20.1% compared to $(40,036,664) for the same period in 2020[195]. - Net loss for the six months ended December 31, 2021, was $(47,060,144), a decrease of 33.7% from $(70,989,577) in the same period of 2020[209]. Cash Flow and Assets - Cash and cash equivalents increased by 27.0% to $23,607,170 as of December 31, 2021, from $18,593,944 as of June 30, 2021[215]. - Net cash provided by operating activities was $1,640,536 for the six months ended December 31, 2021, an increase of 126.3% from cash used in operating activities of $(6,237,210) in the same period of 2020[218]. - Accounts receivable decreased by 27.2% to $74,786,136 as of December 31, 2021, from $102,783,004 as of June 30, 2021[224]. - Inventories decreased by 39.7% to $38,766,953 as of December 31, 2021, from $64,315,903 as of June 30, 2021[226]. - As of December 31, 2021, customer deposits increased to $6,434,068 from $6,257,215 as of June 30, 2021, representing a growth of $176,853 or 2.8%[229]. Financial Structure and Risks - The company has no off-balance sheet arrangements, indicating a straightforward financial structure[230]. - The company’s short-term debt remained stable at $4.2 million as of both December 31, 2021, and June 30, 2021[241]. - The accumulated other comprehensive loss was $1 million as of December 31, 2021, reflecting foreign exchange risks associated with RMB fluctuations[240]. - The company has not experienced significant credit risk, as most customers are long-term with strong payment records[244]. - The company is exposed to foreign exchange risk due to revenues and expenses being primarily denominated in RMB while reporting in U.S. dollars[239]. - The company has not entered any hedging transactions to mitigate interest rate or foreign exchange risks[243]. Strategic Initiatives - The company entered into strategic acquisition agreements with various targets, with a total cash payment for acquisition amounting to RMB 37 million and principal of notes for acquisition totaling RMB 51 million[166]. - Deferred assets, which represent amounts advanced to distributors for marketing and store development, were fully amortized as of December 31, 2021[235]. Market Conditions - The ongoing COVID-19 pandemic has introduced significant economic uncertainty, potentially impacting demand, supply chains, and overall financial performance[246].
CGA(CGA) - 2022 Q2 - Quarterly Report