Sales Performance - For the nine months ended March 31, 2021, the company sold approximately 303,662 metric tons of fertilizer products, a decrease of 10.7% compared to 340,118 metric tons for the same period in 2020[142]. - Jinong's fertilizer sales increased by 9.3% to 60,165 metric tons for the nine months ended March 31, 2021, compared to 55,059 metric tons for the same period in 2020[142]. - Gufeng's fertilizer sales decreased by 14.6% to 243,496 metric tons for the nine months ended March 31, 2021, compared to 285,060 metric tons for the same period in 2020[142]. - For the three months ended March 31, 2021, Jinong sold 23,066 metric tons of fertilizer products, a 60.7% increase from 14,350 metric tons in the same period of 2020[141]. - Gufeng's revenue per ton of fertilizer sold increased to $363 for the three months ended March 31, 2021, compared to $341 in the same period of 2020[141]. Financial Performance - For the three months ended March 31, 2021, total net sales were $86,068,404, an increase of $241,715 or 0.3% from $85,826,689 for the same period in 2020[159]. - Jinong's net sales increased by $4,552,173, or 40.4%, to $15,818,610, with a sales volume of approximately 23,066 metric tons, an increase of 60.7% compared to 14,350 tons in the prior year[160]. - Gufeng's net sales decreased by $8,655,876, or 15.2%, to $48,438,434, with a sales volume of approximately 131,807 metric tons, down 21.1% from 167,125 metric tons in the previous year[161]. - Yuxing's net sales increased by $1,040,601, or 51.6%, to $3,055,588, driven by increased market demand[162]. - Total net sales for the nine months ended March 31, 2021 were $178,567,978, a decrease of $7,645,291 or 4.1%, from $186,213,269 for the nine months ended March 31, 2020[183]. Profitability - Gross profit for the three months ended March 31, 2021 increased by $1,829,216, or 14.5%, to $14,446,650, with a gross profit margin of 16.8% compared to 14.7% in the prior year[169]. - Jinong's gross profit increased by $1,202,643, or 39.1%, to $4,275,501, with a gross profit margin of approximately 27.0%[170]. - Gufeng's gross profit decreased by $538,304, or 7.7%, to $6,458,950, with a gross profit margin of approximately 13.3%[171]. - Yuxing's gross profit increased by $445,845, or 265.6%, to $613,720, with a gross profit margin of approximately 20.1%[172]. - Gross profit margin percentage for the nine months ended March 31, 2021 was 17.5%, down from 18.6% for the same period in 2020[192]. Expenses - General and administrative expenses decreased by $33,023,331, or 56.2%, to $25,784,656, or 30.0% of net sales for the three months ended March 31, 2021[176]. - Selling expenses for the nine months ended March 31, 2021 were $11,264,533, or 6.3% of net sales, an increase of $1,503,388 or 15.4%[197]. - Jinong's selling expenses for the nine months ended March 31, 2021, were $9,659,301, representing 21.3% of net sales, an increase from $8,726,383 or 19.5% for the same period in 2020[198]. - General and administrative expenses decreased by $5,645,031, or 5.2%, to $102,266,279, which was 57.3% of net sales for the nine months ended March 31, 2021, compared to 58.0% in 2020[199]. Cash Flow and Assets - Cash and cash equivalents decreased by $6,859,190, or 57.5%, to $5,075,588 as of March 31, 2021, from $11,934,778 as of June 30, 2020[210]. - Net cash used in operating activities was $10,584,537 for the nine months ended March 31, 2021, a decrease of $28,092,346, or 72.6%, from $38,676,884 in 2020[213]. - Accounts receivable increased by $20,040,365, or 19.0%, to $125,733,691 as of March 31, 2021, primarily due to Gufeng's accounts receivable[217]. - Inventories decreased by $34,903,126, or 35.3%, to $64,017,955 as of March 31, 2021, mainly due to Gufeng's inventory reduction[220]. - Advances to suppliers decreased by $31,734,320, or 48.8%, to $33,347,498 as of March 31, 2021, reflecting fluctuations in inventory levels[221]. Risk Factors - The accumulated other comprehensive loss as of March 31, 2021, was $9 million, indicating exposure to foreign exchange risk due to RMB fluctuations[236]. - Between July 1, 2020, and March 31, 2021, the RMB appreciated by a cumulative 7.9% against the U.S. dollar, affecting trade dynamics[236]. - The company has not entered any hedging transactions to mitigate exposure to foreign exchange or interest rate risks[239]. - Inflationary factors may adversely affect operating results, although no material impact has been observed to date[241]. - The COVID-19 pandemic has introduced significant economic and demand uncertainty, potentially impacting financial performance[243]. - The company is monitoring the COVID-19 situation and its potential effects on operations and profitability[244]. Business Operations - The company operates in three business segments: fertilizer products (Jinong), fertilizer products (Gufeng), and agricultural products production (Yuxing)[137]. - The company is developing an online platform to connect its physical distribution network, enhancing its e-commerce capabilities in the agricultural sector[153]. - The company is organized into ten main business units, with operations reported in four main segments based on products and geography[233]. - The company had a total of 1,985 distributors across 22 provinces, with Jinong having 1,153 distributors and Gufeng having 334 distributors[144].
CGA(CGA) - 2021 Q3 - Quarterly Report