CAGC.OB (CHINA AGRITECH INC)

[kslifka]

With all the Ag stocks on fire lately  ...here's one that may jump this week.

It had a huge spike in October during the China stock run.  Technically it broke the down trend-line and appears to be at a double bottom.

Financially...CAGC is a profitable small cap of only $69 million which recently had the highest quarterly revenues ever. 

Keep on watch...latest quarterly report below.



China Agritech, Inc. Announces Third Quarter 2007 Results
Thursday November 15, 7:00 am ET
-- Revenue increases 52.5% to a Company record $11.6 million
-- Net income increases 130.8% to $2.6 million

BEIJING, Nov. 15 /Xinhua-PRNewswire-FirstCall/ -- China Agritech, Inc. (OTC Bulletin Board: CAGC - News; "China Agritech" or "the Company"), a leading manufacturer of liquid organic fertilizer and other fertilizer products in China, today announced its financial results for the third quarter ended September 30, 2007.

    Third Quarter Highlights
    -- Revenue increased 52.5% year-over-year to a company record $11.6
       million
    -- Gross profit increased 54.0% to year-over-year a company record $6.2
       million
    -- Net income increased 130.8% year-over-year to $2.6 million
    -- Established strategic alliance and signed $7.8 million liquid
       fertilizer contract with Sinochem Fertilizer Co., Ltd. ("Sinochem
       Fertilizer")
    -- Completed $15 million private placement financing

Third Quarter 2007 Results

"We are pleased to see both record revenue and gross profit during the third quarter as we rebounded from the impact of the unusual weather conditions in China earlier this year," commented Mr. Yu Chang, Chief Executive Officer of China Agritech. "During the quarter, we establish a strategic alliance with China's largest fertilizer distributor, Sinochem Fertilizer. We believe our relationship with Sinochem Fertilizer will contribute to China Agritech penetrating new geographic markets within China as well as our long-term revenue and net income growth."

Revenue for the third quarter of 2007 climbed 52.5% to $11.6 million, from $7.6 million in the third quarter of 2006. The primary growth in revenue during the quarter was due to a new distributor in northeastern China purchasing 499 metric tons of liquid fertilizer for a total of $3.0 million. Revenue contribution from the Beijing and Anhui facilities was 9%, up 72% from the second quarter of 2007.

Gross profit for the third quarter of 2007 was $6.2 million, up 54.0% from $4.0 million in the third quarter of 2006. Gross margin was 53.3%, compared to 52.8% in the same period a year earlier. Gross margin for the quarter benefited from a slight reduction in packaging costs.

Selling expenses during the quarter were $0.8 million, or 7.1% of revenue, up 21.4% from $0.7 million, or 8.9% of revenue, in the third quarter 2006. The increase in selling expenses is attributed to the additional selling and marketing expenses incurred for the new facilities Beijing, Anhui, Chongqing and Xinjiang.

General and administrative expenses during the quarter were $0.7 million, or 6.4% of revenue, compared to $1.1 million, or 14.2% of revenue, in the same period of 2006. The decrease in administrative expenses is attributed to start-up costs associated with the new factories and headquarters and the accrual of certain bad debt allowances in third quarter 2006, which did not occur in third quarter of 2007.

Income from operations was $4.6 million, up 104.8% from $2.3 million in the same period of 2006. Operating margin for the quarter was 39.8% compared to 29.7% in the third quarter of 2006.

Net income for the third quarter of 2007 was $2.6 million, up 130.8% from $1.1 million in the third quarter of 2006. Fully diluted earnings per share were $0.10 for the third quarter of 2007 compared to fully diluted earnings per share of $0.06 for the same period a year earlier. Weighted average fully-diluted outstanding shares for the third quarter of 2007 increased to 24,436,550 compared to weighted average fully-diluted outstanding shares of 19,143,615 in the third quarter of 2006, as the result of an additional 5,556,000 shares of common stock issued in a private placement in July 2007.

Nine Month Financial Results

For the first nine months of 2007, revenue increased to $30.1 million, up 27.9% from $23.5 million in the first nine months of 2006. Gross profit increased 34.6% in the first nine months of 2007 to $16.4 million from $12.2 million in the comparable period a year ago. Gross margin was 54.7% in the first nine months of 2007 compared to 51.9% in the first nine months of 2006. Income from operations increased 54.1% to $12.5 million compared to $8.1 million in the same period a year ago. Net income for the first nine months of 2007 was $7.1 million, or $0.34 per fully diluted share, up 68.1% from $4.2 million, or $0.23 per fully diluted share, in the first nine months of 2006.

Financial Condition

As of September 30, 2007, China Agritech had $13.7 million in cash, restricted cash and cash equivalents, working capital of $48.3 million (of which $2.0 million is restricted or held in escrow) and no long-term debt. Days sales outstanding for the third quarter 2007 was 203 days, compared to 189 days in the third quarter 2006. Shareholders' equity stood at $48.9 million as of September 30, 2007, up from $26.9 million as of December 31, 2006.

Subsequent Event

On October 9, 2007, China Agritech signed a contract with Sinochem Fertilizer Co., Ltd. (Sinochem Fertilizer) to deliver a minimum of 1,000 metric tons of its liquid organic fertilizer "Green Vitality" over the next twelve months. The order is expected to contribute $7.8 million to China Agritech's revenue over the term of the contract.

China Agritech has engaged Ernst & Young to assist the Company in becoming SOX 404 compliant.

Business Outlook

Through China Agritech's strategic alliance with Sinochem, the Company expects that it will accelerate its geographic expansion throughout China, specifically in the central and southern regions. The agriculture season is year round in the southern region with the strongest growing season from the second through fourth calendar quarters, while in the central and northern regions the majority of the growing season occurs during the second and third calendar quarters. As a result, the geographic expansion should minimize the impact of seasonal fluctuation on revenue and net income.

China Agritech is expanding its product line to include the production of organic granular fertilizer at or near each of its four new factories. Total capacity is expected to be 200,000 metric tons in 2008. The Company completed the site selection and has ordered the equipment for the facilities in Beijing, Heilongjiang, and Xinjiang. China Agritech expects the equipment to be delivered and installed by late November or beginning of December, 2007. China Agritech is evaluating the location of the fourth granular fertilizer facility. Capital expenditures for the rest of 2007 are expected to be $6.0 million. China Agritech expects revenue for the year-end 2007 to be in the range of $38.0 and $40.0 million, down from its previous guidance of $46.0 to $48.0 million. The Company reaffirms its previous guidance for year-end 2007 net income to be in the range of $8.4 to $8.6 million.

[kslifka]

CAGC wants to break up...if it can just pass through the $3.05.

I just don't have any funds to buy.

[422fwhp]

I nibbled a little at $2.95

It stayed above $3.05 today ,too.

[422fwhp]

Great volume too!

[422fwhp]

Nice comeback.