Yongye Intl (NASDAQ:YONG)

First Quarter 2012 Financial Highlights

• Revenue increased 28.2% to $64.4 million from $50.2 million in the first quarter of 2011
• Gross profit increased 29.7% year-over-year to $35.4 million
• Income from operations was $21.9 million, an increase of 94.1% over income from operations of $11.3 million in the first quarter of 2011
• Net income attributable to Yongye increased 95.8% to $16.4 million, or $0.27 per diluted share, from $8.4 million, or $0.16 per diluted share, in the same period of 2011
• Adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, was $18.3 million, or $0.31 per diluted share, compared to a net income of $13.3 million, or $0.27 per diluted share, in the same period of 2011*
• Operating cash flow was $61.7 million compared to $6.6 million in the same period of 2011

Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye International, stated, "We are pleased to announce strong first quarter results with year-over-year increases in revenue and net income of 28.2% and 95.8%, respectively. The strong growth demonstrates the continued strength of our brand and our successful launch of two new products, which contributed 77.3% of our total liquid crop nutrient sales this quarter. These new products highlight our commitment to product diversification and our strong research capabilities; we believe they will further solidify our market leading position. During the first quarter of 2012, we prioritized our resources to focus on the launch of those two new products, as their peak season is in the first quarter. Because the focus of our manufacturing capacity and sales and marketing efforts was shifted to the new products, sales of our regular crop nutrient products decreased compared to the first quarter of last year. In addition, to better manage our accounts receivable, we made a decision to decrease shipment of products to certain distributors who had prolonged payment periods in 2011. We do not foresee a decrease in demand for our regular crop nutrient products, and expect that the decreased sales of these products in the first quarter of 2012 will be made up by the sales increase generated in the second and third quarters, which is the peak season for our regular crop nutrient product. During the first quarter of 2012, we also continued the expansion of our branded store network to 30,886 stores covering over 30 provincial regions in China."

Mr. Wu added, "Moving forward, we will continue working diligently to drive higher penetration in our traditional markets and further develop our retail network in new markets throughout China. With the successful launch of two new products, our improved working capital management and our brand building efforts, we look forward to achieving another successful year in 2012."

Business Outlook

For the full year 2012, the Company reiterates its expected revenue between $495 million and $515 million and adjusted net income between $110 million and $120 million, which excludes the impact of non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities. The Company also expects that its branded retailer network will be expanded to 35,000 by the end of 2012, which represents a 16.3% increase over the 2011 year-end number of 30,086.

BEIJING, April 4, 2012 /PRNewswire-Asia-FirstCall/ -- Yongye International, Inc. (NASDAQ: YONG), ("Yongye" or the "Company") a leading developer, manufacturer, and distributor of crop nutrient products in the People's Republic of China ("PRC"), today provided an update on accounts receivable collection as of the quarter ended March 31, 2012.

During the first quarter of 2012 the Company collected $140 million of $154 million accounts receivable, net of allowance for doubtful accounts at the end of 2011. The Company has taken measures to increase its collection efforts and closely monitor its distributors' financial status, and it expects to collect the remaining accounts receivable balance in the second quarter of 2012.

The Company's regular payment terms allow distributors to pay the total purchase price within six months after the receipt of the Company's products. Recent tightening of local credit markets has increased utilization of the Company's full six month credit term by its distributors, which contributed to the Company's account receivables at the end of 2011. The delay in payments from the distributors was not due to excessive inventories of unsold product held by such distributors, nor was it due to a decrease in demand for Yongye products among distributors and end customers.

Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye, stated, "We are pleased to provide a positive update on our accounts receivable collection. Yongye's continued operating success is a testament to our leading products, innovative sales and marketing, and our strong and secure relationships with our distributors with whom we are very pleased to partner."

BEIJING, March 23, 2012 /PRNewswire-Asia-FirstCall/ -- Yongye International, Inc. (NASDAQ: YONG), ("Yongye" or the "Company") a leading developer, manufacturer, and distributor of crop nutrient products in the People's Republic of China ("PRC"), today announced the launch of two new fulvic acid based crop nutrient products, Zhongbaosheng and Qianggenbao.

The two products are complementary to Yongye's existing Shengmingsu products and help the Company break into the nutrient market for seed and root nutrient products in China. Zhongbaosheng, a liquid product, improves crop seeds' germination, fertilizer utilization, and resilience during the key initial seed development period. Qianggenbao is also a liquid product which promotes root development by improving plant roots' ability to absorb water and fertilizers, and enhances plants' overall resistance against drought, frost, disease and stalk leaning. Both products were developed by the Company's industry leading research and development team, and have been successfully field tested extensively throughout China.

The products are available in 100ml and 300ml containers, and are currently manufactured on the Company's existing production lines at its Jinshan and Wuchuan facilities in Inner Mongolia, China. The new products are distributed alongside Yongye's flagship Shengmingsu products, utilizing the Company's leading distribution network of more than 30,000 Yongye branded retailers across China. The Company has already shipped approximately US$15 million worth of Zhongbaosheng and Qianggenbao to distributors during the first quarter of 2012, and anticipates sales of both new products to account for approximately 5 percent of the total sales revenues in 2012.

Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye, stated, "We are excited to announce the launch of Zhongbaosheng and Qianggenbao. These new products highlight our development capabilities, as well as our commitment to product diversification and industry leading research. We will take advantage of our proven sales and marketing strategies to provide our growing customer base with an effective and complementary product to our highly successful and widely used Shengmingsu product. China's degraded soil conditions and increasing food demand has created significant market for all of our products, and we believe the addition of these two new products further solidifies our market leading position."

Full Year 2011 Financial Highlights

• Revenue increased 82.3% to $390.4 million in 2011 from $214.1 million in 2010
• Gross profit increased 91.4% year-over-year to $228.3 million
• Income from operations increased 76.6% to $105.6 million from $59.8 million in 2010
• Net income attributable to Yongye increased 75.2% to $84.9 million, or $1.55 per diluted share, compared to$48.4 million, or $1.05 per diluted share, in the same period of 2010
• Adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, was $93.0 million, or $1.71 per diluted share, compared to $54.1 million, or $1.17 per diluted share, in the same period of 2010*
• Operating cash outflow was $31.2 million in 2011 compared to an operating cash inflow of $15.9 million in 2010

Fourth Quarter Results

• Revenue increased to $44.9 million from $28.1 million in prior year period
• Net loss for the fourth quarter was $7.2 million versus net loss of $0.3 million in prior year period
• Adjusted diluted EPS for the fourth quarter ($0.07) vs $0.14 in prior year quarter

Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye, stated, "We are proud of the progress we continue to make in growing Yongye's business. The company has worked diligently to drive higher penetration in our traditional markets, including Jiangsu, Heilongjiang, Jilin, Liaoning, Hebei, Inner Mongolia, Henan andGuangdong, which contributed to 50% of our revenue growth for the year. In these existing provincial markets we continue to see more effective management of our distribution channels including better execution of our retail marketing program, increasing adoption from large farms and higher frequency training seminars in various locations throughout the year. We are also having success in further developing our retail network in new markets throughout China, including Yunnan, Jiangxi, Sichuan, Shaanxi and Anhui."

Business Outlook

For the full year 2012, the Company expects revenue of between $495 million and $515 million and adjusted net income between $110 million and $120 million, which excludes the impact of non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebeicustomer list, and a change in the fair value of derivative liabilities. In 2012, the Company expects strong growth of revenue in traditional markets like Henan and Guangdong and in new markets like Shaanxi and Sichuan. The Company also expects to fully launch two new products in 2012. One new product will help crop seeds to sprout and grow, and the other will improve the crop roots' ability to absorb the water and fertilizers and to enhance the crop's resistance against drought, freeze, diseases, and stalk leaning. The Company also expects to expand its branded retailer network to 35,000 by the end of 2012, which represents a 16.3% increase over the 2011 year-end number of 30,086.

Third Quarter 2011 Results

• Revenue in the third quarter of 2011 increased 95.9% to $140.6 million from $71.8 million for the same period of 2010
• Gross profit increased 103.2% year-over-year to $85.6 million 
• Income from operations increased 143.0% to $50.6 million 
• Net income attributable to Yongye increased 122.6% to $39.1 million, or $0.69 per diluted share, compared to $17.6 million, or $0.37 per diluted share, in the same period last year
• Adjusted net income attributable to Yongye, which excludes non-cash expenses related to the amortization of the acquired Hebei customer list and a change in the fair value of derivative liabilities, was $39.7 million, or $0.70 per diluted share, compared to $18.3 million, or $0.39 per diluted share, in the same period last year*
• Operating cash inflow was $7.3 million compared to an operating cash outflow of $0.2 million for the same period of 2010

Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye International, stated, "This was a particularly strong quarter for Yongye with year-over-year increases in revenue and net income attributable to Yongye of 95.9% and 122.6%, respectively. Additionally, our gross margins continue to improve, at 60.9% for the quarter. Such strong growth highlights the strength of our brand and the success we are having in existing and new markets with our sales and distribution strategy."

Mr. Wu added, "We continue to work closely with our distributors, and effectively manage our retail network in order to further penetrate existing markets. Our crop nutrient product is also beginning to pick up traction in newly developed provincial markets, as 21.4% of our sales this quarter were derived from new accounts. We are very excited about the future growth prospects of our business, and, to meet the growing demand for our products, we are focused on expanding our production capacity for next year."

Business Outlook

Together with results for the third quarter, the Company also announced that it is increasing both top and bottom line guidance for 2011. Previous guidance included revenues of $335 million to $345 million and adjusted net income of $85 million to $87 million. Revised guidance now includes revenue of $390 million to $400 million and net income, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, of $100 million to $102 million. The Company also expects to expand its branded retailer network to at least 30,000 by the end of 2011, which represents a 24.8% increase over the 2010 year-end number of 24,036.

First Quarter 2010 Highlights

• Revenue increased 101.4% to $50.2 million from the first quarter of 2010
• Gross profit increased 97.0% year-over-year to $27.3 million
• Income from operations increased 101.0% to $11.3 million
• Net income attributable to Yongye increased 91.4% to $8.4 million, or $0.16 per diluted share, compared to $4.4 million, or $0.10 per diluted share, in the first quarter of 2010
• Adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, was $13.3 million, or $0.27 per diluted share, compared to $4.4 million, or $0.10 per diluted share, in the same period last year*
• Cash flow from operations increased to $6.6 million year-over-year from $0.5 million in the first quarter of 2010
• Formed official partnership with Stanford University and China Agricultural University to address rural poverty, education, nutrition and health issues in China and provide technical support to Chinese farmers.

Geoteam® Note: 2011 First quarter analyst EPS estimates were $0.15.

"Due to our expanded distribution network, deeper penetration in our existing market and the significantly enhanced market recognition of our Shengmingsu product, Yongye has achieved another successful quarter with strong top line, bottom line, and operating cash flow growth," stated Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye International. "During the first quarter of 2011, which is normally a seasonally slow quarter, we continued the expansion of our branded store network to 26,006 stores covering 30 provinces in China. In addition, with the launch of the new Shengmingsu production line, as well as our improved working capital management, we were able to achieve significant growth in our operating cash flow."

Business Outlook

• The Company continues to expect to achieve 2011 revenues of between $315 million and $325 million, representing an increase of 47.1% and 51.8% over 2010's revenue of $214.1 million.
• The Company expects adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, of between $80 million and $82 million, representing an increase of between 47.9% and 51.6% over 2010 adjusted net income attributable to Yongye of $54.1 million.
• The Company expects to expand its independently-owned branded store network to at least 30,000 by the end of 2011, which represents a 24.8% increase over the 2010 year-end figure of 24,036.

Mr. Wu added, "Our Shengmingsu plant nutrient product continues to help improve the productivity of Chinese farmers.  After several years of rapid expansion, Yongye has become a leading nationwide agricultural nutrient product supplier in China. Our increased consumer recognition in the agricultural community in China is an important contributor to our business growth. Our new state-of-the-art production facility, which began normal operations at the end of 2010, will help us fulfill the growing demand for our products. We anticipate we will secure the final government approval in order to complete our lignite coal resource project acquisition by the end of 2011. We look forward to achieving another successful year in 2011 by delivering value to both our customers and shareholders."

BEIJING, April 11, 2011 /PRNewswire-Asia-FirstCall/ -- Yongye International, Inc. today announced preliminary financial results for the first quarter of 2011.

• The Company's revenues for the three months ended March 31, 2011, were $50.2 million, more than double last year's first quarter revenues of $24.9 million.  The significant increase in revenues was driven by higher demand for the Company's products in its traditional markets, and growth in several new markets. In addition, after the acquisition of the Hebei customer list in July 2010, the Company is selling its products at a higher price directly to lower level distributors in Hebei, which is Yongye's largest regional market in China.  As of March 31, 2011, Yongye had 26,006 independently-owned branded stores in its network, compared to 24,036 stores at the end of 2010.  In addition, during the first quarter of 2011, the Company achieved positive cash flow from operations.    

• For full year 2011, the Company continues to expect revenues of between $315 million and $325 million, representing an increase of 47.1% and 51.8% over 2010's revenue of $214.1 million.

• The Company expects adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, of between $80 million and $82 million, representing an increase of between 47.9% and 51.6% over 2010 adjusted net income attributable to Yongye of $54.1 million. The Company has a year-end target of at least 30,000 for the number of independently-owned, branded stores selling Yongye's Shengmingsu products.  

"We are pleased with our first quarter sales and cash flow results," stated Mr. Zishen Wu, Chairman and Chief Executive Officer.  "As many of our investors know, our first and fourth quarters are seasonally our slowest.  Nevertheless, we were able to achieve strong sales growth as a result of continued demand for our Shengmingsu agricultural nutrient products from Chinese farmers in both new and existing provinces.  Also of importance, we achieved positive cash flow from operations as a result of our improved working capital management, while more than doubling our sales year-over-year."  

Mr. Wu concluded, "Our management team and board of directors are committed to enhancing shareholder value and are confident in the long-term health and future financial performance of our business.  Based on current market prices, we believe that our shares are presently undervalued in the marketplace.  Our board of directors is contemplating various alternatives to address this issue and will make an announcement as soon as the board determines the appropriate course of action."

Fourth Quarter 2010 Highlights

• Sales increased 177.0% to $28.0 million 
• Gross profit increased 176.1% to $14.9 million 
• Operating income increased to $3.5 million from $0.4 million 
• Net income attributable to Yongye was $2.2 million, or $0.05 per diluted share, compared to a net loss of $0.1 million in the same period last year
• Adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, was $7.4 million, or $0.15 per diluted share, compared to $3.0 million, or $0.08 per diluted share, in the same period last year*
• The number of independently-owned, Yongye-branded stores increased to 24,036 from 21,925 stores at the end of the third quarter.

Full Year 2010 Highlights

• Sales increased 118.3% to $214.1 million 
• Gross profit increased 128.9% to $119.3 million 
• Net income attributable to Yongye was $48.4 million, or $1.05 per diluted share, compared to $2.2 million, or $0.07 per diluted share, in the same period last year
• Adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, was $54.1 million, or $1.17 per diluted share, compared to $26.2 million, or $0.84 per diluted share, in the same period last year*
• Operating cash flow was $15.9 million compared to ($2.2) million in 2009

"We are pleased to announce strong financial results for the fourth quarter and full year 2010," stated Mr. Zishen Wu, Chief Executive Officer.  "In addition to our sales, earnings, and EPS growth, we achieved positive cash flow from operations for the fourth quarter and full year 2010 and an improvement in our accounts receivable.  We believe that 2010 represents an important turning point in terms of cash flow generation for Yongye as we were able to achieve both robust revenue growth and positive operating cash flow as a result of our improved working capital management."

Business Outlook

For full year 2011, the Company expects

• revenues of between $315 million and $325 million, representing an increase of 47.1% and 51.8% over 2010's revenue of $214.1 million.
• adjusted net income attributable to Yongye, which excludes non-cash expenses related to share-based compensation for management and independent directors, the amortization of the acquired Hebei customer list, and a change in the fair value of derivative liabilities, of between $80 million and $82 million, representing an increase of between 47.9% and 51.6% over 2010 adjusted net income attributable to Yongye of $65.5 million.

The Company has a year-end target of at least 30,000 for the number of independently-owned, branded stores selling Yongye's Shengmingsu products.

Mr. Wu concluded, "Our lignite coal resource project, for which we expect final government approvals by the end of 2011, and our new state-of-the-art production facility, which has begun normal operations, position us to effectively meet our anticipated increase in future market demand. The strong demand for our products has been driven by the efficacy of our product in helping Chinese farmers improve yield as well as our innovative, integrated marketing approach which educates and trains the Chinese rural community on the appropriate and most effective use of agricultural nutrients like ours. We have established long term cooperative relationships with tier-one media in China, such as Farmer's Daily and CCTV, and Shengmingsu is rapidly becoming a nationwide recognized brand among Chinese farmers. We believe that Yongye has built a solid business foundation in its market and is now the largest liquid agricultural nutrient product provider in China. We look forward to continuing to strengthen our market leadership position in 2011 and beyond."

Yongye issued a response to the Seeking Alpha article allegations. Read here.

YONG achieves positive operating cash flow:

BEIJING, Jan. 5, 2011 /PRNewswire-Asia-FirstCall/ -- Yongye International, Inc. today reported it has achieved positive cash flow from operations for the fourth quarter and full year 2010 and an improvement in its accounts receivable as of year-end 2010.  

For the three months ended December 31, 2010, the Company collected $77.0 million in cash from revenue that was recognized in the fourth quarter of 2010 and previous quarters. As of December 31, 2010, the Company had $25.7 million in accounts receivable, a decline of 66.0% from $75.6 million as of the end of the third quarter of 2010.

Mr. Sam Yu, Chief Financial Officer, stated, "We believe that 2010 represents an important turning point in terms of cash flow generation for Yongye as we were able to achieve both robust revenue growth and positive operating cash flow as a result of our improved working capital management.  

"Our business is seasonal with approximately 70% to 80% of our annual sales occurring in the second and third quarters. We currently provide our key distributors up to six months credit terms and our strong sales growth resulted in an increase in our accounts receivable in the second and third quarters. We normally collect a significant part of our third quarter accounts receivable balance in the fourth quarter, and we did so again this year.  Our improved working capital management and cash collection efforts also contributed to the significant decline in our accounts receivable and positive operating cash flow performance.  

"We expect that our positive operating cash flow performance will continue, including in the year ended December 31, 2011, due to robust market demand for our products and our improved working capital management. We remain optimistic about our business prospects as our Shengmingsu agricultural nutrient product continues to help Chinese farmers increase crop yields, shorten harvest times, and extend the life-cycles of plants as well enhance crop taste, nutrition and appearance."

Per November 15, 2010 release:

Third Quarter 2010 Highlights

• Sales increased 145.1% to $71.8 million

• Gross profit increased 165.8% to $42.1 million

• Gross margin increased 460 basis points to 58.7%

• Operating income increased 77.1% to $20.8 million

• Net income attributable to Yongye was $17.6 million, or $0.37 per diluted share, compared to a net loss of $7.0 million in the same period last year

• Adjusted net income attributable to Yongye, which excludes the impact of non-cash items related to a change in the fair value of derivative liabilities of $12,077 and amortization of the acquired Hebei customer list of $674,622, was $18.3 million, or $0.39 per diluted share, compared to $8.8 million, or $0.27 per diluted share, in the same period last year.

"During the third quarter we saw continued strong growth in demand for our Shengmingsu products in both our traditional and new provinces," stated Mr. Zishen Wu, Chief Executive Officer. "We added over 3,000 independently owned Yongye-branded stores to our network in the quarter. We made significant investments in our training programs for branded store owners and our distributors to build a more solid foundation for future growth. We are also pleased to report that after the acquisition of the customer list from our previous distributor, our Shengmingsu business in Hebei, our largest province, has been developing very well. Sales from Hebei increased 474% year-over-year in the third quarter and 96% year-over-year during the first nine months of this year. Our post-acquisition gross margin in Hebei was 63%, which surpassed our original pre-acquisition forecast of 60%."

Business Outlook

For full year 2010, the Company expects

• revenues of between $200 million and $205 million, representing an increase of 103.9% and 109.0%, respectively, over last year's revenue of $98.1 million.

• adjusted net income attributable to Yongye, which excludes the impact of certain non-cash expenses such as the change in fair value of derivative liabilities, share-based compensation and amortization of the acquired Hebei customer list, of between $50 million, or $1.07 per diluted share, and $52 million, or $1.12 per diluted share, representing an increase of between 90.8% and 98.4%, respectively, over 2009 adjusted net income attributable to Yongye of $26.2 million, or $0.84 per diluted share.

• The Company increased its year-end target to at least 24,000 for the number of independently owned, Yongye-branded stores selling Yongye's Shengmingsu products, which represents a 163% increase over the 2009 year-end figure of 9,110.

Yongye is in the process of securing governmental approvals to close its previously announced acquisition of the development rights of a lignite coal resource project. The Company's new production facility is currently in trial runs and is expected to launch normal operations by year end.

Mr. Wu concluded, "We are pleased to have already achieved our previously issued full year revenue guidance one quarter early. This reflects the robust demand for our product in the market and the success of our integrated marketing approach. As a result, we have raised our revenue and adjusted net income guidance for the full year. Primarily due to the significant investments in training for branded store owners and other distributors that we made during the third quarter, we do not expect our full year 2010 selling expenses as a percentage of revenues to fall within the range of between 15% and 17% that we had previously indicated. However, we are actively evaluating the effectiveness of our training initiatives and based on our current estimates of optimal spending in this area we are confident that we will be able to keep our selling expenses excluding amortization of acquired customer list at no more than 20% of revenues.

"Overall, we remain confident in our business prospects. We expect sustained sales growth in both our traditional and new provinces. We expect our new state-of-the-art production facility, which we believe is the best of its kind in China, to launch normal operations later this quarter. We also are confident that we will complete the remaining requirements to receive government approvals for the acquisition of our lignite coal resource project. These facilities will help fulfill our anticipated increase in future market demand for our Shengmingsu products. We continue to expect to achieve at least a 50% annual growth rate in revenue in 2011 and 2012."

Second Quarter 2010 Results:

• Revenue for the three months ended June 30, 2010, was $89.4 million compared to $46.3 million for the same period in 2009, an increase of 93.2%. The increase in revenue was due to higher sales penetration in existing markets and the rapid expansion of the Company's distribution network. As of June 30, 2010, Yongye had 18,700 independently-owned branded stores in its network, compared to 13,880 stores at the end of the first quarter and 9,110 stores at the end of 2009.
  
• Net income attributable to Yongye was $24.2 million, or $0.54 per diluted share, compared to net income attributable to Yongye of $6.0 million, or $0.20 per diluted share, in the second quarter of 2009. The Company recorded a non- cash change in fair value of derivative liabilities of $156,936 in the second quarter of 2010. Excluding the impact of this non-cash item, adjusted net income attributable to Yongye was $24.1 million, or $0.54 per diluted share,  or $0.37 per diluted share in the same period last year. 

"We achieved strong sales, earnings, and EPS growth in the second quarter," stated Mr. Zishen Wu, Chief Executive Officer of Yongye International. "The majority of our revenue came from continued growth in sales in our existing markets as our loyal consumers, the rural Chinese farmers, continued to return to our branded stores to purchase our Shengmingsu products as they continued to receive value from increased crop yields and shortened harvest times. A significant part of our sales in the second quarter came from new geographic markets which are outside our core provinces in northern China where we are traditionally strong and where our business originated. We believe our record results were also driven by our more aggressive advertising and promotion efforts during the quarter as reflected in our increased selling expenses. In addition, we were successful in adding a large number of new stores to our network."

Business Outlook:

As previously announced, from 2010 to 2012, Yongye expects to achieve at least a 50% annual growth rate in revenue and, for full year 2010, expects:

• Annual revenues of between$180 million and $185 million, representing an increase of between 83% and 89% over last year's revenue of $98.1 million.

Yongye updated guidance on adjusted net income attributable to Yongye. For full year 2010, the Company expects:

• Adjusted net income attributable to Yongye, which excludes the impact of certain non-cash expenses such as the change in fair value of warrants and share-based compensation, of between $48 million and $50 million, representing an increase of between 83.2% and 90.8% over 2009 adjusted net income attributable to Yongye of $26.2 million.

Mr. Wu added, "We expect continued strong sales growth in our business through the balance of the year and beyond as reflected in our recently updated guidance and branded store target. We have positioned our business to be able to satisfy the strong growth we expect. We recently announced a 50% capacity increase in our existing production facility and we are opening our new production facility later this month. We also expect strong growth in our bottom line and EPS. The recently closed acquisition of the Shengmingsu distribution network in Hebei, our most important province, as well as our announced deal to acquire the lignite coal resource project are both part of our vertical integration strategy, which we expect to have a positive impact on our gross margin performance. We believe we have sufficient cash resources to finance the remaining phases of the two vertical integration initiatives mentioned above. We are very pleased with the 44% year-over-year increase we achieved in our adjusted diluted EPS this quarter and are committed to continuing to maximize shareholder value not just through increased sales and net income, but also through further increases in our per share earnings performance."

Yongye International, Inc.  announced preliminary revenue results for the second quarter ended June 30, 2010, and updated its sales guidance.

• Yongye expects to report preliminary unaudited revenue for the second quarter of 2010 of approximately $89 million, a 93.5% increase from $46 million for the same period last year.
• For the first half of 2010, approximately 39% of sales came from Guangdong, Henan, Hubei and other provinces in central and southern China that are outside of the five traditionally strong provinces in northern China where the Company's business originated and where the bulk of revenues have historically been generated.

Yongye also updated its revenue outlook for 2010

• Full year 2010 revenue of between $180 million and $185 million, compared with the previously provided guidance of between $160 million and $165 million.
• The Company plans to provide updated net income guidance when it reports its second quarter financial results in full next month.

"Our strong second quarter sales and increased revenue guidance reflect the robust demand for our Shengmingsu agricultural nutrient products among rural Chinese farmers," stated Mr. Zishen Wu, Chief Executive Officer. "We are seeing strong sales growth in our traditional provinces as well from the newer Yongye branded stores in central and southern China. This growing demand is a testament to the effectiveness of our product in helping farmers increase crop yields and shorten harvest times, thereby providing them with a compelling return on investment. It also reflects the success of our integrated advertising and promotion campaigns at the national, provincial and village level which ensures that rural farmers continue to respond positively our branding message that Shengmingsu gives them the best value proposition for their plant and animal nutrient needs.

Yongye International, Inc  announced that the Company has successfully increased the annual production capacity of its existing plant nutrient production line from 10,000 tons to 15,000 tons. Yongye's current production facilities are located in Hohhot, Inner Mongolia.

"We are very pleased to have achieved such a significant production capacity expansion without major financial investment, through our continuous improvement efforts," stated Mr. Zishen Wu, Chief Executive Officer of Yongye International, Inc. "We expect that the enhanced production line and 20,000 tons per annum plant nutrient product production line, which is currently under construction, together will provide solid support for Yongye's sales growth in the next several years."

"Additionally, we are seeing higher than expected sales growth in the second quarter of 2010 and will report some preliminary numbers in a few weeks. Hebei is currently our most important provincial market and continues to have significant room to grow. We have full confidence that this customer list acquisition will be successfully executed," Mr. Wu added.

July 2, 2010 (PR Newswire)

Yongye announced that the number of independently-owned, Yongye branded stores selling the Company's Shengmingsu products increased 52% over the first three months of 2010 to approximately 13,880 stores from 9,110 stores as of December 31, 2009.

"We believe the continued fast growth of our branded store network is a testament to the strength of our Shengmingsu brand, the uniqueness of our sales and marketing model, and the strong local support of our distribution partners," said Mr. Zishen Wu, CEO of Yongye International, Inc. "During the first quarter, we experienced significant growth in the number of new stores joining the Yongye branded store network in provinces outside our traditional markets as well as in our existing markets. This swift penetration of new markets reflects the growing influence of the Shengmingsu brand across China and the success of the Company's marketing campaign outside its traditional top four provinces. The expansion of our network positions Yongye for sustained rapid growth in the years to come."

On October 2, 2009  Yongye International announces 2010-2012 Strategic Plan:

Following the Company's rapid business expansion in 2008 and thus far in 2009, Yongye expects to achieve at least 50% growth in revenue during each of the next three years through a strategy focused on geographic expansion into new markets, increased penetration in existing markets, additional marketing and brand-building efforts, and expanded production capacity. The Company also intends to improve its cost structure and gain greater control of its supply and distribution through vertical integration so as to enhance its profit margins.

Source: PR Newswire (October 2, 2009)

^a Company forecasts reflect the Company's current and preliminary view and are subject to change.

^b The company did not provide EPS guidance. The GeoTeam® used a share count As of August 18, 2009 of 32,781,065 to derive an implied EPS number.

The above forecasts reflect the Company's current and preliminary view and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

GeoGuidance Report:

 "China's government recently announced that land reform will take place through which farmers will be allowed to sell or trade their land rights. We expect this reform to lead to larger and better managed farms, which should increase demand for our products," said Mr. Wu. "China's government also recently announced a major economic stimulus program that includes rural development. Details of what will take place are not yet available, but should have the effect of raising rural incomes and increasing demand for higher quality food products."

We look forward to utilizing our new increased production capacity to meet growing demand for our products. We plan to continue growing by deepening the penetration of our distribution and sales network, and eventually broadening our geographic market coverage. We also plan to increase our ability to provide technical assistance to our customers and help them achieve the best possible results through use of our products," stated Mr. Wu.

 "As part of the private placement financing that took place in April 2008, we entered into a 'make good' agreement that set a target of a minimum of $10.3 million in net income for fiscal year 2008. I am pleased to report that we have exceeded our make good target as of the third quarter of 2008. We expect to achieve 2009 make good targets of $44 million in revenue and $15.2 million in net income."

Source: PR Newswire (November 13, 2008)