Yongye International Announces Third Quarter 2012 Financial Results

     Yongye International Announces Third Quarter 2012 Financial Results

PR Newswire

BEIJING, Nov. 9 , 2012

BEIJING, Nov. 9 , 2012 /PRNewswire-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 its financial results for the quarter ended September
30, 2012.

Third Quarter 2012 Financial Highlights

  oRevenue decreased 7.7% to $129.7 million from $140.6 million in the third
    quarter of 2011
  oGross profit decreased 5.9% year-over-year to $80.5 million
  oIncome from operations decreased 55.0% to $22.8 million
  oNet income attributable to Yongye decreased 57.0% to $16.8 million from
    $39.1 million for the same period of 2011. Diluted earnings per share for
    the quarter was $0.28, compared to $0.69 for the same period of 2011
  oAdjusted 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, a change in the fair value of derivative liabilities, and goodwill
    impairment charge, was $29.7 million, or $0.51 per diluted share, compared
    to $39.7 million, or $0.70 per diluted share, in the same period last
    year*
  oCash flows used in operating activities was $(52.3) million for nine
    months ended September 30, 2012, compared to cash flows used in operating
    activities of $(20.5) million in the same period of 2011

Orders and shipments for the third quarter were very strong, while selling
prices have remained stable. The shipments made by the Company in the third
quarter of 2012 and 2011 were 14,251 tons and 11,913 tons, respectively,
representing a 19.6% increase over the prior year quarter. Despite this fact,
the Company did not recognize revenue for a significant portion of those
shipments, as a result of the previously disclosed delayed revenue recognition
for certain distributors. It is important to reiterate that since the fourth
quarter of 2011, for those provincial-level distributors with prolonged
payment records, the Company has recognized revenue upon the receipt of cash,
instead of upon shipments. Yongye continues to provide these provincial-level
distributors with six-month credit terms. During the third quarter of 2012,
the Company primarily collected cash for sales to these distributors with
shipments made in the first quarter of 2012, which is a non-peak season for
the Company. Consequently, a significant amount of sales and related profits
were not recorded in the Company's financial statements for the third quarter
of 2012.

Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye International,
stated, "Despite the impact we continue to feel from the delayed revenue
recognition for certain distributors, our business trends remain very strong.
Shipments for the quarter were up almost 20% and we continue to expand our
reach while solidifying our brand by increasing the number of branded
retailers with whom we partner. Additionally, during the quarter we completed
our capacity expansion project at the Wuchuan Factory. We have now increased
our manufacturing capacity by 52% to 70,000 tons compared to the 46,000 ton
capacity that we had before this project was initiated. As we have stated
previously, this is consistent with our strategy to expand our product
diversity and capacity in order to take advantage of the growing market demand
for our products."

Third Quarter 2012 Results

Sales decreased by $10.9 million, or 7.7%, to $129.7 million in the third
quarter of 2012, from $140.6 million for the same period of 2011, reflecting
the existing revenue recognition issue. In the third quarter of 2012, total
sales were from the regular crop nutrient. The Company's two new products for
crop seeds and roots did not contribute to third quarter revenue, as their
sales season is during the first and second quarter months. During the third
quarter of 2012, the number of branded retailers increased from 32,015 to
33,298, with the majority of newly recruited branded retailers located in
Hebei, Henan, Jiangsu, Inner Mongolia, Guangdong and Shanxi provinces.

Gross profit was $80.5 million in the third quarter of 2012, compared to $85.6
million in the same period of 2011, a decrease of 5.9%. Gross margin was
62.1% in the third quarter of 2012, compared to 60.9% for the same period of
2011. The increase in gross margin was mainly due to the decreased purchase
price of certain raw materials.

Selling expenses increased by $11.4 million, or 44.8%,to $37.0 million in the
third quarter of 2012, from $25.6 million for the same period of 2011. The
increase in selling expenses was primarily due to an increase in advertising
and promotion expense and distributors' seminar expenditure of $11.7 million
related to marketing and promotional activities in our markets.

General and administrative ("G&A") expenses decreased by $0.03 million, or
0.6%, to $4.82 million in the third quarter of 2012, from $4.85 million for
the same period of 2011.

Research and development ("R&D") expenses were $5.2 million in the third
quarter of 2012, compared to $4.5 million for the same period of 2011. The R&D
expenses mainly consisted of field testing expenses for existing and new
products on different crops, and in various geographic markets.

The Company conducted its annual impairment test in September 2012 to identify
if goodwill, which related to its restructuring completed in October 2009,
should be impaired. For the restructuring project, the Company gave certain
cash and profit sharing rights to Inner Mongolia Yongye Biotechnology, its
non-controlling interest owner, in exchange for its Shengmingsu manufacturing
business. Based on a valuation analysis, taking into consideration the
Company's stock price during this recent annual impairment test, the Company
determined to write off the full amount of goodwill related to the
restructuring project. Therefore, a goodwill impairment loss of $10.7 million
was recognized for the three and nine months ended September 30, 2012. This
impairment loss does not represent any liabilities or cash payment. The amount
of this write-off is insignificant to the Company's balance sheet,
representing less than 2% of the Company's total assets on a post write-off
basis.

Income from operations was $22.8 million in the third quarter of 2012,
compared to $50.6 million in the same period of 2011. Excluding non-cash
expenses related to share-based compensation for management and independent
directors, the amortization of the acquired Hebei customer list, and goodwill
impairment charge, third quarter 2012 adjusted income from operations was
$35.5 million, or 27.3% of sales.* The decrease in income from operations was
mainly due to the decrease in sales combined with the increase in selling
expenses, as well as a $10.7 million goodwill impairment charge.

Net income attributable to Yongye was $16.8 million, or $0.28 per diluted
share in the third quarter of 2012, compared to a net income of $39.1 million,
or $0.69 per diluted share, in the same period of 2011. Excluding the impact
of non-cash expenses related to share-based compensation for management and
independent directors, the amortization of the acquired Hebei customer list, a
change in the fair value of derivative liabilities, and goodwill impairment
charge, adjusted net income attributable to Yongye for the third quarter of
2012 was $29.7 million, or $0.51 per diluted share, compared to adjusted net
income of $39.7 million, or $0.70 per diluted share in the same period of
2011.*

Nine Months Financial Results

Revenue for the nine months ended September 30, 2012 increased 7.6% to $371.7
million from $345.5 million for the comparable period in 2011, while gross
profit was $224.0 million, compared to $204.6 million in the first nine months
of 2011. Gross margin was 60.3% for the nine months ended September 30, 2012,
as compared to 59.2% for the same period of 2011.

Income from operations in the first nine months of 2012 was $98.2 million,
compared to $113.4 million in the first nine months of 2011. Net income
attributable to Yongye for the first nine months of 2012 was $74.3 million,
compared to $87.0 million in the prior year period. In the first nine months
of 2012, net income per diluted share was $1.31, as compared to $1.65 diluted
earnings per share for the same period of 2011. Excluding the impact of
non-cash expenses related to share-based compensation for management and
independent directors, the amortization of the acquired Hebei customer list, a
change in the fair value of derivative liabilities, and goodwill impairment
charge, adjusted net income attributable to Yongye for the nine months ended
September 30, 2012 was $91.0 million, or $1.60 per diluted share, compared to
$93.6 million, or $1.78 per diluted share in the same period last year.*

(*) See the table following this press release for a reconciliation of gross
profit, income from operations, net income and diluted EPS to exclude non-cash
items related to share-based compensation for management and independent
directors, the amortization of the acquired Hebei customer list, a change in
the fair value of derivative liabilities, and goodwill impairment charge to
the comparable financial measure prepared in accordance with US Generally
Accepted Accounting Principles ("U.S. GAAP"). 

Financial Condition

As of September 30, 2012, the Company had $18.1 million in cash and restricted
cash, compared to $81.2 million as of December 31, 2011. Working capital was
$354.6 million, compared to $270.4 million at the end of 2011. The increase in
accounts receivable of $140.9 million was consistent with the Company's strong
sales in the second and third quarter of this year due to seasonality. The
Company had $25.3 million in short-term bank loans and $13.2 million in
long-term debt as of September 30, 2012. Stockholders' equity totaled $413.6
million as of September 30, 2012, compared to $331.9 million at the end of
2011. Cash flow used in operating activities was $(52.3) million and $(20.5)
million for the nine months ended September 30, 2012 and 2011, respectively.
The change was primarily due to the increase of $26.1 million in working
capital employed. That was mainly driven by increases of accounts receivable
and inventory.

Recent Developments

  oIn the third quarter, the Company completed a capacity expansion project
    at the Wuchuan Facility. Yongye now has a total of 70,000 tons of combined
    annual design production capacity at the Wuchuan Facility and the Jinshan
    Facility.
  oAlso during the third quarter, the Company continued the expansion of its
    branded retailers from 32,015 to 33,298, an increase of 4%. The majority
    of our newly recruited branded retailers are located in Hebei, Henan,
    Jiangsu, Inner Mongolia, Guangdong and Shanxi provinces. We remain focused
    on expanding our distribution networks and deepening our penetration in
    both new and existing markets.
  oOn October 15, 2012, the Company's Board of Directors received a
    preliminary, non-binding proposal made by Mr. Zishen Wu, the Company's
    Chairman of the Board and Chief Executive Officer, Full Alliance
    International Limited, Morgan Stanley Private Equity Asia Agriculture
    Holding Limited, and Abax Global Capital (Hong Kong) Limited
    (collectively, "Abax," together with Mr. Wu, Full Alliance and MSPEA, the
    "Buyer Parties"), to acquire all of the outstanding shares of Common Stock
    of Yongye not currently owned by the Buyer Parties in a going private
    transaction for $6.60 per share in cash, subject to certain conditions. A
    Special Committee was formed to consider certain potential transactions
    involving the Company (including the proposal) and has retained Cleary
    Gottlieb Steen & Hamilton LLP as its legal counsel to assist it in
    consideration of such matters.
  oIn relation to the above-referenced to go private transaction, on October
    25, 2012, the Special Committee of the Company's Board of Directors
    retained Houlihan Lokey as the Special Committee's independent financial
    advisor. The Special Committee is evaluating and considering the Proposal
    as well as the Company's other alternatives. No decisions have been made
    by the Special Committee with respect to the Company's response to the
    Proposal. There can be no assurance that any definitive offer will be
    made, that any agreement will be executed or that this or any other
    transaction will be approved or consummated.

Business Outlook

According to the Company's revenue recognition policy, certain distributors'
revenue is being recognized on a cash basis rather than a shipment basis. In
addition, the Company's distributors' payment cycle has been longer in 2012
compared to prior years. As a result, the Company has difficulty knowing what
its revenue will be with specificity until cash collection is completed. The
second and third quarters are the largest quarters for shipments and as the
Company provides six-month credit terms, it currently cannot predict how much
cash it will collect in the fourth quarter of 2012. As a result, the Company
believes it is prudent to temporarily withdraw the previously provided revenue
and net income expectations. The Company intends to update the market in early
January 2013 on collections as of year-end 2012.

The Company's business growth and profitability remain strong. Yongye will
now, and going forward, provide more formal expectations on shipments, which
is not impacted by the revenue recognition issue mentioned above. The Company
expects total shipments in 2012 to increase 30% with a total amount of $510
million over 2011, in line with its original full year revenue growth
guidance. The Company also reaffirms 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.

Conference Call

The Company will host a conference call at 8:30 a.m. Eastern Time on November
9, 2012, to discuss its third quarter 2012 results.

To participate in the live conference call, please dial the following number
five to ten minutes prior to the scheduled conference call time: +1 (866)
519-4004. International callers should dial +1 (718) 354-1231. The conference
pass code is 648 23 232.

For those who are unable to participate on the live conference call, a replay
will be available for fourteen days starting from 11:30 a.m. Eastern Time on
November 9 to 23:59 Eastern Time on November 23. To access the replay, please
dial +1 (855) 452-5696. International callers should dial +1 (646) 254-3697.
The replay pass code is 648 23 232. A webcast recording of the conference
call will be accessible through Yongye's website at www.yongyeintl.com.

Use of Non-GAAP Financial Measures

GAAP results for the three months and nine months ended September 30, 2012 and
2011 include non-cash items related to share-based compensation for management
and independent directors, the amortization of the acquired Hebei customer
list, a change in the fair value of derivative liabilities, and goodwill
impairment charge. To supplement the Company's condensed consolidated
financial statements presented on a U.S. GAAP basis, the Company has provided
adjusted financial information excluding the impact of these items in this
release. Such adjustment is a departure of U.S. GAAP; however, the Company's
management believes that these adjusted measures provide investors with a
better understanding of how the results relate to the Company's historical
performance. These adjusted measures should not be considered an alternative
to net income, or any other measure of financial performance or liquidity
presented in accordance with U.S. GAAP. These measures are not necessarily
comparable to a similarly titled measure of another company. A reconciliation
of the adjustments to U.S. GAAP results appears in the table accompanying this
press release. This additional adjusted information is not meant to be
considered in isolation or as a substitute for U.S. GAAP financials. The
adjusted financial information that the Company provides also may differ from
the adjusted information provided by other companies.

About Yongye International, Inc.

Yongye International, Inc. is a leading crop nutrient company headquartered in
Beijing, with its production facilities located in Hohhot, Inner Mongolia,
China. Yongye's principal product is a liquid crop nutrient, from which the
Company derived substantially all of the sales in 2011. The Company also
produces powder animal nutrient product which is mainly used for dairy cows.
Both products are sold under the trade name "Shengmingsu," which means "life
essential" in Chinese. The Company's patented formula utilizes fulvic acid as
the primary compound base and is combined with various micro and macro
nutrients that are essential for the health of the crops. The Company sells
its products primarily to provincial level distributors, who sell to the
end-users either directly or indirectly through county-level and village-level
distributors. For more information, please visit the Company's website at
www.yongyeintl.com.

Safe Harbor Statement

This press release contains certain statements that may include
"forward-looking statements." All statements other than statements of
historical fact included herein are "forward-looking statements." These
forward-looking statements are often identified by the use of forward-looking
terminology such as "believes," "expects" or similar expressions, involving
known and unknown risks and uncertainties. Although the Company believes that
the expectations reflected in these forward-looking statements are reasonable,
they do involve assumptions, risks and uncertainties, and these expectations
may prove to be incorrect. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of a variety of
factors, including the risk factors discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission and
available on the SEC's website (http://www.sec.gov). All forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these risk factors. Other than as
required under the securities laws, the Company does not assume a duty to
update these forward-looking statements.

Contacts

Yongye International, Inc.
Ms. Kelly Wang
Finance Director - Capital Markets
Phone: +86-10-8231-9608
E-mail: ir@yongyeintl.com

Ms. Wendy Xuan
Business Associate
Phone: +86-10-8232-8866 x 8827
E-mail: ir@yongyeintl.com

FTI Consulting
Mr. John Capodanno (U.S. Contact)
Phone: +1-212-850-5705
E-mail: john.capodanno@fticonsulting.com

(Financial Tables to Follow)

YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
                                         September30,2012  December31,2011
Current assets
Cash                                     US$   18,039,589    US$  81,154,880
Restricted cash                                40,000             40,000
Accounts receivable, net of allowance          294,539,045        153,629,522
for doubtful accounts
Inventories                                    110,778,185        86,117,000
Deposits to suppliers                          26,729,093         2,664,360
Prepaid expenses                               620,215            4,954,359
Other receivables                              389,560            385,263
Deferred tax assets                            1,347,371          2,283,388
Total Current Assets                           452,483,058        331,228,772
Property, plant and equipment, net             26,567,836         21,929,444
Intangible asset, net                          19,581,735         21,649,890
Land use right, net                            6,067,103          6,129,151
Prepayment for mining project                  35,691,140         35,511,520
Distributor vehicles                           46,821,955         31,621,465
Goodwill                                       -                  10,694,636
Total Assets                                   587,212,827        458,764,878
Current liabilities
Short-term bank loans                          25,290,445         28,308,563
Long-term loans and payables - current         8,638,977          4,279,234
portion
Capital lease obligations - current            372,731            -
portion
Accounts payable                               26,678,383         13,098,183
Income tax payable                             13,120,557         3,161,538
Advance from customers                         140,352            4,095,580
Accrued expenses                               19,102,685         4,437,220
Other payables                                 4,066,737          3,159,070
Derivative liabilities - fair value of         451,747            317,183
warrants
Total Current Liabilities                      97,862,614         60,856,571
Long-term loans and payables                 10,978,658         7,464,683
Capital lease obligations - long term        2,237,404          -
Other non-current liability                 4,319,581          4,297,842
Deferred tax liabilities                     7,023,293          4,857,800
Total Liabilities                              122,421,550        77,476,896
Redeemable Series A convertible
preferred shares: par value $.001;                               
7,969,044 shares authorized; 6,079,545
shares and 5,681,818 shares issued and         51,208,657         49,399,990
outstanding as of September 30, 2012 and
December 31, 2011, respectively
Equity
Common stock: par value $.001;
75,000,000 shares authorized; 49,370,711
shares issued and                              49,371             49,371
outstanding at September 30, 2012 and
December 31, 2011, respectively
Additional paid-in capital                     154,304,643        150,654,849
Retained earnings                              221,308,562        148,804,997
Accumulated other comprehensive income         18,786,563         17,078,758
Total equity attributable to Yongye           394,449,139        316,587,975
International, Inc.
Noncontrolling interest                        19,133,481         15,300,017
Total Equity                                  413,582,620        331,887,992
Commitments and Contingencies                                     -
Total Liabilities, Redeemable Series A         587,212,827        458,764,878
Convertible Preferred Shares and Equity







YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                             FortheThreeMonthsEnded              FortheNineMonthsEnded
                             September30,2012  September30,2011  September30,2012  September30,2011
Sales                        US$  129,734,770   US$  140,593,777   US$  371,726,400   US$  345,519,853
Cost of sales                      49,223,371          55,013,997          147,712,243         140,874,455
Gross profit                       80,511,399          85,579,780          224,014,157         204,645,398
Selling expenses                   37,009,019          25,557,635          89,766,666          62,391,878
Research and development           5,160,458           4,541,392           14,054,000          11,150,006
expenses
General and administrative
expenses (including a
reversal of allowance for
doubtful accounts of               4,823,781           4,854,225           11,261,073          17,718,549
US$6,334,832 and US$ nil
for the nine months ended
September 30, 2012 and
2011, respectively)
Impairment loss of goodwill        10,748,731          -                   10,748,731          -
Income from operations             22,769,410          50,626,528          98,183,687          113,384,965
Other income/(expenses)
Interest expense                   (1,130,175)         (496,509)           (3,236,470)         (806,371)
Interest income                    312,206             40,702              447,616             67,866
Subsidy income                     -                   -                   -                   655,071
Other (expense)/ income,           (135,382)           76,321              (100,666)           177,940
net
Change in fair value of            (203,851)           119,663             (134,564)           533,250
derivative liabilities
Total other (expenses)             (1,157,202)         (259,823)           (3,024,084)         627,756
/income, net
Earnings before income tax         21,612,208          50,366,705          95,159,603          114,012,721
expense
Income tax expense                 4,084,473           9,116,471           17,096,901          21,876,518
Net income                         17,527,735          41,250,234          78,062,702          92,136,203
Less: Net income
attributable to the                707,656             2,126,046           3,750,470           5,108,823
noncontrolling interest
Net income attributable to         16,820,079          39,124,188          74,312,232          87,027,380
Yongye International, Inc.
Net income per share of
common stock:
Basic                              0.28                0.69                1.31                1.66
Diluted                            0.28                0.69                1.31                1.65
Weighted average shares
used in computation:
Basic                              49,370,711          49,370,711          49,370,711          48,948,944
Diluted                            49,370,711          49,472,773          49,370,711          49,057,131
Net income                         17,527,735          41,250,234          78,062,702          92,136,203
Othercomprehensiveincome
Foreign currency
translation adjustment, net        (847,511)           3,334,751           1,790,799           9,006,908
of nil US$ income taxes
Comprehensive income               16,680,224          44,584,985          79,853,501          101,143,111
Less: Comprehensive income
attributable to the                667,794             2,280,815           3,833,464           5,515,394
noncontrolling interest
Comprehensive income
attributable to Yongye             16,012,430          42,304,170          76,020,037          95,627,717
International, Inc.









YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        For the Nine Months Ended
                                        September30,2012  September30,2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                              US$  78,062,702     US$  92,136,203
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization                11,353,583          5,320,798
Goodwill impairment loss                     10,748,731          -
Reversal of allowance for doubtful           (6,334,832)         -
accounts
Change in fair value of derivative           134,564             (533,250)
liabilities
Stock compensation expense                   3,649,794           4,950,600
Deferred tax (benefit)/expense               (276,459)           162,234
Changes in operating assets and
liabilities:
Accounts receivable                          (133,726,272)       (174,681,910)
Inventories                                  (24,286,936)        19,215,136
Deposits to suppliers                        (23,970,641)        6,490,269
Prepaid expenses                             4,365,644           (701,236)
Other receivables                            (2,040)             280,068
Distributor vehicles                         (6,417,878)         (5,937,069)
Accounts payable                             13,526,323          4,067,065
Income tax payable                           9,955,073           9,233,827
Advance from customers                       (3,987,053)         102,835
Accrued expenses                             14,657,056          17,837,436
Other payables                               271,634             1,546,503
Net Cash used in Operating Activities        (52,277,007)        (20,510,491)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for land use right                   -                   (1,600,867)
Payment for intangible asset                 -                   (3,000,000)
Purchase of property, plant and              (2,778,431)         (1,753,420)
equipment
Net Cash Used in Investing Activities        (2,778,431)         (6,354,287)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term bank loans          25,318,859          15,384,852
Repayment of long-term loans and             (5,172,447)         (820,207)
payables
Repayment of short-term bank loans           (28,483,717)        -
Proceeds from preferred shares, net of       -                   49,399,990
issuance cost of $600,010
Net Cash (Used in)/Provided by               (8,337,305)         63,964,635
Financing Activities
EFFECT OF FOREIGN EXCHANGE RATE CHANGES      277,452             1,370,827
ON CASH
NET (DECREASE)/INCREASE IN CASH              (63,115,291)        38,470,684
Cash at beginning of period                  81,154,880          41,913,469
Cash at end of period                        18,039,589          80,384,153
Supplemental cash flow information:
Cash paid for income taxes                   7,444,236           12,480,456
Cash paid for interest expense               3,178,077           633,874
Noncash investing and financing
activities:
Acquisition of property, plant and           1,459,764           1,209,207
equipment included in other payables
Acquisition of property, plant and           2,610,135           -
equipment under capital leases
Acquisition of distributor vehicles by       13,012,137          3,788,788
assuming long-term loans and payables
Issuance of paid-in-kind dividends on
redeemable Series A convertible preferred    1,808,667           -
shares







YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL DATA
                     Gross Profit
                     Three Months Ended September  Nine Months Ended September
                     30,                           30,
                     2012           2011           2012          2011
GAAP amount per
consolidated         $80,511,399    $85,579,780    $224,014,157  $204,645,398
statement of income
Amortization of the
acquired Hebei       $723,107       $713,241       $2,171,978    $2,112,086
customer list
Adjusted Amount      $81,234,506    $86,293,021    $226,186,135  $206,757,484
                     Income from Operations
                     Three Months Ended September  Nine Months Ended September
                     30,                           30,
                     2012           2011           2012          2011
GAAP amount per
consolidated         $22,769,410    $50,626,528    $98,183,687   $113,384,965
statement of income
Non-cash management  $1,225,478     -              $3,649,794    $4,950,600
compensation expense
Amortization of the
acquired Hebei       $723,107       $713,241       $2,171,978    $2,112,086
customer list
Impairment of        $10,748,731    -              $10,748,731   -
Goodwill
Adjusted Amount      $35,466,726    $51,339,769    $114,754,190  $120,447,651
                     Net income (attributable to Yongye)
                     Three Months Ended September  Nine Months Ended September
                     30,                           30,
                     2012           2011           2012          2011
GAAP amount per
consolidated         $16,820,079    $39,124,188    $74,312,232   $87,027,380
statement of income
Change in fair value
of derivative        $203,851       ($119,663)     $134,564      ($533,250)
liabilities
Non-cash management  $1,225,478     -              $3,649,794    $4,950,600
compensation expense
Amortization of the
acquired Hebei       $723,107       $713,241       $2,171,978    $2,112,086
customer list
Impairment of        $10,748,731    -              $10,748,731   -
Goodwill
Adjusted Amount      $29,721,246    $39,717,766    $91,017,299   $93,556,816
Weighted average     49,370,711     49,472,773     49,370,711    49,057,131
shares -- diluted
Adjusted diluted     $0.51          $0.70          $1.60         $1.78
earnings per share



SOURCE Yongye International, Inc.

Website: http://www.yongyeintl.com