Yongye International Announces Fourth Quarter and Full Year 2012 Financial Results and Filing of Form 10-K

  Yongye International Announces Fourth Quarter and Full Year 2012 Financial
                       Results and Filing of Form 10-K

PR Newswire

BEIJING, April 1, 2013

BEIJING, April 1, 2013 /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 fourth quarter and full
year ended December 31, 2012.

Full Year 2012 Financial Highlights

  oRevenue increased 13.5% to $443.0 million in 2012 from $390.4 million in
    2011.
  oShipment of Yongye's agricultural nutrient products increased 33.9% to
    $542.2 million in 2012 from $405.1 million in 2011, exceeding the
    Company's guidance of $510 million.
  oGross profit increased 14.9% year-over-year to $262.4 million.
  oIncome from operations increased 10.7% to $116.9 million from $105.6
    million in 2011.
  oNet income attributable to Yongye increased 10.4% to $93.7 million, or
    $1.62 per diluted share, compared to $84.9 million, or $1.55 per diluted
    share, in 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 $111.4 million, or $1.94 per diluted share,
    compared to $93.0 million, or $1.71 per diluted share, in the same period
    of 2011.*
  oOperating cash outflow was $51.4 million in 2012 compared to an operating
    cash outflow of $31.2 million in 2011.
  oAt the end of 2012, the amount of accounts receivable outstanding was
    $302.6 million, of which $114.9 million was past the Company's six-month
    credit term. As of March 29, 2013, the Company has collected approximately
    $225 million from its distributors, including the entire overdue accounts
    receivable balance as of December 31, 2012.

Fourth Quarter 2012 Financial Highlights

  oRevenue increased 58.9% to $71.3 million from $44.9 million in the fourth
    quarter of 2011.
  oGross profit increased 62.2% year-over-year to $38.4 million.
  oIncome from operations was $18.7 million, compared to a loss from
    operations of $7.8 million in the fourth quarter of 2011.
  oNet income attributable to Yongye was $19.4 million, or $0.32 per diluted
    share, compared to a net loss of $2.2 million, or a loss of $0.05 per
    diluted share, in 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 $20.4 million, or $0.34 per diluted share, compared
    to a loss of $0.5 million, or a loss of $0.03 per diluted share, in the
    same period of 2011.*

Mr. Zishen Wu, Chairman and Chief Executive Officer of Yongye International,
stated, "2012 was another solid year for Yongye, as we delivered double digit
growth on both the top and bottom line, and continued the expansion of our
branded retailer network. The introduction of our two new products,
Zhongbaosheng and Qianggenbao, further solidified our market-leading position
and enhanced our already strong brand. Additionally, we expanded our
manufacturing capacity in order to take advantage of the growing market demand
for our products, and now have 70,000 tons of combined annual design
production capacity at our Wuchuan and Jinshan Facilities. Yongye continues to
be well positioned for long-term growth given China's limited arable land and
demand for better agricultural productivity. After our stock trading was
halted by NASDAQ on March 18, 2013, we have worked diligently to provide
NASDAQ with all the necessary information they requested, and on Tuesday,
March 26 we provided a full, detailed response to NASDAQ. We have not yet
received a response from them as of today. We will maintain an open line of
communications with NASDAQ so as to address all of their concerns and ensure
compliance with their regulations."

Full Year 2012 Financial Results

Sales increased by $52.6 million, or 13.5%, to $443.0 million for the year
ended December 31, 2012, from $390.4 million for the same period of 2011. For
the full year, the Company derived $438.4 million, or 99.0% of total sales,
from liquid crop nutrient, and derived $4.6 million, or 1.0% of total sales,
from the powder animal nutrient. For the liquid crop nutrient, the regular
crop nutrient contributed $367.6 million, or 83.8% of total liquid crop
nutrient, while the two new products for crop seeds and roots contributed
$70.8 million, or 16.2% of total liquid crop nutrient sales. During 2012, the
number of branded retailers reached 35,058, compared to 30,086 as of December
31, 2011, an increase of 16.5%.

Gross profit was $262.4 million for the year ended December 31, 2012, compared
to $228.3 million for the year ended December 31, 2011, an increase of 14.9%.
Gross margin was 59.2% for the year ended December 31, 2012, compared to 58.5%
for the same period of 2011.The increase in gross margin was mainly due to
the decreased purchase price of certain raw materials. The Company recorded
non-cash expenses of $2.9 million related to the amortization of the acquired
Hebei customer list as part of its cost of sales for the full year 2012.
Excluding the aforementioned non-cash expenses related to the amortization of
the acquired Hebei customer list, full year 2012 adjusted gross profit was
$265.3 million, or 59.9% of sales.*

Selling expenses increased by $30.1 million to $104.0 million for the year
ended December 31, 2012. As a percentage of sales for the year ended December
31, 2012, selling expenses increased 4.6% to 23.5% as compared to 18.9% of
sales in the year ended December 31, 2011. The increase in selling expenses
was primarily due to an increase in advertising and promotion expense and
distributors' seminar expenditure of $28.9 million relating to marketing and
promotional activities for the Company's original and newly launched products
in their respective markets.

General and administrative ("G&A") expenses decreased by $21.6 million, or
60.4%, to $14.1 million for the year ended December 31, 2012, from $35.7
million for the same period of 2011. The decrease in G&A expenses was mainly
due to the bad debt expenses amounting to $15.0 million for the year of 2011,
and reversal of allowance for doubtful accounts of $6.3 million which was
recorded in the first quarter of 2012, as well as a decrease in management
equity compensation expenses for the year ended December 31, 2012.

Research and development ("R&D") expenses were $16.6 million for the year
ended December 31, 2012, compared to $13.1 million for the same period of
2011. The R&D expenses mainly consisted of field testing expenses for new and
existing products on various crops and in different geographic markets.

Operating income was $116.9 million, or 26.4% of sales for the year ended
December 31, 2012, compared to $105.6 million, or 27.0% of sales, 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, full year 2012
adjusted operating income was $134.3 million, or 30.3% of sales.* 

Net income attributable to Yongye was $93.7 million, or $1.62 per diluted
share for the year ended December 31, 2012, compared to a net income of $84.9
million, or $1.55 per diluted share, in the same period of 2011. The Company
recorded a non-cash expense related to a change in fair value of derivative
liabilities of $0.3 million in the full year 2012. 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 full year 2012 was
$111.4 million, or $1.94 per diluted share, compared to $93.0 million, or
$1.71 per diluted share in the same period of 2011.*

Fourth Quarter 2012 Financial Results

Sales increased by $26.4 million, or 58.9%, to $71.3 million in the fourth
quarter of 2012, from $44.9 million for the same period of 2011. During the
fourth quarter of 2012, the number of branded retailers increased to 35,058
from 33,298 in the third quarter of 2012.

Gross profit was $38.4 million in the fourth quarter of 2012, compared to
$23.7 million in the fourth quarter of 2011, an increase of 62.2%. Gross
margin was 53.8% in the fourth quarter of 2012, compared to 52.7% for the same
period of 2011. The increase in gross margin was mainly due to the decreased
purchase price of certain raw materials. The Company recorded non-cash
expenses of $0.7 million related to the amortization of the acquired Hebei
customer list as part of its cost of sales for the fourth quarter of 2012.
Excluding the aforementioned non-cash expenses related to the amortization of
the acquired Hebei customer list, fourth quarter 2012 adjusted gross profit
was $39.1 million, or 54.8% of sales.*

Selling expenses increased by $2.8 million, or 24.1%,to $14.3 million in the
fourth quarter of 2012, from $11.5 million for the same period of 2011. The
increase in selling expenses was primarily due to advertising costs associated
with branding programs and commercials.

G&A expenses decreased by $15.1 million, or 84.1%, to $2.9 million in the
fourth quarter of 2012, from $18.0 million for the same period of 2011.The
decrease in G&A expenses was mainly due to the bad debt expenses amounting to
$15.0 million for the year of 2011.

R&D expenses were $2.5 million in the fourth quarter of 2012, compared to $2.0
million for the same period of 2011. The R&D expenses mainly consisted of
field test expenses for new and existing products on various crops and in
different geographic markets.

Operating income was $18.7 million in the fourth quarter of 2012, compared to
an operating loss of $7.8 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, fourth quarter 2012 adjusted operating income
was $19.6 million, or 27.4% of sales.* 

Net income attributable to Yongye was $19.4 million, or $0.32 per diluted
share in the fourth quarter of 2012, compared to a net loss of $2.2 million,
or a loss of $0.05 per diluted share, in the same period of 2011. The Company
recorded non-cash expenses related to a change in fair value of derivative
liabilities of $0.2 in the fourth quarter of 2012. 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 fourth quarter of
2012 was $20.4 million, or $0.34 per diluted share, compared to an adjusted
net loss of $0.5 million, or a loss of $0.03 per diluted share in the same
period of 2011.*

(*) 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

Balance Sheet and Cash Flow

As of December 31, 2012, the Company had $44.6 million in cash and restricted
cash, compared to $81.2 million as of December 31, 2011. Working capital was
$383.3 million, compared to $270.4 million at the end of 2011. The Company had
a $50.9 million short-term bank loan and $12.4 million in long-term debt as of
December 31, 2012. Stockholders' equity totaled $436.3 million as of December
31, 2012, compared to $331.9 million at the end of 2011. Cash flow used in
operating activities was $51.4 million for the year ended December 31, 2012,
compared to cash flow used in operating activities of $31.2 million in the
year ended December 31, 2011. The year over year increase in cash used in
operating activities was primarily due to the increase of $25.7 million in
working capital employed. That was mainly driven by the increase of accounts
receivable and inventory.

Accounts Receivable

At the end of 2012, the amount of Accounts Receivable outstanding was $302.6
million, of which $114.9 million was past the Company's six-month credit
period. The significant increase in accounts receivable was primarily due to
continued business growth and longer collection days from certain
distributors. Yongye recorded an allowance for doubtful receivables in the
amount $9.0 million as of December 31, 2012, taking into account current
market conditions, customers' financial condition, the accounts receivable
ageing and the customers' repayment patterns. Subsequent to this, the Company
has collected approximately $225 million from its distributors as of March 29,
2013. The Company continues to take measures to increase collection efforts
and closely monitor its distributors' financial status.

Recent Developments

Expansion of Branded Retailer Network

The Company continued the expansion of its branded retailers from 30,086 asof
December 31, 2011to 35,058 as of December 31, 2012, an increase of 16.5%,
exceeding the Company's target for 35,000 branded retailers in 2012. The
majority of the Company's newly recruited branded retailers are located in
Hebei, Henan, Jiangsu, Inner Mongolia, Guangdong, Shanxi and Xinjiang
provinces. The Company remains focused on expanding its distribution networks
and deepening its penetration in both new and traditional markets.

Capacity Expansion

In 2012, the Company also 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.

Update on Go-private Proposal

In the fourth quarter of 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 ("Full Alliance"), Morgan Stanley Private Equity Asia Agriculture
Holding Limited ("MSPEA"), 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. The Board of
Directors formed a Special Committee to consider certain potential
transactions involving the Company (including the proposal), and the Special
Committee has retained Cleary Gottlieb Steen & Hamilton LLP as its legal
counsel to assist it in consideration of such matters.

In relation to the above-referenced going 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. The Special Committee has been in discussions
with the Buyer Parties regarding the proposed transaction and such discussions
are continuing.

On April 1, 2013, the Buyer Parties confirmed to the Special Committee that
they remain interested in pursuing the proposed going private transaction set
forth in their proposal. On the same day, the Special Committee was provided
an amended and restated financing commitment letter issued by Abax to Full
Alliance, pursuant to which Abax has extended the expiration of its $35
million conditional mezzanine financing commitment to the earliest of (i)
April 15, 2013, if the common stock of the Company has not resumed trading on
NASDAQ by 4 p.m. (New York City time) on such date, (ii) April 30, 2013, (iii)
the date of definitive documentation for which such financing becomes
effective and (iv) the date the acquisition agreement for the proposed
transaction becomes effective. Additionally, Abax's commitment is subject to
a number of conditions, including among others, Abax's completion of its
review of and satisfaction in all respect with, the audited financial
statements of the Company for the fiscal year ended December 31, 2012.No
decisions have been made by the Special Committee with respect to the
Company's response to the going private 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.
Yongye will continue to provide expectations on shipments, which is not
impacted by the revenue recognition issue mentioned above. The Company expects
total shipments in 2013 to be in the range of $650 million to $680 million,
representing a growth of 20% to 25% over 2012. The Company also expects that
its branded retailer network will be expanded to 36,000 by the end of 2013,
which represents a 3% increase over the 2012 year-end number of 35,058.

Filling of Form 10-K and Conference Call

The Company has filed its Annual Report on Form 10-K on April 1, 2013. The
Company will host a conference call at 8:30 a.m. Eastern Time on April 2,
2013, to discuss its fourth quarter and full year 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 305 61 574.

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
April 2, 2013 to 09:59 a.m. Eastern Time on April 16, 2013. To access the
replay, please dial +1 (855) 452-5696. International callers should dial +1
(646) 254-3697. The replay pass code is 305 61 574. 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 ended December 31, 2012 and full year 2012
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 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. It
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

Yongye International 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
Ms. Kelly Wang
Finance Director – Capital Markets
Phone: +86-10-8231-9608; +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
CONSOLIDATED BALANCE SHEETS
                                         December31,2012  December31,2011
Current assets
Cash                                     $   44,511,404     $   81,154,880
Restricted cash                              40,000             40,000
Accounts receivable, net of allowance        293,600,762        153,629,522
for doubtful accounts
Inventories                                  118,693,596        86,117,000
Deposits to suppliers                        24,048,028         2,664,360
Prepaid expenses                             312,648            4,954,359
Other receivables                            1,189,633          385,263
Deferred tax assets                          11,591,797         2,283,388
Total Current Assets                         493,987,868        331,228,772
Property, plant and equipment, net           26,224,957         21,929,444
Intangible assets, net                       18,909,349         21,649,890
Land use right, net                          4,807,313          6,129,151
Prepayment for mining project                35,792,410         35,511,520
Distributor vehicles                         44,125,293         31,621,465
Goodwill                                     -                  10,694,636
Total Assets                             $   623,847,190    $   458,764,878
Current liabilities
Short-term bank loans                    $   50,857,163     $   28,308,563
Long-term loans and payables - current       9,149,280          4,279,234
portion
Capital lease obligations - current          395,878            -
portion
Accounts payable                            12,364,193         13,098,183
Income tax payable                           3,196,078          3,161,538
Advance from customers                       154,944            4,095,580
Accrued expenses                             31,389,630         4,437,220
Other payables                               2,828,262          3,159,070
Derivative liabilites- fair value of         348,364            317,183
warrants
Total Current Liabilities                    110,683,792        60,856,571
Long-term loans and payables                 10,254,922         7,464,683
Capital lease obligations - non-current      2,134,155          -
Other non-current liability                  6,683,802          4,297,842
Deferred tax liabilities                     6,618,794          4,857,800
Total Liabilities                            136,375,465        77,476,896
Redeemable Series A convertible
preferred
shares: par value $.001; 7,969,044
shares                                       51,208,657         49,399,990
authorized; 6,079,545 shares and
5,681,818
shares issued and outstanding as of
December 31, 2012 and 2011, respectively
Equity
Common stock: par value $.001;
75,000,000
shares authorized; 50,604,026 shares and     50,604             49,371
49,370,711 shares issued and outstanding
at
December 31, 2012 and 2011, respectively
Additional paid-in capital                   154,792,050        150,654,849
Retained earnings                            240,679,395        148,804,997
Accumulated other comprehensive              19,950,447         17,078,758
income
Total equity attributable to Yongye          415,472,496        316,587,975
International, Inc.
Noncontrolling interest                      20,790,572         15,300,017
Total Equity                                 436,263,068        331,887,992
Commitments and Contingencies                -                  -
Total Liabilities, Redeemable Series A   $   623,847,190    $   458,764,878
Convertible Preferred Shares andEquity



YONGYE
INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
                     For the Three Months Ended   For the Years Ended
                     December 31,  December 31,   December 31,   December 31,
                     2012          2011           2012           2011
Sales                $ 71,260,204  $ 44,859,636   $ 442,986,604  $ 390,379,489
Cost of sales          32,902,107    21,203,955     180,614,350    162,078,410
Gross profit           38,358,097    23,655,681     262,372,254    228,301,079
Selling expenses       14,269,679    11,494,664     104,036,345    73,886,542
Research and           2,521,976     1,980,621      16,575,976     13,130,627
development expenses
General and
administrative
expenses, including
a reversal of
allowance for
doubtful accounts of   2,862,448     17,975,496     14,123,521     35,694,045
US$6,332,022 and US$
nilfor
the year ended
December 31, 2012
and 2011,
respectively
Impairment loss of     25,375        -              10,774,106     -
goodwill
Income from            18,678,619    (7,795,100)    116,862,306    105,589,865
operations
Other
(expenses)/income
Interest expenses      (957,439)     (622,740)      (4,193,909)    (1,429,111)
Interest income        7,653         55,188         455,269        123,054
Subsidy income         9,506,306     2,318,291      9,506,306      2,973,362
Other
(expenses)/income,     (395,348)     45,556         (496,014)      223,496
net
Change in fair value
of derivative          (162,258)     185,835        (296,822)      719,085
liabilities
Total other income,    7,998,914     1,982,130      4,974,830      2,609,886
net
Earnings before        26,677,533    (5,812,970)    121,837,136    108,199,751
income tax expense
Income tax expense     5,706,980     (3,468,964)    22,803,881     18,407,554
Net income/(loss)      20,970,553    (2,344,006)    99,033,255     89,792,197
Less: Net
income/(loss)
attributable to the    1,599,720     (178,252)      5,350,190      4,930,571
noncontrolling
interest
Net income/(loss)
attributable to      $ 19,370,833  $ (2,165,754)  $ 93,683,065   $ 84,861,626
Yongye
International, Inc.
Net income/(loss)
per share of common
stock
 Basic             $ 0.32        $ (0.05)       $ 1.62         $ 1.57
 Diluted           $ 0.32        $ (0.05)       $ 1.62         $ 1.55
Weighted average
shares used in
computation:
 Basic              50,462,990    49,370,711     49,645,273     49,055,252
 Diluted            50,462,990    49,370,711     49,645,273     49,161,073
Net income/(loss)      20,970,553    (2,344,006)    99,033,255     89,792,197
Other comprehensive
income
Foreign currency
translation            1,221,255     1,944,408      3,012,054      10,951,316
adjustment, net of
US$ nil income taxes
Comprehensive income   22,191,808    (399,598)      102,045,309    100,743,513
Less: Comprehensive
income attributable
to the                 1,657,091     (88,459)       5,490,555      5,426,935
noncontrolling
interest
Comprehensive income
attributable to        20,534,717    (311,139)      96,554,754     95,316,578
Yongye
International, Inc.



YONGYE INTERNATIONAL,
INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH
FLOWS
                      FortheYearsEnded
                      December31,2012  December31,2011  December31,2010
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net income            $  99,033,255      $  $89,792,197     $   51,331,981
Adjustments to
reconcile net income
to net cash (used
in)/ provided by
operating activities:
Depreciation and         15,680,481         8,574,526           3,723,839
amortization
Loss on sale of
property, plant and      11,269             -                   -
equipment
Impairment loss of       10,774,106         -                   -
goodwill
(Reversal)/Provision
of allowance             (6,332,022)        14,973,439          -
for doubtful accounts
Change in fair value
of derivative            296,822            (719,085)           41,212
liabilities
Stock compensation       3,769,678          6,056,194           4,310,640
expense
Deferred tax benefit     (10,974,693)       (2,639,450)         (154,767)
Changes in operating
assets and
liabilities:
Accounts receivable      (132,358,082)      (139,381,935)       (19,252,818)
Inventories              (31,880,264)       (17,326,312)        (21,859,880)
Deposit to suppliers     (21,162,361)       8,299,720           (4,436,327)
Prepaid expenses         4,676,605          (4,128,949)         (603,146)
Other receivables        (801,090)          390,750             (354,500)
Distributor Vehicles     (5,633,992)        (9,866,857)         (6,076,207)
Accounts payable-        -                  -                   (887,614)
related party
Accounts payable-        (837,196)          6,616,383           5,628,946
third parties
Income tax payable       2,360,375          1,060,140           1,868,346
Advance from             (3,971,143)        3,966,320           29,934
customers
Accrued expenses         26,905,759         1,307,892           2,444,434
Other payables           (935,892)          1,821,586           137,178
Net Cash (Used
in)/Provided by          (51,378,385)       (31,203,441)        15,891,251
Operating Activities
CASH FLOWS FROM
INVESTING
ACTIVITIES
Change in restricted     -                  -                   (40,000)
cash
Payment for              -                  (3,000,000)         -
intangible asset
Prepayment for mining    -                  -                   (33,309,976)
project
Payment for land use     -                  (1,807,699)         -
right
Government subsidy
received for land use    1,245,326          -                   -
right
Proceeds from sale of
property, plant and      8,873              -                   93,412
equipment
Purchase of property,    (3,001,749)        (2,264,361)         (11,028,190)
plant and equipment
Purchase of property,
plant and equipment      -                  -                   (1,677,532)
from a related party
Net Cash Used in
Investing                (1,747,550)        (7,072,060)         (45,962,286)
Activities


CASH FLOWS FROM
FINANCING
ACTIVITIES
Proceeds from            50,832,990         43,314,821          -
short-term bank loans
Repayment of short       (28,518,918)       (15,469,579)        (2,950,396)
term loans
Repayment of
long-term loans and      (6,416,977)        (1,738,717)         (712,391)
payables
Proceeds from common
stock and warrants       103,115            -                   8,634,397
issued and warrants
exercised
Proceeds from
preferred shares, net
of                       -                  49,399,990          -
issuance cost of
$600,010
Repayment for capital    (87,467)           -                   -
lease obligations
Net Cash Provided by
Financing                15,912,743         75,506,515          4,971,610
Activities
EFFECT OF FOREIGN
EXCHANGE                 569,716            2,010,397           1,494,713
RATE CHANGES ON CASH
NET
(DECREASE)/INCREASE      (36,643,476)       39,241,411          (23,604,712)
IN
CASH
Cash at beginning of     81,154,880         41,913,469          65,518,181
year
Cash at end of year      44,511,404         81,154,880          41,913,469
Supplemental cash
flow information:
Cash paid for income     31,756,081         19,986,864          9,154,278
taxes
Cash paid for            4,847,983          1,386,763           93,402
interest expense
Noncash investing and
financing activities:
Acquisition of
property, plant and      2,617,541          -                   -
equipment under
capital leases
Acquisition of
distributor vehicles
by                       13,980,773         11,554,688          525,739
assuming long-term
loans and payables
Acquisition of
property, plant and      1,463,905          980,169             1,852,473
equipment included in
other payables
Issuance of
paid-in-kind
dividends on             1,808,667          -                   -
Redeemable Series A
convertible preferred
shares
Acquisition of
property, plant and
equipment by assuming    -                  189,229             315,426
long-term loans
and payables
Exercise of warrants
that were liability      265,641            -                   385,149
classified



YONGYE INTERNATIONAL,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP FINANCIAL DATA
                        Gross Profit
                        Three Months Ended December  Year Ended December 31,
                        31,
                        2012          2011           2012         2011
GAAP amount per
consolidated            $38,358,097   $23,655,681    $262,372,254 $228,301,079
statement of income
Amortization of the
acquired Hebei          $726,910      $718,324       $2,898,888   $2,830,410
customer list
Adjusted Amount         $39,085,007   $24,374,005    $265,271,142 $231,131,489
                        Income from Operations
                        Three Months Ended December  Year Ended December 31,
                        31,
                        2012          2011           2012         2011
GAAP amount per
consolidated            $18,678,619   ($7,795,100)   $116,862,306 $105,589,865
statement of income
Amortization of the
acquired Hebei          $726,910      $718,324       $2,898,888   $2,830,410
customer list
Non-cash management
compensation            $119,884      $1,105,594     $3,769,678   $6,056,194
expense
Impairment of goodwill  $25,375       -              $10,774,106  -
Adjusted Amount         $19,550,788   ($5,971,182)   $134,304,978 $114,476,469
                        Net income (attributable to Yongye)
                        Three Months Ended December  Year Ended December 31,
                        31,
                        2012          2011           2012         2011
GAAP amount per
consolidated            $19,370,833   ($2,165,754)   $93,683,065  $84,861,626
statement of income
Amortization of the
acquired Hebei          $726,910      $718,324       $2,898,888   $2,830,410
customer list
Non-cash management
compensation            $119,884      $1,105,594     $3,769,678   $6,056,194
expense
Impairment of goodwill  $25,375       -              $10,774,106  -
Change in fair value of
derivative              $162,258      ($185,835)     $296,822     ($719,085)
liabilities
Adjusted Amount         $20,405,260   ($527,671)     $111,422,559 $93,029,145
Weighted average shares 50,462,990    49,370,711     49,645,273   49,161,073
-- diluted
Adjusted diluted        $0.34         ($0.03)        $1.94        $1.71
earnings per share

SOURCE Yongye International, Inc.

Website: http://www.yongyeintl.com