SOURCE: Yasheng Group

November 11, 2010 15:10 ET

Yasheng Group Announces Third Quarter 2010 Results

3Q10 Revenue Advances 29.7% Year-Over-Year to $235.6 Million; EPS Increases 33.3% to $.20

REDWOOD CITY, CA--(Marketwire - November 11, 2010) - Yasheng Group (OTCQB: YHGG), a high-growth diversified China-based agricultural company with US headquarters in California, today announced results for the third quarter and nine months ended September 30, 2010.

  3Q10 3Q09 9M10 9M09 FY09
Revenues $235.6 $181.6 $595.2 $539.8 $739.6
Net Income $31.7 $24.0 $68.6 $60.8 $79.0
EPS $.20 $.15 $.44 $.39 $.51
In millions except EPS.

Revenues

3Q10 revenues increased $54.0 million or 29.7% to $235.6 million compared to $181.6 million for the third quarter last year. Year-to-date revenues increased $55.4 million or 10.3% to $595.2 million compared to $539.8 million for the same period last year.

Chairman Zhou Changsheng said, "Yasheng Group had a very successful third quarter. Aside from an uptrend in pricing in the general economy in China, which benefitted the company, third quarter top-line growth was considerably stronger than for the first two quarters, because of our contract renegotiations. The renewal of our fixed price contracts that we had in place for the first half of 2010 gave us stronger pricing for the third quarter. What's more, most of our products are harvested in the third quarter and a large part of them are sold out in this quarter, which allows us to benefit from price increases."

Cost of Goods Sold

3Q10 cost of goods sold, which is defined as direct production costs such as raw materials, direct labor, overhead and miscellaneous other supplies, increased $45.5 million or 29.1% year-over-year to $201.8 million from $156.3 million for the third quarter last year. Year-to-date cost of goods sold increased $46.7 million or 9.8% to $521.8 million from $475.1 million for the same period last year.

Chairman Zhou Changsheng continued, "We kept costs in line with sales due to our continued emphasis on cost control that we exercised throughout our entire production chain. However, earlier this year our production was adversely affected by heavy snow storms from January through May in Northwest China, which disrupted our planting and lead to an increase in production costs."

Gross Profit and Gross Margin

3Q10 gross profit increased $8.6 million or 34.1% year-over-year to $33.8 million from $25.2 million for the third quarter last year. Year-to-date gross profit increased $8.7 million or 13.6% to $73.4 million from $64.6 million for the same period last year. Operating margins rose significantly due to increased product pricing and the heightened focus on cost control exercised throughout production.

Net Income

3Q10 net income grew to $31.7 million or $.20 per share from $24.0 million or $.15 per share for the same period last year. Year-to-date net income increased to $68.6 million or $.44 per share compared to $60.8 million or $.39 per share for the same period last year.

Chairman Zhou Changsheng summarized, "Our solid financial performance for the third quarter was primarily the result of increased pricing attributable to the positive growth economics in China, our successful price renegotiations, and contributions from key projects we implemented during the past year to optimize our operations and control cost. Given the positive economics and our successful harvest during the second and third quarters, we anticipate continued growth and a strong fourth quarter."

Yasheng Group

Yasheng Group (OTCQB: YHGG) (www.yashenggroup.com), founded over 30 years ago, is a US holding company that conducts primarily agricultural operations in the Northwest of China. Today it is one of China's leading producers and marketers with six major product segments including field crops, vegetables, fruit, specialty crops, hops, hemp, seeds, beef and poultry. Yasheng is a supplier of high-quality agricultural products to world-famous conglomerates such as McDonald's, KFC, Tsingtao Beer, and Pepsi. The company is lead by a highly qualified management team and it has total assets of approximately $1.7 billion, over 15,000 employees, and a history of strong sales and earnings growth.

Safe Harbor Statement

Except for the historical information contained herein, certain matters discussed in this press release are forward-looking statements which involve risks and uncertainties. These forward-looking statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are discussed in the company's various filings with the Securities and Exchange Commission. The company assumes no obligation to update these forward-looking statements.

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