AgFeed Industries, Inc. Announces Quarterly Results

NEW YORK, Nov. 9, 2010 /PRNewswire-Asia/ -- AgFeed Industries, Inc. (Nasdaq: FEED, NYSE Alternext: ALHOG - News), an international agribusiness with operations in the U.S. and China and one of the largest independent hog production and animal nutrient companies in China, announced its results for the third quarter of 2010.

AgFeed reports continued record results in its animal nutrition business segment with revenue and operating income increasing 59% and 37% respectively for the first three quarters of 2010 as compared to the same period in 2009 and achieving new record levels.  AgFeed's U.S. hog production system, which commenced through its acquisition of M2P2 late in the third quarter generated results in line with the Company's plans.  The performance of AgFeed's Chinese hog farms, acquired during 2007 and 2008, showed revenue declines and an operating loss.

AgFeed's Board of Directors, recognizing the weak performance of the Company's existing Chinese hog production system and the extreme operating conditions that the Company has experienced during 2010 has conducted a full review of its established Chinese hog production system, the farms acquired during 2007 and 2008, in connection with the preparation of its financial statements for the period ending September 30, 2010.  This review has resulted in a number of actions regarding the management and organization of the business and has caused the board to reach the conclusion that while this existing production system can be operated profitably it cannot sustain a high enough level of profitability to support the original acquisition values of these assets and the resulting goodwill.  As a result a determination has been made to write down the value of the intangible assets related to this production system by approximately $16.8 million.

In connection with the acquisition of M2P2 AgFeed has changed significantly from a company focused on China to an international company presented with global growth opportunities.   AgFeed's board appreciates that these opportunities bring with them high performance standards regarding, improving and growing earnings and cash flow and building long term value for the Company's shareholders.

The Board of Directors has realigned members of the Company's management team in the furtherance of the opportunities presented by the market and in response to its review of operations.

Mr. Edward Pazdro, currently Chief Financial Officer of the Company's animal nutrition business and of its joint venture AgFeed International Protein Technology Corp., has been named acting Chief Financial Officer.  The Board of Directors has relieved Ms. Selina Jin, the Company's Chief Financial Officer, of her duties with immediate effect and she will be reassigned.

In recognition of the growth opportunities for AgFeed's animal nutrition business, Mr. Gerry Daignault the Company's Chief Operating Officer has been assigned the additional duties of President and Chief Executive Officer of the animal nutrition business.

The Board of Directors has also installed a new management team for its existing Chinese hog production system.  Mr. Yaoliang Tu and Dr. Ming Wei have replaced Mr. Zhengru Xiong, an AgFeed founder, with management responsibilities for this established production system.   Mr. Tu and Dr. Wei have been charged with plotting a path to returned and sustainable profitability in this production system.  Together these executives bring 43 years of experience to their responsibilities both within AgFeed and with other international hog production companies.

The AgFeed Board continues its commitment to the development of the Company's western-style hog production system in China with its initial production pods under construction in Dahua and Xinyu.  Initial stocking of the first farm in the Dahua production pod is expected to take place in late December or early January.  Based on the progress in Dahua and Xinyu to date, the Company expects to expand its "AgFeed, Government & Farmer" model to continue to roll out western production pods with other local governments as part of its initiative to lead the modernization of the Chinese hog production industry.  The Company's Chairman, Dr. Songyan Li and its Chief Executive Officer, Mr. Junhong Xiong will be leading a dedicated team to focus on government relations and the development of opportunities to work with local governments in the development of the company's western-style hog production pods.

ABOUT AGFEED INDUSTRIES, INC. 

NASDAQ Global Market Listed AgFeed Industries (www.agfeedinc.com) is an international agribusiness with operations in the U.S. and China.  AgFeed has two business lines -- animal nutrients in premix, concentrates and complete feeds and hog production. AgFeed is one of China's largest commercial hog producers in terms of total annual hog production as well as one of the largest premix feed companies in terms of revenues.  In the U.S., AgFeed's hog production unit, M2P2, is a market leader in setting new standards for production efficiency and productivity. The transfer of these processes, procedures and techniques will allow our Chinese hog production units to set new standards for production in China. China is the world's largest hog producing country that produced over 645 million hogs in 2009, compared to approximately 100 million hogs produced annually in the U.S. China also has the world's largest consumer base for pork consumption.  Over 62% of total meat consumed in China is pork.  Hog production in China enjoys income tax free status.  The swine feed markets in which AgFeed operates represent a $20 billion segment of China's $58 billion per year animal feed market.

SAFE HARBOR DISCLOSURE NOTICE 

Certain statements regarding AgFeed Industries set forth in this press release contain forward-looking information and speak only as of the date of such statement.  You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans and prospects.  This forward-looking information is subject to numerous material risks, uncertainties and assumptions, certain of which are beyond the control of AgFeed Industries, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, stock market volatility, ability to access sufficient capital from internal and external sources. Readers are cautioned that the material assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise.  Actual results, performance or achievement could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that AgFeed Industries will derive therefrom.  AgFeed Industries disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.  For additional information and risk factors that could affect AgFeed Industries, see its filings with the Securities and Exchange Commission, including "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations," including "Cautionary Statement for Forward-Looking Statements," set forth in its Quarterly Report on Form 10-Q for the period ended September 30, 2010.  The information contained in this press release is made as of the date of the press release, even if subsequently made available by AgFeed Industries on its website or otherwise.

Contact:  Investor Relations: AgFeed Industries, Inc. Tel: (917) 804-3584 Email: [email protected]

The Company's policy is to handle all questions by email to [email protected] and they will be answered as soon as possible.

SOURCE AgFeed Industries, Inc.