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SOURCE: China ModernOctober 05, 2011 09:36 ET

China Modern Reports 2011 Fiscal Year End EPS of $0.23

HARBIN, CHINA--(Marketwire - Oct 5, 2011) - China Modern Agricultural Information Inc. ("the Company")(OTCQB:CMCI) (PINKSHEETS:CMCI), a high-tech livestock company specializing in the breeding of cows and calves, the

production and sale of milk and the sale of organic fertilizer, today announced net income for the 2011 fiscal year end totaled $9million, or earnings per share of $0.23.

Financial Highlights for the Fiscal Year Ended June 30, 2011

Revenue increased 74.3% year-over-year to $25 million from $14.4 million Gross profit increased 96.5% to $13.1 million; gross margin improved to 52.3% from 46.4%; Net income increased 96.9% to $9 million versus $4.6 million in 2010; Earnings per share of $0.23 based on 38 million shares outstanding; Cash and cash equivalents totaled $5.5 million or $0.15 per share; Working capital increased year-over-year 132.2% to $8.2 million.Operational Highlights for the Fiscal Year Ended June 30, 2011

Signed Letter of Intent to acquire Shangzhi Yulong Cattle Co., which has annual production capacity of 30,000 tons of freshmilk and is expected to add approximately $4.5 million in net income in 2012.

Received several raw milk orders including 3,500 tons from Qiqihar Heshan Dairy Co. , 4,000 ton raw milk order fromHeilongjiang Nongkendelong Dairy Co., 4,300 ton raw milk order from LongXing Dairy Co., and 4,700 ton raw milk orderfrom Suihua Dongxing Dairy.

Total tons of raw fresh milk sold increased 58% to 82,785 for the 2011 fiscal year as compared to 52,383 for the 2010 fiscalyear.Mr. Youliang Wang, Chief Executive Officer of China Modern Agricultural Information, commented, "China Modern has beenengaged in the breeding of livestock and in the production and sale of fresh milk since January 2005. Today we haveapproximately 9,200 adult cows and for the fiscal 2011 year we sold approximately 82,785 tons of fresh milk, an increase of 58%year over year. This growth including the price appreciation of raw milk has yielded an increase in revenue and net income of74% and 97% to $25 million and $9 million respectively. Recently we signed a letter of intent to acquire Shangzhi Yunlongwhich would increase our production capacity by 30,000 tons and add approximately $4.5 million in net income in 2012. We willcontinue to aggressively seek other opportunities to fuel the growth of our business."Mr. Wang, continued, "In June 2011 the management team of China Modern adjusted our business model to increase theCompany's profitability. We now sell our cows directly to farmers under a five year lease to own program. The two distinctadvantages are that the asset is now moved off our balance sheet which enables the company to make additional return on the saleof the livestock, and farmers are further incentivized to produce more milk because they now have ownership of the cow. Thenew model has already increased profit margins and allowed us to focus more on the distribution of our raw milk product.Management will now be able to focus additional time and resources on building our customer base and cultivating industry

relationships."Financial Results for the Fiscal Year Ended June 30, 2011Revenue for the fiscal year ended June 30, 2011 totaled $25 million, an increase of 74.3% as compared to $14.4 million for thesame period in 2010. Revenue is generated predominately from the sale of natural milk and natural milk sales commissions fromfarmers. Revenue increased year-over-year due to an increase in the number of adult cows cared for and the increase in sales

price of milk per kg. Since November 2010 the price of milk has increased from $0.30 per kg to $0.35 per kg as of May 2011, anincrease of 16.7%. Total tons of raw fresh milk sold increased 58% to 82,785 for the 2011 fiscal year as compared to 52,383 forthe 2010 fiscal year.Cost of sales for the fiscal year ended June 30, 2011 totaled $11.9 million, or 47.7% of revenue, an increase of 55.1% comparedto $7.7 million, or 53.6% of revenue, for the fiscal year ended June 30, 2010. Cost of goods sold consists of feed, feedingexpenses, and other working capital. The increase in cost of sales was a direct result of the increase in number of adult cowscared for.Gross profit for the fiscal year ended June 30, 2011 totaled $13.1 million, an increase of 96.5% compared to $6.7 million for thefiscal year ended June 30, 2010. Gross profit margin improved to 52.3% for the 2011 fiscal year as compared to 46.4% for the2010 fiscal year. Management expects under the new business model for gross profit margins to increase due to the reduction incosts associated with maintaining the livestock. Additionally, management expects the price of raw milk to continue rising overthe next one to three years.Operating expenses for the fiscal year ended June 30, 2011 totaled $1.4 million as compared to $602,000 for the fiscal year endedJune 30, 2010. Operating expenses increased due to the costs and services associated with going public in January 2011 includingfees for advisors, legal, audit and filings.

Net income for the 2011 fiscal year ended June 30, 2011 totaled $9 million, an increase of 96.9% compared to $4.6 million forthe 2010 fiscal year ended June 30, 2010. Earnings per share for fiscal 2011 were $0.23, based on 38 million shares outstandingversus earnings per share of $0.13 for fiscal 2010, based on 36 million shares outstanding.

Liquidity and Capital ResourcesAs of June 30, 2011, China Modern had approximately $5.5 million in cash and cash equivalents or $0.15 per share. As of June30, 2011, total current assets and total assets were approximately $8.6 million and $30.5 million, respectively. During the same

period, total current liabilities and total liabilities were approximately $354,000 and $7.4 million, respectively. Working capitalincreased year-over-year by $4.7 million to $8.2 million as of June 30, 2011, as compared to $3.5 million as of June 30, 2010.Shareholder's equity increased 80.5% to $23.1 million as of June 30, 2011, compared to $12.8 million as of June 30, 2010.

Cautionary Statement Regarding Forward Looking InformationCertain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning ofSection 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, asamended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in suchforward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks anduncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability tosustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wageincreases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-timeframe contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal ofgovernmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiringcompanies outside China. Additional risks that could affect our future operating results are more fully described in our UnitedStates Securities and Exchange Commission filings including our 8K/A dated March 31, 2011, and other recent filings. Thesefilings are available athttp://www.sec.gov/.

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CONSOLIDATED BALANCE SHEETSJUNE 30, 2011 AND 2010ASSETS 2011 2010

Current assetsCash $ 5,525,180 $ 2,959,661Accounts receivable 2,506,548 1,358,448Inventories 90,017 112,220Prepaid expenses 238,238 618,660

Notes receivable, current portion 210,674 -Total current assets 8,570,657 5,048,989

Property, plant and equipment 1,884,944 1,769,295Less: accumulated depreciation (430,096 (308,261

Total property, plant and equipment, net 1,454,848 1,461,034

Other assetsNotes receivable 1,127,707 -Loan receivable 2,165,800 -Biological assets, net 17,204,616 11,733,205

Total other assets 20,498,123 11,733,205

TOTAL ASSETS $ 30,523,628 $ 18,243,228

LIABILITIES AND STOCKHOLDERS' EQUITY 2011 2010

Current liabilitiesAccounts payable $ - $ 2,235Accrued expenses and other payables 123,876 165,476Stockholder loans 230,356 1,344,129Total current liabilities 354,232 1,511,840

Deferred income taxes 7,080,292 3,939,662

Total liabilities 7,434,524 5,451,502

Stockholders' equityCommon stock, $0.001 par value; 75,000,000 shares authorized;41,100,000 shares and 35,998,000 shares issued andoutstanding at June 30, 2011 and 2010, respectively 41,100 35,998

Additional paid-in capital 1,603,170 1,170,802

Retained earnings 19,477,303 10,624,119Statutory reserve fund 190,011 190,011Other comprehensive income 1,498,692 606,341

Sub-total 22,810,276 12,627,271Noncontrolling interests 278,828 164,455

Total stockholders' equity 23,089,104 12,791,726

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,523,628 $ 18,243,228

CONSOLIDATED STATEMENTS OF INCOMEAND OTHER COMPREHENSIVE INCOMEFOR THE YEARS ENDED JUNE 30, 2011 AND 2010

2011 2010

Revenues $ 25,021,612 $ 14,357,334

Cost of goods sold (11,931,849) (7,694,202Gross profit 13,089,763 6,663,132

Operating expensesSelling and marketing (48,892) (156,589General and administrative (1,348,669) (445,301

Total operating expenses (1,397,561) (601,890

Operating income 11,692,202 6,061,242

Other income and (expenses)Non-operating income 158,201 7,642Non-operating expenses - (5,678

Total other income 158,201 1,964

Income before income taxes 11,850,403 6,063,206

Provision for income taxes 2,866,622 1,500,371

Net income before noncontrolling interests 8,983,781 4,562,835

Noncontrolling interests (130,597) (61,721

Net income attributable to controlling interests 8,853,184 4,501,114

Other comprehensive incomeForeign currency translation adjustment 892,351 64,184

Total comprehensive income $ 9,745,535 $ 4,565,298

Earnings per common share, basic and diluted $ 0.23 $ 0.13

Weighted average shares outstanding, basic and diluted 38,038,022 35,998,000