L&L Energy Announces Fiscal First Quarter FY2014 Financial Results

Conference call scheduled for 4:00 p.m. Eastern Time on Tuesday, September 10, 2013

PR Newswire

SEATTLE, Sept. 9, 2013 /PRNewswire/ -- L & L Energy, Inc. (LLEN) ("L&L" or "Company"), a U.S.-based company engaged in producing, processing and selling coal in China, today announced its financial results for the first quarter of the fiscal year 2014, ended July 31, 2013.

First Quarter Continuing Operations Highlights

  • Coal production up 54% y/y to 228,000 tons
  • Revenue up 29% y/y to $51.2 million from 39.4 million
  • Gross profit up 92.5% y/y to $19.1 million from 9.9 million
  • Net income attributable to L&L shareholders up 133% y/y to $10.7 million from 4.6 million
  • Diluted earnings per share up 108% y/y to $0.27 from $0.13.

"The first quarter of fiscal 2014 was one of progress and growth for L&L," stated Clayton Fong, Vice President of US Operations for L&L Energy.  "Coal production increased significantly, revenue grew impressively, and we improved profitability as we rework our mix of business toward more profitable segments.  Our balance sheet remains strong.  We will further enhance our ability to fund growth with our upcoming Taiwan Depository Receipt listing.  We believe we are poised for meaningful success in the quarters ahead."

First Quarter 2014 Continuing Operations Results

This press release makes comparisons to only the continuing operations of L&L in previous quarters.  The company believes this presentation aids in comparing and understanding its results.  When the LuoZhou and LaShu coal mines were acquired in November 2012, they were paid for in part by transferring ownership interests in the Company's ZoneLin Coking plant and DaPing Mine.  Financial contributions from those operations are classified as discontinued operations, and all comparisons to fiscal first quarter 2013 exclude those contributions.

Revenue was $51.2 million in the first quarter, an increase of 29% from $39.4 million in the same quarter last year.

Coal Mining net revenue was $25.0 million in the first quarter, an increase of 118% from $11.5 million in the same quarter last year.  Coal production for the quarter was 228,000 tons, an increase of 54% from 148,510 tons in the same quarter last year.  The increase in production volume was primarily due to the acquisitions of the LaShu and LuoZhou mines in November of 2012, and our continued ramp of operations at the Weishe mine.

Coal Wholesale revenue was $13.0 million in the first quarter, an increase of 5% from $12.3 million in the same quarter last year.  The increase was primarily due to expanding market share, and increases in long-term sales contracts to large customers and state-owned enterprises.

Coal Washing revenue was $13.2 million in the first quarter, a decrease of 26% from $17.8 million in the same quarter last year.  The decrease in coal washing revenue was due principally to the idling of the Hong Xing washing plant late in the quarter. Management is currently evaluating the Hong Xing facility.

Gross Profit was $19.1 million in the first quarter, an increase of 92% from $9.9 million in the same quarter last year.  Gross margin was 37.2% in the first quarter, compared with 25.1% in the same quarter last year. The increase was primarily due to the shift in revenue mix to more mining and away from washing, which is a lower margin business.

Total Operating expenses were $4.4 million in the first quarter, compared with $3.6 million in the same quarter last year.  Operating expenses as a percentage of revenue in the first quarter was 8.6%, compared with 9.2% in the same quarter last year.

Net income was $13.4 million in the first quarter, a 123% increase from $6.0 million in the same quarter last year.

Diluted per share earnings attributable to L&L common shareholders was $0.27 in the first quarter, an increase of 108% from $0.13 in the same quarter last year.  The Company's fully diluted shares outstanding were 40.1 million.

Conference Call Information
Management will host a conference call to discuss its first quarter financial results at 4:00 p.m. Eastern Daylight Time (1:00 p.m. Pacific Daylight Time) on Tuesday, September 10, 2013.

The audio call of the meeting will be available via telephone at:

North America Toll Free: +1 (800) 893-5360
International Toll: +1 (404) 665-9534
Conference ID: 55365832

Please call five minutes prior to 4:00 p.m. Eastern Time. A live webcast of the call will also be available at http://www.llenergyinc.com.  A replay will be available from September 10, 2013 to September 17, 2013.  The number for the replay is +1 (855) 859-2056 or for international calls, +1 (404) 537-3406, using conference ID#: 55365832.

About L&L Energy, Inc.

L&L Energy, Inc. (LLEN) ("L&L Energy" or "the Company") is an American company engaged in producing, processing and selling coal in the People's Republic of China.  Its vertically-integrated operations include mining, washing, wholesale, and distribution.  The Company is incorporated in the State of Nevada with its US corporate office located in Seattle, Washington.  L&L Energy's China headquarters is located in Beijing with additional offices Kunming and Guiyan.  L&L Energy is a member of the American Coal Council, one of the country's largest coal trade associations representing the business interests of the American coal industry.

Caution Regarding Forward Looking Statements

The release contains statements related to Company's future performance and is within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve uncertainties and actual results of the future events described in this release could differ materially. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For further information, please contact: 

L&L Energy Inc.
Investor Relations
+1 (206)-264-8065
ir@llenergyinc.com

ICR, LLC
Gary Dvorchak, CFA
Senior Vice President
U.S.: +1 (310) 954-1123
China: +86 (10) 6583-7528
Email: gary.dvorchak@icrinc.com

 

 L & L ENERGY,  INC. 

 CONSOLIDATED BALANCE SHEETS 

 AS OF JULY 31, 2013 AND APRIL 30, 2013  

 (Unaudited) 




July 31, 2013


April 30, 2013

 ASSETS 






 CURRENT ASSETS: 






 Cash and cash equivalents 

$

9,041,400

$

9,565,084


 Accounts receivables 


34,793,782


35,431,260


 Prepaid and other current assets 


22,255,894


23,139,756


 Other receivables, net 


6,449,967


12,895,304


 Due from related parties 


5,320,624


3,434,502


 Related party notes receivable - current 


4,185,598


4,237,715


 Inventories 


8,153,457


7,154,544


      Total current assets 


90,200,722


95,858,165








 Property, plant, equipment, and mine development, net 


188,240,373


173,409,488


 Construction-in-progress 


44,825,438


34,679,059


 Intangible assets, net 


836,096


214,883


 Goodwill 


2,772,307


2,753,439


 Other assets 


3,000,000


3,094,830


 Deferred finance fee 


123,731


146,072


 Long term receivable, net 


12,441,007


12,441,007


      Total non-current assets   


252,238,952


226,738,778







 TOTAL ASSETS 

$

342,439,674

$

322,596,943







 LIABILITIES AND EQUITY 





 CURRENT LIABILITIES: 






 Accounts payable 

$

3,479,068

$

3,794,840


 Accrued expenses and other current liabilities 


1,182,254


1,011,100


 Other payables 


21,455,016


21,373,835


 Related party payables - current 


8,141,475


6,808,798


 Due to officers 


2,214,432


1,304,431


 Tax payable 


19,703,878


17,792,612


 Customer deposits 


766,208


745,200


 Bank loans 


4,999,985


4,999,985


      Total current liabilities 


61,942,316


57,830,801







 LONG-TERM LIABILITIES 






 Convertible note payable, net 


710,415


543,367


 Derivative liabilities 


4,145,788


4,594,912


 Asset retirement obligations 


3,712,351


3,616,643


      Total long-term liabilities 


8,568,554


8,754,922








            Total Liabilities  


70,510,870


66,585,723








 Commitments and contingencies 











 EQUITY: 





 L&L ENERGY STOCKHOLDERS' EQUITY: 






 Preferred stock, no par value, 2,500,000 shares authorized, none issued and outstanding 


-


-


 Common stock ($0.001 par value, 120,000,000 shares authorized: 38,549,283  and 38,385,050 shares issued and outstanding at July 31, 2013 and April 30, 2013 respectively)


38,549


38,385


 Additional paid-in capital 


70,211,536


69,588,550


 Accumulated other comprehensive income 


11,390,294


9,814,087


 Retained Earnings 


145,222,793


134,487,028


 Treasury stock (286,595 shares and 286,595 shares at July 31, 2013 and April 30, 2013 respectively, including shared held by subsidiary)


(68,035)


(68,035)


      Total L & L Energy stockholders' equity 


226,795,137


213,860,015


 Non-controlling interest 


45,133,667


42,151,205


      Total equity 


271,928,804


256,011,220

 TOTAL LIABILITIES AND  EQUITY 

$

342,439,674

$

322,596,943







 The accompanying notes are an integral part of these consolidated financial statements. 

 

 L & L ENERGY, INC. 

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

 FOR THE THREE MONTHS ENDED JULY 31, 

 (Unaudited) 













2013


2012

 NET REVENUES 

$

51,181,370

$

39,448,098

 COST OF REVENUES 


32,126,563


29,548,014

 GROSS PROFIT 


19,054,807


9,900,084






 OPERATING COSTS AND EXPENSES: 





 Salaries & wages-selling, general and administrative 


1,163,294


1,037,713

 Selling, general and administrative expenses, excluding salaries and wages 


3,224,985


2,597,956

      Total operating expenses 


4,388,279


3,635,669






 INCOME FROM OPERATIONS 


14,666,528


6,264,415

 OTHER INCOME (EXPENSE): 





    Interest income  


5,132


107,266

    Other income (expense), net 


(1,336)


328,228

    Derivative gain 


449,124


-

      Total other income  


452,920


435,494






 INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES 


15,119,448


6,699,909

 PROVISION FOR INCOME TAXES 


1,692,451


692,440

 INCOME FROM CONTINUING OPERATIONS 


13,426,997


6,007,469






 Income attributable to non-controlling interests  


2,691,232


1,377,363

 Income attributable to L & L 


10,735,765


4,630,106






 DISCONTINUED OPERATIONS, NET OF TAX 





 Net income from discontinued operations attributable to non-controlling interests 


-


968,162

 Net income from discontinued operations attributable to L & L 


-


1,556,365

 TOTAL (LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX 


-


2,524,527






 NET INCOME 

$

13,426,997

$

8,531,996






 Net income attributable to non-controlling interests 

$

2,691,232

$

2,345,525

 Net income attributable to L & L 


10,735,765


6,186,471






 OTHER COMPREHENSIVE INCOME: 





 Foreign currency translation gain (loss) 


1,867,437


(1,346,509)

 COMPREHENSIVE INCOME 

$

15,294,434

$

7,185,487






 Comprehensive  income attributable to non-controlling interests 

$

2,982,462

$

2,094,286

 Comprehensive  income attributable to L & L 


12,311,972


5,091,201











 INCOME PER COMMON SHARE – basic from continuing operations  

$

0.28

$

0.13

 (LOSS) INCOME PER COMMON SHARE – basic from discontinued operations 

$

-

$

0.04

 INCOME PER COMMON SHARE – basic    

$

0.28

$

0.17






 INCOME PER COMMON SHARE – diluted from continuing operations  

$

0.27

$

0.13

 (LOSS) INCOME PER COMMON SHARE – diluted from discontinued operations 

$

-

$

0.04

 INCOME PER COMMON SHARE – diluted 

$

0.27

$

0.17






 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – basic 


37,846,470


36,839,324






 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - diluted 


40,138,137


36,839,324











 The accompanying notes are an integral part of these consolidated financial statements. 

 

L & L ENERGY, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS 

FOR THE THREE MONTHS ENDED JULY 31, 

(UNAUDITED)







2013


2012

CASH FLOWS FROM OPERATING ACTIVITIES:





Net income

$

13,426,997

$

8,531,996

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation and amortization


1,912,951


1,582,219


Stock compensation


623,150


566,111


Accretion of asset retirement obligation


95,708


27,714

Changes in assets and liabilities, net of businesses acquisitions:






Accounts receivable


637,478


(2,240,633)


Prepaid and other current assets


250,845


(5,116,801)


Inventories


(998,913)


(1,525,259)


Other receivable


4,611,332


1,277,909


Accounts payable and other payable


1,296,412


2,989,804


Customer deposit


21,008


(936,538)


Accrued and other liabilities


(110,922)


(225)


Taxes payable


1,911,266


668,942

Net cash provided by operating activities


23,677,312


5,825,239







CASH FLOWS FROM INVESTING ACTIVITIES:






Acquisition of property and equipment


(668,967)


(98,629)


Construction-in-progress


(24,994,276)


(5,661,986)


Proceeds from repayment of long term receivable


-


1,563,621

Net cash used in  investing activities


(25,663,243)


(4,196,994)







CASH FLOWS FROM FINANCING ACTIVITIES:






Due to officers


910,001


6,666

Net cash provided by (used in) financing activities 


910,001


6,666













Effect of exchange rate changes on cash and cash equivalents


552,246


1,015,359







INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


(523,684)


2,650,270

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


9,565,084


4,040,020

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

9,041,400

$

6,690,290







SUPPLEMENTAL INFORMATION





INTEREST PAID

$

405,677

$

80,862

INCOME TAX PAID

$

65,924

$

580,334













NON-CASH INVESTING AND FINANCING ACTIVITIES:





Payable to DaPing shareholders

$

-

$

15,388,508













The accompanying notes are an integral part of these consolidated financial statements.

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