- Revenues Up 395% YoY to $55.3 million
- Net Income Up 306% YoY to $10.9 million
- EPS Up 177% YoY to $0.36
SEATTLE, Sept. 9, 2010 (GLOBE NEWSWIRE) -- L & L Energy, Inc., (Nasdaq:LLEN)("L&L" or the "Company"), a U.S- based company operating coal businesses in China, today announced financial results for its first fiscal quarter ended July 31, 2010. The Company generated $55.3 million in sales for the first quarter, representing 395% growth over the same period in fiscal 2010. Net income in the first quarter totaled $10.9 million, an increase of 306% from the prior-year period.
Fiscal 2011 First Quarter Financial Highlights
- Revenues for the first quarter increased approximately 395% year-over-year to $55.3 million, compared with $11.2 million in the same period a year ago.
- Net income for the quarter was $10.9 million, versus $2.7 million for the first quarter of fiscal 2010, representing a year-over-year increase of 306% or $8.2 million.
- Earnings per share totaled $0.36 per diluted share, a 177% increase over $0.13 per diluted share reported for the same period a year ago.
- Operating profit in the first quarter increased 208% year-over-year to $14.6 million, compared with $4.7 million in the first quarter of fiscal 2010.
- Gross profit increased to $18.6 million, an increase of 217% over gross profit of $5.9 million reported for the same period a year ago.
"We are very pleased with our strong performance in the first quarter," said Dickson Lee, Chairman and CEO of L&L. "Propelled by our acquisitions over the past year and the recent growth of our washing and coking businesses, we were able to more than triple both first quarter revenues and net profit when compared with last year's first quarter. As we mentioned on our preliminary earnings call, we have decided not to continue pursuing an acquisition of Shunda Mining based on concerns of Shunda's past safety record. However, we remain confident about the potential for larger acquisitions to be incurred later in fiscal 2011."
Total Revenue and Gross Profit
During the first fiscal quarter 2011, L&L sales increased approximately 395% to $55.3 million, up from $11.2 million in the first quarter of 2010. The sales increase was mainly a result of the Company's acquisitions over the past year as well as higher coal demand in China, which led to higher coal prices and an increase in sales volume for the Company.
Gross profit in the first quarter was $18.6 million, representing 217% growth from gross profit of $5.9 million in the first quarter of fiscal 2010. Gross margin decreased year-over-year from 52.5% in the first quarter of fiscal 2010 to 33.6% in the first quarter of fiscal 2011. The decrease was largely attributable to the Company's expansion into the coal washing and coking businesses over the past year. While profitable for the Company, washing and coking tend to have lower margins than mining operations. Because a large portion of first quarter sales growth was generated by the Company's coal washing segment, the shift in this quarter's revenue mix caused gross margin to decline.
Net Income and Earnings per Share
Net income totaled $10.9 million in the first quarter, representing 306% growth from $2.7 million in the first quarter of fiscal year 2010. The increase was mainly due to corresponding growth in revenue, and reduced selling, general, and administrative costs as a percent of sales as a result of cost reduction and streamlining measures. Net margin for the first quarter of fiscal 2011 was 19.8%, versus 24.1% in the previous year. First quarter EPS was $0.36 per diluted share, an increase of 177% or $0.23, from $0.13 in the first quarter of fiscal 2010.
About L & L Energy
L & L Energy (Nasdaq:LLEN) was founded in 1995 and headquartered in Seattle is engaged in coal mining, washing, coking and distribution in Yunnan and Guizhou Provinces. The Company has offices in Kunming, Shenzhen, Guangzhou, Hong Kong and Taipei. The Company produces thermal and metallurgical coals. During the year ended April 30, 2010, the Company has achieved impressive revenue growth of 167% and net income growth of 230% from the previous year. In June, 2010, L & L's stock was added to the Russell 3000® Index. For more information, see www.llenergyinc.com.
Forward-Looking Statements
Various statements in this press release, including those that express a belief, expectation or intention, including but not limited to the potential larger acquisitions later in fiscal 2011, as well as those that are not statements of historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to various risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements.
| L & L ENERGY, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| As of July 31, 2010 and April 30, 2010 | ||
| (Unaudited) | ||
| July 31, 2010 | April 30, 2010 | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 9,476,634 | $ 7,327,369 |
| Accounts receivable | 16,113,257 | 17,304,949 |
| Prepaid and other current assets | 15,865,361 | 22,670,529 |
| Other receivables | 7,893,019 | 7,956,069 |
| Inventories | 11,758,019 | 9,605,103 |
| Total current assets | 61,106,290 | 64,864,019 |
| Property, plant, equipment, and mine development, net | 35,236,597 | 33,657,410 |
| Construction-in-progress | 31,201,530 | 17,211,093 |
| Intangible assets, net | 5,221,766 | 5,028,253 |
| Long term receivable | 1,259,370 | 1,259,151 |
| Related party notes receivable | 7,082,039 | 7,141,800 |
| Total non-current assets | 80,001,302 | 64,297,707 |
| TOTAL ASSETS | $141,107,592 | $ 129,161,726 |
| LIABILITIES AND EQUITY | ||
| CURRENT LIABILITIES: | ||
| Accounts payable | $ 5,234,722 | $ 1,995,513 |
| Accrued and other liabilities | 755,330 | 1,225,294 |
| Other payables | 6,966,193 | 15,344,920 |
| Taxes payable | 11,822,698 | 10,387,265 |
| Customer deposits | 4,770,432 | 3,937,770 |
| Total current liabilities | 29,549,375 | 32,890,762 |
| LONG-TERM LIABILITIES | ||
| Bank loans | 3,407,080 | 4,146,950 |
| Long-term payable | 800,000 | 800,000 |
| Asset retirement obligation | 1,225,312 | 507,279 |
| Total long-term liabilities | 5,432,392 | 5,454,229 |
| Total Liabilities | 34,981,767 | 38,344,991 |
| 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: 29,660,449 and 28,791,735 shares issued and outstanding at July 31, 2010 and April 30, 2010, respectively | 29,661 | 28,792 |
| Additional paid-in capital | 34,718,042 | 32,781,365 |
| Accumulated other comprehensive income | 1,738,587 | 699,755 |
| Retained Earnings | 56,047,044 | 45,108,530 |
| Treasury stock (400,000 shares) | (396,000) | (396,000) |
| Total stockholders' equity | 92,137,334 | 78,222,442 |
| Non-controlling interest | 13,988,491 | 12,594,293 |
| Total equity | 106,125,825 | 90,816,735 |
| TOTAL LIABILITIES AND EQUITY | $ 141,107,592 | $ 129,161,726 |
| L & L ENERGY, INC. | ||
| CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPRENSIVE INCOME | ||
| FOR THE PERIODS ENDED JULY 31, 2010 and 2009 | ||
| (Unaudited) | ||
|
For the Three Months Periods Ended July 31, |
||
| 2010 | 2009 | |
| NET REVENUES | $55,329,939 | $ 11,185,753 |
| COST OF REVENUES | 36,724,263 | 5,312,458 |
| GROSS PROFIT | 18,605,676 | 5,873,295 |
| OPERATING COSTS AND EXPENSES: | ||
| Salaries & wages | 780,672 | 325,237 |
| Selling, general and administrative expenses, excluding salaries and wages | 3,225,609 | 815,475 |
| Total operating expenses | 4,006,281 | 1,140,712 |
| INCOME FROM OPERATIONS | 14,599,395 | 4,732,583 |
| OTHER INCOME (EXPENSE): | ||
| Interest expense | (70,540) | (3,600) |
| Other (expense) income | (12,843) | (3,163) |
| Total other (expense) income | (83,383) | (6,763) |
| INCOME BEFORE PROVISON FOR INCOME TAXES | 14,516,012 | 4,725,820 |
| LESS PROVISION FOR INCOME TAXES | 2,183,300 | 338,761 |
| INCOME FROM CONTINUED OPERATIONS BEFORE NON-CONTROLLING INTEREST | 12,332,712 | 4,387,059 |
| LESS: NONCONTROLLING INTEREST | 1,394,198 | 1,864,265 |
| NET INCOME FROM CONTINUED OPERATIONS | 10,938,514 | 2,522,794 |
| DISCONTINUED OPERATIONS | ||
| GAIN/(LOSS) FROM SUBSIDIARY DISPOSED OF | -- | 171,335 |
| TOTAL INCOME/(LOSS) FROM DISCOUNTED OPERATIONS | -- | 171,335 |
| NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | 10,938,514 | 2,694,129 |
| OTHER COMPREHENSIVE INCOME: | ||
| Foreign currency translation gain(loss) | (1,038,832) | (38,105) |
| COMPREHENSIVE INCOME | $9,899,682 | $ 2,656,024 |
| INCOME PER COMMON SHARE – basic from continued operation | $0.38 | $ 0.12 |
| INCOME PER COMMON SHARE – basic from discontinued operation | $ -- | $ 0.01 |
| INCOME PER COMMON SHARE – basic | $0.38 | $ 0.13 |
| INCOME PER COMMON SHARE – diluted from continued operation | $0.36 | $ 0.12 |
| INCOME PER COMMON SHARE – diluted from discontinued operation | $ -- | $ 0.01 |
| INCOME PER COMMON SHARE – diluted | $0.36 | $ 0.13 |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – basic | 29,037,451 | 21,167,409 |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - diluted | 30,407,090 | 21,307,409 |
|
L & L ENERGY, INC. |
|||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||
| FOR THE PERIODS ENDED JULY 31, 2010 and 2009 | |||
| (Unaudited) | |||
| For the Three Months Periods Ended July 31, | |||
| 2010 | 2009 | ||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||
| Net income including non-controlling interest | $10,938,514 | $2,522,794 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Income from non-controlling interest | 1,394,198 | 1,864,265 | |
| Depreciation and amortization | 3,111,736 | 768,114 | |
| Amortization for deferred compensation | -- | 10,500 | |
| Issuance of common stock for services | 430,546 | 619,262 | |
| Changes in assets and liabilities, net of businesses acquisitions: | |||
| Accounts receivable | 1,191,692 | 1,090,178 | |
| Prepaid and other current assets | 6,945,169 | 1,169,610 | |
| Inventories | (2,152,916) | (1,176,975) | |
| Deferred tax asset | -- | 154 | |
| Other receivable | 63,050 | 0 | |
| Accounts payable | 3,239,209 | 24,347 | |
| Accrued and other liabilities | (469,964) | 278,106 | |
| Customer deposit | 832,662 | 194,271 | |
| Loan to associate | -- | (204,660) | |
| Taxes payable | 1,435,432 | (569,906) | |
| Other payable | (8,378,727) | 0 | |
| Net cash provided by(used in) discontinued operation | -- | 485,608 | |
| Net cash provided by operating activities | 18,580,601 | 7,075,668 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||
| Acquisition of property and equipment | (3,582,067) | (2,909,227) | |
| Acquisition of intangible assets | (429,298) | -- | |
| Change in intangible assets | -- | 3,671 | |
| Change in fixed assets | -- | (20,018) | |
| Construction-in-progress | (13,990,438) | (4,200,333) | |
| Change in non-controlling interest due to acquisition and disposal | -- | 760,906 | |
| Loan to related party | (80,239) | -- | |
| Increase in investments | -- | (12,437) | |
| Net cash (used in) provided by investing activities | (18,082,042) | (6,377,438) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||
| Payment on bank loans | (739,870) | -- | |
| Proceeds from issuance of common stock | -- | 201,313 | |
| Proceeds from warrant extension | 50,000 | -- | |
| Warrants converted to common stock | 1,457,000 | 475,000 | |
| Net cash provided by financing activities | 767,130 | 676,313 | |
| Effect of exchange rate changes on cash and cash equivalents | 883,576 | (38,105) | |
| INCREASE IN CASH AND CASH EQUIVALENTS | 2,149,265 | 1,336,438 | |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 7,327,369 | 5,098,711 | |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 9,476,634 | $ 6,435,149 | |
| SUPPLEMENTAL NON CASH FLOW INFORMATION: | |||
| INTEREST PAID | $ 59,200 | $ 3,598 | |
| INCOME TAX PAID | $ 747,848 | $ 352,634 | |