L & L Energy Announces First Quarter Fiscal 2012 Financial Results and Earnings Call

SEATTLE, Sept. 9, 2011 /PRNewswire/ -- L & L Energy, Inc., (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company operating coal businesses in China, today announced its financial results for the first fiscal quarter ended July 31, 2011. The Company generated $36.7 million in sales for the first quarter, and net income totaled $3.08 million.

Fiscal 2012 First Quarter Summary and Recent Highlights

• Accelerated Guizhou Provincial Consolidation policy creates tremendous growth opportunity for L&L
• CEO, Dickson Lee, meets and receives endorsement from the Vice Governor of Guizhou for L&L to take a leadership role in the provincial coal consolidation process
• L&L signs letters of intent with 14 operating Guizhou mines that collectively produce approximately 3 million tons per year
• L&L enters into a Memorandum of Understanding with Tianjin Fuhao, a fully-owned subsidiary of Tianjin Materials and Equipment Co., and a leader in coal logistics and infrastructure in China
• Revenues and earnings were negatively affected during the last quarter and this quarter due to temporary idling of all company-owned mines. In accordance with the provincial-wide mandate, approximately 1600 mines in Guizhou were temporarily idled. Three of four L&L mines are now back in operation
• Revenues for the first quarter were approximately $36.7 million
• Net income was $3.08 million
• Earnings per share was $0.08 per diluted share
• Operating profit was $4.24 million
• Gross profit was $8.19 million

"Our earnings and revenues were affected across all segments of our business by the idling of our mines during mandatory, but temporary closures and slowdowns issued by the local government," said Ian Robinson, Chief Financial Officer of L&L. "The negative effect on our numbers are temporary and we support the government's stance on increasing accountability and safety in our industry. We continue to work with the local provincial governments to take the lead in increasing the standards of not only safety, but also operational efficiency. We expect that the government will play a major role in supporting consolidation efforts and we look forward to working with them to ensure safe and efficient operations within the region."

Dickson Lee, Chairman and CEO stated, "Continued negative perception on companies who operate in China has slowed our growth plans. However we continue to improve our foothold in the coal industry and have been able to make tremendous strides in positioning ourselves at the forefront of a number of opportunities in South China. We are focused and confident in our position to take a leadership role in the Guizhou coal consolidation process and with the support of the local government, we have been able to sign letters of intent with 14 potential mines that collectively could yield US$500 million in revenues. The next step will be to have Dr. Syd Peng, an L&L Board Member and world-renowned coal expert, lead our acquisition team on a trip through Guizhou to evaluate each potential acquisition.  Dr. Peng is a recognized expert in underground mining in both the U.S. and China and will be able to assist our very strong mining and acquisition team in China to evaluate each mines' management team and mining operations, including mechanization potential, safety, and production expansion capabilities."

Lee continued, "The potential in Guizhou is huge, and going forward I expect we will expend a tremendous percentage of our resources on this potentially game-changing opportunity."

Results of Operations

In this quarter our net revenues decreased to $36.7 million during the three months ended July 31, 2011, down from $55 million during the same period the year before. The decrease was primarily due to the government's temporary slowdown and idling of all mines in our region, coupled with the cyclical low summer season.

The idling of mines and regional shut downs had negative effects across all segments of our business. Revenues from mining operations for the first quarter were $7.3 million.  Our washing and wholesale segments were affected by the lack of coal. Revenues from coal washing decreased over the first quarter to $18.98 million and revenues from wholesale operations decreased to $4.46 million. The volume of sales dropped due to decreased supplies of raw coal and fine coal in Yunnan and Guizhou. Coking was also negatively affected, with revenues for the first quarter being $6.64 million.

Our gross profit was margin was reduced to 22%. Mining, which typically has had the highest margin, was impacted most by the idling. Secondly the vast majority of our work force stayed on payroll and spent significant time implementing upgrades to meet increasing safety and regulatory standards.

The government took action and issued the provincial-wide temporary closure due to several fatal mine accidents (our mines had no accidents) in South China during the spring. Our Yunnan mines have resumed production, although are undergoing improvements in accordance with the recent regulatory changes. Our Da Ping mine has been approved to resume production and is currently expanding its production capacity. However, our Ping Yi mine remains idle as of July 31, 2011.

Earnings Call Information

The company will host a conference call to discuss its first quarter financial results at 4:30 p.m. Eastern Daylight Time (1:30 p.m. Pacific Daylight Time) on Monday, September 12. The audio call of the meeting will be available via telephone at:

North America Toll Free: (800) 893-5360
International Toll: (404) 665-9534

Please call five minutes prior to 4:30 p.m. Eastern Daylight Time. A live webcast of the call will also be available at www.llenergyinc.com. A replay of the conference call will be available from September 12, 2011 at 6:30 p.m. EDT to September 19, 2011 at 11:59 p.m. EDT.  The toll free number for the replay is (855)-859-2056, passcode: 98988413.

Forward-Looking Statements

The statements contained words that are not historical fact, including statements related to Company's future performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties. Actual results of the future events described in this document could differ materially due to numerous factors and other made by the company filing with the Securities and Exchange Commission. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Contacts:
L&L Energy, Inc.
(206) 264 – 8065
[email protected]

SOURCE L & L Energy, Inc.