L&L Energy Announces Second Quarter Fiscal 2014 Financial Results
Conference call scheduled for 4:30 p.m. Eastern Time on Tuesday, December 17, 2013
SEATTLE, Dec. 13, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: 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 second quarter of the fiscal year 2014, ended October 31, 2013.
Second Quarter Continuing Operations Highlights
- Coal Production was up 60% to 211,000 tons compared to the same quarter last year
- Gross profit up 45.2% to $17.2 million
- Gross margin up to 40.1% compared with 26.1% in same quarter last year
L&L's Chief Financial Officer, Ian Robinson, commented, "The second quarter of fiscal 2014 was challenging, as we responded to inaccurate and defamatory attacks on our company and reputation. We formed a special committee of independent board members to review the allegations and have provided them with detailed documentation to refute the claims. On November 18th, NASDAQ placed a T-12 temporary trading halt on our stock pending a request for additional information. The Company has responded to the request and continues to be in steady communication with NASDAQ. L&L shares will remain halted until NASDAQ completes their review of the information provided."
Robinson continued, "In spite of our challenges, we continued strong execution of our coal operations and expansion of our clean energy initiatives. On target growth of our coal mining production continues to deliver good operational results. However a onetime non-cash charge reduced our net income by $6.1 million to $1.4 million for the quarter. During the second half of fiscal 2014, we remain committed to our growth plans which include acquiring additional mining operations, expanding our wholesaling business, pursuing new clean energy projects, and completing our TDR listing."
Second 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 $43.0 million in the second quarter, a decrease of 6% from $45.5 million in the same quarter last year. The modest reduction was primarily driven by the temporary idling of the Company's Hong Xing Washing Facility. Mining, the primary driver of the Company's earnings, grew substantially year-over-year.
Coal Mining net revenue was $24.3 million in the second quarter, an increase of 76% from $13.8 million in the same quarter last year. Coal production for the quarter was 211,000 tons, an increase of 60% from 132,000 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 $12.8 million in the second quarter, an increase of 27% from $10.1 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 $7.0 million in the second quarter, a decrease of 68% from $21.6 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.
Gross Profit was $17.2 million in the second quarter, an increase of 45% from $11.9 million in the same quarter last year. Gross margin was 40% in the second quarter, compared with 26% 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 $8.0 million in the second quarter, compared with $4.2 million in the same quarter last year. Operating expenses as a percentage of revenue in the second quarter was 19%, compared with 9% in the same quarter last year.
Income from Operations was $9.3 million in the second quarter, a 20% increase from $7.7 million in the same quarter last year.
Net income attributable to L&L common shareholders decreased from $5.6 million to $1.4 million primarily due to a onetime, non-recurring, non-cash charge of $6.1 million. Diluted per share earnings attributable to L&L common shareholders was $0.03 in the second quarter.
The Company's fully diluted shares outstanding were 44.4 million.
Conference Call Information
L&L's Chief Executive Officer Dickson Lee, Chief Financial Officer Ian Robinson, and Vice President Clayton Fong, will host a conference call to discuss its second quarter financial results at 4:30 p.m. Eastern Time (1:30 p.m. Pacific) on Tuesday, December 17, 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: 24650982
Please call five minutes prior to 4:30 p.m. Eastern. A live webcast of the call will also be available at http://www.llenergyinc.com. A replay will be available from December 17, 2013 to December 24, 2013. The number for the replay is +1 (855) 859-2056 or for international calls, +1 (404) 537-3406, using conference ID#: 24650982.
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
[email protected]
| L & L ENERGY, INC. |
|||||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
| AS OF OCTOBER 31, 2013 AND APRIL 30, 2013 |
|||||
| (Unaudited) |
|||||
| October 31, 2013 |
April 30, 2013 |
||||
| ASSETS |
|||||
| CURRENT ASSETS: |
|||||
| Cash and cash equivalents |
$ |
8,209,516 |
$ |
9,565,084 |
|
| Accounts receivables |
34,425,178 |
35,431,260 |
|||
| Prepaid and other current assets |
25,796,596 |
23,139,756 |
|||
| Other receivables, net |
4,136,879 |
12,895,304 |
|||
| Due from related parties |
5,382,884 |
3,434,502 |
|||
| Related party notes receivable - current |
4,305,137 |
4,237,715 |
|||
| Inventories |
8,092,437 |
7,154,544 |
|||
| Total current assets |
90,348,627 |
95,858,165 |
|||
| Property, plant, equipment, and mine development, net |
210,583,848 |
173,409,488 |
|||
| Construction-in-progress |
41,885,124 |
34,679,059 |
|||
| Intangible assets, net |
840,194 |
214,883 |
|||
| Goodwill |
2,788,822 |
2,753,439 |
|||
| Prepaid and other assets, non-current |
5,926,886 |
3,094,830 |
|||
| Deferred finance fee |
101,215 |
146,072 |
|||
| Long term receivable, net |
12,441,007 |
12,441,007 |
|||
| Total non-current assets |
274,567,096 |
226,738,778 |
|||
| TOTAL ASSETS |
$ |
364,915,723 |
$ |
322,596,943 |
|
| LIABILITIES AND EQUITY |
|||||
| CURRENT LIABILITIES: |
|||||
| Accounts payable |
$ |
4,059,127 |
$ |
3,794,840 |
|
| Accrued expenses and other current liabilities |
1,157,651 |
1,011,100 |
|||
| Other payables |
23,799,316 |
21,373,835 |
|||
| Related party payables - current |
10,786,214 |
6,808,798 |
|||
| Due to officers |
1,214,432 |
1,304,431 |
|||
| Tax payable |
20,829,158 |
17,792,612 |
|||
| Customer deposits |
464,743 |
745,200 |
|||
| Bank loans |
4,999,985 |
4,999,985 |
|||
| Total current liabilities |
67,310,626 |
57,830,801 |
|||
| LONG-TERM LIABILITIES |
|||||
| Convertible note payable, net |
928,819 |
543,367 |
|||
| Derivative liabilities |
961,726 |
4,594,912 |
|||
| Asset retirement obligations |
3,805,834 |
3,616,643 |
|||
| Total long-term liabilities |
5,696,379 |
8,754,922 |
|||
| Total Liabilities |
73,007,005 |
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: 44,140,938 and 38,385,050 shares issued and outstanding at October 31, 2013 and April 30, 2013 respectively) |
44,141 |
38,385 |
|||
| Additional paid-in capital |
84,036,975 |
69,588,550 |
|||
| Accumulated other comprehensive income |
12,715,639 |
9,814,087 |
|||
| Retained Earnings |
146,653,330 |
134,487,028 |
|||
| Treasury stock (286,595 shares and 286,595 shares at October 31, 2013 and April 30, 2013 respectively, including shared held by subsidiary) |
(68,035) |
(68,035) |
|||
| Total L & L Energy stockholders' equity |
243,382,050 |
213,860,015 |
|||
| Non-controlling interest |
48,526,668 |
42,151,205 |
|||
| Total equity |
291,908,718 |
256,011,220 |
|||
| TOTAL LIABILITIES AND EQUITY |
$ |
364,915,723 |
$ |
322,596,943 |
|
| L & L ENERGY, INC. |
||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||||||
| FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31, 2013 AND 2012 |
||||||||
| (Unaudited) |
||||||||
| For The Three Months Ended October 31, |
For The Six Months Ended October 31, |
|||||||
| 2013 |
2012 |
2013 |
2012 |
|||||
| NET REVENUES |
$ |
42,966,509 |
$ |
45,504,279 |
$ |
94,147,879 |
$ |
84,952,377 |
| COST OF REVENUES |
25,723,806 |
33,625,414 |
57,850,369 |
63,173,428 |
||||
| GROSS PROFIT |
17,242,703 |
11,878,865 |
36,297,510 |
21,778,949 |
||||
| OPERATING COSTS AND EXPENSES: |
||||||||
| Salaries & wages-selling, general and administrative |
3,037,852 |
856,801 |
4,201,146 |
1,894,514 |
||||
| Selling, general and administrative expenses, excluding salaries and wages |
4,927,012 |
3,304,418 |
8,151,997 |
5,902,374 |
||||
| Total operating expenses |
7,964,864 |
4,161,219 |
12,353,143 |
7,796,888 |
||||
| INCOME FROM OPERATIONS |
9,277,839 |
7,717,646 |
23,944,367 |
13,982,061 |
||||
| OTHER INCOME (EXPENSE): |
||||||||
| Interest income |
4,884 |
117,069 |
10,016 |
224,335 |
||||
| Other income (expense), net |
(493,454) |
562,188 |
(494,790) |
890,414 |
||||
| Loss on debt settlement |
(6,101,488) |
(6,101,488) |
||||||
| Derivative gain |
3,184,062 |
- |
3,633,186 |
- |
||||
| Total other income (expense) |
(3,405,996) |
679,257 |
(2,953,076) |
1,114,749 |
||||
| INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES |
5,871,843 |
8,396,903 |
20,991,291 |
15,096,810 |
||||
| PROVISION FOR INCOME TAXES |
1,694,850 |
805,527 |
3,387,301 |
1,497,967 |
||||
| INCOME FROM CONTINUING OPERATIONS |
4,176,993 |
7,591,376 |
17,603,990 |
13,598,843 |
||||
| Income attributable to non-controlling interests |
2,764,508 |
1,949,832 |
5,437,688 |
3,327,195 |
||||
| Income attributable to L & L |
1,430,537 |
5,641,544 |
12,166,302 |
10,271,648 |
||||
| DISCONTINUED OPERATIONS, NET OF TAX |
||||||||
| Net income from discontinued operations attributable to non-controlling interests |
- |
1,091,865 |
- |
2,060,027 |
||||
| Net income from discontinued operations attributable to L & L |
- |
2,101,397 |
- |
3,657,762 |
||||
| TOTAL (LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX |
- |
3,193,262 |
- |
5,717,789 |
||||
| NET INCOME |
$ |
4,176,993 |
$ |
10,784,638 |
$ |
17,603,990 |
$ |
19,316,632 |
| Net income attributable to non-controlling interests |
$ |
2,764,508 |
$ |
3,041,697 |
$ |
5,437,688 |
$ |
5,387,222 |
| Net income attributable to L & L |
1,412,485 |
7,742,941 |
12,166,302 |
13,929,410 |
||||
| OTHER COMPREHENSIVE INCOME: |
||||||||
| Foreign currency translation gain |
1,325,345 |
1,015,096 |
2,901,552 |
(331,413) |
||||
| COMPREHENSIVE INCOME |
$ |
5,502,338 |
$ |
11,799,734 |
$ |
20,505,542 |
$ |
18,985,219 |
| Comprehensive income attributable to non-controlling interests |
$ |
3,022,055 |
$ |
3,233,916 |
$ |
6,004,598 |
$ |
5,328,203 |
| Comprehensive income attributable to L & L |
2,480,283 |
8,565,818 |
14,500,944 |
13,657,016 |
||||
| INCOME PER COMMON SHARE – basic from continuing operations |
$ |
0.03 |
$ |
0.15 |
$ |
0.30 |
$ |
0.27 |
| (LOSS) INCOME PER COMMON SHARE – basic from discontinued operations |
$ |
- |
$ |
0.06 |
$ |
- |
$ |
0.10 |
| INCOME PER COMMON SHARE – basic |
$ |
0.03 |
$ |
0.21 |
$ |
0.30 |
$ |
0.37 |
| INCOME PER COMMON SHARE – diluted from continuing operations |
$ |
0.03 |
$ |
0.15 |
$ |
0.28 |
$ |
0.27 |
| (LOSS) INCOME PER COMMON SHARE – diluted from discontinued operations |
$ |
- |
$ |
0.06 |
$ |
- |
$ |
0.10 |
| INCOME PER COMMON SHARE – diluted |
$ |
0.03 |
$ |
0.21 |
$ |
0.28 |
$ |
0.37 |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – basic |
42,462,474 |
36,988,915 |
40,337,131 |
37,569,600 |
||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - diluted |
44,411,324 |
36,988,915 |
42,745,653 |
37,569,600 |
||||
SOURCE L & L Energy, Inc.
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