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

13 Dec, 2013, 18:59 ET from L & L Energy, Inc.

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 ir@llenergyinc.com

 

 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.



RELATED LINKS

http://www.llenergyinc.com