American Lorain Corporation Reports 2011 First Quarter Financial Results

JUNAN COUNTY, China, May 16, 2011 /PRNewswire-Asia-FirstCall/ -- American Lorain Corporation (NYSE Amex: ALN) ("American Lorain" or the "Company"), an international processed snack foods, convenience foods, and frozen foods company based in the Shandong Province, China, today announced financial results for its first quarter ended March 31, 2011.

Q1 2011 Operational Highlights

• Each product segment increased by over 16% in sales year-over-year
• Convenience food segment continued to grow as a percent of total revenue
• Company's international sales continued to improve, increasing 49.2%

Q1 2011 Financial Highlights

• Total revenues of $30.4 million, an increase of 24.0% year over year
• Gross margins decreased slightly to 22.2%, compared to 23.3% year-over-year and 22.7% at 12/31/2010
• Net income attributable to common stockholders of $2.4 million, up 30.4% year-over-year
• Diluted earnings per share of $0.07
• Operating cash flow of $3.8 million for the period ended March 31, 2011

2011 Operations and Market Overview

Sales by categories of product consisted of the following as of March 31, 2011 and 2010:

Categories of product as a percentage of sales as of March 31, 2011 and 2010:

American Lorain's Chairman and CEO, Mr. Si Chen, stated, "We are extremely pleased with the performance of the Company in the first quarter.  We believe the largest contributor to our growth in the coming months will be the continued expansion of our convenience foods segment, as was the case in the first quarter.  We continue to focus on both diversifying our lines to include a wider variety of food products and leveraging our known brand name among different segments, as evidenced by our expansion in the instant rice market."

"Although the first quarter is seasonally one of our weakest due to the chestnut business, American Lorain's highly competitive cost structure, coordinated sales and marketing platform, and continued diverse food operations allowed us to deliver another solid quarter.  Over the past two years, American Lorain has made significant improvements to the balance sheet and cash generation.  We reported $3.8 million in operating cash flow during the period. We believe that the Company is appropriately capitalized to grow organically in the coming months."

2011 First Quarter Financial Review

• The Company reported sales for the 2011 first quarter of $30.4 million, an increase of 24.0% compared to $24.6 million in the first quarter of 2010.

• Gross profit increased 18.4% to $6.8 million from $5.7 million in the prior-year period.  Gross margin declined slightly to 22.2% for the three months ended March 31, 2011, from 23.3% for the prior-year period. The decrease is primarily due to a higher percentage of sales from the American Lorain's convenience foods, which typically sell at a slightly lower margin than the Company's chestnut business.  However, American Lorain expects that its margins will remain relatively stable and in the 20-25% range in the coming months.

• Income from operations during the period was $3.9 million, an increase of 18.0% from $3.3 million reported in the prior year period.  Operating margin for the 2011 first quarter was 12.9% compared with 13.6% in the prior year.

• The Company had net income attributable to common shareholders for the fourth quarter of 2010 of $2.4 million, or $0.07 per diluted share based on 35.2 million diluted shares outstanding, compared to $1.9 million, or $0.07 per diluted share based on 26.7 million diluted shares outstanding in the prior-year period.  The Company's net margin for the period improved to 8.0% from 7.5% in the prior year period, largely because of lower interest expenses.

Balance Sheet Highlights and Financial Position

The Company had a book value per share at March 31, 2011 of $3.87.

Outlook for 2011

Mr. Chen concluded, "Chestnut sales (both domestically and internationally) have remained strong throughout the first four months of the year when compared to last.  While it is always a challenge to precisely assess customer demand for our products, we are optimistic about fiscal 2011 based on what we are seeing thus far.  The efforts of our management group in all three business segments are producing greater efficiencies in both the operating infrastructure and costs control which will help us as we continue to grow.  We are in a very basic business, supplying easy, ready-to-eat food to individuals across the globe. In tough economic times, people tend to cook at home by shopping at their local grocer.  This is our core business and, along with our international presence, we should be better positioned than many of our local competitors in this regard.  We are optimistic about the outlook of our market growth in China and abroad because of growing demand, improving brand recognition, and balanced supply.  We will continue to execute on the Company's core strategies of driving growth through each of our business segments."  

Conference Call

The Company will also discuss these results in a conference call tomorrow morning (May 17, 2011) at 9:00 a.m. ET.

Participant Dial-In Numbers:
(In the United States):  877-407-8031
(International):  201-689-8031

Webcast

The call will also be simultaneously broadcast over the Internet.  To listen to the live webcast, please go to http://www.americanlorain.com and click on the conference call link, or go directly to: http://www.investorcalendar.com/IC/CEPage.asp?ID=164281.  The Company will also have an accompanying slide presentation available in PDF format on its website prior to the conference call.

Phone Replay Information

A recorded replay of the call will be available until 11:59 p.m. ET on May 23, 2011.  Listeners may dial:
(In the United States):  877-660-6853
(International):  201-612-7415

The following replay passcodes are both required for playback:
Account #: 286
Conference ID #: 371500

About American Lorain Corporation

American Lorain Corporation products include chestnut products, convenience food products and frozen food products. The Company currently sells over 240 products to 26 provinces and administrative regions in China as well as to 42 foreign countries. The Company operates through its five direct and indirect subsidiaries and one leased factory located in China. For further information about American Lorain Corporation, please visit the Company's website at http://www.americanlorain.com.

Forward-Looking Statements

This press release contains certain "forward-looking statements" that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to, the Company's ability to obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems, political and economic factors in the PRC, compliance requirement of laws and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:  Mr. David She, CFO, American Lorain Corporation, +86-10-8411-3393, [email protected]; Investor Relations: Katherine Yao, Account Executive, The Equity Group Inc., +86-10-6587-6435, [email protected], or Adam Prior, Vice President, +1-212-836-9606, [email protected]

SOURCE American Lorain Corporation