American Lorain Corporation Reports 2011 Third Quarter Financial Results
- Company to Hold Conference Call Wednesday, November 16, 2011, at 8:00 a.m. ET -
JUNAN COUNTY, China, Nov. 15, 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 third quarter ended September 30, 2011.
Q2 2011 Operational Highlights
- Chestnut and convenience food sales increased by 15.2% and 20.1% year-over-year, respectively
- Convenience food segment continued to grow as a percent of total revenue year-over-year
- Frozen food increased at a slower rate of 7.2%, and represented lower weight in total sales year-over-year
- Continued channel and brand building efforts
Q2 2011 Financial Highlights
- Total revenues of $55.6 million, an increase of 15.7% year over year
- Gross margins decreased slightly to 22.2%, compared to 22.4% year-over-year and 22.7% at 12/31/2010
- Net income attributable to common stockholders of $7.1 million, up 39.1% year-over-year
- Diluted earnings per share of $0.20
2011 Operations and Market Overview
Sales by categories of product consisted of the following for the three month ended September 30, 2011 and 2010:
Three month ended |
||||||
Category |
9/30/2011 |
9/30/2010 |
% Increase |
|||
Chestnut |
$ |
24,468,233 |
$ |
21,233,329 |
15.2% |
|
Convenience food |
22,288,710 |
18,552,192 |
20.1% |
|||
Frozen food |
8,885,098 |
8,287,703 |
7.2% |
|||
Total |
$ |
55,642,041 |
$ |
48,073,224 |
15.7% |
|
Categories of product as a percentage of sales for the three month ended September 30, 2011 and 2010:
Three month ended |
||||
Category |
9/30/2011 % of Total Revenues |
9/30/2010 % of Total Revenues |
% Difference |
|
Chestnut |
44.0% |
44.2% |
(0.2%) |
|
Convenience food |
40.1% |
38.6% |
1.5% |
|
Frozen food |
16.0% |
17.2% |
(1.3%) |
|
Total |
100% |
100% |
||
American Lorain's Chairman and CEO, Mr. Si Chen, stated, "We are satisfied with the Company's performance in the third quarter, during which we have again achieved solid growth in each of our three business lines, despite the tightened credit environment and inflation pressure. We believe the largest contributor to our growth in the fourth quarter will be the continued expansion of our convenience foods segment, as well as the chestnut food segment which is seasonally strong in fourth quarter. We believe the continuous focus on product quality and building our distribution channels and brand equity is key to the Company's success in a competitive landscape and will continue to execute on these strategies in the coming months."
2011 Third Quarter Financial Review
American Lorain Corporation Selected Financial Statements in USD ($ in 000s) |
||||||
3 months ended |
3 months ended |
% Increase |
||||
9/30/2011 |
9/30/2010 |
|||||
Sales |
$55,642,041 |
$48,073,224 |
15.7% |
|||
Cost of Revenues |
($43,291,417) |
($37,293,496) |
16.1% |
|||
Gross Profit |
$12,350,624 |
$10,779,728 |
14.6% |
|||
Gross Profit Ratio |
22.2% |
22.4% |
||||
Income from operations |
$8,200,913 |
$7,063,609 |
16.1% |
|||
Earnings before tax |
$9,779,476 |
$6,868,892 |
42.4% |
|||
Net income attributable to common stockholders |
$7,071,288 |
$5,084,475 |
39.1% |
|||
Diluted earnings per share |
$0.20 |
$0.16 |
27.3% |
|||
Weighted average diluted shares outstanding |
34,605,668 |
31,679,871 |
9.2% |
|||
- The Company reported sales for the 2011 third quarter of $55.6 million, an increase of 15.7% compared to $48.1 million in the third quarter of 2010.
- Gross profit increased14.6% to $12.4 million from $10.8 million in the prior-year period. Gross margin declined slightly to 22.2% for the three months ended September 30, 2011, from 22.4% for the prior-year period, due to inflation pressure. 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 $8.2 million, an increase of 16.1% from $7.1 million reported in the prior year period. Operating margin remained the same at 14.7% for the 2011 third quarter compared with same period in the prior year.
- The Company had net income attributable to common shareholders for the third quarter 2011 of $7.1 million, or $0.20 per diluted share based on 34.6 million diluted shares outstanding, compared to $5.1 million, or $0.16 per diluted share based on 31.8 million diluted shares outstanding in the prior-year period. The Company's net margin for the period was 12.7% compared with 10.6% in the prior year period.
- The increase in net income was largely attributable to a $2.1 million other income we recognized in the third quarter when we sold the land previously carried on our balance sheet as short term investment. Without the effect of the land sale, our net income increased 6.1% to $5.4 million for the three months ended September 30, 2011 from $5.1 million in the same period of last year. Please refer to note 22 to the financial statements for details.
Balance Sheet Highlights and Financial Position
(in millions) |
9/30/2011 |
12/31/2010 |
% Increase |
|||
Cash and Cash Equivalents |
$ |
11.4 |
$ |
12.7 |
-10.2% |
|
Restricted Cash |
8.9 |
2.3 |
287.0% |
|||
Working Capital |
83.7 |
57.4 |
45.8% |
|||
Total Liabilities |
40.5 |
45.6 |
-11.2% |
|||
Stockholders' Equity |
148.4 |
129.3 |
14.8% |
|||
The Company had a book value per share at June 30, 2011 of $4.31.
Outlook for 2011
Mr. Chen concluded, "We remain conservatively optimistic about full year 2011. 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. Despite the current uncertainties weighing on the global economy, as well as the tightened credit environment and inflation pressure domestically, we remain confident about the outlook of our market growth in China and are determined to achieve sustainable long-term growth through continued efforts in extending our channels and building our brand recognition. 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 (November 16, 2011) at 8:00 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=166632.
Phone Replay Information
A recorded replay of the call will be available until 11:59 p.m. ET on November 19, 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 #: |
383356 |
|
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.
For more information, please contact:
American Lorain Corporation
Mr. David She, CFO
+86-10 8411 3393
[email protected]
www.americanlorain.com
AMERICAN LORAIN CORPORATION |
|||||||||||||
Three months ended |
Nine months ended |
||||||||||||
2011 |
2010 |
2011 |
2010 |
||||||||||
Net revenues |
$ |
55,642,041 |
$ |
48,073,224 |
$ |
121,818,496 |
$ |
101,851,754 |
|||||
Cost of revenues |
(43,291,417) |
(37,293,496) |
(95,036,378) |
(78,629,267) |
|||||||||
Gross profit |
$ |
12,350,624 |
$ |
10,779,728 |
$ |
26,782,118 |
$ |
23,222,487 |
|||||
Operating expenses |
|||||||||||||
Selling and marketing expenses |
(2,538,469) |
(2,072,152) |
(4,989,922) |
(4,639,500) |
|||||||||
General and administrative expenses |
(1,611,242) |
(1,643,967) |
(4,680,555) |
(3,592,629) |
|||||||||
(4,149,711) |
(3,716,119) |
(9,670,477) |
(8,232,129) |
||||||||||
Operating income |
$ |
8,200,913 |
$ |
7,063,609 |
$ |
17,111,641 |
$ |
14,990,358 |
|||||
Investment income |
|||||||||||||
Government subsidy income |
47,657 |
321,537 |
643,009 |
698,961 |
|||||||||
Interest and other income |
2,135,832 |
628,008 |
2,285,288 |
759,579 |
|||||||||
Other expenses |
(54,269) |
(16,269) |
(235,324) |
(88,506) |
|||||||||
Interest expense |
(550,657) |
(1,127,993) |
(1,813,891) |
(3,071,546) |
|||||||||
Earnings before tax |
$ |
9,779,476 |
$ |
6,868,892 |
$ |
17,990,723 |
$ |
13,288,846 |
|||||
Income tax |
(1,887,950) |
(1,476,363) |
(4,061,371) |
(3,005,959) |
|||||||||
Net income |
$ |
7,891,526 |
$ |
5,392,529 |
$ |
13,929,352 |
$ |
10,282,887 |
|||||
Other comprehensive income: |
|||||||||||||
Foreign currency translation gain |
1,664,668 |
1,755,844 |
4,772,659 |
2,175,729 |
|||||||||
Comprehensive income |
$ |
9,556,194 |
$ |
7,148,373 |
$ |
18,702,011 |
$ |
12,458,616 |
|||||
Net income attributable to: |
|||||||||||||
- Common Stockholders |
$ |
7,071,288 |
$ |
5,084,475 |
$ |
12,760,027 |
$ |
9,624,619 |
|||||
- Non-controlling Interest |
820,238 |
308,054 |
1,169,325 |
658,268 |
|||||||||
Net income |
$ |
7,891,526 |
$ |
5,392,529 |
$ |
13,929,352 |
$ |
10,282,887 |
|||||
Earnings per share |
|||||||||||||
-- Basic |
$ |
0.21 |
$ |
0.16 |
$ |
0.37 |
$ |
0.32 |
|||||
-- Diluted |
$ |
0.20 |
$ |
0.16 |
$ |
0.37 |
$ |
0.31 |
|||||
Weighted average shares outstanding |
|||||||||||||
-- Basic |
34,466,144 |
31,083,710 |
34,440,483 |
30,525,487 |
|||||||||
-- Diluted |
34,605,668 |
31,679,871 |
34,754,552 |
31,221,758 |
|||||||||
AMERICAN LORAIN CORPORATION |
|||||
(Audited) |
|||||
At September 30, |
At December 31, |
||||
ASSETS |
2011 |
2010 |
|||
Current assets |
|||||
Cash and cash equivalents |
$ |
11,439,874 |
$ |
12,730,626 |
|
Restricted cash |
8,881,019 |
2,308,898 |
|||
Short-term investment |
117,074 |
9,447,585 |
|||
Trade accounts receivable |
35,105,826 |
33,226,612 |
|||
Other receivables |
6,389,505 |
1,492,850 |
|||
Inventories |
34,829,858 |
29,807,198 |
|||
Advance to suppliers |
10,747,976 |
7,744,976 |
|||
Prepaid expenses and taxes |
396,960 |
434,061 |
|||
Deferred tax asset |
107,338 |
103,713 |
|||
Security deposits and other Assets |
628,998 |
693,858 |
|||
Total current assets |
$ |
108,644,428 |
$ |
97,990,377 |
|
Non-current assets |
|||||
Investment |
469,594 |
- |
|||
Property, plant and equipment, net |
74,819,359 |
72,095,007 |
|||
Land use rights, net |
4,929,838 |
4,877,438 |
|||
Deposit |
33,812 |
20,297 |
|||
TOTAL ASSETS |
$ |
188,897,031 |
$ |
174,983,119 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
Short-term bank loans |
$ |
14,824,640 |
$ |
25,164,469 |
|
Long-term debt – current portion |
56,743 |
218,935 |
|||
Notes payable |
782,656 |
4,249,977 |
|||
Accounts payable |
4,961,054 |
6,284,532 |
|||
Taxes payables |
3,146,526 |
3,266,502 |
|||
Accrued liabilities and other payables |
1,164,310 |
1,335,947 |
|||
Customers deposits |
33,421 |
89,370 |
|||
Total current liabilities |
$ |
24,969,350 |
$ |
40,609,732 |
|
Long-term liabilities |
|||||
Long-term debt |
15,509,447 |
5,030,930 |
|||
TOTAL LIABILITIES |
$ |
40,478,797 |
$ |
45,640,662 |
|
STOCKHOLDERS' EQUITY |
|||||
Preferred Stock, $.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively |
- |
- |
|||
Common stock, $0.001 par value, 200,000,000 shares authorized; 34,471,801 and 34,419,709 shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively |
34,472 |
34,420 |
|||
Additional paid-in capital |
52,823,660 |
52,371,481 |
|||
Statutory reserves |
12,078,429 |
11,340,739 |
|||
Retained earnings |
60,710,712 |
48,688,375 |
|||
Accumulated other comprehensive income |
14,169,939 |
9,475,745 |
|||
Non-controlling interests |
8,601,022 |
7,431,697 |
|||
TOTAL STOCKHOLDER'S EQUITY |
$ |
148,418,234 |
$ |
129,342,457 |
|
TOTAL LIABILITIES AND |
|||||
STOCKHOLDER'S EQUITY |
$ |
188,897,031 |
$ |
174,983,119 |
|
AMERICAN LORAIN CORPORATION |
|||||||||
Three months ended |
Nine months ended |
||||||||
2011 |
2010 |
2011 |
2010 |
||||||
Cash flows from operating activities |
|||||||||
Net income |
$ |
7,891,526 |
$ |
5,392,529 |
$ |
13,929,352 |
$ |
10,282,887 |
|
Stock and share based compensation |
146,806 |
195,868 |
452,179 |
650,817 |
|||||
Depreciation |
333,588 |
554,385 |
1,475,523 |
1,242,370 |
|||||
Amortization |
41,854 |
40,053 |
141,997 |
109,114 |
|||||
Write down/(gain) on short-term investment |
(30,702) |
(479,332) |
(78,465) |
(479,332) |
|||||
(Increase)/decrease in accounts & other receivables |
(13,203,625) |
(12,081,954) |
(6,831,817) |
(3,787,024) |
|||||
(Increase)/decrease in inventories |
6,268,000 |
(979,407) |
(5,022,660) |
(8,655,050) |
|||||
(Increase)/decrease in prepayment |
(2,650,221) |
(5,152,378) |
(2,965,900) |
(4,418,283) |
|||||
Increase/(decrease) in deferred tax asset |
(1,237) |
- |
(3,625) |
- |
|||||
Increase/(decrease) in accounts and other payables |
2,359,115 |
(2,425,974) |
(1,615,090) |
(4,376,091) |
|||||
Net cash (used in)/provided by operating activities |
1,155,104 |
(14,936,210) |
(518,506) |
(9,430,592) |
|||||
Cash flows from investing activities |
|||||||||
Shandong Greenpia acquisition net of cash required |
- |
(1,929,773) |
- |
(1,929,773) |
|||||
Sales/(purchase) of short-term investments |
(807,647) |
(186,966) |
1,358,573 |
(161,739) |
|||||
(Increase)/decrease in restricted cash |
(1,816,892) |
(103,792) |
(6,572,121) |
454,656 |
|||||
Payment of construction in progress |
(507,155) |
- |
(978,260) |
- |
|||||
Payment of land use rights |
(60,047) |
(72,466) |
(194,397) |
(105,671) |
|||||
Payments for purchase of equipment & plant |
(874,224) |
(1,295,379) |
(3,221,615) |
(11,341,132) |
|||||
Decrease/(increase) in deposit |
136,099 |
- |
51,345 |
- |
|||||
Sales /(purchase) of land investment |
7,502,344 |
- |
7,502,344 |
- |
|||||
Net cash used in investing activities |
3,572,478 |
(3,585,376) |
(2,054,131) |
(13,083,659) |
|||||
Cash flows from financing activities |
|||||||||
Bank borrowings |
3,853,879 |
41,717,825 |
22,036,891 |
64,869,426 |
|||||
Repayment of bank loans |
(5,278,540) |
(32,736,075) |
(22,060,396) |
(53,597,904) |
|||||
Proceeds from issuance of notes |
- |
716,621 |
782,656 |
716,621 |
|||||
Repayment of notes |
(3,085,517) |
- |
(4,249,977) |
- |
|||||
Issue of common stock |
27 |
8,693,478 |
52 |
8,693,478 |
|||||
Net cash provided by/(used in) financing activities |
$ |
(4,510,151) |
$ |
18,391,849 |
$ |
(3,490,774) |
$ |
20,681,621 |
|
Net Increase/(decrease) of Cash and Cash Equivalents |
217,430 |
(129,737) |
(6,063,412) |
(1,832,630) |
|||||
Effect of foreign currency translation on cash |
1,616,905 |
1,676,496 |
4,772,660 |
1,606,648 |
|||||
and cash equivalents |
|||||||||
Cash and cash equivalents–beginning of period/year |
9,605,539 |
10,338,791 |
12,730,626 |
12,111,532 |
|||||
Cash and cash equivalents–end of period/year |
$ |
11,439,874 |
$ |
11,885,550 |
$ |
11,439,874 |
$ |
11,885,550 |
|
SOURCE American Lorain Corporation
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