American Lorain Corporation Reports 2012 First Quarter Financial Results

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May 15, 2012, 04:05 ET

JUNAN COUNTY, China, May 15, 2012 /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, 2012.

Q1 2012 Operational Highlights

Strong sales in convenience and frozen food product lines with growth of 28.4% and 53.7%, respectively, over same period of last year
Convenience food segment continued to grow as a percent of total revenue
Domestic sales accounted for 78.9%, as compared to 74.5% over same period of last year

Q1 2012 Financial Highlights

Total revenues of $37.1 million, an increase of 22.0% year over year
Net income attributable to common stockholders of $3.6 million, up 47.6% year-over-year
Diluted earnings per share of $0.10

2012 First Quarter Financial Review

*American Lorain Corporation*
*Selected Financial Statements in USD ($ in 000s)*

		3 months ended	3 months ended	% Increase / Decrease
		3/31/2012	3/31/2011

Sales		$37,141,031	$30,449,805	21.97%
Cost of Revenues		($29,683,226)	($23,674,895)	25.38%
Gross Profit		$7,457,805	$6,774,910	10.08%
	Gross Profit Ratio	20.08%	22.20%
Income from operations		$4,784,376	$3,936,277	21.55%

Earnings before tax		$4,946,137	$3,463,759	42.80%

Net income attributable to common stockholders		$3,582,365	$2,426,288	47.65%

Diluted earnings per share		$0.10	$0.07	48.30%
Weighted average diluted shares outstanding		34,507,874	35,155,958	-1.84%

The Company reported sales for the 2012 first quarter of $37.1 million, an increase of 22.0% compared to $30.4 million in the first quarter of 2011.
Gross profit increased 10.1% to $7.5 million from $6.8 million in the prior-year period. Gross margin declined to 20.1% for the three months ended March 31, 2012, from 22.2% for the prior-year period. The decrease is primarily due to increase inflation pressure for raw materials as well as increase labor cost.
Income from operations during the period was $4.8 million, an increase of 21.5% from $3.9 million reported in the prior year period. Operating margin for the 2011 first quarter remained the same at 12.9% compared with prior year.
The Company had net income attributable to common shareholders for the first quarter of 2012 of $3.6 million, or $0.10 per diluted share based on 34.5 million diluted shares outstanding, compared to $2.4 million, or $0.07 per diluted share based on 35.2 million diluted shares outstanding in the prior-year period.

Balance Sheet Highlights and Financial Position

(in millions)		3/31/2012		3/31/2011	% Increase
Cash and Cash Equivalents	$	19.5	$	18.6	4.84%
Restricted Cash		15.1		4.9	208.16%
Working Capital		87.1		70.8	23.02%
Total Debt		55.8		47.3	17.97%
Stockholders' Equity		161.4		133.4	20.99%

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.

AMERICAN LORAIN corporation
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2012 and 2011
(Stated in US Dollars)
		March 31,		March 31,
		2012		2011

Net revenues	$	37,141,031	$	30,449,805
Cost of revenues		(29,683,226)		(23,674,895)
Gross profit	$	7,457,805	$	6,774,910

Operating expenses
Selling and marketing expenses		(1,371,275)		(1,362,686)
General and administrative expenses		(1,302,154)		(1,475,947)
		(2,673,429)		(2,838,633)

Operating income	$	4,784,377	$	3,936,277

Government subsidy income		635,163		293,093
Interest income		58,132		2,475
Other income		396,668		44,609
Other expenses		(18,734)		(159,572)
Interest expense		(909,468)		(653,123)
		161,761		(472,518)

Earnings before tax	$	4,946,137	$	3,463,759

Income tax		(1,187,209)		(895,868)

Net income	$	3,758,928	$	2,567,891

Other comprehensive income:
Foreign currency translation gain		(80,463)		1,232,883
Comprehensive Income		3,678,465		3,800,774
Net income attributable to:

-Common stockholders	$	3,582,365	$	2,426,288
-Non-controlling interest		176,563		141,603
	$	3,758,928	$	2,567,891


Earnings per share
- Basic	$	0.10	$	0.07
- Diluted	$	0.10	$	0.07

Weighted average shares outstanding
- Basic		34,507,874		34,419,709
- Diluted		34,507,874		35,155,958

AMERICAN LORAIN corporation
CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 2012 AND DECEMBER 31, 2011
				(Audited)
		At March 31,		At December 31,
ASSETS		2012		2011
Current assets
Cash and cash equivalents	$	19,497,808	$	17,353,494
Restricted cash		15,070,555		13,017,371
Trade accounts receivable		32,102,641		41,469,880
Other receivables		6,514,104		6,147,550
Inventory		35,900,495		34,348,997
Advance to suppliers		17,632,219		15,772,736
Prepaid expenses and taxes		264,620		132,710
Deferred tax asset		165,438		164,394
Security deposits and other Assets		16,477		16,373
Total current assets	$	127,164,357	$	128,423,505

Non-current assets
Investment		475,270		472,270
Property, plant and equipment, net		84,110,655		84,377,306
Land use rights, net		5,417,572		5,425,252
TOTAL ASSETS	$	217,167,854	$	218,698,333

LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term bank loans	$	31,557,935	$	36,018,450
Long-term debt – current portion		57,428		57,066
Accounts payable		3,996,907		3,900,317
Taxes payable		2,656,413		4,237,142
Accrued liabilities and other payables		1,113,921		1,938,759
Customers deposits		728,314		-
Total current liabilities	$	40,110,918	$	46,151,734

Long-term liabilities
Long-term bank loans		15,696,920		15,597,831

TOTAL LIABILITIES	$	55,807,838	$	61,749,565
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively		-		-
Common stock, $0.001 par value, 200,000,000 shares authorized; 34,507,874 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively		34,508		34,508
Additional paid-in capital		53,067,243		53,015,636
Statutory reserves		14,658,073		13,976,899
Retained earnings		69,522,079		65,939,713
Accumulated other comprehensive income		15,273,423		15,353,885
Non-controlling interests		8,804,690		8,628,127

TOTAL STOCKHOLDER'S EQUITY	$	161,360,016	$	156,948,768

TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY	$	217,167,854	$	218,698,333

AMERICAN LORAIN corporation
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Stated in US Dollars)
		March 31,		March 31,
		2012		2011
Cash flows from operating activities
Net income	$	3,758,928	$	2,567,891
Stock and share based compensation		51,607		173,702
Depreciation of fixed assets		873,032		483,601
Amortization of intangible assets		55,010		44,886
Write down of short-term investments		-		44,909
Adjustment to statutory reserve		678,175		-
(Increase)/decrease in accounts & other receivables		7,869,515		11,998,911
(Increase)/decrease in inventories		(1,551,498)		(8,923,732)
Decrease/(increase) in prepayment		(131,910)		(238,013)
Decrease/(increase) in deferred tax asset		(1,044)		(977)
Increase/(decrease) in accounts and other payables		(2,308,977)		(2,390,331)
Net cash (used in)/provided by operating activities		9,292,838		3,760,847

Cash flows from investing activities
Shandong Greenpia acquisition net of cash acquired
Purchase of plant and equipment		(606,381)		(791,155)
Payment of construction in progress		-		(380,266)
(Increase)/decrease in restricted cash		(2,053,184)		(2,549,882)
Payments for the purchase of land use rights		(47,329)		(51,902)
Payments for security deposits		(104)		69,279
Proceeds from sale of short-term investments		-		1,698,341
Net cash used in investing activities		(2,706,998)		(2,005,585)

Cash flows from financing activities
Repayment of notes		-		(1,196,589)
Proceeds from issuance of notes		-		3,053,390
Proceeds from bank borrowings		4,193,799		11,449,469
Repayment of bank borrowings		(8,554,862)		(10,376,859)
Net cash provided by/(used in) financing activities	$	(4,361,063)	$	2,929,411

Net Increase/(decrease) of Cash and Cash Equivalents		2,224,777		4,684,673

Effect of foreign currency translation on cash
and cash equivalents		(80,463)		1,187,973

Cash and cash equivalents–beginning of year		17,353,494		12,730,626

Cash and cash equivalents–end of year	$	19,497,808	$	18,603,272

Supplementary cash flow information:
Interest received	$	58,132	$	2,475
Interest paid	$	1,159,514	$	653,123
Income taxes paid	$	2,604,089	$	2,028,968