American Lorain Corporation Reports 2012 Third Quarter Financial Results

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Nov 14, 2012, 05:00 ET

JUNAN COUNTY, China, Nov. 14, 2012 /PRNewswire-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, 2012.

Q3 2012 Operational Highlights

Strong sales in chestnut products with growth of 10.3% over same period of last year
Convenience food grew 3.9% over same period of last year
International sales accounted for 27.7%, as compared to 24.2% over same period of last year

Q3 2012 Financial Highlights

Total revenues of $58.0 million, an increase of 4.2% year over year
Net income attributable to common stockholders of $5.3 million, down 25.7% year-over-year, mostly due to the one-time gain we recognized in the third quarter of 2011 when we sold a parcel of land previously carried on our balance sheet as a short term investment
Diluted earnings per share of $0.15

*2012 Third Quarter Financial Review*
*American Lorain Corporation*
*Selected Financial Statements in USD ($ in 000s)*

		3 months ended		3 months ended		% Increase / Decrease
		9/30/2012		9/30/2011

Sales			$57,972,627		$55,642,041	4.2%
Cost of Revenues			($45,583,295)		($43,291,417)	5.3%
Gross Profit			$12,389,332		$12,350,624	0.3%
	Gross Profit Ratio		21.4%		22.2%
Income from operations			$8,451,374		$8,200,913	3.1%

Earnings before tax			$7,645,304		$9,779,476	-21.8%

Net income attributable to common stockholders			$5,252,569		$7,071,288		-25.7%

Diluted earnings per share			$0.15		$0.20		-25.0%
Weighted average diluted shares outstanding			34,507,874		34,605,668		-0.3%

2012 Third Quarter Financial Review

The Company reported sales for the 2012 third quarter of $58.0 million, an increase of 4.2% compared to $55.6million in the third quarter of 2011.
Gross profit increased 0.3% to $12.39 million from $12.35 million in the prior-year period. Gross margin declined to 21.4% for the three months ended September 30, 2012, from 22.2% for the prior-year period. The decrease is primarily due to increased inflation pressure for raw materials as well as increased labor cost.
Income from operations during the period was $8.5 million, an increase of 3.1% from $8.2 million reported in the prior year period. Operating margin for the 2012 third quarter remained flat at 14.6% compared to 14.7% in the prior-year period.
The Company had net income attributable to common shareholders for the third quarter of 2012 of $5.3million, or $0.15 per diluted share based on 34.5 million diluted shares outstanding, compared to $7.1 million, or $0.20 per diluted share based on 34.6 million diluted shares outstanding in the prior-year period. The decrease is mostly due to the one-time gain we recognized in the third quarter of 2011 when we sold a parcel of land previously carried on our balance sheet as a short term investment.

Balance Sheet Highlights and Financial Position

(in millions)		9/30/2012		9/30/2011	% Increase
Cash and Cash Equivalents	$	16.7	$	11.4	46.5%
Restricted Cash		14.1		8.9	58.4%
Working Capital		98.6		83.7	17.8%
Total Debt		76.8		40.5	89.6%
Stockholders' Equity		171.0		148.4	15.2%

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:

At the Company:

American Lorain Corporation
Mr. David She, CFO
+86-10 8411 3393
[email protected]
Web: http://www.americanlorain.com

AMERICAN LORAIN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMPER 30, 2012 and 2011
(Stated in US Dollars)

		Three months ended September 30,				Nine months ended September 30,
		2012		2011		2012		2011

Net revenues	$	57,972,627	$	55,642,041	$	135,930,419	$	121,818,496
Cost of revenues		-45,583,295		-43,291,417		-107,582,656		-95,036,378
Gross profit	$	12,389,332	$	12,350,624	$	28,347,763	$	26,782,118

Operating expenses
Selling and marketing expenses		-2,310,863		-2,538,469		-5,098,669		-4,989,922
General and administrative expenses		-1,627,095		-1,611,242		-4,387,609		-4,680,555
		-3,937,958		-4,149,711		-9,486,278		-9,670,477

Operating income	$	8,451,374	$	8,200,913	$	18,861,485	$	17,111,641

Government subsidy income		281,374		47,657		1,135,730		643,009
Interest income		2,886		26,257		192,076		36,526
Other income		44,472		2,109,575		98,779		2,248,762
Other expenses		-6,434		-54,269		-24,098		-235,324
Interest expense		-1,128,368		-550,657		-2,703,251		-1,813,891


Earnings before tax	$	7,645,304	$	9,779,476	$	17,560,721	$	17,990,723

Income tax		-2,037,590		-1,887,950		-4,631,730		-4,061,371

Net income	$	5,607,714	$	7,891,526	$	12,928,991	$	13,929,352

Other comprehensive income:
Foreign currency translation gain		-317,396		1,664,668		89,984		4,772,659
Comprehensive Income		5,290,318		9,556,194		13,018,975		18,702,011
Net income attributable to:

-Common stockholders	$	5,252,569	$	7,071,288	$	12,165,013	$	12,760,027
-Non-controlling interest		355,145		820,238		763,978		1,169,325
	$	5,607,714	$	7,891,526	$	12,928,991	$	13,929,352


Earnings per share
- Basic	$	0.15	$	0.21	$	0.35	$	0.37
- Diluted	$	0.15	$	0.20	$	0.35	$	0.37

Weighted average shares outstanding
- Basic		34,507,874		34,466,144		34,507,874		34,440,483
- Diluted		34,507,874		34,605,668		34,507,874		34,754,552

AMERICAN LORAIN CORPORATION
CONSOLIDATED BALANCE SHEETS
AT SEPTEMPER 30, 2012 AND DECEMBER 31, 2011

				(Audited)
		At September 30,		At December 31,
ASSETS		2012		2011
Current assets
Cash and cash equivalents	$	16,731,380	$	17,353,494
Restricted cash		14,141,625		13,017,371
Trade accounts receivable		52,667,221		41,469,880
Other receivables		6,243,500		6,147,550
Inventory		51,949,507		34,348,997
Advance to suppliers		12,620,123		15,772,736
Prepaid expenses and taxes		2,315,491		132,710
Deferred tax asset		165,260		164,394
Security deposits and other Assets		18,040		16,373
Total current assets	$	156,852,149	$	128,423,505

Non-current assets
Investment		474,758		472,270
Property, plant and equipment, net		85,195,024		84,377,306
Land use rights, net		5,330,865		5,425,252
TOTAL ASSETS	$	247,852,796	$	218,698,333

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term bank loans	$	49,468,885	$	36,018,450
Long-term debt – current portion		57,367		57,066
Accounts payable		3,363,447		3,900,317
Taxes payable		3,738,859		4,237,142
Accrued liabilities and other payables		1,410,070		1,938,759
Customers deposits		229,045		-
Total current liabilities	$	58,267,673	$	46,151,734

Long-term liabilities
Long-term bank loans		18,555,701		15,597,831

TOTAL LIABILITIES	$	76,823,374	$	61,749,565





				(Audited)
		At September 30,		At December 31,
		2012		2011
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value, 5,000,000		-		-
shares authorized; 0 shares issued and outstanding at September 30, 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 September 30, 2012 and December 31, 2011, respectively		34,508		34,508
Additional paid-in capital		53,396,140		53,015,636
Statutory reserves		14,658,074		13,976,899
Retained earnings		78,104,726		65,939,713
Accumulated other comprehensive income		15,443,869		15,353,885
Non-controlling interests		9,392,105		8,628,127

TOTAL STOCKHOLDER'S EQUITY	$	171,029,422	$	156,948,768

TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY	$	247,852,796	$	218,698,333

AMERICAN LORAIN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE AND NINE MONTHS ENDED SEPTEMPER 30, 2012 AND 2011
(Stated in US Dollars)

		Three months ended				Nine months ended
		September 30,				September 30,
		2012		2011		2012		2011
Cash flows from operating activities
Net income	$	5,607,714	$	7,891,526	$	12,928,991	$	13,929,352
Stock and share based compensation		328,897		146,806		380,504		452,179
Depreciation of fixed assets		847,189		333,588		2,017,237		1,475,523
Amortization of intangible assets		32,464		41,854		127,284		141,997
Write down/(gain) of short-term investments				-30,702		-		-78,465
Adjustment to statutory reserve		-		-		681,175		-
(Increase)/decrease in accounts & other receivables		-19,575,936		-13,203,625		-7,911,633		-6,831,817
(Increase)/decrease in inventories		-11,914,113		6,268,000		-17,600,510		-5,022,660
Decrease/(increase) in prepayment		-1,453,208		-2,650,221		-2,182,781		-2,965,900
Decrease/(increase) in deferred tax asset		265		-1,237		-866		-3,625
Increase/(decrease) in accounts and other payables		1,050,685		2,359,115		-1,563,843		-1,615,090
Net cash (used in)/provided by operating activities		-25,076,044		1,155,104		-13,124,442		-518,506

Cash flows from investing activities
Sale/(Proceeds) from short-term investment		-		-807,647		-		1,358,573
Purchase of plant and equipment		-2,707,402		-874,224		-2,834,954		-3,221,615
Payment of construction in progress		-		-507,155		-		-978,260
Payment for the purchase of land use rights		15,741		-60,047		-32,897		-194,397
(Increase)/decrease in restricted cash		746,976		-1,816,892		-1,124,254		-6,572,121
Decrease (Increase) in deposit		-1,556		136,099		-1,668		51,345
Sales/(purchase) of land investment		-		7,502,344		-		7,502,344
Net cash used in investing activities		-1,946,241		3,572,478		-3,993,774		-2,054,131

Cash flows from financing activities
Repayment of bank borrowings		-		-5,278,540		-7,405,267		-22,060,396
Proceeds from bank borrowings		19,753,932		3,853,879		19,066,286		22,036,891
Proceeds from long-term bank borrowings		4,747,587				4,747,587
Repayment of Notes		-		-3,085,517		-		-4,249,977
Proceeds from issuance of notes		-		-		-		782,656
Issuance of common stock		-		27		-		52
Net cash provided by/(used in) financing activities	$	24,501,519	$	-4,510,151	$	16,408,606		-3,490,774

Net Increase/(decrease) of Cash and Cash Equivalents		-2,520,766		217,431		-709,610		-6,063,411

Effect of foreign currency translation on cash and cash equivalents		-316,636		1,616,904		87,496		4,772,659

Cash and cash equivalents–beginning of period		19,568,782		9,605,539		17,353,494		12,730,626

Cash and cash equivalents–end of period	$	16,731,380	$	11,439,874		16,731,380		11,439,874

Supplementary cash flow information:
Interest received	$	2,886	$	26,171	$	192,076	$	36,526
Interest paid	$	919,218	$	502,519	$	2,751,309	$	1,766,318
Income taxes paid	$	1,348,553	$	1,116,795	$	5,136,481	$	4,962,052