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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

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.

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