L & L Energy (NASDAQ:LLEN)

SEATTLE, Jan. 17, 2012 /PRNewswire/ -- L & L Energy, Inc. (Nasdaq: LLEN) ("L&L" or the "Company"), a U.S. based company since 1995 with coal mining and distribution businesses in southwest China, announced today it is concentrating greater efforts in the Guizhou Province, specifically, on new acquisitions that will focus on larger mines, as well as newer mines that meet anticipated enhanced safety and mechanization regulations .  The Company will also explore geographical diversification from southwestern China by looking at new coal resources in other provinces.

L&L recently signed two joint sales/marketing agreements with two giants; China Chengtong Metals Co. and Tianjin Fuhao Industrial Co. Ltd to expand its wholesale operation in addition to its existing sales operations in South China. If fully executed, the agreements collectively will generate approximately $US 300 million in revenues throughout 2012.

L&L also recently added Mr. Jingcai Yang as an advisor. He is a former senior executive from China Shenhua Group Corporation Limited, the world largest coal producer and will assist the Company to explore coal sales on a national level. As an executive who ran one of the largest surface mines in the world, Mr. Yang will also help the Company evaluate potential surface mines, which have experienced fewer disruptions than underground mines.

The Company also recently signed an MOU with three newly built mines Guizhou and is in active negotiations to acquire all three.

Dr. Syd Peng commented, "What I learned from my recent extensive visit to inspect potential mine acquisitions is that the Company should take advantage of the new availability of larger mines with stronger management teams as well as some new mines that meet anticipated enhanced safety and mechanization regulations." 

Dickson Lee, Chairman and CEO added, "As a company with 16 years of experience in China we have consistently sought to take our operations to the next level. Our partnerships with companies of CCMC and Tianjin Fuhao's caliber have exposed us to many new opportunities. We believe our vision and hard work have helped us to navigate this somewhat turbulent past year and we are positioning ourselves to bring solid results to our shareholders."

Second Quarter 2012 Financial Summary

Ian Robinson, Chief Financial Officer, stated, "Our earnings and revenues have seen improvements from our first quarter as a result of our mining operations beginning to ramp up production in accordance with the changing regulatory environment. Although second quarter results have improved, we are still seeing the effects of intermittent temporary slowdown and idling of all mines in our region by the government."

• Revenues were $41.9 million, up 14% from the first quarter
• Net income was $5.25 million, up 70% from the first quarter
• Gross profit was $12.4 million, up 51% from the first quarter
• Earnings per share was $0.11 per diluted share compared to $0.35 in the 2011 Second quarter

Dickson Lee, Chairman and CEO, commented, "I expect a challenging environment for our current operations to continue throughout the course of the consolidation process. However, we have positioned ourselves very well to benefit from the consolidation in the long run with the support we have received from the government and local banks. Additionally we are bolstering up our operations in Guizhou with the addition of new wholesale operations. This will increase our visibility throughout the region and create a strong revenue base."

Lee continued, "This past year has been challenging. The capital markets have also caused us to slow our acquisition plans, but as the business cycle turns, L&L will be well positioned to take advantage of this tremendous growth opportunity in Guizhou."

SEATTLE, Sept. 21, 2011 /PRNewswire/ -- L & L Energy, Inc., (Nasdaq: LLEN) ("L&L" or the "Company"), a U.S.-based company since 1995 with coal mining and distribution businesses in China, announced that LLEN shareholders re-elected all seven directors with over 98% of the vote during the September 15th Annual Shareholders Meeting.

During the meeting Dickson Lee, Chairman and CEO, gave an in depth presentation on the tremendous growth opportunities that L&L will be focusing on in the Guizhou Province. Highlights from Mr. Lee's remarks included:

• Details regarding L&L's meeting with Guizhou's Vice Governor and Energy Bureau Chief where L&L received an endorsement to take a leadership role in the consolidation process.
• 1,600 locally owned mines currently operating in the Guizhou Province will be reduced to 200 or less under the outlined plan.
• L&L is the only American owned and US publicly listed company in Guizhou, which is unique from the government's perspective.
• L&L is working with one a large local commercial bank that may assist with financing.
• L&L signed letters of intent with owners of 14 locally operated mines in the Guizhou Province who are willing to be acquired by L&L, subject to further due diligence.

Dr. Syd Peng, L&L Director and world renowned mining expert from the US, commented on his planned visit to Guizhou, saying "I am eager to get on the ground and help L&L target quality acquisitions. We will evaluate each mine's geology and mining operations, emphasizing safety and mechanization. Our goal is to apply a US level of standards to China, which will bring long term benefit to the Company and its shareholders.

First Quarter 2012 Results

Results of Operations

Fiscal 2012 First Quarter Summary and Recent Highlights

• Accelerated Guizhou Provincial Consolidation policy creates tremendous growth opportunity for L&L
• CEO, Dickson Lee, meets and receives endorsement from the Vice Governor of Guizhou for L&L to take a leadership role in the provincial coal consolidation process
• L&L signs letters of intent with 14 operating Guizhou mines that collectively produce approximately 3 million tons per year
• L&L enters into a Memorandum of Understanding with Tianjin Fuhao, a fully-owned subsidiary of Tianjin Materials and Equipment Co., and a leader in coal logistics and infrastructure in China
• Revenues and earnings were negatively affected during the last quarter and this quarter due to temporary idling of all company-owned mines. In accordance with the provincial-wide mandate, approximately 1600 mines in Guizhou were temporarily idled. Three of four L&L mines are now back in operation
• Revenues for the first quarter were approximately $36.7 million
• Net income was $3.08 million
• Earnings per share was $0.08 per diluted share
• Operating profit was $4.24 million
• Gross profit was $8.19 million

In this quarter our net revenues decreased to $36.7 million during the three months ended July 31, 2011, down from $55 million during the same period the year before. The decrease was primarily due to the government's temporary slowdown and idling of all mines in our region, coupled with the cyclical low summer season.

The idling of mines and regional shut downs had negative effects across all segments of our business. Revenues from mining operations for the first quarter were $7.3 million. Our washing and wholesale segments were affected by the lack of coal. Revenues from coal washing decreased over the first quarter to $18.98 million and revenues from wholesale operations decreased to $4.46 million. The volume of sales dropped due to decreased supplies of raw coal and fine coal in Yunnan and Guizhou. Coking was also negatively affected, with revenues for the first quarter being $6.64 million.

Our gross profit was margin was reduced to 22%. Mining, which typically has had the highest margin, was impacted most by the idling. Secondly the vast majority of our work force stayed on payroll and spent significant time implementing upgrades to meet increasing safety and regulatory standards.

"Our earnings and revenues were affected across all segments of our business by the idling of our mines during mandatory, but temporary closures and slowdowns issued by the local government," said Ian Robinson, Chief Financial Officer of L&L. "The negative effect on our numbers are temporary and we support the government's stance on increasing accountability and safety in our industry. We continue to work with the local provincial governments to take the lead in increasing the standards of not only safety, but also operational efficiency. We expect that the government will play a major role in supporting consolidation efforts and we look forward to working with them to ensure safe and efficient operations within the region."

Dickson Lee, Chairman and CEO stated, "Continued negative perception on companies who operate in China has slowed our growth plans. However we continue to improve our foothold in the coal industry and have been able to make tremendous strides in positioning ourselves at the forefront of a number of opportunities in South China. We are focused and confident in our position to take a leadership role in the Guizhou coal consolidation process and with the support of the local government, we have been able to sign letters of intent with 14 potential mines that collectively could yield US$500 million in revenues. The next step will be to have Dr. Syd Peng, an L&L Board Member and world-renowned coal expert, lead our acquisition team on a trip through Guizhou to evaluate each potential acquisition.  Dr. Peng is a recognized expert in underground mining in both the U.S. and China and will be able to assist our very strong mining and acquisition team in China to evaluate each mines' management team and mining operations, including mechanization potential, safety, and production expansion capabilities."

Lee continued, "The potential in Guizhou is huge, and going forward I expect we will expend a tremendous percentage of our resources on this potentially game-changing opportunity."

The government took action and issued the provincial-wide temporary closure due to several fatal mine accidents (our mines had no accidents) in South China during the spring. Our Yunnan mines have resumed production, although are undergoing improvements in accordance with the recent regulatory changes. Our Da Ping mine has been approved to resume production and is currently expanding its production capacity. However, our Ping Yi mine remains idle as of July 31, 2011.

Fiscal Year 2011 Financial Results

• Revenues generated in fiscal year 2011 increased to approximately $224 million up from $109 million, in 2010.
• Income from continued operations for fiscal year 2011 increased to approximately $37 million compared to $31 million in 2010.
• Fully diluted earnings per share from continued operations for fiscal year 2011 were approximately $1.21 vs $1.28 in 2010

Dickson Lee, Chairman CEO of L & L, commented: "I am pleased to report that our revenues experienced strong growth, primarily attributable to the execution of our organic expansion plans. In April of 2011, the last month of the fourth quarter, we cooperated with local authorities to slow down mining production to enforce safety standards, which was the primary reason we missed our guidance on net income for this fiscal year. Our results for this fiscal year continue to illustrate our ability to increase the production capacity of our existing operations, conduct accretive acquisitions, such as the DaPing mine, as well as our flexibility to work under increasing government safety requests."

Lee also commented," As the Guizhou coal mining consolidation has started in April, L & L is ready to take on these opportunities and challenges to demonstrate our leadership and prowess in becoming a leader in the China coal industry."

SEATTLE, May 23, 2011 /PRNewswire/ -- L & L Energy, Inc.,  announced today the formation of Yunnan L&L Tai Fung Coal Co. Ltd. ("Tai Fung") in the Yunnan province of China.

SEATTLE, March 28, 2011 /PRNewswire/ -- L & L Energy, Inc. announced that it has entered into a contract to acquire a majority controlling interest (60%) of the DaPing coal mine. The acquisition became effective on March 15, 2011.

The DaPing mine is located in PanXian, Guizhou Province in China. The mine currently produces approximately 150,000 tons of high-quality, low-sulfur metallurgical coal per year and is expanding to 300,000 tons of production capacity, which is expected to be completed in 2012. The Mine is expected to generate an estimated $36 million in annual revenue based on current production capacity and an average coal price of $240 per ton. The Mine is expected to contribute an estimated $11 million in net income attributable to L&L for the fiscal year ending April 30, 2012.

SEATTLE, March 15, 2011 /PRNewswire/ -- L & L Energy, Inc., today announced financial results for its FY Q3 2011 ended January 31, 2011.

• Revenues for the FY Q3 2011 were $65.9 million, an increase of 74% from the $38.0 million reported in the same quarter last year. Sales growth was driven by sustained demand for coal as well as price increases.
• Gross profit grew 33% to $21.4 million, compared to $16 million for FY Q3 2010. Gross margin declined slightly sequentially to 32.5% as compared with 33.5% in the prior quarter and reflects increased levels of coal washing at the expanded Hong Xingwashing facility.
• Operating expense remained steady at nearly $4.9 million. Operating margin increased to 77% from 75%, reflecting the increased sales level.
• Operating income grew 26% to $16.5 million as compared to $13 million in FY Q3 2010. Earnings per share of $0.41 grew 21% as compared to $0.34 in FY Q3 2010.

"Demand for coal in our operating region of Southwest China remains robust," said Dickson Lee, Chairman and CEO of L&L. "We are encouraged by our strong results, our partnership with Bowie Resources in Colorado, and ongoing discussions with the Zhanjiang Port in China. We anticipate sustained demand for our fiscal fourth quarter, driven by ongoing overall economic growth."

Fiscal 2010 Second Quarter

• Total revenue jumped from $24.5 million to $57.4 million compare to last year, approximately 135% growth.
  
  
  • This is due to our acquisition decision.
  • During the three months ended October 31, 2010, our coal mining net sale decreased by $436,423, approximately 4% decrease compared to the three months ended October 31, 2009. This sales decrease was mainly due to increase in intersegment sales from Ping Yi mine to its washing facility.
  • Total intersegment sale was $6.6 million, which was eliminated from our mining revenue.
  • Coal wholesale went up by 48% due to higher coal price and increase volume this year.
  • Coal washing revenue went up sharply in 2010 because we acquired HongXing Coal Washing Facility and established of Ping Yi Coal Washing Plant.
  • Coal Coking revenue increase because we acquired ZoneLin Coal coking facility in 2010 with production capacity of 150,000 tons annually.
     
• Our gross margin went down from 52% to 34% for the period due to two factors. First, expansion into washing and coking are lower margin businesses, but vertical integration increases the overall value of the business and adds stability to the supply chain. Second, expansion of capacity and increases in safety standards on new acquisitions require up front investments.

• Net income attributable to Common shareholders was $11,060,858 vs. $6,946,781.

• Fully diluted EPS was $0.35 vs. $0.29.

L&L Energy Announces Preliminary Second Quarter Fiscal Year 2011 Financial Results 

• Record Revenue of $57.4 million in Q2 Increased 135% Year-over-Year and 3.8% Quarter-over-Quarter
• Gross Profit of $19.2 million increased 135% Year-over-Year and 3.8% Quarter-over-Quarter
• Record Net Income of $12.7 million
• Earnings per Share of $0.35 increased 21% Year-over-Year
• Doubled Production for two Acquired Mines to 300,000 Tons
• Company Entered into Agreement to Provide Loan to High Quality U.S.-Based Bowie Coal Mine

"We are very pleased with our continued strong performance in the second quarter," said Dickson Lee, Chairman and CEO of L&L. "Our continued focus on the improvement of our acquired operations has enabled us to more than double revenue compared to last year's quarter. Additionally, our agreement to provide bridge financing to the Bowie Mine is an exciting first step that extends the company onto the global stage. 

L & L Energy reported preliminary results for its fiscal 2011 first quarter:

• Revenues for the first quarter increased approximately 336% to $55.3 million, compared with revenues of $12.7 million in the same period a year ago.
  
• Gross profit for the first quarter increased to $18.6 million, up approximately 207% compared with $6.1 millionin the same period a year ago.
  
• Net income increased approximately 306% year-over-year to $10.9 million, compared with $2.7 million in the same period a year ago.
  
• Earnings per share for the quarter totaled $0.36 per diluted share, an increase of approximately 177% compared with $0.13 in the same period a year ago.

"We are delighted to be able to announce such exceedingly positive preliminary results for our first quarter," commented Dickson Lee, Chairman and CEO of L&L. "We continue to experience the accretive effects of the four acquisitions we made last year, as well as the benefits of operational improvements at those facilities. China's government recently reiterated its commitment to consolidate the coal industry and support mergers and acquisitions of smaller mines, which form the crux of our strategic expansion. We look forward to sharing our full quarterly results with our shareholders shortly.  We expect strong continued growth for the rest of the year as we continue to execute our core businesses, integrate our recent acquisitions, and seek out new growth avenues."

GeoTeam note:

According to analysts estimates, LLEN has one more quarter left of above average EPS growth, before EPS growth is forecast to slow for a few quarters.

Source: Reuters

We have referenced this issue in the past. Please be aware that 2011 company EPS guidance of $1.61 is greater than analyst estimates.  Also keep in mind that LLEN goal is to pursue accretive acquisitions.

Fiscal Year 2010 Financial and Operating Highlights

(Pending Finalization of Audit)

Management believes that:

• Revenues generated in fiscal year 2010 increased to approximately $109 million, up from $41 million in 2009, representing a 166% increase.
• Operating income for fiscal year 2010 doubled to approximately $39 million, compared to $19 million in 2009
• Net income for fiscal year 2010 tripled to approximately $30 million, compared with $10 million in 2009
• Fully diluted earnings per share for fiscal year 2010 were approximately $1.17, up from 2009 EPS of $0.46.

Dickson Lee, Chairman and CEO of L & L, commented: "We are thrilled to report such dramatic growth in our fiscal year April 30, 2010 results.  We believe our financial performance in 2010 showcases the effectiveness of our aggressive growth strategy.  We have seen strong organic growth this year, coupled with an unprecedented number of successful acquisitions, which resulted in sales growth of 2 1/2 times.  The integration of these new additions into our existing operations will continue to benefit the Company. We will continue to look for other strategic actions to create the best possible value for our shareholders. We expect continued high demand for our products in the long-term, as approximately 80% of China's electricity generation is fueled by coal. We look forward to fiscal year 2011 with enthusiasm, and will share any new developments as they materialize."

Financial Outlook for Fiscal Year 2011

Management reaffirms previously stated guidance of $218 million in revenue and $46 million in net income for fiscal year 2011 ended April 30, 2011. These organic growth projections translate to EPS of $1.61 based on 29 million shares outstanding today. This does not include Company's potential acquisitions. Revenue and net income guidance projections for fiscal year 2011 represent year-over-year growth of 100% and 56%, respectively, from 2010.

The Company expects

• Revenue of $218 million for the 2011 fiscal year ending April 30, 2011 which represents growth of approximately 102% over previously released 2010 guidance of $108.1 million.
• Expects net income after tax and minority interest to grow from an estimated $28.1 million in 2010 to $46.7 million in 2011 for an increase of 66%. The Company is
• Earnings per share of $1.33 for 2011, an increase of 41% over previously released 2010 guidance EPS of $0.94 for the fiscal year 2010.

Management believes revenues and earnings would exceed the previously provided guidance released in March 2010. Management said that it expects fiscal 2010 annual revenue ended on April 30, 2010 to be higher than $108.1 million. The Company also believes net income would exceed the previously announced $28.1 million, or $0.94 EPS, on a GAAP basis, subject to final audit.

"We have two important elements working in our favor: first, demand for coal in the world's fastest growing economy, China, continues to exceed supply; and secondly, the PRC's mandate that smaller coal mines make infrastructure investments to improve efficiency and safety or face being shut down. With the mandate in process, we intend to acquire more profitable coal mines and help comply with the PRC mandate, that will bring in significant revenue and profits."

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b Guidance is subject to funding requirements.