L & L Energy (NASDAQ:LLEN)

2011 Fiscal First Quarter:

• Shunda Mining Company acquisition is taken off the table.  During the LLEN's due diligence process, management spotted safety record issues that would have increased business risk.
  
• Assured investors that the company is evaluating additional accretive acquisition targets that could help exceed financial guidance; Believes a transaction will be consummated before the end of 2010.
  
• Reaffirmed that company guidance does not include acquisitions.   
  
• Addressed sequential decline in gross margins: The company continues to diversify its business and reduce overall business risk. Part of this strategy includes ramping up its coal washing business which carries less margin than direct mining operations.  Management also noted that the company has made some investments that may benefit margins going forward.
  
• Vertical integration strategy and emphasis on being a service provider gives it pricing power.
  
• Financing goals: Appears that the company will use debt over equity in the current market environment.
  
• L & L Energy has strengthened its internal control procedures.
  
  
  • Hired internal auditors and a CPA from Arthur Anderson.
  • Will continue to upgrade professional staff.
  • Contemplating retention of a new auditor.