American Lorain Corporation Reports Third Quarter Fiscal Year 2015 Financial Results

- Q3 Operating income increased by 47.86% YOY;

- Q3 Net income increased by 157.24% YOY;

- Total sales reached $120.79 million for the first nine months of FY 2015

LINYI, China, Nov. 20, 2015 /PRNewswire/ -- American Lorain Corporation (NYSE MKT: ALN) (the "Company" or "American Lorain"), an international processed snack foods, convenience foods, and frozen foods company based in Shandong Province, China, today announced financial results for the third quarter ended September 30, 2015.

Third Quarter FY 2015 Highlights vs. the Comparable Period of 2014

Revenue decreased by $7.58 million to $47.68 million for the third quarter FY 2015 compared to the prior year period;

Gross profit of $8.29 million for the third quarter FY 2015 as compared to $9.16 million of the same period in 2014;

Gross margin of 17.39% for the third quarter of FY 2015 as compared to 16.57% in comparison to the same period in 2014;

Operating income of $4.07 million an increase of 47.86% in comparison to $2.75 million of the same period in 2014;

Net income of $1.88 million or $0.06 per fully diluted share, compared with net income of $0.73 million or $0.03 per fully diluted share of the same period in 2014;

Management Comments

"We were so glad to see both our operating income and net income increased by 48% YOY and 157% YOY, respectively. During the third quarter, the Company made tremendous progresses for our newly launched Youtiao product. And the Company was also actively moving forward with new products for China breakfast market along with the other business segment. Our offices all around the country were working very closely with local dealers to promote all kinds of the product," Said Mr. Chen Si, Chairman and CEO of American Lorain Corporation, "The Company continues to expand new sales channels to grow its customer base and increase its revenues. We will continuously devote ourselves to deliver the optimal returns to our shareholders in the future."

Third Quarter 2015 Financial Results
Revenue and Gross Profit		Stated in US Dollars
	3Q15	3Q14	Y-O-Y%
Revenue	47,681,598	55,264,211	-13.72%
Gross Profit	8,290,041	9,156,591	-9.46%
Gross Margin	17.39%	16.57%	0.82%

Revenue for the three months ended September 30, 2015 dropped by $7.58 million, or 13.72%, as compared to the three months ended September 30, 2014, it is principally as a result of a question raised by CTCPA, with respect to the origin of canned chestnuts sold by Conserverie Minerve ("Minerve") and Minerve chestnuts come from a Chinese cultivar, while CTCPA stated that only chestnuts based on the European or Japanese cultivars can be used in canned chestnut products sold in France according to CTCPA policies. The Company has since shipped chestnuts based on the Japanese cultivar grown in China to Minerve.

Gross Margin was 17.39% for the three months ended September 30, 2015 as compared to 16.57% for the same period of 2014, it was primarily due to the fact that higher-margin products contributed more revenue in current quarter than in the same period of last year.

Operating Income/Expenses		Stated in US Dollars
	3Q15		3Q14	Y-O-Y%
Operating Expenses	4,224,141		6,406,721	-34.07%
Operating Income	4,065,900		2,749,870	47.86%
Operating Margin	8.53%		4.98%	3.55%
Selling and marketing expenses	1,875,739		3,044,877	-38.40%
General and administrative expenses	2,348,402		3,361,844	-30.15%
	4,224,141		6,406,721	-34.07%

Selling and Marketing Expenses. Our selling and marketing expenses decreased by approximately $1.17 million, or 38.40%, to $1.88 million for the three months ended September 30, 2015. The overall decrease was mainly due to the decrease of personnel costs and transportation costs, which was in line with the decline of net revenue. Management actively worked to control sales related expenses in accordance with market and sales conditions.

General and Administrative Expenses. Our general and administrative expenses decreased by approximately $1.01 million, or 30.15%, to $2.35 million for the three months ended September 30, 2015. As our revenues decreased, we prepared our budget to strictly control our expenses incurred. The main items leading to the decrease of our expenses are our staff welfare expense and office supply expense.

The operating income increased by 47.86%, or $1.32 million, to approximately $4.07 million YOY. It was mainly due to the fact that the operating expense dropped by approximately 34.07% YOY to 4.22 million for the three months ended September 30, 2015.

Net Income

Net income increased by approximately $1.15 million, or 157.24%, to $1.88 million for the three months ended September 30, 2015. The increase was attributable to decrease of operating expenses in the three months ended September 30, 2015 as compared to the three months ended September 30, 2014.

As of September 30, 2015, we had cash and cash equivalents of approximately $31.1 million. The Company's total current assets as of September 30, 2015, were $197.4 million and total current liabilities were $105.4 million, which resulted in a positive net working capital of $92.0 million.

AMERICAN LORAIN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
(Stated in US Dollars)

				*(Audited)*
		At September 30,		At December 31,
ASSETS		2015		2014
Current assets
Cash and cash equivalents	$	31,145,108	$	30,279,988
Restricted cash		14,262,450		4,195,114
Trade accounts receivable		41,142,978		58,806,466
Other receivables		12,670,630		8,183,485
Inventory		58,002,702		51,648,160
Advance to suppliers		33,473,757		42,479,437
Prepaid expenses and taxes		2,887,635		2,758,334
Security deposits and other assets		3,821,959		3,578,514
Total current assets	$	197,407,219	$	201,929,498

Non-current assets
Investment		3,284,719		3,258,125
Property, plant and equipment, net		84,823,722		89,148,530
Construction in Progress, net		13,866,188		14,340,145
Intangible assets, net		16,652,212		17,537,868
Goodwill		9,955,983		10,327,553
TOTAL ASSETS	$	325,990,043	$	336,541,719

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term bank loans	$	36,839,015	$	41,645,100
Notes payable		3,053,465		6,005,430
Convertible promissory note		-		3,500,000
Long-term debt – current portion		34,925,487		19,226,094
Accounts payable		18,680,167		10,071,009
Taxes payable		3,511,059		4,320,470
Accrued liabilities and other payables		5,655,640		4,153,054
Related party payable		1,809,493		2,433,300
Deferred tax liabilities		19,204		70,545
Customers deposits		412,954		61,428
Capital lease – current portion		465,916		-
Total current liabilities	$	105,372,400	$	91,486,430

AMERICAN LORAIN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
(Stated in US Dollars)

				*(Audited)*
		At September 30,		At December 31,
		2015		2014

Long-term liabilities
Long-term bank loans		567,112		2,707,587
Notes payable and debenture		11,009,160		32,581,249
Capital lease		831,595		-
TOTAL LIABILITIES	$	117,780,267	$	126,775,266

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively		-		-
Common Stock, $0.001 par value, 200,000,000 shares authorized; 38,259,490 shares and 34,916,714 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively		38,259		34,917
Additional paid-in capital		57,844,419		53,853,089
Statutory reserves		23,038,917		23,038,917
Retained earnings		100,340,007		99,021,555
Accumulated other comprehensive income		15,838,394		20,796,420
Non-controlling interests		11,109,780		13,021,555

TOTAL STOCKHOLDER'S EQUITY	$	208,209,776	$	209,766,453

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	325,990,043	$	336,541,719

AMERICAN LORAIN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2015 AND 2014
(Stated in US Dollars)

		For the three months period				For the nine months period
		ended September 30,				ended September 30,
		2015		2014		2015		2014

Net revenues	$	47,681,598	$	55,264,211	$	120,786,813	$	119,469,809
Cost of revenues		39,391,557		46,107,620		101,073,478		96,582,685
Gross profit	$	8,290,041	$	9,156,591	$	19,713,335	$	22,887,124

Operating expenses
Selling and marketing expenses		1,875,739		3,044,877		5,037,527		5,783,319
General and administrative expenses		2,348,402		3,361,844		9,530,701		6,756,226
		4,224,141		6,406,721		14,568,228		12,539,545

Operating income	$	4,065,900	$	2,749,870	$	5,145,107	$	10,347,579

Government subsidy income		941,545		401,443		1,947,630		2,209,814
Interest income		116,451		94,186		391,056		151,510
Other income		87,371		779,644		649,045		935,198
Other expenses		(347,684)		(74,946)		(850,313)		(220,456)
Interest expense		(2,017,820)		(2,553,415)		(5,620,812)		(6,332,249)


Earnings/(loss) before tax	$	2,845,763	$	1,396,782	$	1,661,713	$	7,091,396

Income tax		(967,650)		(666,673)		(2,255,036)		(2,378,889)

Net income/(loss)	$	1,878,113	$	730,109	$	(593,323)	$	4,712,507

Other comprehensive income/(loss):
Foreign currency translation gain/(loss)		(6,063,073)		82,660		(4,958,027)		(2,020,740)
Comprehensive Income/(Loss)		(4,184,960)		812,769		(5,551,350)		2,691,767

Net income/(loss) attributable to:
-Common stockholders	$	2,263,262	$	1,179,001	$	1,318,452	$	4,909,926
-Non-controlling interest		(385,149)		(448,892)		(1,911,775)		(197,419)
	$	1,878,113	$	730,109	$	(593,323)	$	4,712,507

Earnings/(loss) per share
- Basic	$	0.06	$	0.03	$	0.04	$	0.14
- Diluted	$	0.06	$	0.03	$	0.04	$	0.14

Weighted average shares outstanding
- Basic		38,259,490		34,745,285		36,727,504		34,873,699
- Diluted		38,259,490		34,745,285		36,727,504		34,873,699

AMERICAN LORAIN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2015 AND 2014
(Stated in US Dollars)

		For the three months period				For the nine months period
		ended September 30,				ended September 30,
		2015		2014		2015		2014
Cash flows from operating activities
Net income		1,878,113		730,109		(593,323)		4,712,507
Stock compensation expense		-		366,000		987,500		366,000
Depreciation of fixed assets		1,023,350		1,093,167		3,037,385		2,926,095
Amortization of intangible assets		97,727		485,916		289,497		672,370
(Increase)/decrease in accounts and other receivables		(12,837,631)		(17,077,118)		11,063,323		2,262,344
(Increase)/decrease in inventories		8,567,805		(15,298,226)		(1,034,711)		(35,514,753)
Decrease/(increase) in prepayment		(96,065)		(178,964)		(230,948)		(2,488,951)
Decrease/(increase) in deferred tax asset		(12,351)		(52)		(38,327)		1,263
Increase/(decrease) in accounts and other payables		7,629,986		27,357,598		12,887,010		28,019,912
Increase/(decrease) in related party payable		40,442		-		(397,660)		-
Net cash (used in)/provided by operating activities		6,291,376		(2,521,570)		25,969,746		956,787

Cash flows from investing activities
Payment for acquisition of Athena Group		-		2,100,000		-		-
Purchase of plant and equipment		(1,512,795)		(5,152,779)		(1,905,906)		(6,167,956)
Disposal/(Purchase) of intangible assets		444		(2,064,247)		(56,813)		(1,935,326)
(Increase)/decrease in restricted cash		(4,655,012)		198,008		(10,529,664)		(2,444,287)
(Increase)/decrease in deposit		(62,971)		(8,427,528)		(606,921)		(8,403,929)
Sales of investments		(159,615)		-		-		-
Net cash used in investing activities		(6,389,949)		(13,346,546)		(13,099,304)		(18,951,498)

Cash flows from financing activities
Repayment of bank borrowings		(4,241,287)		(505,914)		(7,731,253)		(8,970,772)
Proceeds from bank borrowings and debentures		12,257,115		7,563,144		16,388,949		21,867,129
(Repayment)/proceeds of long-term borrowings and notes payable		(14,225,110)		4,605,638		(21,109,957)		11,354,924
Net cash provided by/(used in) financing activities	$	(6,209,282)	$	11,662,868	$	(12,452,261)	$	24,251,281

Net Increase/(decrease) of cash and cash equivalents		(6,307,855)		(4,205,248)		418,181		6,256,570

Effect of foreign currency translation on cash and cash equivalents		185,641		2,777,136		446,939		673,737

Cash and cash equivalents–beginning of period		37,267,322		42,215,612		30,279,988		33,857,193

Cash and cash equivalents–end of period	$	31,145,108	$	40,787,500	$	31,145,108	$	40,787,500

Supplementary cash flow information:
Interest received	$	116,451	$	94,186	$	391,056	$	151,510
Interest paid	$	554,080	$	1,482,803	$	2,815,173	$	3,243,753
Income taxes paid	$	788,965	$	961,838	$	1,973,428	$	4,003,028

About American Lorain Corporation

American Lorain Corporation ALN is China's leading chestnut, convenience food product and frozen food product manufacturer. The company currently has 8 world-class production facilities in China and Europe, which can supply more than 200 kinds of product categories. For domestic trade, it has more than thirty offices, with its sales network covers large cities, medium-size cities and coastal open cities all over China. Regarding to international trade, the products are exported to more than 20 countries and regions, such as Japan, South Korea, Taiwan, Southeast Asia and Europe, which makes our company enjoys a high reputation in the international market. For more information on American Lorain Corporation, please visit: http://en.usalr.cn/index.html

Forward Looking Statements

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. All statements other than statements of historical fact in this press release are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.

Contact:
Johnny Zhou
Tel.: +86 13917303401
E-mail: johnny.zhou@usalr.cn

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SOURCE American Lorain Corporation

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