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. 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 18^th, 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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