American Lorain Corporation Reports Third Quarter Fiscal Year 2015 Financial Results

2015-11-20

LINYI, ChinaNov. 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 (NYSE: 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 JapanSouth KoreaTaiwanSoutheast 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 

SOURCE American Lorain Corporation

Related Links

http://www.americanlorain.com