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AMERICAN LORAIN CORPORATION REPORTS 2011 FIRST QUARTER FINANCIAL RESULTS

Company to Hold Conference Call Tuesday, May 17, 2011, at 9:00 a.m. ET -
Accompanying Slide Presentation at www.americanlorain.com

JUNAN COUNTY, China, May 16, 2011 -- American Lorain Corporation (NYSE Amex: ALN) ("American Lorain" or the "Company"), an international processed snack foods, convenience foods, and frozen foods company based in the Shandong Province, China, today announced financial results for its first quarter ended March 31, 2011.

Q1 2011 Operational Highlights
• Each product segment increased by over 16% in sales year-over-year
• Convenience food segment continued to grow as a percent of total revenue
• Company’s international sales continued to improve, increasing 49.2%

Q1 2011 Financial Highlights
• Total revenues of $30.4 million, an increase of 24.0% year over year
• Gross margins decreased slightly to 22.2%, compared to 23.3% year-over-year and 22.7% at 12/31/2010
• Net income attributable to common stockholders of $2.4 million, up 30.4% year-over-year
• Diluted earnings per share of $0.07
• Operating cash flow of $3.8 million for the period ended March 31, 2011

2011 Operations and Market Overview

Sales by categories of product consisted of the following as of March 31, 2011 and 2010:

Category   3/31/2011     3/31/2010     % Increase  
Chestnut $  15,050,594   $  12,960,561     16.1%  
Convenience food   10,003,660     7,089,176     41.1%  
Frozen food   5,395,552     4,510,479     19.6%  
Total $  30,449,805   $  24,560,216     23.9%  

Categories of product as a percentage of sales as of March 31, 2011 and 2010:

Category   3/31/2011 % of Total Revenues     3/31/2010 % of Total Revenues     % Difference  
Chestnut   49.4%     52.8%     (3.4% )
Convenience food   32.9%     28.9%     4.0%  
Frozen food   17.7%     18.3%     (0.6% )
Total   100%     100%        

American Lorain’s Chairman and CEO, Mr. Si Chen, stated, “We are extremely pleased with the performance of the Company in the first quarter. We believe the largest contributor to our growth in the coming months will be the continued expansion of our convenience foods segment, as was the case in the first quarter. We continue to focus on both diversifying our lines to include a wider variety of food products and leveraging our known brand name among different segments, as evidenced by our expansion in the instant rice market.”

“Although the first quarter is seasonally one of our weakest due to the chestnut business, American Lorain’s highly competitive cost structure, coordinated sales and marketing platform, and continued diverse food operations allowed us to deliver another solid quarter. Over the past two years, American Lorain has made significant improvements to the balance sheet and cash generation. We reported $3.8 million in operating cash flow during the period. We believe that the Company is appropriately capitalized to grow organically in the coming months.”



American Lorain Corporation Page 2
May 16, 2011  

2011 First Quarter Financial Review

American Lorain Corporation  
Selected Financial Statements in USD ($ in 000s)  
    3 months ended     3 months ended     % Increase  
    3/31/2011     3/31/2010        
                   
Sales $ 30,449,805   $ 24,560,216     24.0%  
Cost of Revenues   ($23,674,895 )   ($18,836,126 )   25.7%  
Gross Profit $ 6,774,910   $ 5,724,090     18.4%  
           Gross Profit Ratio   22.2%     23.3%        
Income from operations $ 3,936,277   $ 3,335,286     18.0%  
                   
Earnings before tax $ 3,463,759   $ 2,690,841     28.7%  
Net income attributable to common stockholders $ 2,426,288   $ 1,860,531     30.4%  
                   
Diluted earnings per share $ 0.07   $ 0.07     0.0%  
Weighted average diluted shares outstanding   35,155,958     26,730,651     31.5%  
  • The Company reported sales for the 2011 first quarter of $30.4 million, an increase of 24.0% compared to $24.6 million in the first quarter of 2010.
  • Gross profit increased 18.4% to $6.8 million from $5.7 million in the prior-year period. Gross margin declined slightly to 22.2% for the three months ended March 31, 2011, from 23.3% for the prior-year period. The decrease is primarily due to a higher percentage of sales from the American Lorain’s convenience foods, which typically sell at a slightly lower margin than the Company’s chestnut business. However, American Lorain expects that its margins will remain relatively stable and in the 20-25% range in the coming months.
  • Income from operations during the period was $3.9 million, an increase of 18.0% from $3.3 million reported in the prior year period. Operating margin for the 2011 first quarter was 12.9% compared with 13.6% in the prior year.
  • The Company had net income attributable to common shareholders for the fourth quarter of 2010 of $2.4 million, or $0.07 per diluted share based on 35.2 million diluted shares outstanding, compared to $1.9 million, or $0.07 per diluted share based on 26.7 million diluted shares outstanding in the prior-year period. The Company’s net margin for the period improved to 8.0% from 7.5% in the prior year period, largely because of lower interest expenses.

Balance Sheet Highlights and Financial Position

(in millions)   3/31/2011     12/31/2010     % Increase  
Cash and Cash Equivalents $  18.6   $  12.7     46.5%  
Restricted Cash   4.9     2.3     113.0%  
Working Capital   70.8     57.4     23.4%  
Total Liabilities   47.3     45.6     3.6%  
Stockholders’ Equity   133.4     129.3     3.2%  

The Company had a book value per share at March 31, 2011 of $3.87.

Outlook for 2011

Mr. Chen concluded, “Chestnut sales (both domestically and internationally) have remained strong throughout the first four months of the year when compared to last. While it is always a challenge to precisely assess customer demand for our products, we are optimistic about fiscal 2011 based on what we are seeing thus far. The efforts of our management group in all three business segments are producing greater efficiencies in both the operating infrastructure and costs control which will help us as we continue to grow. We are in a very basic business, supplying easy, ready-to-eat food to individuals across the globe. In tough economic times, people tend to cook at home by shopping at their local grocer. This is our core business and, along with our international presence, we should be better positioned than many of our local competitors in this regard. We are optimistic about the outlook of our market growth in China and abroad because of growing demand, improving brand recognition, and balanced supply. We will continue to execute on the Company's core strategies of driving growth through each of our business segments.”



American Lorain Corporation Page 3
May 16, 2011  

Conference Call
The Company will also discuss these results in a conference call tomorrow morning (May 17, 2011) at 9:00 a.m. ET.

Participant Dial-In Numbers:
(In the United States):      877-407-8031
(International):                   201-689-8031

Webcast
The call will also be simultaneously broadcast over the Internet. To listen to the live webcast, please go to http://www.americanlorain.com and click on the conference call link, or go directly to: http://www.investorcalendar.com/IC/CEPage.asp?ID=164281. The Company will also have an accompanying slide presentation available in PDF format on its website prior to the conference call.

Phone Replay Information
A recorded replay of the call will be available until 11:59 p.m. ET on May 23, 2011. Listeners may dial:
(In the United States):      877-660-6853
(International):                   201-612-7415

The following replay passcodes are both required for playback:
Account #: 286
Conference ID #: 371500

About American Lorain Corporation
American Lorain Corporation products include chestnut products, convenience food products and frozen food products. The Company currently sells over 240 products to 26 provinces and administrative regions in China as well as to 42 foreign countries. The Company operates through its five direct and indirect subsidiaries and one leased factory located in China. For further information about American Lorain Corporation, please visit the Company's website at http://www.americanlorain.com.

Forward-Looking Statements
This press release contains certain "forward-looking statements" that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to, the Company's ability to obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems, political and economic factors in the PRC, compliance requirement of laws and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



American Lorain Corporation Page 4
May 16, 2011  

  Investor Relations:
For more information, please contact: The Equity Group Inc.
At the Company: Katherine Yao
American Lorain Corporation Account Executive
Mr. David She, CFO +86- 10 6587 6435 / kyao@equityny.com
+86-10 8411 3393  
david.she@americanlorain.com Adam Prior
Web: http://www.americanlorain.com Vice President
  (212) 836-9606 / aprior@equityny.com



American Lorain Corporation Page 5
May 16, 2011  

AMERICAN LORAIN CORPORATION
 
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2011 and 2010
(Stated in US Dollars)
 
    March 31,     March 31,  
    2011     2010  
             
Net revenues $  30,449,805   $  24,560,216  
Cost of revenues   (23,674,895 )   (18,836,126 )
      Gross profit $  6,774,910   $  5,724,090  
             
Operating expenses            
Selling and marketing expenses   (1,362,686 )   (1,372,352 )
General and administrative expenses   (1,475,947 )   (1,016,452 )
    (2,838,633 )   (2,388,804 )
             
Operating income $  3,936,277   $  3,335,286  
             
Government subsidy income   293,093     181,421  
Interest income   2,475     2,804  
Other income   44,609     119,277  
Other expenses   (159,572 )   (27,523 )
Interest expense   (653,123 )   (920,424 )
    (472,518 )   (644,445 )
             
Earnings before tax $  3,463,759   $  2,690,841  
             
Income tax   (895,868 )   (671,992 )
             
Net income $  2,567,891   $  2,018,849  
Net income attributable to:            
             
-Common stockholders $  2,426,288   $  1,860,531  
-Non-controlling interest   141,603     158,318  
  $  2,567,891   $  2,018,849  
             
             
Earnings per share            
 - Basic $  0.07   $  0.07  
 - Diluted $  0.07   $  0.07  
             
Weighted average shares outstanding            
 - Basic   34,419,709     26,075,413  
 - Diluted   35,155,958     26,730,651  




American Lorain Corporation Page 6
May 16, 2011  
 
AMERICAN LORAIN CORPORATION
CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 2011 AND DECEMBER 31, 2010
             
          (Audited)  
    At March 31,     At December 31,  
ASSETS   2011     2010  
   Current assets            
       Cash and cash equivalents $  18,603,272   $  12,730,626  
       Restricted cash   4,858,780     2,308,898  
       Short term investment   7,794,153     9,447,585  
       Trade accounts receivable   21,835,538     33,226,612  
       Other receivables   1,976,234     1,492,850  
       Inventories   38,730,930     29,807,198  
       Advance to suppliers   7,467,094     7,744,976  
       Prepaid expenses and taxes   949,956     434,061  
       Deferred tax asset   104,689     103,713  
       Security deposits and other Assets   628,998     693,858  
              Total current assets $  102,949,644   $  97,990,377  
             
   Non-current assets            
       Property, plant and equipment, net   72,782,827     72,095,007  
       Land use rights, net   4,884,453     4,877,438  
       Deposit   15,878     20,297  
TOTAL ASSETS $  180,632,802   $  174,983,119  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
             
       Short-term bank loans $  16,139,139   $  25,164,469  
       Long-term debt – current portion   220,998     218,935  
       Notes payable   6,106,777     4,249,977  
       Accounts payable   5,468,206     6,284,532  
       Taxes payables   1,248,383     3,266,502  
       Accrued liabilities and other payables   1,780,060     1,335,947  
       Customers deposits   1,180,590     89,370  
              Total current liabilities $  32,144,154   $  40,609,732  
             
   Long-term liabilities            
       Long-term debt   15,126,807     5,030,930  
             
TOTAL LIABILITIES $  47,270,960   $  45,640,662  
             
STOCKHOLDERS’ EQUITY            
       Preferred Stock, $.001 par value, 5,000,000 shares authorized; 0 
              shares issued and outstanding at March 31, 2011 and 
              December 31, 2010, respectively




-






-


             
       Common stock, $0.001 par value, 200,000,000 shares authorized; 
              34,419,709 and 34,419,709 shares issued and outstanding as 
              of March 31, 2011 and December 31, 2010, respectively

34,420

34,420
             
   Additional paid-in capital   52,545,183     52,371,481  
   Statutory reserves   12,060,229     11,340,739  
   Retained earnings   50,395,173     48,688,375  
   Accumulated other comprehensive income   10,753,537     9,475,745  
   Non-controlling interests   7,573,300     7,431,697  
             
TOTAL STOCKHOLDER’S EQUITY $  133,361,842   $  129,342,457  
TOTAL LIABILITIES AND            
STOCKHOLDER’S EQUITY $  180,632,802   $  174,983,119  



American Lorain Corporation Page 7
May 16, 2011  


AMERICAN LORAIN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(Stated in US Dollars)

    March 31,     March 31,  
    2011     2010  
Cash flows from operating activities            
Net income $  2,567,891   $  2,018,849  
       Stock and share based compensation   173,702     249,006  
       Depreciation of fixed assets   483,601     365,569  
       Amortization of intangible assets   44,886     35,720  
       Write down of short-term investments   44,909     -  
       (Increase)/decrease in accounts & other receivables   11,998,911     4,089,021  
       (Increase)/decrease in inventories   (8,923,732 )   (9,473,698 )
       Decrease/(increase) in advance to suppliers and prepayment   (238,013 )   (238,115 )
       Decrease/(increase) in deferred tax asset   (977 )   -  
       Increase/(decrease) in accounts, tax and other payables   (2,390,331 )   (301,956 )
       Net cash (used in)/provided by operating activities   3,760,847     (3,255,604 )
             
Cash flows from investing activities            
     Purchase of plant and equipment   (791,155 )   (427,535 )
     Payment of construction in progress   (380,266 )   -  
     Proceeds from short-term investments   1,698,341     22,227  
     (Increase)/decrease in restricted cash   (2,549,882 )   181,835  
     Payments for the purchase of land use rights   (51,902 )   (14,887 )
     Payments for security deposits   69,279     -  
     Net cash used in investing activities   (2,005,585 )   (238,360 )
             
Cash flows from financing activities            
   Repayment of notes   (1,196,589 )   -  
   Proceeds from issuance of notes   3,053,390     -  
   Proceeds from bank borrowings   11,449,469     17,853,746  
   Repayment of bank borrowings   (10,376,859 )   (17,961,100 )
   Net cash provided by/(used in) financing activities $  2,929,411   $  (107,354 )
             
Net Increase/(decrease) of Cash and Cash Equivalents   4,684,673     (3,601,318 )
             
Effect of foreign currency translation on cash and cash equivalents   1,187,973     19,450  
             
Cash and cash equivalents–beginning of year   12,730,626     12,111,532  
             
Cash and cash equivalents–end of year $  18,603,272   $  8,529,664  
             
Supplementary cash flow information:            
         Interest received $  2,475   $  2,804  
         Interest paid $  653,123   $  909,715  
         Income taxes paid $  2,028,968   $  1,839,950