L&L Energy, Inc. (LLEN)

F1Q2013 Results Earnings Call

September 11, 2012 11:30 AM ET


Sean Morishige - Assistant

Ian Robinson - Chief Financial Officer

Clayton Fong - Vice President, U.S. Operations


Don Sinsabaugh - Fulcrum Securities

Steve Anderson - Private Investor

Jack Casey - Private Investor

Gary Scott - Private Investor



Good day, ladies and gentlemen. And welcome to the L&L Energy Incorporated First Quarter Fiscal Year 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions)

As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Sean Morishige. Sir, you may begin.

Sean Morishige

Good everybody. With me today is L&L’s Chief Financial Officer, Ian Robinson; and Vice President of U.S. Operations, Clayton Fong.

Before I turn the call over to Mr. Fong, may I remind our listeners that in this call management’s prepared remarks contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions.

Information regarding forward-looking statements, except for historical information contained herein are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve known and unknown risks, as well as uncertainties, which may cause actual results in future periods to differ materially from forecasted results.

As results may differ from those discussed today, and therefore we refer you to the more detailed discussion of the risks and uncertainties in the company’s filing with the Securities and Exchange Commission.

It’s now my pleasure to turn the call over to L&L’s Vice President of U.S. Operations, Clayton Fong. Mr. Fong, please go ahead.

Clayton Fong

Thank you, Sean, and good morning to everyone. We had a good quarter. So I’d like to share with you some of the results and discuss some recent developments. Production, revenues and earnings per share are up both year-over-year and quarter-over-quarter. We expect further improvement on the top and bottom line as seasonal coal prices go up from the summer lows and Weishe mine ramps up production.

We continue to capitalize on the consolidation opportunity in Guizhou province. The potential to acquire mine such as the Yunnan Energy Mine that meet our safety standards, scalability and operational efficiencies could be a major driver of sales growth moving forward. We are pleased with the progress thus far toward becoming a consolidator in Guizhou.

In parallel, we’re making great strides in expanding our wholesaling capabilities. Our wholesale segment experienced significant growth on the both year-over-year and quarter-over-quarter basis.

The relationships we secured with Datang with China Construction Bank, AVIC Sichuan Coal Logistics during the first quarter, as well as more recent acquisition of sales focus GuangYeh Coal further strengthens our capabilities in the wholesale market. Overall, I believe this segment is attractive and poised for rapid expansion in the quarters ahead.

I’d like to thank our shareholders for their continued support. And with that, I’d like to turn the call over to our Chief Financial Officer, Ian Robinson, will give a details of our fiscal year financial results.

Ian Robinson

Thank you, Clayton. Good morning for all those on the call today. We are pleased to report another quarter of solid improvement. This confirms our expectations that we are turning the corner from the challenges of the previous year. Our product of 149,000 tons represents year-over-year growth of 116% and quarter-on-quarter, an increase of 38% from the fourth quarter.

Our total sales for the quarter were $45.3 million and this was broken up into mining $15.5 million, washing $17.9 million, wholesale $12.3 million, coking $1.7 million.

Revenues continuing -- from continuing operations increased 26% year-over-year to $45.3 million in the first quarter of the fiscal year 2013. On quarter-on-quarter basis revenues from continuing operations increased 11% was $41 million last quarter.

Wholesale revenues increased to $174 million -- 174% year-over-year to $12.2 million for the first quarter for the fiscal year 2013. On a quarter-over-quarter basis wholesale revenues increased 94%, compared with $6.3 million last year.

Net income attributable to L&L increased to 159% year-over-year to $6.2 million for the first quarter of the fiscal year 2013 and increased 48% from $4.2 million in the fourth quarter.

Important issue is tangible book value per share from -- applicable to L&L is $4.7 and as at 31st of July 2012, earnings per diluted share were $0.17 for this quarter.

Clayton, would you like to make a few further comments.

Clayton Fong

Thanks Ian for the review of the financial data. Before moving onto the Q&A, I’d really just like to briefly summarize. We’re quite pleased with our accomplishments during the quarter and we really believe we’ve got the stage set for accelerated growth in our mining and wholesaling segments.

I’m confident our strong start in the first quarter is just beginning of 2013 and will be a great year for L&L. Just to summarize really quickly, production is up. Earnings are up and the prices are firming and we are ramping our production in Weishe. Those are all good signs that really look forward -- look well forward from here on now.

With that, I’ll turn things back over to the operator to begin the Q&A session.

Question-and-Answer Session

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