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Summary

  • Q2 EPS, $0.06; H1 EPS, $0.11.
  • My opinion has changed from buy to sell.
  • There is still a lack of communication.

This year I already wrote two articles about American Lorain (NYSEMKT:ALN). The first one was in January entitled: American Lorain An Undervalued Opportunity and the second one in May called American Lorain More Questions Than Answers.

Unfortunately, I had to find out that the company published its second quarter results on August 14. American Lorain didn't take the time to publish an official press release.

Revenue/EPS Summary 2012-2014
Fiscal Quarter 2014
(Fiscal Year)
2013
(Fiscal Year)
2012
(Fiscal Year)
March
Revenue $31,689 $34,809 $37,141
EPS 0.05 0.07 0.10
June
Revenue $32,516 $34,064 $40,816
EPS 0.06 0.07 0.10
September
Revenue $53,103 $57,972
EPS 0.13 0.15
December (FYE)
Revenue $93,301 $103,743
EPS 0.21 0.24
Totals
Revenue $64,205 $215,279 $239,673
EPS 0.11 0.48 0.59

Net revenue for the second quarter was $32.5 million, which represents a slight decrease of approximately $1.55 million, or 4.55%, from the same quarter last year. The overall decrease was attributable to a decrease in sales of the company's product segments.

(click to enlarge)

Net income decreased $0.4 million, or 13.20%, to $2.2 million for the second quarter, from $2.6 million for the same period of 2013. The decrease was attributable to decreased sales revenue, an increase in wage expense for factory workers, an increase in depreciation expenses for capital equipment and an increase in the cost of consumables used in conjunction with capital equipment.

The declining revenues isn't a good sign for the nearby future and as I wrote in my last article the lack of communication is a big red flag. My opinion has changed, and right now I am not a buyer of the stock anymore, despite the company appointing a new CFO.

Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Source: Update: American Lorain Earnings