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Specialty Chemical Company China XD Plastics Announces First Quarter 2017 Financial Results

2017-05-10 20:00
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- Revenue of $237.8 million, up 10.6% YoY -

- Net Income of $9.9 million, down 13.2% YoY -

- Reiterating Fiscal 2017 Guidance of $1.2 - $1.3 Billion in Revenue, $85.0 - $100.0 Million in Net Income -

HARBIN, China, May 10, 2017 /PRNewswire/ -- China XD Plastics Company Limited (NASDAQ: CXDC) ("China XD Plastics" or the "Company"), one of China's leading specialty chemical companies engaged in the development, manufacture and sale of polymer composite materials primarily for automotive applications, today announced its financial results for the first quarter ended March 31, 2017.

First Quarter 2017 Financial Highlights    

  • Revenue was $237.8 million, an increase of 10.6% YoY
  • Gross profit was $34.8 million, which was approximately equivalent YoY
  • Gross margin of 14.6%, a decrease of 160 basis points YoY
  • Net income was $9.9 million, a decrease of 13.2% YoY
  • EBITDA was $34.0 million, which was approximately equivalent YoY
  • Total volume shipped was 85,416 metric tons, up 11.3% YoY

"We are pleased to report our first quarter 2017 results as they reflect our strong operating capabilities as well as the results of our strategic initiatives.  Our domestic sales showed favorable year-over-year comparisons as we continued to enter new geographic markets.  Our high value-added products enable better safety and performance features for our automobile manufacturing customers and have wide applications in numerous verticals as well.  However, a contraction in our gross margin occurred in the quarter due to a lower gross margin from higher-end products sold in the domestic market and an increase in cost of goods sold resulting from increased depreciation attributable to the expansion of our Sichuan campus. In terms of our international sales, we suspended overseas sales to an international customer due to an account receivable balance overdue situation which will be resumed once the agreed upon terms for payment are met and all overdue balances are collected," said Jie Han, Chairman of the Board of Directors and Chief Executive Officer.

"After a strong year in 2016, we are beginning to see moderating industry fundamentals in our sector. The China Association of Automobile Manufacturers reports that the growth of auto sales in China slowed in 2017 to date, affected by both the holidays and the Chinese government's restriction on the implementation of the favorable tax deductions for small engine cars. While we anticipate slower growth as compared to last year, we believe that our broad and deep product platform, new geographical positioning and expanding production capabilities will enable us to capture market share from our competitors and maintain solid profitability."

Mr. Han continued, "We continued to see significant revenue contributions from new growth regions in the first quarter, augmented by the continued ramp of our Sichuan manufacturing facility. Sales in the South China and the Central China regions increased 104.2% and 50.2%, respectively, from the same period in 2016, and our presence in the region has enabled us to secure new customers and improved market penetration. Our Sichuan facility now has 50 production lines with 216,000 metric tons of annual production capacity. The Sichuan facility will ultimately add 300,000 metric tons of annual production to our domestic capacity for a total domestic capacity of 690,000 metric tons.  We expect that construction at the complex will be completed by the end of the second quarter of 2017.  Although we expect that automotive applications will continue to be our core business, high precision equipment in our new facilities will enable us to diversify our product platform to serve an array of high-growth verticals which will help to propel the Company's growth."

"We are also pleased that our strategic plan to develop diversified products has gained significant traction with the signing of a definitive agreement with the People's Government of Shunqing District, Nanchong City of Sichuan Province for the production of 300,000 metric tons of bio-composite materials and additive manufacturing and 20,000 metric tons of functional masterbatch.  The project will add 320,000 metric tons of production capacity and we will also benefit from the favorable tax policies under China's 'Go West Campaign' by locating the project in Southwest China."

"Our new facility in Dubai also extends our specialized high-tech products into an important overseas market. We plan to complete the installation of 45 production lines with 12,000 metric tons of annual production capacity by the first quarter of 2018, and to complete the installation of an additional 50 production lines with 13,000 metric tons of annual production capacity by the second quarter of 2018.  This will bring the total annual production capacity in our Dubai facility to 25,000 metric tons. The Dubai facility will target high-end products for overseas markets and will ultimately enable more active inroads into the markets of Europe, the Middle East, Russia and other overseas markets."

"We believe that our increased production capabilities, new product offerings and a more diversified customer base form a solid platform which will enable sustainable corporate growth.  In addition, our strategic geographical expansion leverages our technical expertise and customer-centric philosophy.  Further, our product diversification is reflective of both our industry leadership in China's auto market and the growing demand of high technology sectors as driven by China's new economy.  We reiterate our financial guidance for fiscal 2017 and continue to appreciate the support of our shareholders and all of our stakeholders," Mr. Han concluded.

First Quarter 2017 Results

Revenues were $237.8 million for the first quarter of 2017, compared to $215.0 million for the same period of 2016, representing an increase of $22.8 million, or 10.6%.  The year-over-year increase was primarily due to an 11.3% increase in sales volume and a 4.8% increase in the average RMB selling price of our products.

The increase in revenues in the first quarter of 2017 was driven by growth in demand for our products in the domestic China market, our efforts to expand our customer base attributable to our new plant in Sichuan and our efforts to increase overseas sales.  We recorded sales increases of 104.2% in South China, 50.2% in Central China, 30.2% in Southwest China and 14.2% in North China as compared to the same period in 2016. In 2017, overseas sales were suspended due to an accounts receivable balance overdue situation with an existing overseas customer. On April 1, 2017, the Company and the overseas customer reached an agreement on the credit payment method and product refining costs. We expect to resume sales to this overseas customer after retrieving all previous overdue payments from this customer in the second quarter of 2017. The customer has made a payment of $41.0 million in the first quarter of 2017 and has an unpaid balance of $33.6 million to date.

Premium products (PA66, PA6, Plastic Alloy, PLA, POM and PPO) in total accounted for 81.3% of revenues in the first quarter of 2017, compared to 77.3% for the same period of 2016. The Company continued to shift its production mix from traditional polymer materials to higher-end products due to (i) the greater growth potential of advanced modified plastics in luxury automobile models in China, (ii) the stronger demand for higher-end products as a result of the Chinese government's promotion for clean energy vehicles, and (iii) better end consumer recognition of higher-end cars made by automotive manufacturers from Chinese and Germany joint ventures, and U.S. and Japanese joint ventures, where manufacturers tend to use more and higher-end modified plastics in quantity per vehicle in China.

Gross profit was $34.8 million for the first quarter of 2017, compared to $34.8 million for the same period of 2016, representing a stable period to period comparison.  Gross margin was 14.6% for the first quarter of 2017, compared to 16.2% for the same period of 2016, primarily due the lower gross margin of higher-end products sold in the domestic market in the current period as compared to the same period in 2016.

General and administrative (G&A) expenses were $7.1 million for the first quarter of 2017, compared to $5.1 million for the same period of 2016, representing an increase of $2.0 million, or 39.2%.  This increase was primarily due to the increases in salary and welfare expenses, due to the increase in the number of management and general staff.  

Research and development (R&D) expenses were $5.9 million for the first quarter of 2017, compared to $4.9 million for the same period of 2016, representing an increase of $1.0 million, or 20.4%. This increase was primarily due to (i) elevated R&D activities to meet the higher quality requirements of potential customers from Europe, (ii) increased R&D efforts directed towards applications in new electrical equipment, electronics, alternative energy applications, power devices, aviation equipment and ocean engineering, in addition to other new products primarily for advanced industrialized applications in the automobile sector and in new verticals such as ships, airplanes, high-speed rail, 3D printing materials, biodegradable plastics and medical, and (iii) an increase in depreciation expenses after R&D equipment was put into use at Sichuan Enterprise Group Company Limited ("Sichuan Xinda"). As of March 31, 2017, the number of ongoing research and development projects was 255.

Operating income was $21.3 million for the first quarter of 2017, compared to $24.5 million for the same period of 2016, representing a decrease of $3.2 million, or 13.1%. This decrease was primarily due to higher G&A expenses and higher R&D expenses.

Net interest expense was $8.8 million for the first quarter of 2017, compared to net interest expense of $9.3 million for the same period of 2016, representing a decrease of $0.5 million, or 5.4%. This decrease was primarily due to (i) the increase of average deposit balance in amount of $485.3 million for the first quarter of 2017 compared to $360.8 million for the same period in 2016, (ii) a decrease of interest expense due to a decrease in the average interest rate to 4.8% for the first quarter of 2017 compared to 5.8% for the same period in 2016, partially offset by (iii) a decrease of interest income resulting from a decrease in the average interest rate to 1.2% for the first quarter compared to 1.7% of the same period in 2016, and (iv) an increase in the average short-term and long-term loan balance of $785.4 million for the first quarter of 2017 compared to $415.9 million for the same period in 2016.

Income tax expense was $3.6 million for the first quarter of 2017, representing an effective income tax rate of 26.4%, compared to income tax expense of $4.5 million in the same period of 2016, representing an effective income tax rate of 28.5%. The effective income tax rate for the three-month period ended March 31, 2017 differs from the People's Republic of China (PRC) statutory income tax rate of 25% primarily due to (i) the consolidated income before income taxes for the current quarter decreased due to the operating losses of entities not subject to income tax, and (ii) non-deductible expenses in the PRC operating entities, which were partially offset by (iii) the additional deduction of R&D for the major PRC operating entities; and (iv) Sichuan Xinda's preferential income tax rate.

Net income was $9.9 million for the first quarter of 2017, compared to $11.4 million for the same period of 2016, representing a decrease of $1.5 million, or 13.2%. Basic and diluted earnings per share in the current quarter were $0.15, compared to $0.17 per basic and diluted share for the same period of 2016.  The average number of shares used in the computation of basic and diluted earnings per share current quarter was 49.5 million, compared to 49.4 million shares for basic and diluted earnings per share in the prior year period.

Earnings before interest, tax, depreciation and amortization (EBITDA) was $34.0 million for the first quarter of 2017, virtually unchanged from EBITDA of $33.9 million for the same period of 2016.  For a detailed reconciliation of EBITDA, a non-GAAP measure, to its nearest GAAP equivalent, please see the financial tables at the end of this release.

Financial Condition

As of March 31, 2017, the Company had $57.7 million in cash and cash equivalents, $77.8 million in time deposits with commercial banks, negative working capital of $179.8 million (current assets minus current liabilities) and a current ratio (current assets divided by current liabilities) of 0.8 as compared to 1.2 as of December 31, 2016. The decrease in the current ratio was primarily because the Company's cash and cash equivalents, restricted cash and time deposits decreased by 37.8%, and short-term loans increased by 43.4% for the increased prepayment obligations to equipment suppliers for the Company's new Nanchong Project (see Recent Events, below).  Stockholders' equity as of March 31, 2017 was $648.2 million compared to $634.3 million as of December 31, 2016.

Inventories increased by 30.9% to $367.7 million as of the first quarter of 2017 as compared to fiscal year end 2016 as a result of more purchases of raw materials and the Company's strategy to stock up on finished goods for upcoming orders. Prepayment to equipment suppliers increased by 2,583.1% mainly because of advances to purchases for the new Nanchong Project.  The aggregate short-term and long-term bank loans increased by 18.9% due to the utilization of existing lines of credit to support the expansion of the Sichuan and Dubai facilities.  We define the manageable debt level as the sum of aggregate short-term and long-term loans, and notes payable over total assets.  We expect that we will be able to meet our needs to fund operations, capital expenditures and other commitments in the next 12 months primarily with our cash and cash equivalents, operating cash flows and bank borrowings. 

Recent Events

On March 18, 2017, the Company issued a press release announcing the official signing of an agreement with the People's Government of Shunqing District, Nanchong City, Sichuan Province, for the production of 300,000 metric tons of bio-composite materials and additive manufacturing and 20,000 metric tons of functional masterbatch (the "Nanchong Project").  After initial approval by the Board of Directors and the Company's major investor on December 8, 2016, Sichuan Xinda entered into a strategic investment agreement with Shunqing Government, Nanchong City, Sichuan Province, on December 12, 2016.  Due to the uncertainty of securing the necessary land use rights for the project, the Company waited until March 13, 2017 and entered into a "Land Use Right Transfer Agreement" with the government agency, formalizing its initial dialogue, and entered into a definitive agreement after approval by the Board of Directors and its major shareholder. The Nanchong Project will be located in a land area of 250 mu (equivalent to 41.2 acres), where 215 mu will be designated for bio-composite materials and additive manufacturing production and 35 mu will be designated for functional masterbatch production. The projected total capital expenditures for the project is approximately 2.5 billion RMB (estimated to be $357 million) and the anticipated completion will take place by the end of December 2018. The Nanchong Project will add 320,000 metric tons of production capacity and the Company will also benefit from favorable tax policies under China's 'Go West Campaign' by locating the project in Southwest China.

On February 17, 2017, the Company issued a press release announcing that its Board of Directors (the "Board") has received a preliminary non-binding proposal letter, dated February 16, 2017, from its Chairman and Chief Executive Officer, Mr. Jie Han ("Mr. Han"), XD Engineering Plastics Company Limited ("XD Engineering"), a company incorporated in the British Virgin Islands and wholly owned by Mr. Han, and MSPEA Modified Plastics Holding Limited, an affiliate of Morgan Stanley Private Equity Asia III, Inc. (collectively, the "Buyer Consortium"), to acquire all of the outstanding shares of common stock of the Company not already beneficially owned by the Buyer Consortium in a "going-private" transaction (the "Transaction") for $5.21 per share of common stock in cash.  The proposal letter states that the Buyer Consortium expects that the Board will appoint a special committee of independent directors to consider the proposal and make a recommendation to the Board.  The proposal letter also states that the Buyer Consortium will not move forward with the proposed Transaction unless it is approved by such a special committee, and the proposed Transaction will be subject to a non-waivable condition requiring approval by majority shareholder vote of shareholders other than the Buyer Consortium members.  The Buyer Consortium currently beneficially owns approximately 74% of the issued and outstanding shares of common stock of the Company on a fully diluted and as-converted basis.

The Board has established a special committee (the "Special Committee") of disinterested directors to consider the proposal.  The Special Committee is composed of the following independent directors of the Company: Mr. Lawrence W. Leighton, Mr. Feng Li, and Mr. Linyuan Zha, with Mr. Leighton serving as chairperson of the Special Committee.  The Special Committee will be responsible for evaluating, negotiating and recommending to the Board any proposals involving a strategic transaction by the Company with one or more third parties.  The Special Committee intends to retain advisors, including an independent financial advisor, to assist in the evaluation of the proposal and any additional proposals that may be made by the Buyer Consortium.

The Special Committee cautions the Company's shareholders and others considering trading in its securities that the Special Committee has not made any decisions with respect to the Company's response to the proposal.  There can be no assurance that any definitive offer will be made by the Buyer Consortium or any other person, that any definitive agreement will be executed relating to the proposed Transaction, or that this or any other transaction will be approved or consummated.

Financial Guidance and Business Outlook

The Company reiterates its financial guidance for fiscal 2017 with revenue to range between $1.2 billion and $1.3 billion, and net income to range between $85.0 million to $100.0 million. This is based on the anticipation of a continued recovery throughout the Chinese automotive supply chain and a stabilization of crude oil pricing and its impact on polymer composite materials in 2017. This forecast also assumes additional contributions from the Sichuan facility and that overseas sales will be resumed in the second half of 2017.  It also assumes the average exchange rate of the US dollar to RMB at 6.8 and that the Company will incur interest expenses for loan term loans and short term loans. This financial guidance reflects the Company's preliminary view of its business outlook for the fiscal year of 2017 and is subject to revision based on changing market conditions at any time.

Conference Call

China XD Plastics' senior management will host a conference call at 9:00 am Eastern Time on Wednesday, May 10, 2017, to discuss its first quarter 2017 financial results.  The conference call can be accessed by dialing +1 (855) 298-3404 (for callers in the U.S.), +86-4001-200-539 (for Mainland China callers) or +852 5808 3202 (for Hong Kong callers) and entering pass code 5959925.

A recording of the conference call will be available through May 17, 2017, by calling +1 (866) 846-0868 (for callers in the U.S.) and entering pass code 5959925.

A live webcast and replay of the conference call will be available on the investor relations page of the Company's website at http://www.chinaxd.net.

About China XD Plastics Company Limited

China XD Plastics Company Limited, through its wholly-owned subsidiaries, develops, manufactures and sells polymer composites materials, primarily for automotive applications. The Company's products are used in the exterior and interior trim and in the functional components of 29 automobile brands manufactured in China, including without limitation, AUDI, Mercedes Benz, BMW, Toyota, Buick, Chevrolet, Mazda, Volvo, Ford, Citroen, Jinbei and VW Passat, Golf, Jetta, etc. The Company's wholly-owned research center is dedicated to the research and development of polymer composites materials and benefits from its cooperation with well-known scientists from prestigious universities in China. As of March 31, 2017, 410 of the Company's products have been certified for use by one or more of the automobile manufacturers in China. For more information, please visit the Company's English website at http://www.chinaxd.net, and the Chinese website at http://www.xdholding.com.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's growth potential in international markets; the effectiveness and profitability of the Company's product diversification strategy; the impact of the Company's product mix shift to more advanced products and related pricing policies;  the effectiveness, profitability, and the marketability of its the ongoing mix shift to more advanced products; the prospects of the Company's Dubai facility, and the associated expansion into Middle East, Europe and other parts of Asia; the prospects of the Company's Sichuan facility, and its penetration into Southwest China; the Company's projections of its revenues for performance in fiscal 2017.   These forward-looking statements can be identified by terminology such as "will," "expect," "project," "anticipate," "forecast," "plan," "believe," "estimate" and similar statements. Forward-looking statements involve inherent risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the global economic uncertainty could further impair the automotive industry and limit demand for our products; fluctuations in automotive sales and production could have a material adverse effect on our results of operations and liquidity; our financial performance may be affected by the prospect of our Dubai facility and the associated expansion into Middle East, Europe and other parts of Asia; the withdrawal of preferential government policies and the tightening control over the Chinese automotive industry and automobile purchase restrictions imposed in certain major cities may limit market demand for our products; the slowing of Chinese automotive industry's growth; the concentration of our distributors, customers and suppliers; and other risks detailed in the Company's filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to 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 its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

Contacts:

China XD Plastics
Mr. Taylor Zhang, CFO (New York)
Phone: +1 (212) 747-1118
Email: cxdc@chinaxd.net

Investor Relations: Citigate Dewe Rogerson
Ms. Vivian Chen, Managing Director
US: +1 (347) 481-3711
Email: Vivian.chen@citigatedr.com

- Financial Tables Follow -

 

CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS






March 31,


December 31,


2017


2016


US$


US$

ASSETS




Current assets:




Cash and cash equivalents

57,695,720


168,086,445

Restricted cash

148,303,280


103,489,402

Time deposits

77,833,983


184,806,112

Accounts receivable, net of allowance for doubtful accounts

187,319,795


410,049,559

Amounts due from a related party

57,720


229,624

Inventories

367,666,903


280,939,008

Prepaid expenses and other current assets

54,833,793


125,310,309

    Total current assets

893,711,194


1,272,910,459

Property, plant and equipment, net

811,362,139


806,363,692

Land use rights, net

22,546,978


22,536,397

Long-term prepayments to equipment and construction suppliers

381,007,445


14,167,702

Other non-current assets

10,568,563


10,521,949

    Total assets

2,119,196,319


2,126,500,199





LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCKS AND STOCKHOLDERS' EQUITY

Current liabilities:




Short-term loans, including current portion of long-term bank loans

637,931,355


444,757,476

Bills payable

164,625,397


148,392,677

Accounts payable

152,260,922


320,013,040

Amounts due to a related party

11,611


11,548

Income taxes payable

-


897,625

Accrued expenses and other current liabilities

118,686,093


119,339,366

    Total current liabilities

1,073,515,378


1,033,411,732

Long-term bank loans, excluding current portion

187,697,496


249,520,615

Deferred income

68,282,595


69,311,102

Other non-current liabilities

43,929,163


42,420,619

    Total liabilities

1,373,424,632


1,394,664,068





Redeemable Series D convertible preferred stock (redemption amount of US$219,653,000 and US$212,212,300 as of March 31, 2017 and December 31, 2016, respectively)

97,576,465


97,576,465

Stockholders' equity:




Series B preferred stock

100


100

Common stock, US$0.0001 par value, 500,000,000 shares authorized, 49,532,541 shares and 49,532,541 shares issued, 49,511,541 shares and 49,511,541 shares outstanding as of  March 31, 2017 and December 31, 2016, respectively

4,952


4,952

Treasury stock, 21,000 shares at cost

(92,694)


(92,694)

Additional paid-in capital

82,722,668


82,606,404

Retained earnings

627,069,724


617,168,735

Accumulated other comprehensive loss

(61,509,528)


(65,427,831)

    Total stockholders' equity

648,195,222


634,259,666

Commitments and contingencies




    Total liabilities, redeemable convertible preferred stocks and stockholders' equity

2,119,196,319


2,126,500,199













See accompanying notes to the unaudited condensed consolidated financial statements in the Company's first quarter 2017 10-Q as filed with the SEC





















CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME






Three-Month Period Ended
March 31,


2017


2016


US$


US$





Revenues

237,840,197


215,030,158

Cost of revenues

(203,068,027)


(180,216,507)

    Gross profit

34,772,170


34,813,651





Selling expenses

(518,813)


(285,136)

General and administrative expenses

(7,053,671)


(5,069,674)

Research and development expenses

(5,851,100)


(4,909,567)

    Total operating expenses

(13,423,584)


(10,264,377)





    Operating income

21,348,586


24,549,274





Interest income

1,163,259


1,614,263

Interest expense

(10,021,976)


(10,904,659)

Foreign currency exchange losses

(476,085)


427,665

Government grant

1,439,531


208,433

    Total non-operating expense, net

(7,895,271)


(8,654,298)





    Income before income taxes

13,453,315


15,894,976





Income tax expense

(3,552,326)


(4,537,626)





    Net income

9,900,989


11,357,350





Earnings per common share:




Basic and diluted

0.15


0.17





Net Income

9,900,989


11,357,350





Other comprehensive income 




Foreign currency translation adjustment, net of nil income taxes

3,918,303


4,927,024





Comprehensive income

13,819,292


16,284,374





















See accompanying notes to the unaudited condensed consolidated financial statements in the Company's first quarter 2017 10-Q as filed with the SEC





















CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS














Three-Month Period Ended
March 31,


2017


2016


US$


US$

Cash flows from operating activities:




Net cash used in operating activities

(57,631,880)


(25,403,676)





Cash flows from investing activities:




Purchase of time deposits

(59,853,272)


(155,330,882)

Proceeds from maturity of time deposits

168,083,097


94,362,745

Purchase of and deposits for property, plant and equipment

(328,428,788)


(27,399,896)

Refund of deposit from an equipment supplier

75,052,508


-

Purchases of land use rights

(3,036,333)


-

Government grant related to the construction of Sichuan plant

-


2,060,355

Net cash used in investing activities

(148,182,788)


(86,307,678)





Cash flows from financing activities:




Proceeds from bank borrowings

316,586,547


166,914,532

Repayment of bank borrowings

(188,024,421)


(131,602,645)

Release of restricted cash as collateral for bank borrowings

6,292,727


21,341,912

Placement of restricted cash as collateral for bank borrowings

(40,575,289)


(21,954,042)

Net cash provided by financing activities

94,279,564


34,699,757





Effect of foreign currency exchange rate changes on cash and cash equivalents

1,144,379


138,350

Net decrease in cash and cash equivalents

(110,390,725)


(76,873,247)





Cash and cash equivalents at beginning of period

168,086,445


119,928,485

Cash and cash equivalents at end of period

57,695,720


43,055,238





Supplemental disclosure of cash flow information:




Interest paid, net of capitalized interest

8,482,216


14,380,560

Income taxes paid

5,057,042


6,874,104

Non-cash investing and financing activities:




Accrual for purchase property, plant and equipment

4,147,349


93,422,837













See accompanying notes to the unaudited condensed consolidated financial statements in the Company's first quarter 2017 10-Q as filed with the SEC













CHINA XD PLASTICS COMPANY LIMITED

Reconciliation of Net Income to EBITDA




Three Months Ended


March 31,


2017


2016

EBITDA

$33,969,074


$33,948,482

Less: Interest expense

10,021,976


10,904,659

        Income tax expense

3,552,326


4,537,626

        Depreciation and amortization expense

10,493,783


7,148,847

Net income

$9,900,989


$11,357,350


Source: China XD Plastics Company Limited

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