omniture

Specialty Chemical Company China XD Plastics Announces Fourth Quarter and Fiscal Year 2017 Financial Results

2018-03-15 20:37 1095

- Revenues of $1.3 Billion  Surpassing Guidance -

- Provides Fiscal 2018 Guidance of $1.2-$1.4 Billion in  Revenue, $90-$110 Million in Net Income, Excluding the Effect of Repatriation Tax -

HARBIN, China, March 15, 2018 /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 fourth quarter and fiscal year ended December 31, 2017.

Fourth Quarter 2017 Financial Highlights      

  • Revenue was $427.6 million, an increase of 13.2% YoY and an increase of 37.3% sequentially
  • Gross profit was $91.5 million, an increase of 11.2% YoY and an increase of 93.4% sequentially
  • Gross margin of 21.4%, a decrease of 38 basis points YoY and an increase of 621 basis points sequentially
  • Net Loss was $20.5 million, compared to net income $36.7 million in the same period last year and net income of $14.1sequentially
  • EBITDA was $82.9 million, an increase of 42.4% YoY and an increase of 112.6% sequentially
  • Total volume shipped was 155,716 metric tons, up 24.1% YoY and an increase of 39.2% sequentially

Full Year 2017 Financial Summary

  • Revenue was $1,290.4 million, an increase of 7.4% from $1,201.7 million for the full year 2016
  • Gross profit was $236.7 million, a decrease of 4.2% from $247.0 million for the full year 2016
  • Gross profit margin of 18.3%, a decrease of 230 basis points from 20.6% for the full year 2016
  • Net income was $31.6 million, a decrease of 68.9% from $101.6 million for the full year 2016
  • EBITDA was $210.6 million, an increase of 8.2% YoY from $194.7 million for the full year 2016
  • Total volume shipped was 457,385 metric tons, up 14.3% from 400,316 metric tons for the full year 2016

"We are pleased to have met our revenue guidance for 2017 abetted by strong customer demand from new growth regions in the fourth quarter.  Our robust sales results for the fourth quarter of the year and solid results for fiscal year 2017 are consistent with our expectations of a steady recovery throughout China's automotive supply chain," said Jie Han, Chairman of the Board of Directors and Chief Executive Officer. "According to the China Association of Automobile Manufacturers, automobile production in China increased by 3.2% in 2017 as compared to 2016.  An improved macroeconomic environment has improved business conditions and helped us to improve our profit margins." 

"We are particularly pleased to see major revenue contributions from major new growth frontiers, fostered in large part by the gradual ramp up of our Sichuan manufacturing facility, a key milestone in our corporate development.  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.  The new facility also extends our geographical reach beyond our established Northeast base, generating strong growth from the South and Central China regions, in addition to our continued and steady business development in Southwest and East China. We installed 50 production lines with 216,000 metric tons of annual production and construction at the complex is expected to be completed by the end of the second quarter of 2018." 

"The Sichuan facility substantially expands the footprint of our auto business in China and while we expect that automotive applications will continue to be our core business, the new facility includes precision equipment which will enable us to diversify our product platform into such high-growth verticals as ships, high-speed rail, airplanes, bio-degradable materials, medical-grade materials, food packaging, electronic equipment, electrical products, alternative energy applications and power devices, which will help to propel the Company's growth."  

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

"China XD continues to value our deep working relationships with our customers above all, and is committed to creating value with our culture of hard work and innovation.  We anticipate that the continued execution of our strategic plan driven by an increase in our production capacity, our entry into new markets, a diversified customer base and an escalation in international sales will help to generate business growth for years to come.  For fiscal 2018, we are providing financial guidance of between $$1.2 and $1.4 billion in revenue, $90 and $110 million in net income ", Mr. Han concluded. 

Fourth Quarter 2017 Results

Revenues were $427.6 million for the fourth quarter of 2017, compared to $377.8 million for the same period of 2016, representing an increase of $49.8 million, or 13.2%. The year-over-year increase was primarily due to a 24.1% increase in sales volume and a 9.2% decrease in the average RMB selling price of our products.

The increase in revenues in the fourth quarter of 2017 was driven by growth in demand for our products in the domestic China market, our aggressive efforts to expand our customer base attributable to our new plant in Sichuan and our efforts to expand overseas sales.  We recorded sales increases of 46.6% in North China, 23.5% in East China, 23.3% in Central China and 4.7% in South China. Overseas sales were $35.4 million for the fourth quarter of 2017, accounting for 8.3 % of total sales, reflecting the Company's resumed sales to overseas markets in fiscal 2017.

Premium products (PA66, PA6, POM, PPO, Plastic Alloy and PLA) in total accounted for 73.3% of revenues in the fourth quarter of 2017, compared to 82.8% in the prior year period. Since the third quarter of 2017, the Company implemented a marketing strategy of offering lower-end products with lower RMB pricing to further penetrate the new regional markets in East China, Central China and Southwest China. Pending this marketing strategy, the Company intends to shift its production mix from traditional lower-end products to higher-end products such as PLA, primarily due to (i) greater growth potential of advanced modified plastics in luxury automobile models in China, (ii) the stronger demand as a result of promotion by the Chinese government for clean energy vehicles and (iii) better quality from end consumer recognition of higher-end cars made by automotive manufacturers from Chinese and Germany joint ventures, and U.S. and Japanese joint ventures, which manufacturers tend to use more and higher-end modified plastics in quantity per vehicle in China.

Gross profit was $91.5 million for the fourth quarter of 2017, compared to $82.3 million for the same period of 2016, representing an increase $9.2 million, or 11.2%.  Gross margin was 21.4% compared to 21.8% in the fourth quarter of 2016, primarily due to (i) lower sales of higher-end products by Dubai Xinda; and (ii) implementing a marketing strategy of offering lower-end products with lower RMB pricing to enter the new regional markets in Central China and Southwest China, since the third quarter of 2017 as compared to that of the prior year.

General and administrative (G&A) expenses were $12.2 million for the fourth quarter of 2017, compared to $9.9 million for the same period of 2016, representing an increase of $2.3 million, or 23.0%.  This increase was primarily due to the increases of US$1.8 million in compensation for the terminated contracts with an equipment supplier. On a percentage basis, G&A expenses in the fourth quarter of 2017 were 2.9% compared to 2.6% for the same period of 2016.

Research and development (R&D) expenses were $11.6 million for the fourth quarter of 2017, compared to $29.3 million for the same period of 2016, representing a decrease of $17.7 million, or 60.5%, due to the decrease of raw materials used in two specific research and development projects in Sichuan Xinda. As of December 31, 2017, the number of ongoing research and development projects was 376.

Operating income was $66.6 million for the fourth quarter of 2017, compared to $42.6 million for the same period of 2016, representing an increase of $24.0 million, or 56.3%. This increase was primarily due to the higher gross profit and lower R&D expenses, partially offset by higher G&A expenses.

Net interest expense was $11.2 million for the fourth quarter of 2017, compared to net interest expense of $7.6 million for the same period of 2016, primarily due to  (i) the increase of interest expense due to the increase of the average short-term and long-term loan balance in the amount of $840.7 million for the three-month period ended December 31, 2017 compared to $727.4 million for the same period in 2016,  (ii) the increase of the weighted loan interest rate of 4.8% for the three-month period ended December 31, 2017 as compared to 4.5% for the same period of 2016, which was partially offset by  (iii) an increase of interest income resulting from the decrease of the average interest rate to 1.0% for the three-month period ended December 31, 2017 compared to 1.9% of the same period in 2016, and (iv) the increase of the average deposit balance in the amount of $529.8 million for the three-month period ended December 31, 2017 compared to $282.6 million for the same period of 2016.

Income tax expense was $79.8 million for the fourth quarter of 2017, representing an effective income tax rate of 134.5%, compared to an effective income tax rate of 6.0% for the same period of 2016.  The significant increase of the effective tax rate was primarily due to management's estimate of the amount of US$71.0 million deemed repatriation tax based on overseas accumulated earnings mandated by the U.S. tax reform on December 22, 2017.

Net loss was $20.5 million for the fourth quarter of 2017, compared to net income $36.7 million for the same period of 2016, representing a decrease of $57.2 million. Losses per share were $0.31 for the fourth quarter ended December 31, 2017, compared to $0.56 per share in the fourth quarter of 2016. 

The average number of shares used in the computation of basic and diluted earnings per share for the three months ended December 31, 2017 was 49.7 million, compared to 49.5 million shares for basic and diluted earnings per share in the prior year period.

Earnings before interest, tax, depreciation and amortization (EBITDA) was $82.9 million for the fourth quarter of 2017, compared to EBITDA of $58.2 million for the same period of 2016, representing an increase of $24.7 million, or 42.4%. 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.

Full Year 2017 Financial Results

Revenues were $1,290.4 million in fiscal 2017, compared to $1,201.7 million in fiscal 2016, representing an increase of $88.7 million, or 7.4%. The year-over-year increase was primarily due to a 14.3% increase in sales volume and a 3.9% decrease in the average RMB selling price of our products.

We recorded sales increases of 53.8% in Central China, 33.7% in Southwest China, 21.5% in North China, 21.1% in South China, 7.6% in East China, and 1.3% in Northeast China. Overseas sales were decreased by US$27.7 million and accounted for 6.4% of the total sales as compared to 9.2% of that in 2016.  

Premium products (PA66, PA6, Plastic Alloy, PLA, POM and PPO) in total accounted for 76.9% of revenues in fiscal 2017, compared to 81.3% in fiscal 2016. The Company continued to shift production mix from traditional lower-end products to higher-end products such as PA66, PLA, and PPO, primarily due to (i) greater growth potential of advanced modified plastics in luxury automobile models in China, (ii) the stronger demand as a result of promotion by the Chinese government for clean energy vehicles and (iii) better quality from and consumer recognition of higher-end cars made by automotive manufacturers from Chinese and Germany joint ventures, and U.S. and Japanese joint ventures, which manufacturers tend to use more and higher-end modified plastics in quantity per vehicle in China.

Gross profit was $236.7 million in fiscal 2017, compared to $247.0 million in fiscal 2016, representing a decrease of $10.3 million, or 4.2%. Our gross margin decreased to 18.3% during the year of 2017 from 20.6% for fiscal 2016, (i) lower sales of higher-end products in Dubai Xinda; and (ii) implementing a marketing strategy of offering lower-end products with lower RMB pricing to enter the new regional markets in Central China and Southwest China, since the third quarter of 2017 as compared to that of the prior year..

General and administrative (G&A) expenses were $38.5 million in fiscal 2017, compared to $30.0 million for fiscal 2016, representing an increase of $8.5 million, or 28.5%. This increase is primarily due to the increase of (i) US$5.6 million in salary, bonus and welfare which was resulted from the increase in the number of management and general staff from supporting departments and in the average salary and bonus; (ii) US$0.7 million in depreciation; (iii) US0.5 million in non-income taxation expenses; (iv) US$1.8 million in compensation for the terminated contracts with an equipment supplier; and partially offset by (v) the decrease of US$ 0.1 million in share based compensation.

Research and development expenses were $36.9 million in fiscal 2017compared with $48.0 million in fiscal 2016, a decrease of $11.1 million, or 23.2%. The decrease was primarily due to the decrease of raw materials used in two research and development projects in Sichuan Xinda. As of December 31, 2017, the number of ongoing research and development projects was 376. We expect to complete and commence to realize economic benefits on approximately 25% of the projects in the near term. The remaining projects are expected to be carried out for a longer period. The majority of the projects are in the field of modified plastics in automotive applications and the rest are in advanced fields such as ships, airplanes, high-speed rail, medical devices, etc.

Operating income was $158.2 million in fiscal 2017 compared to $167.7 million for fiscal 2016, representing a decrease of $ 9.5 million, or 5.7%. This decrease in 2017 was due to the lower gross margin and the higher general and administration expenses, partially offset by the lower research and development expenses.

Income tax expense was $90.5 million in fiscal 2017, representing an effective income tax rate of 74.1%, compared to an effective income tax rate of 14.6% in fiscal 2016. The significant increase of our effective tax rate is due to estimated cost of  US$71.0 million  mandatory deemed repatriation of non-U.S. earning according to the Tax Cuts and Jobs Act (the "Act") enacted on  December 22, 2017 which accounted for 78.5% of t our recognized income tax expenses for the year ended December 31, 2017.  Excluding the impact of repatriation tax for 2017, our effective tax rate would be 16.0% for the year ended December 31, 2017.

The effective income rate increased 1.4% (excluding the impact of repatriation tax) from 14.6% in 2016, primarily due to the less proportion of the consolidated profit was generated by Dubai Xinda which was exempted from income taxes and a decrease of the 50% additional deduction of R&D expense.

Net income was $31.6 million in fiscal 2017, compared to $101.6 million for fiscal 2016, representing a decrease of $70.0 million, or 68.9%.  Earnings per share were $0.48 in fiscal 2017, compared to earnings per share of $1.54 for fiscal 2016. 

The average number of shares used in the computation of basic and diluted earnings per share for the fiscal year 2017 was 49.6 million, compared to 49.4 million shares for fiscal 2016.

Earnings before interest, tax, depreciation and amortization (EBITDA) was $210.6 million for the fiscal year 2017 as compared to EBITDA of $194.7 million for fiscal 2016, representing an increase of $15.9 million, or 8.2%.  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 December 31, 2017, the Company had $190.4 million in cash and cash equivalents, $288.0 million in time deposits with commercial banks, $60.5 million in working capital (current assets minus current liabilities) and a current ratio (current assets divided by current liabilities) of 1.0.  Stockholders' equity as of December 31, 2017 was $712.8 million, an increase of 12.4% as compared to $634.3 million as of December 31, 2016.

Accounts receivable decreased by 27.1% or US$111.2 million due to the management efforts to collect outstanding balances due from the domestic customers. Inventory increased by 50.1% to $421.7 million as of fiscal year end 2017 as compared to fiscal year end 2016 as a result of more purchases of the raw materials and the Company's strategy to stock up the finished goods for the upcoming orders. Prepayment to equipment and construction suppliers increased by 1,242.3% mainly because advance to purchases for the storage facility and other equipment of HLJ Xinda group. The aggregate short-term and long-term bank loans increased by 28.1% mainly because the Xinda Group obtained a seven-year unsecured loan of RMB526.3 million (equivalent to US$80.6 million) due to the utilization of existing lines of credit to support the expansion of the Sichuan and Dubai facilities.  We believe our current debt level is manageable. We define the manageable debt level as the sum of aggregate short-term and long-term loans, and notes payable over total assets. 

Financial Guidance and Business Outlook

Excluding the effect from the one time repatriation tax, the Company met its financial guidance for fiscal 2017, with revenue of $1.3 billion, surpassing its forecasted revenue estimate range of $1.2 billion and $1.3 billion

In light of anticipated contribution from production capacity to be added, our entry to new markets, diversified customer base and escalation of sales overseas, the Company projects revenue for fiscal 2018 to range between $1.2 and $1.4 billion in revenue. Gross margin in fiscal 2018 is expected to remain stable as compared to that of fiscal 2017. The Company project net income to range between $90 and $110 million, excluding the effect of repatriation tax. This is based on the anticipation of a steady recovery throughout the Chinese automotive supply chain and a stabilization of crude oil pricing and its impact on polymer composite materials in 2018. This forecast also assumes contributions from the Sichuan plant and the Dubai second phase project, both of which will start production by the end of second quarter of 2018 and the end of 2018, respectively.  It also assumes the average exchange rate of the US dollar to RMB at 6.3. This financial guidance reflects the Company's preliminary view of its business outlook for fiscal 2018 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 Thursday, March 15, 2018, to discuss its fourth quarter and fiscal 2017 financial results.  The conference call can be accessed by dialing +1- 845-675-0437 (for callers in the U.S.), +86-4006-208-038 (for Mainland China callers) or +852- 3018-6771 (for Hong Kong callers) and entering passcode 3594219 . 

A recording of the conference call will be available through March 22, 2018, +1-855-452-5696 (for callers in the U.S.) and entering passcode 3594219 . 

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 30 automobile brands manufactured in China, including without limitation, AUDI, Mercedes Benz, BMW, Toyota, Buick, Chevrolet, Mazda, Volvo, Ford, Citroen, Jinbei,  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 December 31, 2017, 442 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 prospect of the Company's Dubai facility, and the associated expansion into Middle East, Europe and other parts of Asia; the prospect of the Company's Southwest China facility, the prospects of the Company's Harbin facility, and its penetration into Northeast China; and its penetration into Southwest China; the Company's projections of its revenues for performance in fiscal 2018.   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

- Financial Tables Follow -

CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



December 31,


2017


2016


US$


US$

ASSETS




Current assets:




Cash and cash equivalents


190,392,211



168,086,445

Restricted cash


129,699,454



103,489,402

Time deposits


288,023,017



184,806,112

Accounts receivable, net of allowance for doubtful accounts


298,868,984



410,049,559

Amounts due from a related party


-



229,624

Inventories


421,736,682



280,939,008

Prepaid expenses and other current assets


144,326,151



125,310,309

    Total current assets


1,473,046,499



1,272,910,459

Property, plant and equipment, net


835,561,739



806,363,692

Land use rights, net


31,943,652



22,536,397

Long-term prepayments to equipment and construction suppliers


190,627,514



14,167,702

Other non-current assets


12,924,279



10,521,949

    Total assets


2,544,103,683



2,126,500,199







LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY

Current liabilities:






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


775,396,929



444,757,476

Bills payable


252,768,510



148,392,677

Accounts payable


227,993,140



320,013,040

Amounts due to a related party


-



11,548

Income taxes payable


17,710,217



897,625

Accrued expenses and other current liabilities


138,605,509



119,339,366

    Total current liabilities


1,412,474,305



1,033,411,732

Long-term bank loans, excluding current portion


114,208,319



249,520,615

Deferred income


99,168,276



69,311,102

Other non-current liabilities


107,898,318



42,420,619

    Total liabilities


1,733,749,218



1,394,664,068







Redeemable Series D convertible preferred stock (redemption
amount of US$244,044,200 and US$212,212,300 as of December 31,
2017 and 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,
49,748,731 shares and 49,532,541 shares issued, 49,727,731 shares and
49,511,541 shares outstanding as of  December 31, 2017 and 2016,
respectively


4,975



4,952

Treasury stock, 21,000 shares at cost


(92,694)



(92,694)

Additional paid-in capital


83,159,893



82,606,404

Retained earnings


648,790,469



617,168,735

Accumulated other comprehensive loss


(19,084,743)



(65,427,831)

    Total stockholders' equity


712,778,000



634,259,666

Commitments and contingencies






    Total liabilities, redeemable convertible preferred stock and
stockholders' equity


2,544,103,683



2,126,500,199

 

CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)



Years
Ended December 31,


Three-Month Period
Ended December 31,


2017


2016


2017


2016


US$


US$


US$


US$





Revenues

1,290,447,748


1,201,678,898


427,632,945


377,661,511

Cost of revenues

(1,053,782,105)


(954,723,617)


(336,167,827)


(295,504,993)

    Gross profit

236,665,643


246,955,281


91,465,118


82,156,518









Selling expenses

(3,176,928)


(1,356,843)


(1,094,039)


(351,203)

General and administrative expenses

(38,495,704)


(29,952,304)


(12,194,264)


(9,917,384)

Research and development expenses

(36,838,261)


(47,989,665)


(11,582,764)


(29,308,647)

    Total operating expenses

(78,510 893)


(79,298,812)


(24,871,067)


(39,577,234)









    Operating income

158, 154,750


167,656,469


66,594,051


42,579,284









Interest income

5,290,705


5,847,274


1,262,406


1,374,799

Interest expense

(45,370,872)


(41,370,432)


(12,504,933)


(8,966,648)

Foreign currency exchange gains (losses)

(6,498,908)


1,951,732


(1,779,485)


1,595,060

Losses on foreign currency contracts

(1,048,599)


-


(463,875)


-

Loss on debt extinguishment



(18,963,834)


-


-

Government grants

11,619,037


3,914,360


6,200,539


2,475,771

    Total non-operating expenses, net

(36,008,637)


(48,620,900)


(7,285,348)


(3,521,018))









    Income before income taxes

122,146,113


119,035,569


59,308,703


39,058,266









Income tax expense

(90,524,379)


(17,422,819)


(79,788,408)


(2,335,447)









    Net income

31,621,734


101,612,750


(20,479,705)


36,722,819









Earnings (losses) per common share:








Basic and diluted

0.48


1.54


(0.31)


0.56

Net Income (loss)

31,621,734


101,612,750


(20,479,705)


36,722,819









Other comprehensive income (loss)








Foreign currency translation adjustment, net
of nil income taxes

46,343,088


(46,085,173)


12,786,001


(27,617,945)









Comprehensive income (loss)

77,964,822


55,527,577


(7,693,704)


9,104,874

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



Series B Preferred Stock


Common Stock




Additional




Accumulated
Other


Total



Number
of

Shares


Amount


Number
of

Shares


Amount


Treasury

Stock


Paid-in

Capital


Retained

Earnings


Comprehensive

Income (Loss)


Stockholders'

Equity





US$




US$


US$


US$


US$


US$


US$


Balance at
January 1,
2015


1,000,000



100



49,151,796



4,916



(92,694)



80,875,787



431,823,706



12,775,801



525,387,616


Net income


-



-



-



-



-



-



83,732,279



-



83,732,279


Other
comprehensive
loss - Foreign
currency
translation
adjustment,
net of nil
income taxes


-



-



-



-



-



-



-



(32,118,459)



(32,118,459)


Stock based
compensation


-



-



-



-



-



1,044,162



-






1,044,162


Vesting of
unvested shares


-



-



171,488



17



-



(17)



-



-



-


Balance as of
December 31,
2015


1,000,000



100



49,323,284



4,933



(92,694)



81,919,932



515,555,985



(19,342,658)



578,045,598


Net income


-



-



-



-



-



-



101,612,750



-



101,612,750


Other
comprehensive
loss - Foreign
currency
translation
adjustment,
net of nil
income taxes


-



-



-



-



-



-



-



(46,085,173)



(46,085,173)


Stock based
compensation


-



-



-



-



-



686,491



-






686,491


Vesting of
unvested shares


-



-



188,257



19



-



(19)



-



-



-


Balance as of
December 31,
2016


1,000,000



100



49,511,541



4,952



(92,694)



82,606,404



617,168,735



(65,427,831)



634,259,666


Net income


-



-



-



-



-






31,621,734



-



31,621,734


Other
comprehensive
income

Foreign
currency
translation
adjustment,
net of nil
income taxes


-



-



-



-



-



-



-



46,343,088



46,343,088


Stock based
compensation


-



-



-



-



-



553,512



-



-



553,512


Vesting of
unvested
shares


-



-



216,190



23



-



(23)



-



-



-


Balance as of
December 31,
2017


1,000,000



100



49,727,731



4,975



(92,694)



83,159,893



648,790,469



(19,084,743)



712,778,000


 

CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS




Years Ended December 31,



2017



2016



2015



US$



US$



US$

Cash flows from operating activities:









Net income



31,621,734




101,612,750




83,732,279

Adjustments to reconcile net income to net cash provided by operating
activities:












Net reversal for doubtful accounts



-




-




(69,281)

Depreciation and amortization



43,055,976




34,244,842




27,540,212

Stock-based compensation



553,512




686,491




1,044,162

Amortization of discount and issuance cost of the Notes



-




767,170




1,086,010

Amortization of issuance cost of the Syndicate loan facility



3,750,028




1,273,438




-

Change in fair value of foreign currency option contracts



1,048,599




-




-

Foreign currency exchange losses (gains)



6,038,799




(2,965,949)




2,720,131

Losses on disposals of property, plant and equipment



17,509




259,104




9,036

Deferred income tax benefit



(2,407,706)




(2,292,830)




(2,380,236)

Loss on debt extinguishment



-




18,963,834




-

Restricted cash



(31,588,120)




(27,269,199)




(4,011,349)

Accounts receivable



120,443,715




(190,860,210)




(40,614,289)

Amounts due from a related party



243,779




-




(35,937)

Inventories



(120,026,438)




(3,764,167)




(58,103,919)

Prepaid expenses and other current assets



(26,354,886)




21,222,125




(4,542,796)

Value added tax in long-term prepayments to equipment suppliers



(23,267,330)




(575,483)




-

Other non-current assets



45,674




1,386,939




(371,872)

Bills payable



92,130,473




122,226,675




(8,119,365)

Accounts payable



(108,053,082)




82,085,904




116,133,982

Amounts due to a related party



(12,155)




3,792




8,167

Income taxes payable



16,581,508




(5,807,300)




(3,889,710)

Accrued expenses and other current liabilities



18,609,923




(75,664,932)




86,963,823

Deferred income



(4,630,632)




(304,465)




3,371,249

Other non-current liabilities



64,895,667




9,255,439




11,098,323

   Net cash provided by operating activities



82,696,547




84,483,968




227,370,738

Cash flows from investing activities:












Proceeds from maturity of time deposits



475,873,199




515,088,058




463,771,799

Purchase of time deposits



(564,710,760)




(475,315,245)




(474,254,312)

Purchase of land use rights



(8,279,334)




-




(13,931,804)

Purchases of and deposits for property, plant and equipment



(456,474,007)




(210,840,098)




(267,427,681)

Refund of deposit from an equipment supplier



280,814,137




-




-

Deposits for acquisition of equity



(11,937,192)









Government grant related to the construction of Sichuan plant



29,382,885




22,478,569




11,499,000

   Net cash used in investing activities



(255,331,072)




(148,588,716)




(280,342,998)

Cash flows from financing activities:












Proceeds from bank borrowings



842,571,025




687,164,318




504,218,741

Repayment of bank borrowings



(682,921,893)




(537,809,334)




(339,528,477)

Redemption of notes payable



-




(165,366,000)




-

Proceeds from Syndicate loan facility



-




180,000,000




-

Proceeds from early exercise of  options



-




-




121,725

Release of restricted cash as collateral for bank borrowings



92,186,142




31,375,326




-

Placement of restricted cash as collateral for bank borrowings



(68,227,246)




(66,757,459)




(33,077,094)

Payments of issuance cost of bank borrowings



-




(6,770,000)




-

   Net cash provided by financing activities



183,608,028




121,836,851




131,734,895

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



11,332,263




(9,574,143)




(4,290,762)

Net increase in cash and cash equivalents



22,305,766




48,157,960




74,471,873

Cash and cash equivalents at beginning of year



168,086,445




119,928,485




45,456,612

Cash and cash equivalents at end of year



190,392,211




168,086,445




119,928,485

Supplemental disclosure of cash flow information:












Interest paid, net of US$2,893,630,  US$ 2,562,026and US$ 231,356
capitalized for the years ended December 31, 2017, 2016 and 2015,
respectively



38,695,738




45,782,010




40,136,978

Income taxes paid



13,030,643




19,521,472




8,982,167

Non-cash investing and financing activities:












Government grant related to construction in the form of repayment of bank
loans on behalf of the Company by the government



-




-




38,118,231

Government grant related to the construction of Sichuan plant in the form of
restricted cash (note 2(e))



1,537,935




-




11,117,817

Accrual for purchase of equipment



5,144,134




94,031,275




41,251,663

 

CHINA XD PLASTICS COMPANY LIMITED

Reconcilation of Net Income to EBITDA

(Amounts expressed in United States Dollars)


Three-Month Period Ended

December 31,

Years Ended December 31,


2017

2016

2017

2016






Net income -GAAP

$     (20,479,705)

$  36,722,819

$     31,621,734

$ 101,612,750

Interest expense

12,504,933

8,966,648

45,370,872

41,370,432

Provision for income taxes

79,788,408

2,335,447

90,524,379

17,422,819

Depreciation and amortization expense

11,055,793

10,207,125

43,055,976

34,244,842

EBITDA

82,869,429

58,232,039

210,572,961

194,650,843

Cision View original content:http://www.prnewswire.com/news-releases/specialty-chemical-company-china-xd-plastics-announces-fourth-quarter-and-fiscal-year-2017-financial-results-300614554.html

Source: China XD Plastics Company Limited
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