XI'AN, China, May 15, 2014 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended March 31, 2014.
Highlights for Q1 2014:
Mr. Pingji Lu, China Housing's Chairman, commented, "While the market environment was challenging in the first quarter, our revenue performance exceeded the mid-point of our revenue guidance by 38%. Four main projects contributed to the majority of our first quarter revenue along with $6.2 million in property management and construction revenue. We launched one new project in the first quarter, Puhua Phase Four."
"Overall market conditions remain uncertain. Sales of lower end units at our Ankang and Puhua Phase Four projects generally remain stable while sales at our higher end projects, such as Puhua Phase Two are not as strong as they could be as potential buyers in this category wait for greater clarity related to new government real estate policy before committing to new purchases. While Xi'an real estate market conditions remain soft, we believe in the long term strength of the housing market in and around the Xi'an region. Finally, we repurchased shares in the first quarter and intend to continue our share repurchase activity during the second quarter."
Total revenue in the first quarter of 2014 decreased 60.7% to $22.0 million from $56.1 million in the fourth quarter of 2013 and decreased 57.1% from $51.4 million in the first quarter of 2013. Other revenue in the first quarter of 2014 was $6.2 million, compared to $8.9 million in the fourth quarter of 2013 and $11.1 million in the first quarter of 2013.
In the first quarter of 2014, the majority of the Company's real estate revenue came from its Puhua Phase Two and Three projects, Park Plaza and Ankang projects. 2014 first quarter contract sales totaled $19.8 million compared with $31.0 million in the fourth quarter of 2013 and $82.4 million in the first quarter of 2013. Total gross floor area ("GFA") sales were 20,416 sq. meters during the first quarter of 2014, compared with 28,582 sq. meters in the fourth quarter of 2013 and 89,691 sq. meters in the first quarter of 2013. The Company's ASP in the first quarter of 2014 was RMB 5,919, compared with RMB 6,600 in the fourth quarter of 2013, and RMB 5,695 in the first quarter of 2013.
Gross profit for the three months ended March 31, 2014 was $5.4 million, representing a decrease of 57.7% from $12.6 million in the fourth quarter of 2013 and a 39.4% decrease from $8.8 million in the first quarter of 2013. Gross profit margin for the three months ended March 31, 2014 was 24.1%, compared to 22.4% in the fourth quarter of 2013 and the 17.1% in the first quarter of 2013. The increase in gross profit margin was mainly due to an adjustment on the total estimated cost of Park Plaza, Puhua Phase Two and Three projects, of which the accumulated impact was recorded in the first and fourth quarter of 2013 and caused the lower gross margin of those periods. The Company did not make any revision on the total estimated cost during the first quarter of 2014, thus there was no impact on the gross profit margin. Additionally, the Company initiated a group purchase sale on its Puhua Phase Three project at a discounted selling price during the first quarter of 2013 which also reduced the gross margin during that period. The 24.1% gross profit margin during the first quarter of 2014 was within the Company's normal historic range.
SG&A expense was $4.0 million in the first quarter of 2014, compared with $5.1 million in the fourth quarter of 2013 and $3.2 million in the first quarter of 2013. SG&A expense as a percentage of total revenue was 18.1%, compared with 9.1% in the fourth quarter of 2014 and 6.1% in the first quarter of 2013. The increase from the first quarter of 2013 in SG&A expense was mainly due to the increase of salaries and advertising expenses.
Operating loss in the first quarter of 2014 was $205 thousand, compared to operating income of $205 thousand in the fourth quarter of 2013, and $4.0 million in the first quarter of 2013. The year-over-year decrease in operating income was mainly due to reduced sales revenue.
Net loss attributable to China Housing in the first quarter of 2014 was $774 thousand, or ($0.02) per diluted share. This performance compares with net income of $3.9 million, or $0.11 per diluted share, in the fourth quarter of 2013 and net income of $2.9 million, or $0.08 per diluted share, in the first quarter of 2013.
Sequential Quarterly Revenue Breakout Comparison
Project | Q1 2014 | Q4 2013 | ||||||||||||
Recognized | Contract | GFA | ASP | Unsold | POC | Recognized | Contract | GFA | ASP | |||||
($) | ($) | (m2) | (RMB) | (m2) | ($) | ($) | (m2) | (RMB) | ||||||
Projects Under Construction | ||||||||||||||
Park Plaza | 4,984,679 | 3,937,986 | 2,811 | 8,549 | 53,806 | 87% | 17,872,157 | 9,946,924 | 6,942 | 8,727 | ||||
Puhua Phase | 2,663,265 | 1,963,774 | 1,788 | 6,700 | 60,508 | 67% | 11,454,315 | 6,111,757 | 5,511 | 6,754 | ||||
Puhua Phase | 1,872,393 | 1,919,787 | 1,515 | 7,731 | 93,982 | 73% | 6,366,008 | 4,739,552 | 4,066 | 7,099 | ||||
Ankang Phase | 5,269,189 | 5,184,245 | 7,860 | 4,025 | 64,566 | 47% | 9,317,653 | 6,145,128 | 9,374 | 3,992 | ||||
Puhua Four | N/A | 6,043,688 | 6,013 | 6,133 | N/A | N/A | N/A | N/A | N/A | N/A | ||||
Projects Completed | ||||||||||||||
Puhua Phase | 677,091 | 421,314 | 189 | 13,629 | 5,506 | 100% | 170,343 | 1,354,140 | 954 | 8.641 | ||||
Puhua Phase | (56,642) | 98,430 | 107 | 5.600 | 31,025 |
100% | 2,024,106 | 2,679,234 | 1,736 | 9,399 | ||||
JunJing III | 396,809 | 236,812 | 133 | 10,844 | 906 | 100% | -73,562 | - | - | - | ||||
JunJing II | 518 | 100% | - | - | - | - | ||||||||
JunJing I | - | - | - | - | 4,366 | 100% | - | - | - | - | ||||
Other Projects | - | - | - | - | - | - | - | |||||||
Other Income | 6,235,627 | 8,927,863 | ||||||||||||
Total | 22,042,411 | 19,806,036 | 20,416 | 5,919 | 315,183 | - | 56,058,883 | 30,976,735 | 28,583 | 6,600 | ||||
Q-o-Q Change | (60.7%) | (36.1%) | (28.6%) | (10.3%) | 125.8% | 66.9% | 60.2% | 3.6% | ||||||
Total debt outstanding as of March 31, 2014 was $317.6 million compared with $300.7 million on December 31, 2013. Net debt outstanding (total debt less cash and restricted cash) as of March 31, 2014 was $191.0 million compared with $161.8 million on December 31, 2013. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 59.5 percent on March 31, 2014 and 54.1 percent on December 31, 2013.
Q1 2014 | ||
Projects in Planning | Unsold GFA | First Pre-sales Scheduled |
(m2) | ||
Golden Bay | 326,494 | Q4 2014 |
Textile City | 630,000 | Q2 2016 |
Park Plaza- Phase II | 60,057 | Q3 2014 |
Ankang Project- Phase II | 207,794 | Q3 2014 |
Total projects in planning | 1,224,345 | |
Second Quarter 2014 Outlook
Total contract revenue for the second quarter 2014 is expected to reach $28 million to $32 million, compared with $59 million in the second quarter of 2013. The Company is reporting revenues, which are subject to percentage of completion alterations.
Conference Call Information
Management will host a conference call at 8:30 am ET on the same day, May 15, 2014. Listeners may access the call by dialing +1-913-312-1501. To listen to the live webcast of the event, please go to http://public.viavid.com/player/index.php?id=109283. Listeners may access the call replay, which will be available through May 22, 2014, by dialing +1-858-384-5517; passcode: 2553975
About China Housing & Land Development, Inc.
Based in Xi'an, the capital city of China's Shaanxi province, China Housing & Land Development, Inc., is a leading developer of residential and commercial properties in northwest China. China Housing has been engaged in land acquisition, development, and management, including the sales of residential and commercial real estate properties through its wholly-owned subsidiary in China, since 1992.
China Housing & Land Development is the first Chinese real estate development company traded on NASDAQ. The Company's news releases, project information, photographs, and more are available on the internet at www.chldinc.com.
Safe Harbor
This news release may contain forward-looking information about China Housing & Land Development, Inc. which is covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward- looking terminology such as believe, expect, may, will, should, project, plan, seek, intend, or anticipate or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing & Land Development's future performance, operations, and products.
Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual performance results may vary significantly from expectations and projections. Further information regarding this and other risk factors are contained in China Housing's public filings with the U.S. Securities and Exchange Commission.
All information provided in this news release and in any attachments is as of the date of the release, and the companies do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
China Housing contacts
Mr. Cangsang Huang
Chief Financial Officer
Tel: +86 29.8258.2648 in Xi'an
Email: chuang@chldinc.com
Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
Tel: +86 29.8258.2639 in Xi'an
Email: jinglu@chldinc.com / English and Chinese
Ms. Sandy Jin
Assistant CFO
Tel: +86 29.8258.2638 in Xi'an
Email: jinq@chldinc.com / English and Chinese
Mr. Bill Zima, ICR
Tel: +86 10 6583 7511
Email: William.Zima@icrinc.com
China Housing Investor Relations Department
Tel: +1 646.308.1285
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
As of March 31, 2014 and December 31, 2013 | |||||||||
March 31, 2014 | December 31, 2013 | ||||||||
ASSETS | |||||||||
Cash | $ | 14,935,316 | $ | 21,320,071 | |||||
Cash - restricted | 111,640,172 | 117,534,900 | |||||||
Accounts receivable, net of allowance for doubtful | |||||||||
accounts of $578,825 and $594,382, respectively | 40,941,976 | 41,158,998 | |||||||
Construction in excess of billing | 2,051,830 | 2,106,975 | |||||||
Other receivables, prepaid expenses and other assets, net | 7,904,290 | 6,197,023 | |||||||
Real estate held for development or sale | 343,326,886 | 289,474,812 | |||||||
Property and equipment, net | 34,567,530 | 36,281,168 | |||||||
Advances to suppliers | 1,114,193 | 697,823 | |||||||
Deposits on land use rights | 27,507,078 | 59,155,165 | |||||||
Intangible asset, net | 28,736,931 | 42,453,473 | |||||||
Goodwill | 1,918,405 | 1,969,964 | |||||||
Deferred financing costs | 765,257 | 1,142,715 | |||||||
Total assets | $ | 615,409,864 | $ | 619,493,087 | |||||
LIABILITIES | |||||||||
Accounts payable | $ | 42,182,920 | $ | 59,400,262 | |||||
Advances from customers | 50,099,123 | 45,441,402 | |||||||
Accrued expenses | 15,675,466 | 17,439,541 | |||||||
Income tax payable | 23,331,748 | 24,534,095 | |||||||
Other taxes payable | 7,931,818 | 7,139,870 | |||||||
Other payables | 14,362,353 | 12,755,824 | |||||||
Loans from employees | 30,265,105 | 25,759,453 | |||||||
Loans payable | 287,309,110 | 274,917,332 | |||||||
Deferred tax liability | 14,400,496 | 14,782,118 | |||||||
Total liabilities | 485,558,139 | 482,169,897 | |||||||
SHAREHOLDERS' EQUITY | |||||||||
Common stock: $.001 par value, authorized 100,000,000 shares; | |||||||||
Issued 34,882,538 and 35,849,204, respectively | 34,882 | 35,849 | |||||||
Additional paid in capital | 51,480,460 | 51,347,620 | |||||||
Treasury stock | (318,915) | (2,400,288) | |||||||
Statutory reserves | 11,535,242 | 11,535,242 | |||||||
Retained earnings | 45,523,830 | 48,696,878 | |||||||
Accumulated other comprehensive income | 21,596,226 | 28,107,889 | |||||||
Total shareholders' equity | 129,851,725 | 137,323,190 | |||||||
Total liabilities and shareholders' equity | $ | 615,409,864 | $ | 619,493,087 | |||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |||||||||
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES | ||||||||
March 31, 2014 | March 31, 2013 | |||||||
REVENUES | ||||||||
Real estate sales | $ | 15,806,784 | $ | 40,291,817 | ||||
Other revenue | 6,235,627 | 11,099,124 | ||||||
Total revenues | 22,042,411 | 51,390,941 | ||||||
COST OF REVENUES | ||||||||
Cost of real estate sales | 12,716,886 | 33,086,100 | ||||||
Cost of other revenue | 4,009,457 | 9,535,899 | ||||||
Total cost of revenues | 16,726,343 | 42,621,999 | ||||||
Gross margin | 5,316,068 | 8,768,942 | ||||||
OPERATING EXPENSES | ||||||||
Selling, general and administrative expenses | 3,989,482 | 3,158,003 | ||||||
Stock-based compensation | 132,840 | 97,537 | ||||||
Other expenses | 3,907 | 59,982 | ||||||
Financing expense | 1,394,530 | 1,446,786 | ||||||
Total operating expenses | 5,520,759 | 4,762,308 | ||||||
Write off of property | 563,710 | - | ||||||
(Loss)income before provision for income taxes | (768,401) | 4,006,634 | ||||||
Provision for income taxes | 17,036 | 1,198,003 | ||||||
Recovery of deferred income taxes | (11,384) | (64,635) | ||||||
Provision for income taxes | 5,652 | 1,133,368 | ||||||
NET (LOSS) INCOME | $ | (774,053) | $ | 2,873,266 | ||||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||
Basic | 34,518,158 | 35,086,599 | ||||||
Diluted | 34,518,158 | 35,086,599 | ||||||
NET (LOSS) INCOME PER SHARE | ||||||||
Basic | $ | (0.02) | $ | 0.08 | ||||
Diluted | $ | (0.02) | $ | 0.08 | ||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements. | ||||||||
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
For The Three Months Ended March 31, 2014 and 2013 | |||||||||||||
March 31, | March 31, | ||||||||||||
2014 | 2013 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||
Net (loss) income | $ | (774,053) | $ | 2,873,266 | |||||||||
Adjustments to reconcile net income to cash provided | |||||||||||||
Depreciation | 591,907 | 485,870 | |||||||||||
Stock-based compensation | 132,840 | 97,537 | |||||||||||
Write off of property | 563,710 | - | |||||||||||
Amortization of intangible assets | 12,610,339 | 55,367 | |||||||||||
Recovery of provision for deferred income taxes | (11,384) | (64,635) | |||||||||||
(Increase) decrease in assets: | |||||||||||||
Accounts receivable | (876,377) | (7,320,730) | |||||||||||
Construction in excess of billing | - | (657,272) | |||||||||||
Other receivable, prepaid expenses and other assets | (1,735,046) | (4,699,079) | |||||||||||
Real estate held for development or sale | (62,583,224) | 14,768,453 | |||||||||||
Advance to suppliers | (443,760) | 4,306 | |||||||||||
Deposit on land use rights | 30,665,151 | - | |||||||||||
Deferred finance costs | 188,146 | 40,127 | |||||||||||
Increase (decrease) in liabilities: | |||||||||||||
Accounts payable | (15,956,843) | (10,714,367) | |||||||||||
Advances from customers | 5,956,860 | (3,058,201) | |||||||||||
Accrued expense | (1,344,586) | 5,577,855 | |||||||||||
Other payables | 1,975,624 | 348,905 | |||||||||||
Income and other taxes payable | 426,456 | 2,804,031 | |||||||||||
Net cash (used in) provided by operating activities | (30,614,240) | 541,433 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||
Purchase of property and equipment | (382,635) | (632,764) | |||||||||||
Net cash used in investing activities | (382,635) | (632,764) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||
Change in restricted cash | 2,871,458 | 278,129 | |||||||||||
Loans from external parties | 24,648,464 | 42,985,007 | |||||||||||
Payments on loans payable | (7,374,873) | (6,620,495) | |||||||||||
Loans from or repayment to employees, net | 5,277,131 | 4,913,176 | |||||||||||
Purchase of treasury stock | (318,589) | - | |||||||||||
Net cash provided by financing activities | 25,103,591 | 41,555,817 | |||||||||||
(DECREASE)/INCREASE IN CASH | (5,893,284) | 41,464,486 | |||||||||||
Effects on foreign currency exchange | (491,471) | 132,798 | |||||||||||
CASH, beginning of period | 21,320,071 | 6,121,448 | |||||||||||
CASH, end of period | $ | 14,935,316 | $ | 47,718,732 | |||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |||||||||||||
