omniture

China HGS Reports Third Quarter of Fiscal Year 2015 Results

2015-08-07 19:00 1946

HANZHONG, China, August 7, 2015 /PRNewswire/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or the "Company"), a leading regional real estate developer headquartered in Hanzhong City, Shaanxi Province, China, today reported its financial results for the third quarter of fiscal 2015 ended June 30, 2015 with the U.S. Securities and Exchange Commission. An electronic copy of the quarterly report on Form 10-Q can be accessed on the SEC's website at www.sec.gov.

Highlights for the Quarter

  • Total revenues for the third quarter of fiscal 2015 were approximately $26 million, a decrease of 10% from approximately $28.9 million in the same quarter of fiscal 2014. Total revenues recognized from percentage of completion method were approximately $25.6 million, which accounted for 98.2% of total revenues in the third quarter of fiscal 2015. The year-over-year decrease of revenue was primarily due to limited inventory on completed projects.
  • Net income for the third quarter of fiscal 2015 totaled approximately $13.7 million, an increase of approximately $5.5 million from the net income of approximately $8.2 million in the same period of last year. The increased net income in this quarter compared to the same quarter of last year was primarily due to sales of higher margin commercial and parking units during the current period.
  • For the nine months ended June 30, 2015, the Company achieved a positive operating cash flow of approximately $13.1 million, compared to negative operating cash flow of approximately $30.7 million in the same period of last year.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2015 were $0.30, an increase of 66.7% from $0.18 for the same quarter of last year.

"I am very pleased that the Company reported strong earnings this quarter, with net income up 68% compared to the same period of last year. As we are selling out our inventory on completed projects, our sales were negatively impacted due to limited number of units for customer selection," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "The overall slower economic environment in China posted challenges for real estate industry. However, our regional real estate market remains stable, with average unit price held steady. Our commercial property and parking units with higher average unit price are particularly in strong demand. Our near term effort is to focus on completion of the projects currently under construction as soon as possible. We expect our contract sales and revenue will improve as we have more GFA available for sale," concluded Mr. Xiaojun Zhu.

Safe Harbor Statement

This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of China HGS Real Estate Inc., which can be identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ. These factors include but are not limited to: the uncertain market for the Company's business, macroeconomic, technological, regulatory, or other factors affecting the profitability of real estate business; and other risks related to the Company's business and risks related to operating in China. Please refer to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2014, as well as the Company's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The Company's actual results could differ materially from those contained in the forward-looking statements. The Company undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

About China HGS Real Estate, Inc.

China HGS Real Estate, Inc. (NASDAQ: HGSH), founded in 1995 and headquartered in Hanzhong City, Shaanxi Province, is a leading real estate developer in the region and holds the national grade I real estate qualification. The Company focuses on the development of high-rise, sub-high-rise residential buildings and multi-building apartment complexes in China's Tier 3 and Tier 4 cities and counties with rapidly growing populations driven by increased urbanization. The Company provides affordable housing with popular and modern designs to meet the needs of multiple buyer groups. The Company's development activity spans a range of services, including land acquisition, project planning, design management, construction management, sales and marketing, and property management. For further information about China HGS, please go to www.chinahgs.com.

Company contact:

Randy Xiong
President of Capital Market
China Phone: (86) 091-62622612
Email: randy.xiong@chinahgs.com

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)






June 30



September 30




2015



2014


ASSETS









Current assets:









Cash


$

3,784,384



$

1,125,545


Restricted cash



1,783,501




1,589,887


Advances to vendors



223,745




-


Cost and earnings in excess of billings



11,479,614




12,332,396


Real estate property development completed



4,452,559




6,050,263


Real estate property under development



122,564,553




140,313,127


Other current assets



237,488




1,409,367











Total current assets



144,525,844




162,820,585











Property, plant and equipment, net



832,824




889,497


Real estate property development completed, net of current portion



2,312,716




2,572,215


Security deposits for land use right



3,273,965




3,249,549


Real estate property under development, net of current portion



141,714,322




128,516,074


Due from local government for real estate property development completed



2,370,939




3,165,644











Total Assets


$

295,030,610



$

301,213,564











LIABILITIES AND STOCKHOLDERS' EQUITY









Current liabilities:









Bank loan - current portion


$

11,458,879



$

12,998,197


Short-term loans - other



13,090,951




15,290,753


Accounts payable



31,984,471




57,317,877


Other payables



14,770,664




13,777,853


Construction deposits



382,838




367,133


Billings in excess of cost and earnings



7,785,747




2,960,452


Customer deposits



20,876,258




31,100,334


Shareholder loan



3,903,701




5,465,743


Accrued expenses



4,958,910




3,801,567


Taxes payable



15,153,949




12,579,071











Total current liabilities



124,366,368




155,658,980











Long-term bank loan, less current portion



1,636,983




6,499,098


Deferred tax liabilities



4,389,695




2,992,459


Customer deposits, net of current portion



6,704,214




3,829,870


Construction deposits, net of current portion



1,011,910




1,004,364











Total liabilities



138,109,170




169,984,771


Commitments and Contingencies









Stockholders' equity









Common stock, $0.001 par value, 100,000,000 shares authorized, 45,050,000
shares issued and outstanding June 30, 2015 and September 30, 2014



45,050




45,050


Additional paid-in capital



17,759,349




17,759,349


Statutory surplus



12,845,197




12,845,197


Retained earnings



116,440,388




91,834,708


Accumulated other comprehensive income



9,831,456




8,744,489


Total stockholders' equity



156,921,440




131,228,793











Total Liabilities and Stockholders' Equity


$

295,030,610



$

301,213,564




The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)




Three months ended June 30,



Nine months ended June 30,




2015



2014



2015



2014















Real estate sales


$

26,014,516



$

28,854,104



$

60,138,945



$

92,902,437


Less: Sales tax



1,655,046




1,746,835




3,892,435




5,700,706


Cost of real estate sales



9,347,052




17,538,690




27,702,998




58,077,310


Gross profit



15,012,418




9,568,579




28,543,512




29,124,421



















Operating expenses

















Selling and distribution expenses



211,558




154,007




804,700




522,273


General and administrative expenses



427,363




557,779




1,636,889




1,684,253


Total operating expenses



638,921




711,786




2,441,589




2,206,526



















Operating income



14,373,497




8,856,793




26,101,923




26,917,895



















Interest income



-




3,401




-




12,406


Interest expense



(22,540)




(17,793)




(54,300)




(53,973)


Income before income taxes



14,350,957




8,842,401




26,047,623




26,876,328



















Provision for income taxes



641,368




681,130




1,441,943




2,099,030


Net income



13,709,589




8,161,271




24,605,680




24,777,298



















Other comprehensive income (loss)

















Foreign currency translation adjustment



306,940




124,287




1,086,967




(408,017)



















Comprehensive income


$

14,016,529



$

8,285,558



$

25,692,647



$

24,369,281



















Basic and diluted income per common share

















Basic


$

0.30



$

0.18



$

0.55



$

0.55


Diluted


$

0.30



$

0.18



$

0.55



$

0.55



















Weighted average common shares
outstanding

















Basic



45,050,000




45,050,000




45,050,000




45,050,000


Diluted



45,075,821




45,125,144




45,089,819




45,125,144



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Nine months ended June 30,




2015



2014


Cash flows from operating activities









Net income


$

24,605,680



$

24,777,298


Adjustments to reconcile net income to net cash provided by (used in)
operating activities:









Deferred tax provision



1,369,997




1,681,415


Depreciation



63,137




54,933


Changes in assets and liabilities:









Restricted cash



(181,039)




(375,470)


Due from local government for real estate property development
completed



815,661




(3,174,981)


Advances to vendors



(222,972)




109,130


Cost and earnings in excess of billings



942,175




(4,732,899)


Real estate property development completed



1,915,343




9,297,037


Real estate property under development



6,547,520




(87,987,018)


Other current assets



1,178,377




(290,275)


Accounts payables



(25,674,976)




2,728,118


Other payables



886,212




8,432,511


Billings in excess of cost and earnings



4,786,440




3,575,124


Customer deposits



(7,585,864)




10,913,504


Construction deposits



12,902




4,793


Accrued expenses



1,126,826




179,365


Taxes payable



2,471,784




4,085,999


Net cash provided by (used in) operating activities



13,057,203




(30,721,416)











Cash flow from financing activities









Proceeds from shareholder loan



10,500,816




7,577,486


Repayment of shareholder loan



(12,084,829)




(1,906,593)


Proceeds from bank loan



-




8,147,834


Repayment of bank loan



(6,525,285)




(1,629,567)


Proceeds from short-term loans-other



9,787,928




15,335,854


Repayment of short-term loans-other



(12,094,617)




-


Net cash (used in) provided by financing activities



(10,415,987)




27,525,014











Effect of changes of foreign exchange rate on cash



17,623




(8,816)


Net decrease in cash



2,658,839




(3,205,218)


Cash, beginning of period



1,125,545




5,878,101


Cash, end of period


$

3,784,384



$

2,672,883


Supplemental disclosures of cash flow information:









Interest paid


$

1,355,741



$

1,143,784


Income taxes paid


$

102,337



$

291,776



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-hgs-reports-third-quarter-of-fiscal-year-2015-results-300124701.html

Source: China HGS Real Estate Inc.
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