XI'AN, China, Nov. 11 /PRNewswire-Asia/ -- China Housing & Land Development, Inc., ("China Housing" or the "Company", Nasdaq: CHLN) today announced its unaudited financial results for the third quarter ended September 30, 2009.
Highlights for the Third Quarter 2009:
-- Total revenues increased 215% to $23.8 million compared to $7.5 million
in the third quarter of 2008, and increased 5.3% sequentially from
$22.6 million in the second quarter of 2009.
-- Total gross floor area ("GFA") sales were 32,436 sq. meters, compared
to 11,069 sq. meters in the third quarter of 2008 and 31,141 sq. meters
in the second quarter of 2009.
-- Gross profit increased 403% to $7.4 million compared to $1.5 million in
the third quarter of 2008. Third quarter gross margin increased to
31.2% compared to 19.5% in the third quarter of 2008.
-- SG&A expenses as a percentage of total revenue declined to 10.5% from
21.1% in the third quarter of 2008.
-- Operating income was $4.0 million, compared to a net loss of ($3.2
million) in the third quarter of 2008 and income of $5.1 million in the
second quarter of 2009.
-- Net income increased 779% to $12.7 million, compared to $1.4 million in
the third quarter of 2008 and a net loss of ($10.0 million) in the
second quarter of 2009. Third quarter net income included a $5.7
million, or $0.17 per share non-cash gain associated with the
revaluation of derivatives and warrants. Excluding this gain, non-GAAP
net income would have been $7.2 million.
-- Basic and diluted net income per share attributable to ordinary
shareholders was $0.41 and $0.24, compared to basic and diluted
earnings per share of $0.05 and $0.04 in the third quarter of 2008 and
diluted loss per share of ($0.32) in the second quarter of 2009.
Mr. Pingji Lu, China Housing's Chairman commented, "We are pleased with our results for the third quarter as we continued to see stabilized sales trends and higher average selling prices, most notably with our two major projects-JunJing II Phase One and Two. With 91% of units sold and 82% of available GFA sold, we have pre-sold most of JunJing II Phase One's available residential units in just over one year. Pre-sales of JunJing II Phase Two commenced in the third quarter and thus far, the average selling price per sq. meter has exceeded Phase One due to Phase Two's enhanced design layout. Additionally, we are off to a good start with our Puhua Phase One project with initial sales that have exceeded our original expectations. This is our first project within our Baqiao new development zone and we believe our success with this project can further enhance our reputation in Xi'an and the surrounding region. The overall real estate market sentiment in Xi'an has improved each quarter since the beginning of this year and we are particularly satisfied with our 12.9% increase in ASPs from last quarter. We remain focused on providing a steady pipeline of quality, state-of-the-art residential housing and commercial units to meet the rising demand in the marketplace."
For the quarter ended September 30, 2009, the Company's revenues were $23.8 million, representing an increase of 215.3% from $7.5 million as compared to the same period of 2008 and a sequential increase of 5.3% from $22.6 million as compared to the 2nd quarter of 2009. The increase primarily stems from the JunJing II Phase One and Two projects under construction.
Total gross floor area sold was 32,436 sq. meters, compared to 11,069 sq. meters in the third quarter of 2008 and 31,141 sq. meters in the second quarter of 2009. Average selling price per square meter increased to RMB 5,001 from RMB 4,430 in the second quarter, reflecting increased stability in Xi'an's real estate market and the Company's ability to target its residential units toward working professionals in the region.
Gross profit for the third quarter of 2009 was $7.4 million, up 403% from $1.5 million in the same period of 2008 and up 2.9% sequentially from $7.2 million in the second quarter of 2009. The gross profit margin for the third quarter was 31.2%, compared to 19.5% in the same period of 2008. The increase in gross margin reflects an improvement in market conditions.
Selling, general and administrative ("SG&A") expenses were $2.5 million for the third quarter of 2009, compared to $1.6 million for the third quarter of 2008 and $1.9 million for the second quarter of 2009. The increase in SG&A expense was due primarily to marketing expenses associated with Tsining JunJing II Phase One and Phase Two as well as administrative and marketing expenses related to the Puhua project. As a percentage of total revenue, SG&A expenses declined year-over-year to 10.5% compared to 21.1% in the third quarter of 2008 and was comparable to 8.6% in the second quarter of 2009.
Operating income increased to $4.0 million compared to an operating loss of ($3.2 million) in the third quarter of 2008 and $5.1 million in the second quarter of 2009.
Net income for the third quarter of 2009 increased 779% to $12.7 million, or $0.41 per basic share and $0.24 per diluted share, compared to $1.4 million, or $0.05 per basic share and $0.04 per diluted share, in the third quarter of 2008 and net loss of ($10.0 million), or ($0.32) per diluted share, in the second quarter of 2009. Adjusted net income excluding a $5.7 million non-cash gain associated with the revaluation of derivatives and warrants, was $7.2 million, or $0.06 per diluted share.
As of September 30, 2009, China Housing reported $19.1 million in cash, compared to $10.1 million as of June 30, 2009 and $37.4 million on December 31, 2008. Total debt was $52.6 million, compared to $48.5 million as of June 30, 2009 and $59.2 million on December 31, 2008, as the Company repaid a portion of its $147 million revolving credit line. Net debt as a percent of total capital was 21.4% at the end of the third quarter of 2009, compared to 15.6% at the end of 2008.
Sequential Quarterly Revenue Breakout Comparison
Q3 2009 Q2 2009
Revenue Revenue
Project Recognized GFA Sold ASP Recognized GFA Sold ASP
($) (m2) (Rmb) ($) (m2) (Rmb)
Projects Under
Construction
JunJing II
Phase One 12,130,788 6,801 4,845 20,020,886 28,367 4,358
JunJing II
Phase Two 8,804,441 23,606 4,957 960,176 2,456 5,283
Projects Completed
Tsining-24G 1,588,845 1507 7,199 1,018,023 630 11,038
JunJing I (88,081) (166) 3,621 (1,018,606) (788) 8,825
Additional
Projects 292,289 688 2,902 200,460 476 2,873
Other Income 1,065,363 -- -- 1,420,979 -- --
Total 23,793,645 32,436 5,001 22,601,919 31,141 4,430
Q-o-Q change 5.3% 4.2% 12.9%
2009 Outlook
Fourth quarter 2009 GFA sales are expected to range from 46,000 to 48,000 square meters, compared to 32,046 sq. meters in the third quarter of 2009, and contract sales in fourth quarter are expected to reach US$32 million to US$34 million. The Company is reporting contract sale estimates which are not subject to percentage of completion alterations in contrast to revenues.
For the full year 2009, total GFA sales are expected to range from 130,000 to 132,000 square meters, compared to 64,167 square meters in 2008. Total contract sales in 2009 are expected to reach US$86 million to US$88 million.
Mr. Lu concluded, "In addition to our current projects under development, we have several new construction projects that can position us for solid growth in the years to come. As of the end of September, we have approximately 272 thousand sq. meters of unsold GFA from our existing projects, primarily JunJing II Phase One, Phase Two and Puhua Phase One. We also have an additional three projects under planning (JunJing III, Park Plaza and Golden Bay). Our balance sheet remains healthy and we will continue to selectively explore new projects both in Xi'an and potentially in other surrounding tier 2 cities in northwest China as the real estate market continues to move off its lows of the past year. We are encouraged by our opportunities as we build a sustainable platform for growth."
Conference Call Information
China Housing's management will host an earnings conference call on November 11, 2009 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing 1-719-325-2115. To listen to the live webcast of the event, please go to http://www.viavid.net . Listeners may access the call replay, which will be available through November 18, by dialing 1-719-457-0820; passcode: 5491295.
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 and only Chinese real estate development company traded on NASDAQ. The Company's news releases, project information, photographs, and more are available on the internet at http://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 are 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.
Notes to Unaudited Financial Information
This release contains unaudited financial information which is subject to year end audit adjustments. In addition, we are in the process of conducting further evaluations of our internal control over financial reporting for compliance with the requirements of Section 404 under the Sarbanes-Oxley Act. We make no representation of management's assessment regarding internal control over financial reporting or include an attestation report of the Company's independent auditors due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between our audited financial statements and this unaudited financial information.
(Financial Tables to Follow)
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Balance Sheets
As of September 30, 2009 and December 31, 2008
(unaudited)
September 30, December 31,
2009 2008
ASSETS
Cash $ 19,089,130 $ 37,425,340
Cash - restricted 694,334 805,012
Accounts receivable, net of
allowance for doubtful accounts
of $1,002,074 and $1,278,156,
respectively 5,877,162 813,122
Other receivables and prepaid
expenses, net 1,518,719 446,497
Notes receivable, net 274,399 811,695
Prepaid other taxes 1,300,432 545,979
Real estate held for development or
sale 108,220,307 60,650,011
Property and equipment, net 12,868,210 12,391,501
Asset held for sale 14,300,936 14,308,691
Advance to suppliers 863,478 704,275
Deposits on land use rights 28,432,993 47,333,287
Intangible assets, net 41,654,421 46,043,660
Goodwill 816,433 --
Deferred selling costs 344,354 --
Deferred financing costs 506,245 622,118
Total assets 236,761,553 222,901,188
LIABILITIES
Accounts payable $ 18,638,322 $ 10,525,158
Advances from customers 9,252,447 9,264,385
Accrued expenses 4,838,168 3,539,842
Accrued security registration
expenses -- 613,483
Payable to acquisition of businesses 6,342,865 8,429,889
Income taxes payable 6,554,658 8,078,709
Other payables 4,398,464 5,183,251
Loans from employees 2,195,218 1,517,039
Loans payable 29,591,867 35,617,442
Deferred tax liability 11,504,676 11,510,915
Warrants liability 4,721,294 1,117,143
Fair value of embedded derivatives 3,777,670 760,398
Convertible debt 14,511,239 13,621,934
Total liabilities 116,326,888 109,779,588
SHAREHOLDERS' EQUITY
Common stock: $.001 par value,
Authorized 100,000,000 shares
issued and outstanding 31,270,679
and 30,893,757, respectively 31,270 30,894
Additional paid in capital 33,062,320 31,390,750
Common stock subscribed 2,487,777 --
Statutory reserves 3,696,038 3,541,226
Retained earnings 42,171,440 38,651,579
Accumulated other comprehensive
income 10,155,625 10,397,801
Total China Housing & Land Development,
Inc. shareholders' equity 91,604,470 84,012,250
Non-controlling interest 28,830,195 29,109,350
Total shareholders' equity 120,434,665 113,121,600
Total liabilities and shareholders'
equity $236,761,553 $222,901,188
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Income
and Other Comprehensive Income
For The Three and Nine Months Ended September 30, 2009 and 2008
(Unaudited)
3 Months 3 Months 9 Months 9 Months
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
REVENUES
Sale of
properties $22,728,282 $7,475,692 $56,835,091 $25,054,867
Other income 1,065,363 70,070 3,405,156 482,022
Total revenues 23,793,645 7,545,762 60,240,247 25,536,889
COSTS AND EXPENSES
Cost of
properties
and land 16,374,170 6,071,599 41,266,855 19,691,432
Selling,
general, and
administrative
expenses 2,501,688 1,594,514 5,853,458 4,161,865
Stock based
compensation 87,777 3,000,000 87,777 3,000,000
Security
registration
expenses 579,775 -- 1,786,517 --
Other expenses 284,044 60,848 474,167 76,758
Interest expense 417,809 638,228 1,202,786 1,736,344
Accretion expense
on convertible
debt 311,319 266,541 889,305 691,782
Change in fair
value of
embedded
derivatives (2,695,306) (2,101,825) 3,017,272 (2,556,313)
Change in fair
value of
warrants (3,042,752) (2,939,563) 4,012,736 (3,895,615)
Foreign exchange
loss -- (103,344) -- --
Total costs and
expenses 14,818,524 6,486,998 58,590,873 22,906,253
Income before
provision for
income taxes 8,975,121 1,058,764 1,649,374 2,630,636
Recovery of
income taxes (3,652,886) (388,308) (1,591,331) --
NET INCOME 12,628,007 1,447,072 3,240,705 2,630,636
Less: net loss
attributable to
non-controlling
interest (86,121) -- (279,155) --
Net income
attributable to
China Housing &
Land Development,
Inc. 12,714,128 1,447,072 3,519,860 2,630,636
OTHER
COMPREHENSIVE
INCOME (LOSS)
Gain (loss) in
foreign exchange 69,244 911,996 (242,176) 6,176,248
COMPREHENSIVE
INCOME $12,783,372 $2,359,068 $3,277,684 $8,806,884
WEIGHTED AVERAGE
SHARES
OUTSTANDING
Basic 31,134,137 30,877,453 30,987,760 30,389,712
Diluted 32,972,253 30,882,483 30,996,953 30,436,461
NET INCOME PER
SHARE
Basic $0.41 $0.05 $0.11 $0.09
Diluted $0.24 $0.04 $0.11 $0.07
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Cash Flows
For The Nine Months Ended September 30, 2009 and 2008
(Unaudited)
September 30, September 30,
2009 2008
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 3,240,705 $ 2,630,636
Adjustments to reconcile net income
to cash provided by (used in)
operating activities:
Bad debt expense 80,713 --
Depreciation 471,788 233,915
Exchange gain -- (103,344)
Loss on disposal of fixed assets and
inventory 50,501 15,088
Amortization of stock issued for
investor relations fees -- 107,987
Stock-based compensation 87,777 3,000,000
Security registration expenses
settled with common stock to
be issued 1,786,517 --
Change in fair value of warrants 4,012,736 (3,895,615)
Change in fair value of embedded
derivatives 3,017,272 (2,556,313)
Accretion expense on convertible
debt 889,305 691,782
Non-cash proceeds from sale of
properties (31,673) (2,904,172)
(Increase) decrease in assets:
Accounts receivable (4,702,750) (1,444,437)
Prepaid other taxes (803,561) --
Real estate held for development or
sale (35,859,057) (16,437,686)
Advances to suppliers (159,660) 486,434
Refund (deposit) on land use rights 11,534,025 (4,386,535)
Other receivable and deferred
charges 234,834 24,339
Deferred selling costs (344,134) --
Deferred financing costs 155,873 162,269
Increase (decrease) in liabilities:
Accounts payable 8,103,243 2,852,863
Advances from customers (135,544) 5,981,215
Accrued expenses 1,165,695 740,465
Other payables (1,941,379) 40,646
Income taxes payable (1,621,435) (123,908)
Net cash used in operating
activities (10,808,209) (14,884,371)
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash 110,130 (755,376)
Purchase of buildings, equipment and
automobiles (587,595) (868,817)
Notes receivable collected 212,140 139,327
Cash acquired in business combinations 519,309 --
Proceeds from sale of property and
equipment 194,006 867,806
Net cash provided by (used in)
investing activities 447,990 (617,060)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of
convertible debt -- 19,230,370
Loans from bank 12,444,063 32,213,727
Repayments of loans payable (18,447,426) (20,044,097)
Loans from or repayment to
employees, net 678,545 (990,087)
Repayment of payables for
acquisition of businesses (3,841,072) (3,656,905)
Proceeds from exercise of warrants 1,184,662 --
Proceeds from issuance of common
stock and warrants -- 8,415
Net cash (used in) provided by
financing activities (7,981,228) 26,761,423
(DECREASE)/INCREASE IN CASH (18,341,447) 11,259,992
Effects on foreign currency exchange 5,237 773,037
CASH, beginning of period 37,425,340 2,351,015
CASH, end of period $ 19,089,130 $ 14,384,044
