XI'AN, China, November 14, 2014 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended September 30, 2014.
Highlights for Q3 2014:
Mr. Pingji Lu, China Housing's Chairman, commented, "We were pleased that our third quarter contract sales met our financial guidance projections and that we returned to profitability once again compared to the prior quarter. We were able to maintain respectable average selling prices for our units however local real estate market conditions in Xi'an and the surrounding region remain difficult as home buyers remain cautious with their purchase activity. There were five projects that contributed to the majority of our sales in the third quarter, led by our Park Plaza project."
"The Chinese government recently passed several important policies to improve national housing market conditions. While we believe such initiatives can help stabilize the market and increase home purchasing activity over time, we foresee ongoing uncertainty in the near future and expect market turbulence to continue in the fourth quarter. Supply and demand conditions in the local Xi'an housing market remain challenging as competition continues to be fierce. As a result, we intend to increase our promotional efforts to drive unit volume and enhance cash flow in the fourth quarter, which can help stabilize our operations. We will maintain our focus on boosting sales and minimizing costs as we wait for market conditions to improve," concluded Mr. Lu.
Total revenue in the third quarter of 2014 decreased 37.1% to $27.7 million from $44.1 million in the second quarter of 2014 and increased 11.6% from $24.8 million in the third quarter of 2013. Other revenue in the third quarter of 2014 increased to $4.9 million from $3.3 million in the second quarter of 2014 and $3.8 million in the third quarter of 2013.
In the third quarter of 2014, the Company's top three real estate projects measured by revenue were Park Plaza, Puhua Phase Three and Ankang projects. Third quarter 2014 contract sales totaled $23.3 million compared with $31.7 million in the second quarter of 2014 and $18.6 million in the third quarter of 2013. Total gross floor area ("GFA") sales were 21,768 sq. meters during the third quarter of 2014, compared with 30,408 sq. meters in the second quarter of 2014 and 17,846 sq. meters in the third quarter of 2013. The Company's ASP in the third quarter of 2014 was RMB6,597, compared with RMB6,493 in the second quarter of 2014, and RMB6,369 in the third quarter of 2013.
Gross profit for the three months ended September 30, 2014 was $5.8 million, compared to gross loss of $0.8 million in the second quarter of 2014 and a 17.5% increase from $4.9 million in the third quarter of 2013. Gross profit margin for the three months ended September 30, 2014 was 20.9%, compared to negative 1.9% in the second quarter of 2014 and the 19.8% in the third quarter of 2013. The improvement in gross profit margin from the second quarter of 2014 was mainly due to the gross profit margin decreased by change of estimates in the second quarter of 2014.
SG&A expense was $3.9 million in the third quarter of 2014, same as the second quarter of 2014 and compared with $3.8 million in the third quarter of 2013. SG&A expense as a percentage of total revenue was 14.2%, compared with 8.8% inthe second quarter of 2014 and 15.2% in the third quarter of 2013.The increase in the ratio of SG&A to total revenue from the second quarter of 2014 was primarily due to the decrease in revenue.
Operating income in the third quarter of 2014 was $0.5 million compared to operating loss of $6.6 million in the second quarter of 2014, and operating loss of $0.7 million in the third quarter of 2013. The decrease in operating income from the second quarter of 2014 was mainly due to reduced total revenue.
Net income attributable to China Housing in the third quarter of 2014 was $2.2 million, or $0.06 per diluted share. This performance compares with net loss of $6.8 million, or ($0.20) per diluted share, in the second quarter of 2014 and net loss of $0.8 million, or $(0.02) per diluted share, in the third quarter of 2013.
Sequential Quarterly Revenue Breakout Comparison
Project | Q3 2014 | Q2 2014 | ||||||||
Recognized Revenue | Contract Sales | GFA Sold | ASP | Unsold GFA | POC | Recognized Revenue | Contract Sales | GFA Sold | ASP | |
($) | ($) | (m2) | (RMB) | (m2) | ($) | ($) | (m2) | (RMB) | ||
Projects Under Construction | ||||||||||
Park Plaza Phase One | 8,126,813 | 6,150,233 | 4,285 | 8,845 | 40,404 | 98.9% | 15,503,089 | 12,092,922 | 9,117 | 8,265 |
Puhua Phase Three | 5,176,650 | 4,573,451 | 3,639 | 7,748 | 55,457 | 83.1% | 6,472,271 | 1,382,502 | 1,412 | 6,101 |
Puhua Phase Two-East Region | 2,226,757 | 1,916,575 | 1,877 | 6,293 | 87,230 | 81.6% | 6,890,399 | 5,969,853 | 4,875 | 7,631 |
Ankang Phase One | 4,241,380 | 2,559,384 | 3,828 | 4,123 | 53,142 | 62.6% | 7,386,849 | 4,972,520 | 7,596 | 4,079 |
Puhua Four | 2,851,066 | 7,772,451 | 7,868 | 6,090 | 127,571 | 26.3% | 3,485,109 | 6,192,960 | 6,323 | 6,102 |
Projects Completed | ||||||||||
Puhua | 21,271 | 21,271 | - | - | 5,506 | 100% | (284,182) | (284,182) | -- | -- |
Puhua Phase Two-West Region& New Coast Line | 304,026 | 304,026 | 271 | 6,915 | 30,188 |
100% | 616,066 | 616,066 | 566 | 6,780 |
JunJing III | (131,198) | - | - | - | 647 | 100% | 309,952 | 309,952 | 259 | 7,445 |
JunJing I | - | - | - | - | 4,107 | 100% | 433,310 | 433,310 | 259 | 10,407 |
Other Income | 4,893,589 | - | - | - | - | - | 3,254,400 | - | - | |
Total | 27,710,354 | 23,297,391 | 21,768 | 6,597 | 404,252 | - | 44,067,263 | 31,685,903 | 30,408 | 6,493 |
Q-o-Q Change | (37.1)% | (26.5)% | (28.4)% | 1.6% | - | - | 99.9% | 60.0% | 48.9% | 9.7% |
Total debt outstanding as of September 30, 2014 was $333.0 million compared with $300.7 million on December 31, 2013. Net debt outstanding (total debt less cash and restricted cash) as of September 30, 2014 was $212.9 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 62.2 percent on September 30, 2014 and 54.1 percent on December 31, 2013, which mainly resulted from additional debt financing for the next 12 months. Consequently, the ratio of net debt as a percentage of total capital increased as of September 30, 2014 compared with December 31, 2013.
Q3 2013 | ||
Projects in Planning | Unsold GFA | First Pre-sales Scheduled |
(m2) | ||
Golden Bay | 326,494 | Q2 2015 |
Ankang Project-Phase II | 207,794 | Q1 2015 |
Park Plaza- Phase II | 60,057 | Q3 2015 |
Textile City | 630,000 | Q2 2016 |
Total projects in planning | 1,224,345 | |
2014 Fourth Quarter Outlook guidance
Total contract sales for the 2014 fourth quarter are expected to reach $24.3 million to $29.2 million, compared with $23.3 million in the 2014 third quarter and $31.0 million in the fourth quarter of 2013. The Company is reporting revenues, which are subject to percentage of completion alterations.
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
+86 29.8258.2639 in Xi'an
jinglu@chldinc.com / English and Chinese
Mr. Bill Zima, ICR
+86 10 6583 7511
William.Zima@icrinc.com
China Housing Investor Relations Department
+1 646.308.1285
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES | |||||||
Interim Condensed Consolidated Balance Sheets | |||||||
As of September 30, 2014 and December 31, 2013 | |||||||
(Unaudited) | |||||||
September 30, | December 31, | ||||||
ASSETS | |||||||
Cash | $ | 7,013,787 | $ | 21,320,071 | |||
Cash - restricted | 113,112,130 | 117,534,900 | |||||
Short-term investment | 22,070,271 | - | |||||
Accounts receivable, net of allowance for doubtful accounts of $586,219 and $594,382, respectively | 36,231,894 | 41,158,998 | |||||
Construction in excess of billing | 2,078,037 | 2,106,975 | |||||
Other receivables, prepaid expenses and other assets | 10,828,324 | 7,188,153 | |||||
Real estate held for development or sale | 368,088,188 | 289,474,812 | |||||
Property and equipment, net | 42,495,001 | 36,281,168 | |||||
Advance to suppliers | 1,929,343 | 697,823 | |||||
Deposits on land use rights | 16,454,057 | 59,155,165 | |||||
Intangible assets, net | 24,208,737 | 42,453,473 | |||||
Goodwill | 1,942,908 | 1,969,964 | |||||
Deferred financing costs | 545,853 | 151,585 | |||||
Total assets | $ | 646,998,530 | $ | 619,493,087 | |||
LIABILITIES | |||||||
Accounts payable | $ | 60,086,286 | $ | 59,400,262 | |||
Advances from customers | 46,467,941 | 45,441,402 | |||||
Accrued expenses | 14,831,813 | 17,439,541 | |||||
Income taxes payable | 23,945,300 | 24,534,095 | |||||
Other taxes payable | 10,727,679 | 7,139,870 | |||||
Other payables | 14,115,147 | 12,755,824 | |||||
Loans from employees | 29,780,976 | 25,759,453 | |||||
Loans payable | 303,233,847 | 274,917,332 | |||||
Deferred tax liability | 14,568,710 | 14,782,118 | |||||
Total liabilities | 517,757,699 | 482,169,897 | |||||
SHAREHOLDERS' EQUITY | |||||||
Common stock: $.001 par value, authorized 100,000,000 shares | |||||||
Issued 34,800,558 and 35,849,204, respectively | 34,800 | 35,849 | |||||
Additional paid in capital | 52,483,510 | 51,347,620 | |||||
Treasury stock at cost Nil shares and 1,166,369 shares, respectively | - | (2,400,288) | |||||
Statutory reserves | 11,535,242 | 11,535,242 | |||||
Retained earnings | 40,295,103 | 48,696,878 | |||||
Accumulated other comprehensive income | 24,892,176 | 28,107,889 | |||||
Total shareholders' equity | 129,240,831 | 137,323,190 | |||||
Total liabilities and shareholders' equity | $ | 646,998,530 | $ | 619,493,087 | |||
The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |||||||
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES | |||||||||||||||
Interim Condensed Consolidated Statements of Income (Loss) | |||||||||||||||
For The Three and Nine Months Ended September 30, 2014 and 2013 | |||||||||||||||
(Unaudited) | |||||||||||||||
3 Months | 3 Months | 9 Months | 9 Months | ||||||||||||
REVENUES | |||||||||||||||
Real estate sales | $ | 22,816,765 | $ | 21,042,396 | $ | 79,436,412 | $ | 112,091,843 | |||||||
Other income | 4,893,589 | 3,788,434 | 14,383,616 | 21,884,031 | |||||||||||
Total revenues | 27,710,354 | 24,830,830 | 93,820,028 | 133,975,874 | |||||||||||
COST OF SALES | |||||||||||||||
Cost of real estate sales | 18,632,301 | 17,480,961 | 74,840,421 | 86,517,123 | |||||||||||
Cost of other revenue | 3,290,397 | 2,423,455 | 8,692,392 | 16,192,275 | |||||||||||
Total cost of revenues | 21,922,698 | 19,904,416 | 83,532,813 | 102,709,398 | |||||||||||
Gross margin | 5,787,656 | 4,926,414 | 10,287,215 | 31,266,476 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Selling, general, and administrative expenses | 3,936,507 | 3,784,742 | 11,802,817 | 11,844,682 | |||||||||||
Stock-based compensation | - | 135,792 | 1,136,304 | 1,240,065 | |||||||||||
Other expenses (income) | 6,460 | (91,766) | 20,480 | 358,783 | |||||||||||
Financing expense | 1,342,370 | 1,762,724 | 3,676,752 | 6,016,604 | |||||||||||
Total operating expenses | 5,285,337 | 5,591,492 | 16,636,353 | 19,460,134 | |||||||||||
Operating Incom (loss) | 502,319 | (665,078) | (6,349,138) | 11,806,342 | |||||||||||
Loss from disposal of property and equipment | - | - | 563,710 | - | |||||||||||
Gain on extinguishment of loan | (2,071,672) | - | (2,071,672) | - | |||||||||||
Income (loss) before provision for income taxes | 2,573,991 | (665,078) | (4,841,176) | 11,806,342 | |||||||||||
Provision for current taxes | 414,147 | 185,950 | 559,605 | 4,044,863 | |||||||||||
Recovery of deferred taxes | (11,270) | (11,341) | (33,802) | (125,989 | |||||||||||
Provision for income taxes | 402,877 | 174,609 | 525,803 | 3,918,874 | |||||||||||
NET INCOME (LOSS) | $ | 2,171,114 | $ | (839,687) | $ | (5,366,979) | $ | 7,887,468 | |||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||||||
Basic | 34,477,458 | 35,497,724 | 34,532,629 | 35,277,047 | |||||||||||
Diluted | 34,477,458 | 35,497,724 | 34,532,629 | 35,277,047 | |||||||||||
NET INCOME (LOSS) PER SHARE | |||||||||||||||
Basic | 0.06 | (0.02) | (0.16) | 0.22 | |||||||||||
Diluted | 0.06 | (0.02) | (0.16) | 0.22 | |||||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |||||||||||||||
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES | ||||||||||||||||
Interim Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||
For The Three and Nine Months Ended September 30, 2014 and 2013 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
3 Months | 3 Months | 9 Months | 9 Months | |||||||||||||
NET INCOME (LOSS) | $ | 2,171,114 | $ | (839,687) | $ | (5,366,979) | $ | 7,887,468 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
Gain (loss) in foreign exchange | 2,782,552 | 656,539 | (3,215,708) | 4,076,140 | ||||||||||||
COMPREHENSIVE INCOME (LOSS) | $ | 4,953,666 | $ | (183,148) | $ | (8,582,687) | $ | 11,963,608 | ||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements. | ||||||||||||||||
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES | |||||||
Interim Condensed Consolidated Statements of Cash Flows | |||||||
For The Nine Months Ended September 30, 2014 and 2013 | |||||||
(Unaudited) | |||||||
September 30, | September 30, | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net (loss) income for the period | $ | (5,366,979) | $ | 7,887,468 | |||
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: | |||||||
Depreciation | 1,836,084 | 1,940,103 | |||||
Stock-based compensation | 1,136,304 | 1,240,065 | |||||
Loss on disposal of property and equipment | 563,710 | - | |||||
Amortization of deferred financing costs | - | 55,326 | |||||
Amortization of intangible assets | 17,944,433 | 167,609 | |||||
Recovery of deferred income taxes | (33,802) | (125,989 | |||||
Gain on extinguishment of loan | (2,071,672) | - | |||||
(Increase) decrease in assets: | |||||||
Accounts receivable | 4,313,651 | (10,322,423) | |||||
Construction in excess of billing | - | 559,202 | |||||
Other receivable and prepaid expense | (4,783,591) | (1,937,372 | |||||
Real estate held for development or sale | (82,750,198) | (3,011,051 | |||||
Advances to suppliers | (1,238,311) | 597,004 | |||||
Deposit on land use right | 41,899,123 | - | |||||
Deferred finance costs | 416,109 | ||||||
Increase (decrease) in liabilities: | |||||||
Accounts payable | 1,160,426 | (10,956,225 | |||||
Advances from customers | 3,842,693 | 5,986,114 | |||||
Accrued expense and interests | (2,387,985) | (8,669,217) | |||||
Other payables | 1,544,722 | 602,031 | |||||
Income and other taxes payable | 3,537,296 | 6,345,305 | |||||
Net cash used in operating activities | (20,437,987) | (9,642,050 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property and equipment | (9,006,050) | (3,982,755 | |||||
Proceeds from sale of property and equipment | 4,615 | - | |||||
Proceeds from sale of short term investment | 21,537,169 | - | |||||
Purchase of short term investment | (43,607,440) | - | |||||
Net cash used in investing activities | (31,071,706) | (3,982,755 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Change in restricted cash | 2,826,336 | (4,036,463) | |||||
Loans from banks | 49,943,480 | 98,841,999 | |||||
Loans from Days Hotel and Dinghui | 10,979,808 | 42,985,007 | |||||
Payments on loans payable | (29,930,693) | (40,142,194 | |||||
Loans (repayment to) or from employees, net | 4,404,795 | (5,524,219) | |||||
Purchase of treasury stock | (634,648) | - | |||||
Net cash provided by financing activities | 37,589,078 | 92,124,130 | |||||
(DECREASE) INCREASE IN CASH | (13,920,615) | 78,499,325 | |||||
Effects on foreign currency exchange | (385,669) | 1,100,396 | |||||
CASH, beginning of period | 21,320,071 | 6,121,448 | |||||
CASH, end of period | $ | 7,013,787 | $ | 85,721,169 | |||
The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |||||||
