China Housing & Land Development Inc. Announces Fourth Quarter 2014 Financial Results

News provided by

China Housing & Land Development, Inc.

Mar 30, 2015, 07:48 ET

XI'AN, China, March 30, 2015 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company") (NASDAQ: CHLN) today announced its financial results for the quarter ended December 31, 2014.

Highlights for Q4 2014: 

  • Total revenue in the fourth quarter of 2014 was $44.9 million compared to $27.7 million in the third quarter of 2014 and $56.1 million in the fourth quarter of 2013. 
  • Total gross floor area ("GFA") sales were 30,888 sq. meters during the fourth quarter of 2014, compared with 21,768 sq. meters in the third quarter of 2014 and 28,582 sq. meters in the fourth quarter of 2013.
  • Average residential selling price ("ASP") in the fourth quarter of 2014 was RMB4,736, compared with RMB6,597 in the third quarter of 2014, and RMB6,600 in the fourth quarter of 2013.
  • Gross profit was $(2.8) million in the fourth quarter of 2014 compared to gross profit of $5.8 million in the third quarter of 2014 and gross profit of $12.6 million in the fourth quarter of 2013. Fourth quarter 2014 gross margin was (6.2)%, compared with 20.9% in the third quarter of 2014 and 22.4% in the fourth quarter of 2013.
  • SG&A expenses as a percentage of total revenue decreased to 12.5%, from 14.2% in the third quarter of 2014 and increased from 9.1% in the fourth quarter of 2013.
  • Operating loss was $15.7 million in the fourth quarter of 2014 compared to operating income of $0.5 million in the third quarter of 2014, and operating income of $6.0 million in the fourth quarter of 2013.
  • Net loss attributable to the Company in the fourth quarter of 2014 was $16.1 million, or $(0.46) per diluted share, compared to net income of $2.2 million, or $0.06 per diluted share, in the third quarter of 2014 and net income of $3.9 million, or $0.11 per diluted share, in the fourth quarter of 2013.

Mr. Pingji Lu, China Housing's Chairman, commented, "In the fourth quarter, local real estate market conditions in Xi'an, where we primarily operate, remain challenging. We are encouraged by recent government policies to stimulate the local housing market, however such efforts will take time to reduce inventory in our local market. According to a study by E-House, real estate inventory in Xi'an rose to 30 million square meters at the end of 2014, resulting in higher supply, increased competition and lower average selling prices. This impacted our performance as we increased our promotional activity to drive sales and cash-flow. While this strategy negatively impacted our gross margin, the increased volume and cash flow reduced overall financial risk to our business. 

In 2015, we believe the government will initiate additional policies to stabilize and instill greater confidence in the real estate market. Our strategy is to continue to be flexible on pricing, drive sales growth, control our costs and maintain stable cash flows. Taking such action can reduce our inventory down to more normalized levels."

Total revenue in the fourth quarter of 2014 increased 62.1% to $44.9 million from $27.7 million in the third quarter of 2014 and decreased 20% from $56.1 million in the fourth quarter of 2013. Other revenue in the fourth quarter of 2014 increased to $9.1 million from $4.9 million in the third quarter of 2014 and $8.9 million in the fourth quarter of 2013.

In the fourth quarter of 2014, the Company's top three real estate projects measured by revenue were Park Plaza, Puhua Phase Three and Ankang Phase One. Fourth quarter 2014 contract sales totaled $23.8 million, compared with $23.3 million in the third quarter of 2014 and $31.0 million in the fourth quarter of 2013. Total GFA sales were 30,888 sq. meters during the fourth quarter of 2014, compared with 21,768 sq. meters in the third quarter of 2014 and 28,582 sq. meters in the fourth quarter of 2013. The Company's ASP in the fourth quarter of 2014 was RMB4,736 compared with RMB6,597 in the third quarter of 2014, and RMB6,600 in the fourth quarter of 2013.

Gross profit for the three months ended December 31, 2014 was $(2.8) million, compared to gross profit of $5.8 million in the third quarter of 2014 and $12.6 million in the fourth quarter of 2013. Gross profit margin for the three months ended December 31, 2014 was negative 6.2%, compared to 20.9% in the third quarter of 2014 and the 22.4% in the fourth quarter of 2013. The negative gross profit for the fourth quarter of 2014 was mainly due to a more competitive real estate environment resulting in lower average selling prices at the Company's major projects under construction.

SG&A expense was $5.6 million in the fourth quarter of 2014, compared with $3.9 million in the third quarter of 2014 and $5.1 million in the fourth quarter of 2013. SG&A expense as a percentage of total revenue was 12.5%, compared with 14.2% in the third quarter of 2014 and 9.1% in the fourth quarter of 2013.The decrease in SG&A expense as a percent of total revenue in the fourth quarter of 2014 compared to the 2014 third quarter was primarily due to the increased revenue in the fourth quarter compared to the third quarter, while SG&A expense remained consistent.

Operating loss in the fourth quarter of 2014 was $15.7 million compared to operating income of $0.5 million in the third quarter of 2014, and operating income of $6.0 million in the fourth quarter of 2013. The operating loss for the fourth quarter of 2014 included a one-time $5.5 million allowance related to construction in excess of billing of the low-income housing of government. Collection of this amount is not ensured due to current fiscal conditions of the local government.

Net loss attributable to China Housing in the fourth quarter of 2014 was $16.1 million, or $(0.46) per diluted share, compared to net income of $2.2 million, or $0.06 per diluted share, in the third quarter of 2014 and net income of $3.9 million, or $0.11 per diluted share, in the fourth 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

5,913,163

5,090,548

8,843

3,538

30,503

99.8%

8,126,813

6,150,233

4,285

8,845

Puhua Phase Three

13,560,028

6,442,195

7,425

5,333

47,165

83.0%

5,176,650

4,573,451

3,639

7,748

Puhua Phase Two-East Region

4,150,988

4,994,287

5,344

5,744

53,236

86.0%

2,226,757

1,916,575

1,877

6,293

Ankang Phase One

11,088,809

3,583,725

5,525

3,987

44,084

83.0%

4,241,380

2,559,384

3,828

4,123

Puhua Four

849,179

3,455,283

3,443

6,168

119,555

21.0%

2,851,066

7,772,451

7,868

6,090

Projects Completed









Puhua Phase One

-24,415


9,447

100%

21,271

21,271

0

-

Puhua Phase Two-West Region& New Coast Line

160,608

160,608

205

6,168

12,743

100%

304,026

304,026

271

6,915


JunJing III

226,584

226,584

246

5,655

100%

-131,198

-

0

-

JunJing II

-154,247

-154,247

-143

6,621

100%

-

-

0

-

Other Income

9,137,336

-

0

-

-

4,893,589

-

0

-

Total

44,908,034

23,798,984

30,888

4,736

316,733

-

27,710,354

23,297,391

21,768

6,597

Q-o-Q Change

62.06%

2.15%

41.90%

-28.21%

-

-

-37.12%

-26.47%

-28.41%

1.60%

Total debt outstanding as of December 31, 2014 was $323.5 million compared with $300.7 million on December 31, 2013. Net debt outstanding (total debt less cash and restricted cash) as of December 31, 2014 was $199.9 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 64.4% on December 31, 2014 and 54.1% 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 December 31, 2014 compared with December 31, 2013.

Q4 2014

Projects in Planning

Unsold

GFA

First

Pre-sales

Scheduled

(m2)

Golden Bay

329,508

2015Q2

Ankang Project-Phase II

170,851

2015Q4

Park Plaza- Phase II

66,155

2015Q3

Textile City

630,000

2016Q2

Total projects in planning

1,196,514

2015 First Quarter Guidance Outlook

Total contract sales for the 2015 first quarter are expected to be in the range of $18 million to $22 million, compared with $34.3 million in the 2014 fourth quarter and $19.8 million in the first quarter of 2014. The Company is reporting revenues, which are subject to percentage of completion alterations.

Conference Call Information

Management will host a conference call at 8:00 am ET on March 30, 2015. Listeners may access the call by dialing 1-913-312-0669. To listen to the live webcast of the event, please go to http://public.viavid.com/index.php?id=113753. Listeners may access the call replay, which will be available through April 3, 2015, by dialing 1-858-384-5517; passcode: 5536170.

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 residential 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 press release may contain certain 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, as amended. 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 press release and in any attachments is as of the date of the release, and the Company does 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

Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
+86 29.8258.2639 in Xi'an
[email protected] / English and Chinese

Mr. Bill Zima, ICR
+86 10 6583 7511
[email protected]
China Housing Investor Relations Department
+1 646.308.1285

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets 

As of December 31, 2014 and 2013






December 31, 2014

December 31, 2013

ASSETS




  Cash

$

33,223,127

$

21,320,071

  Cash - restricted

90,328,084

117,534,900

  Short-term investment

-

-

  Accounts receivable, net of allowance for doubtful accounts of $579,926 and $594,382, respectively





33,041,324

41,158,998

  Construction in excess of billing

-

2,106,975

  Other receivables, prepaid expenses and other assets, net

9,377,150

7,188,153

  Real estate held for development or sale

374,083,969

289,474,812

  Property and equipment, net

43,383,002

36,281,168

  Advances to suppliers

1,033,359

697,823

  Deposits on land use rights

16,136,415

59,155,165

  Intangible asset, net

23,561,951

42,453,473

  Goodwill

1,922,053

1,969,964

  Deferred financing costs

438,926

151,585

        Total assets

626,529,360

619,493,087






LIABILITIES




  Accounts payable

$

75,845,986

$

59,400,262

  Advances from customers

35,172,506

45,441,402

  Accrued expenses

21,842,922

17,439,541

  Income tax payable

24,280,260

24,534,095

  Other taxes payable

9,318,119

7,139,870

  Other payables 

11,692,913

12,755,824

  Loans from employees

29,819,381

25,759,453

  Loans payable

293,660,575

274,917,332

  Deferred tax liability

14,395,327

14,782,118

       Total liabilities

516,027,989

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

-

(2,400,288)

  Statutory reserves

11,700,198

11,535,242

  Retained earnings

24,046,687

48,696,878

  Accumulated other comprehensive income

22,236,176

28,107,889

        Total shareholders' equity

110,501,371

137,323,190






            Total liabilities and shareholders' equity

$

626,529,360

$

619,493,087






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

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Income

For The Years Ended December 31, 2014 and 2013







December 31, 2014

December 31, 2013

REVENUES




  Real estate sales

$

115,207,106

$

159,222,863

  Other revenue

23,520,952

30,811,894

Total revenues

138,728,059

190,034,757






COST OF REVENUES




  Cost of real estate sales

114,214,971

124,152,403

  Cost of other revenue

17,006,602

22,056,802

Total cost of revenues

131,221,573

146,209,204






Gross margin

7,506,486

43,825,552






OPERATING EXPENSES




  Selling, general and administrative expenses

17,433,892

16,968,686

  Stock-based compensation

1,136,304

1,375,857

  Other expenses

28,235

400,247

  Bad debt expense

5,532,777


  Financing expense 

5,455,689

7,317,008

  Accretion expense on convertible debt

-

-

Total operating expenses

29,586,897

26,061,798


(22,080,412)


CHANGE IN FAIR VALUE OF DERIVATIVES




  Change in fair value of embedded derivatives

-

-

  Change in fair value of warrants

-

-

Total change in fair value of derivatives

-

-






Loss from disposal of property and equipment

563,710

1,107,212

Gain on extinguishment of loan

(2,390,343)

-






Income / (Loss) before provision for income taxes     

(20,253,779)

16,656,542






  Provision for income taxes

1,241,766

5,039,240

  Recovery of deferred income taxes

(45,104)

(137,395)

Provision for income taxes

1,196,663

4,901,845






NET (LOSS) INCOME

$

(21,450,441)

$

11,754,697






WEIGHTED AVERAGE SHARES OUTSTANDING




  Basic

34,661,736

35,127,877






  Diluted

34,661,736

35,127,877






NET INCOME PER SHARE




  Basic

$

(0.62)

$

0.33






  Diluted

$

(0.62)

$

0.33






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

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Comprehensive (Loss) Income

For years ended December 31, 2014 and 2013
















December 31,

December 31,


2014

2013







NET (LOSS) INCOME

$

(21,450,441)

$

11,754,697







OTHER COMPREHENSIVE (LOSS) INCOME 





  (Loss) gain in foreign exchange translation

(5,871,713)

6,546,790







COMPREHENSIVE (LOSS) INCOME

$

(27,322,155)

$

18,301,487







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

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

For The Years Ended December 31, 2014 and 2013









December 31,

December 31,


2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES:





  Net income 

$

(21,450,440)

11,754,697

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


    Depreciation

2,497,495

2,598,326

    Bad debt expense (recovery)

5,532,777

(164)

    Inventory impairment 

7,877,400


    Discount on long term accounts receivable 

-


    Stock-based compensation

1,136,304

1,375,857

    Loss on disposal of property and equipment

563,710

1,107,358

    Amortization of deferred financing costs

-

-

    Amortization of intangible assets

18,494,694

13,498,819

    Recovery of provision for deferred income taxes

-45,104

(137,395)

    Gain on extinguishment of loan

(2,390,343)

-

  (Increase) decrease in assets:





    Accounts receivable

7,141,930

(13,637,801)

    Construction in excess of billing

(3,457,512)

(574,056)

    Other receivable, prepaid expenses and other assets          

(3,331,508)

(468,501)

    Real estate held for development or sale

(101,879,665)

(70,989,071)

    Advance to suppliers

(354,243)

693,807

    Deposit on land use rights

42,041,487

(15,071,133)

    Deferred finance costs

517,972

-

  Increase (decrease) in liabilities:





    Accounts payable 

17,720,962

2,834,646

    Advances from customers

(7,056,543)

(5,243,032)

    Accrued expense and interests

5,025,643

(5,274,374)

    Other payable

(748,082)

1,185,307

    Income and other taxes payable

2,725,370

7,572,979

      Net cash provided by (used in) operating activities

(29,437,696)

(68,773,731)







CASH FLOWS FROM INVESTING ACTIVITIES:





  Purchase of property and equipment

(9,824,644)

(5,793,142)

  Proceeds from sale of property and equipment

4,615

654,321

  Proceeds from sale of ST investment

43,607,440

-

  Purchase/Sale of ST investment

(43,607,440)

-

      Net cash (used in) provided by investing activities

(9,820,029)

(5,138,821)







CASH FLOWS FROM FINANCING ACTIVITIES:





  Change in restricted cash

24,601,193

(3,694,203)

  Loans from banks

18,143,480

98,841,999

  Loans from external parties

31,642,982

46,269,017

  Payments on loans payable

(26,296,875)

(49,173,393)

  Loans from or repayment to employees, net

4,766,270

(2,902,615)

  Purchase of treasury stock

(635,970)

(1,966,047)

      Net cash provided by financing activities

52,221,080

87,374,758







(DECREASE)/INCREASE IN CASH

12,963,355

13,462,206







Effects on foreign currency exchange

(1,060,299)

1,736,417







CASH, beginning of period

21,320,071

6,121,448







CASH, end of period

$

33,223,127

21,320,071







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

SOURCE China Housing & Land Development, Inc.

Related Links

http://www.chldinc.com

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED