China Housing & Land Development Inc. Announces Third Quarter 2013 Financial Results
XI'AN, China, Nov. 19, 2013 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended September 30, 2013.
Highlights for Q3 2013:
- Total revenue in the third quarter of 2013 was $24.8 million compared to $57.8 million in the second quarter of 2013 and $28.7 million in the third quarter of 2012.
- Total gross floor area ("GFA") sales were 17,846 sq. meters during the third quarter of 2013, compared with 48,439 sq. meters in the second quarter of 2013 and 12,773 sq. meters in the third quarter of 2012.
- Average residential selling price ("ASP") in the third quarter of 2013 was RMB 6,369, compared with RMB 7,499 in the second quarter of 2013, and RMB 6,359 in the third quarter of 2012.
- Gross profit decreased to $4.9 million in the third quarter of 2013 compared to $17.6 million in the second quarter of 2013 and $6.5 million in the third quarter of 2012. Third quarter 2013 gross margin was 19.8%, compared with 30.4% in the second quarter of 2013 and 22.5% in the third quarter of 2012.
- SG&A expenses as a percentage of total revenue increased to 15.2%, from 8.5% in the second quarter of 2013 and 12.9% in the third quarter of 2012.
- Operating loss was $0.7 million in the third quarter of 2013 compared to operating income of $8.5 million in the second quarter of 2013, and operating income of $2.5 million in the third quarter of 2012.
- Net loss attributable to the Company in the third quarter of 2013 was $0.8 million, or $0.02 per diluted share, compared to net income of $5.9 million, or $0.17 per diluted share, in the second quarter of 2013 and $1.6 million, or $0.04 per diluted share, in the third quarter of 2012.
Mr. Pingji Lu, China Housing's Chairman, commented, "We experienced a challenging period as our current saleable project inventory did not fully match consumer demand in the third quarter. We encountered higher levels of interest for low and high end apartment units this quarter whereas more of our saleable units were in the mid-tier category. Given the government's efforts over the last year to reduce pricing speculation in Xi'an's real estate market, consumers looking to upgrade to mid-level units were not as active this quarter as they were in past quarters. At our Puhua and Park Plaza projects, the limited amount of our entry-level unit inventory sold well during the quarter, however more of our remaining inventory is intended for customers looking to upgrade to larger, more expensive mid-level units. At the high end, of which sales remain steady, our Golden Bay project was delayed to the second quarter of 2014 due to government delays issuing the required permits to commence pre-sales activity."
"As we move forward, we are comfortable we'll have the appropriate levels of inventory to march customer demand. We are preparing to develop more low-end units early next year through our Puhua Phase 4 project. Our unit sales at the high end will benefit from our Golden Bay development once all permits are secured and pre-sales begins early next year. Consequently, we expect our performance in the fourth quarter to mirror that of the third, and that our sales trends in 2014 can grow once again as our development projects offer a broader array of low, mid and high-end units that can more adequately meet customer demand."
Total revenue in the third quarter of 2013 decreased 57.1% to $24.8 million from $57.8 million in the second quarter of 2013 and decreased 13.6% from $28.7 million in the third quarter of 2012. Other revenue in the third quarter of 2013 decreased to $3.8 million from $7.0 million in the second quarter of 2013 and $4.8 million in the third quarter of 2012. The year-over-year decrease was due to the Company's available unit inventory not fully matching the customer demand and the market condition.
In the third quarter of 2013, the majority of the Company's real estate revenue came from its Puhua Phase Two and Three projects, Park Plaza and Ankang projects. Third quarter 2013 contract sales totaled $18.6 million compared with $59.0 million in the second quarter of 2013 and $12.8 million in the third quarter of 2012. Total gross floor area ("GFA") sales were 17,847 sq. meters during the third quarter of 2013, compared with 48,439 sq. meters in the second quarter of 2013 and 12,773 sq. meters in the third quarter of 2012. The Company's ASP in the third quarter of 2013 was RMB 6,369, compared with RMB 7,499 in the second quarter of 2013, and RMB 6,359 in the third quarter of 2012.
Gross profit for the three months ended September 30, 2013 was $4.9 million, representing a decrease of 72.2% from $17.6 million in the second quarter of 2013 and a 24.6% decrease from $6.5 million in the third quarter of 2012. Gross profit margin for the three months ended September 30, 2013 was 19.8%, compared to 30.4% in the second quarter of 2013 and the 22.5% in the third quarter of 2012. The decrease in gross profit margin was mainly due to that We made some adjustment on the total estimate cost of Park Plaza, Puhua Phase Two and Three according to the actual situation and recorded the accumulated impact in the third quarter of 2013.We still expect full year gross margin to be in the 25% to 30% range in 2013.
SG&A expense was $3.8 million in the third quarter of 2013, compared with $4.9 million in the second quarter of 2013 and $3.7 million in the third quarter of 2012. SG&A expense as a percentage of total revenue was 15.2%, compared with 8.5% in the second quarter of 2013 and 12.9% in the third quarter of 2012. The year-over-year increase in SG&A expense was mainly due to the increase of salary of salary.
Operating loss in the third quarter of 2013 was $0.7 million compared to operating income of $8.5 million in the second quarter of 2013, and $2.5 million in the third quarter of 2012. The year-over-year decrease in operating income was mainly due to reduced sales revenue and lower profit margin.
Net loss attributable to China Housing in the third quarter of 2013 was $0.8 million, or a loss of $0.02 per diluted share. This performance compares with net income of $5.9 million, or $0.17 per diluted share, in the second quarter of 2013 and net income of $1.6 million, or $0.04 per diluted share, in the third quarter of 2012.
Sequential Quarterly Revenue Breakout Comparison
| Project |
Q3 2013 |
Q2 2013 |
||||||||
| Recognized Revenue |
Contract Sales |
GFA Sold |
ASP |
Unsold GFA |
POC |
Recognized Revenue |
Contract Sales |
GFA Sold |
ASP |
|
| ($) |
($) |
(m2) |
(RMB) |
(m2) |
($) |
($) |
(m2) |
(RMB) |
||
| Projects Under Construction |
||||||||||
| Park Plaza |
6,541,366 |
5,659,081 |
4,002 |
8,661 |
110,323 |
68.1% |
19,958,986 |
25,098,516 |
17,348 |
8,903 |
| Puhua Phase Three |
3,449,098 |
3,685,035 |
3,675 |
6,143 |
68,058 |
50.9% |
8,985,610 |
10,163,137 |
8,665 |
7,218 |
| Puhua Phase Two-East Region |
5,979,885 |
3,470,786 |
3,240 |
6,560 |
111,394 |
71.2% |
12,512,381 |
14,039,803 |
9,181 |
9,411 |
| Ankang |
3,304,218 |
3,571,860 |
5,474 |
4,000 |
185,677 |
71.5% |
5,526,291 |
8,024,028 |
12,655 |
3,902 |
| Projects Completed |
||||||||||
| Puhua Phase One |
642,927 |
889,021 |
662 |
8,232 |
6,649 |
100% |
1,673,638 |
1,673,638 |
591 |
17,427 |
| Puhua Phase Two-West Region |
231,686 |
387,717 |
327 |
7,264 |
13,553 |
100% |
2,057,092 |
2,057,092 |
1,773 |
7,138 |
| JunJing III |
-116,995 |
-116,995 |
-166 |
-- |
1,039 |
100% |
24,132 |
24,132 |
-- |
-- |
| JunJing II Phase One |
481,746 |
481,746 |
299 |
9,855 |
518 |
100% |
- |
- |
- |
- |
| JunJing I |
528,465 |
528,465 |
333 |
9,277 |
4,366 |
100% |
- |
- |
- |
- |
| Other Projects |
19,500 |
- |
- |
- |
||||||
| Other Income |
3,788,434 |
6,996,473 |
- |
- |
||||||
| Total |
24,830,830 |
18,556,716 |
17,846 |
6,369 |
501,577 |
- |
57,754,103 |
59,023,253 |
48,439 |
7,499 |
| Q-o-Q Change |
-57% |
-68.6% |
-63.2% |
-15.1% |
9.9% |
-28.4% |
-46.0% |
31.7% |
||
Total debt outstanding as of September 30, 2013 was $301.6 million compared with $202.6 million on December 31, 2012. Net debt outstanding (total debt less cash and restricted cash) as of September 30, 2013 was $99.3 million compared with $85.9 million on December 31, 2012. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 42.8 percent on September 30, 2013 and 36.6 percent on December 31, 2012.
| Q3 2013 |
||
| Projects in Planning |
Unsold GFA |
First Pre-sales Scheduled |
| (m2) |
||
| Golden Bay |
250,000 |
Q1 2014 |
| Puhua Phase Four |
263,833 |
Q3 2014 |
| Textile City |
630,000 |
Q3 2014 |
| Total projects in planning |
1,143,833 |
|
2013 Fourth Quarter Outlook guidance
Total recognized revenue for the 2013 fourth quarter is expected to reach $18 million to $22 million, compared with $24.8 million in the 2013 third quarter and $62.5 million in the fourth quarter of 2012. 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 following day, November 20th, 2013. Listeners may access the call by dialing +1-913-312-0406. To listen to the live webcast of the event, please go to http://public.viavid.com; event number: 7167817. Listeners may access the call replay, which will be available through November 27th, 2013, by dialing +1-858-384-5517; passcode: 7167817.
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: [email protected]
Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
+86 29.8258.2639 in Xi'an
[email protected] / English and Chinese
Ms. Sandy Jin
Assistant CFO
+86 29.8258.2638 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
Interim Condensed Consolidated Balance Sheets As of September 30, 2013 and December 31, 2012 (Unaudited)
|
||||||||
| December 31, |
||||||||
| September 30, |
2012 |
|||||||
| 2013 |
(Restated ) |
|||||||
| ASSETS |
||||||||
| Cash |
$ |
85,721,169 |
$ |
6,121,448 |
||||
| Cash - restricted |
116,602,187 |
110,576,248 |
||||||
| Accounts receivable, net of allowance for doubtful |
37,413,820 |
26,429,332 |
||||||
| Construction in excess of billing |
956,447 |
1,484,626 |
||||||
| Other receivables, prepaid expenses and other assets |
9,149,087 |
6,854,325 |
||||||
| Real estate held for development or sale |
218,980,559 |
212,371,875 |
||||||
| Property and equipment, net |
36,493,568 |
33,837,346 |
||||||
| Advance to suppliers |
786,453 |
1,363,817 |
||||||
| Deposits on land use rights |
43,517,062 |
42,748,017 |
||||||
| Intangible assets, net |
55,292,952 |
54,482,252 |
||||||
| Goodwill |
1,948,622 |
1,914,186 |
||||||
| Deferred financing costs |
149,778 |
194,162 |
||||||
| Total assets |
$ |
607,011,704 |
$ |
498,377,634 |
||||
| LIABILITIES |
||||||||
| Accounts payable |
$ |
45,033,491 |
$ |
55,142,928 |
||||
| Advances from customers |
56,123,221 |
49,297,915 |
||||||
| Accrued expenses |
13,985,716 |
22,229,514 |
||||||
| Income and other taxes payable |
30,739,765 |
23,727,064 |
||||||
| Other payables |
12,307,734 |
11,228,553 |
||||||
| Loans from employees |
22,871,639 |
27,868,785 |
||||||
| Loans payable |
278,747,427 |
174,749,368 |
||||||
| Deferred tax liability |
14,657,144 |
14,521,613 |
||||||
| Total liabilities |
474,196,137 |
378,765,740 |
||||||
| SHAREHOLDERS'EQUITY |
||||||||
| Common stock: $.001 par value, authorized 100,000,000 shares |
||||||||
| Issued 35,849,204 and 35,438,079, respectively |
35,849 |
35,438 |
||||||
| Additional paid in capital |
51,211,828 |
49,972,174 |
||||||
| Treasury stock at cost 351,480 shares and 351,480 shares, respectively |
(434,240) |
(434,240) |
||||||
| Statutory reserves |
9,903,457 |
9,903,457 |
||||||
| Retained earnings |
46,461,434 |
38,573,966 |
||||||
| Accumulated other comprehensive income |
25,637,239 |
21,561,099 |
||||||
| Total shareholders' equity |
132,815,567 |
119,611,894 |
||||||
| Total liabilities and shareholders' equity |
$ |
607,011,704 |
$ |
498,377,634 |
||||
| CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of (Loss) Income For The Three and Nine Months Ended September 30, 2013 and 2012 (Unaudited)
|
||||||||||||||||
| 3 Months |
9 Months |
|||||||||||||||
| 3 Months |
September 30, |
9 Months |
September 30, |
|||||||||||||
| September 30, |
2012 (Restated ) |
September 30, |
2012 (Restated ) |
|||||||||||||
| REVENUES |
||||||||||||||||
| Real estate sales |
$ |
21,042,396 |
$ |
23,931,025 |
$ |
112,091,843 |
$ |
74,170,706 |
||||||||
| Other income |
3,788,434 |
4,798,239 |
21,884,031 |
12,811,638 |
||||||||||||
| Total revenues |
24,830,830 |
28,729,264 |
133,975,874 |
86,982,344 |
||||||||||||
| COST OF SALES |
||||||||||||||||
| Cost of real estate sales |
17,480,961 |
18,140,372 |
86,517,123 |
53,458,120 |
||||||||||||
| Cost of other revenue |
2,423,455 |
4,134,356 |
16,192,275 |
10,166,314 |
||||||||||||
| Total cost of revenues |
19,904,416 |
22,274,728 |
102,709,398 |
63,624,434 |
||||||||||||
| Gross margin |
4,926,414 |
6,454,536 |
31,226,476 |
23,357,910 |
||||||||||||
| OPERATING EXPENSES |
||||||||||||||||
| Selling, general, and administrative expenses |
3,784,742 |
3,717,178 |
11,884,682 |
10,696,590 |
||||||||||||
| Stock-based compensation |
135,792 |
96,438 |
1,240,065 |
909,434 |
||||||||||||
| Other (income) expenses |
(91,766) |
(22,503) |
358,783 |
42,385 |
||||||||||||
| Financing expense |
1,762,724 |
63,764 |
6,016,604 |
394,712 |
||||||||||||
| Accretion expense on convertible debt |
- |
254,023 |
- |
728,174 |
||||||||||||
| Total operating expenses |
5,591,492 |
4,108,900 |
19,460,134 |
12,771,295 |
||||||||||||
| CHANGES IN FAIR VALUE OF DERIVATIVES |
||||||||||||||||
| Change in fair value of embedded derivatives |
- |
(109,344) |
- |
(330,628) |
||||||||||||
| Change in fair value of warrants |
- |
(976) |
- |
(4,162) |
||||||||||||
| Total changes in fair value of derivatives |
- |
(110,320) |
- |
(334,790) |
||||||||||||
| (Loss) income before provision for income taxes |
(665,078) |
2,455,956 |
11,806,342 |
10,921,405 |
||||||||||||
| Provision for current income taxes |
185,950 |
1,201,523 |
4,044,863 |
3,984,823 |
||||||||||||
| Recovery of deferred income taxes |
(11,341) |
(310,834) |
(125,989) |
(96,210) |
||||||||||||
| Provision for income taxes |
174,609 |
890,689 |
3,918,874 |
3,888,613 |
||||||||||||
| NET (LOSS) INCOME |
$ |
(839,687) |
$ |
1,565,267 |
$ |
7,887,467 |
$ |
7,032,792 |
||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING |
||||||||||||||||
| Basic |
35,497,724 |
35,086,599 |
35,277,047 |
34,911,173 |
||||||||||||
| Diluted |
35,497,724 |
35,086,599 |
35,277,047 |
34,911,173 |
||||||||||||
| NET (LOSS) INCOME PER SHARE |
||||||||||||||||
| Basic |
(0.02) |
0.04 |
0.22 |
0.20 |
||||||||||||
| Diluted |
(0.02) |
0.04 |
0.22 |
0.20 |
||||||||||||
| CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Comprehensive (Loss) Income For The Three and Nine Months Ended September 30, 2013 and 2012 (Unaudited)
|
||||||||||||||||
| 3 Months |
9 Months |
|||||||||||||||
| 3 Months |
September 30, |
9 Months |
September 30, |
|||||||||||||
| September 30, |
2012 (Restated ) |
September 30, |
2012 (Restated ) |
|||||||||||||
| NET INCOME |
$ |
(839,687) |
$ |
1,565,267 |
$ |
7,887,468 |
$ |
7,032,792 |
||||||||
| OTHER COMPREHENSIVE INCOME |
||||||||||||||||
| Gain in foreign exchange |
656,539 |
1,969,140 |
4,076,140 |
397,512 |
||||||||||||
| COMPREHENSIVE (LOSS) INCOME |
$ |
(183,148) |
$ |
3,534,407 |
$ |
11,963,608 |
$ |
7,430,304 |
||||||||
| CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES Interim Condensed Consolidated Statements of Cash Flows For The Nine Months Ended September 30, 2013 and 2012 (Unaudited)
|
||||||||
| September 30, |
||||||||
| September 30, |
2012 |
|||||||
| 2013 |
(Restated ) |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income for the period |
$ |
7,887,468 |
$ |
7,032,792 |
||||
| Adjustments to reconcile net income to cash provided by (used in) operating activities: |
||||||||
| Depreciation |
1,940,103 |
1,559,229 |
||||||
| Stock-based compensation |
1,240,065 |
909,434 |
||||||
| Gain on disposal of property and equipment |
- |
(70,097) |
||||||
| Amortization of deferred financing costs |
55,326 |
117,155 |
||||||
| Amortization of intangible assets |
167,609 |
163,290 |
||||||
| Recovery of deferred income taxes |
(125,989) |
(96,210) |
||||||
| Change in fair value of embedded derivatives |
- |
(330,628) |
||||||
| Change in fair value of warrants |
- |
(4,162) |
||||||
| Accretion expense on convertible debt |
- |
728,174 |
||||||
| (Increase) decrease in assets: |
||||||||
| Accounts receivable |
(10,322,423) |
5,126,977 |
||||||
| Construction in excess of billing |
559,202 |
- |
||||||
| Other receivable and prepaid expense |
(1,937,372) |
(2,877,068) |
||||||
| Real estate held for development or sale |
(3,011,051) |
(66,525,427) |
||||||
| Advances to suppliers |
597,004 |
(1,611,109) |
||||||
| Deposit on land use right |
- |
22,754,848 |
||||||
| Increase (decrease) in liabilities: |
||||||||
| Accounts payable |
(10,956,225) |
(17,485) |
||||||
| Advances from customers |
5,986,114 |
(5,569,449) |
||||||
| Accrued expense |
(8,669,217) |
9,816,101 |
||||||
| Other payables |
602,031 |
265,942 |
||||||
| Income and other taxes payable |
6,345,305 |
2,807,134 |
||||||
| Net cash used in operating activities |
(9,642,050) |
(25,820,559) |
||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Purchase of property and equipment |
(3,982,755) |
(7,995,987) |
||||||
| Proceeds from sale of property and equipment |
- |
63,476 |
||||||
| Net cash used in investing activities |
(3,982,755) |
(7,932,511) |
||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Change in restricted cash |
(4,036,463) |
20,968,025 |
||||||
| Loans from banks |
98,841,999 |
30,111,889 |
||||||
| Loans from Days Hotel and Dinghui |
42,985,007 |
34,367,627 |
||||||
| Payments on loans payable |
(40,142,194) |
(68,685,407) |
||||||
| Loans (repayment to) or from employees, net |
(5,524,219) |
4,963,786 |
||||||
| Purchase of treasury stock |
- |
(14,142) |
||||||
| Net cash provided by financing activities |
92,124,130 |
21,711,778 |
||||||
| INCREASE (DECREASE) IN CASH |
78,499,325 |
(12,041,292) |
||||||
| Effects on foreign currency exchange |
1,100,396 |
(27,729) |
||||||
| CASH, beginning of period |
6,121,448 |
22,014,953 |
||||||
| CASH, end of period |
$ |
85,721,169 |
$ |
9,945,932 |
||||
SOURCE China Housing & Land Development, Inc.
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