China XD Plastics Announces Fourth Quarter and Fiscal Year 2009 Results
-- Full-year revenue grew 79.2% to $135.7 million
-- Full-year gross profit grew 76.4% to $30.6 million
HARBIN, China, April 15 /PRNewswire-Asia-FirstCall/ -- China XD Plastics Company Ltd. ("China XD Plastics" or the "Company"), (Nasdaq: CXDC), a leading Chinese developer, manufacturer, and distributor of modified plastics primarily for use in the automotive applications in China, today announced financial results for the fourth quarter and fiscal year ended December 31, 2009.
Fourth Quarter 2009 Highlights
-- Revenue was a record $41.2 million, an increase of 106.6% from the
fourth quarter of 2008
-- Gross profit was $9.7 million, an increase of 185.5% from the fourth
quarter of 2008
-- Gross profit margin was 23.6%, compared to 17.1% in the fourth quarter
of 2008
-- Net loss attributable to common shares was $19.8 million, or loss of
$0.50 per fully diluted share
-- Adjusted net income was $8.0 million or $0.18 per fully diluted share
-- Total volume shipped was 23,620 metric tons, up 76.2% from 13,402
metric tons in the fourth quarter of 2008
-- China XD Plastics common stock listed on the NASDAQ Global Market in
November 2009
-- Completed a private placement resulting in gross proceeds of
approximately $15.2 million
-- Engaged Ernst & Young to assist with the implementation of Section 404
of the Sarbanes-Oxley Act
-- Engaged Moore Stephens Hong Kong as independent auditor
Full Year 2009 Highlights
-- Revenue was a record $135.7 million, an increase of 79.2% from 2008
-- Gross profit was $30.6 million, an increase of 76.4% from 2008
-- Gross profit margin was 22.5%, compared to 22.9% in 2008
-- Income from operations was $17.6 million, an increase of 95.7%
from 2008
-- Net loss attributable to common shareholders was $9.9 million or $0.36
per fully diluted share
-- Adjusted net income was $24.2 million or $0.58 per fully diluted share
-- Total volume shipped was 73,796 metric tons, up 79.5% from 41,120
metric tons in 2008
-- The Company obtained 28 new certifications to reach a total of 145
product certifications
"We are delighted with our 2009 results, as we were able to deliver strong growth in revenue and operating profits, and reach several important milestones in the execution of our business strategy. In addition to delivering exceptional results, we also won 28 new OEM certifications, listed our shares on the Nasdaq Global Market and successfully raised capital to fund our capacity expansion," commented Mr. Jie Han, Chairman and Chief Executive Officer of China XD Plastics. "As we move into the first quarter, we have increased our capacity by 42.9% to 100,000 tons, and expanded our distribution network in Eastern China, positioning our business well to continue our rapid growth in the quarters ahead."
Fourth Quarter 2009 Results
Revenue for the fourth quarter of 2009 increased 106.6% to a record of $41.2 million, compared to $20.0 million in the same period of 2008. The increase in revenue is primarily attributable to the increased sales volume driven by the strong demand for the Company's modified plastic products supported by continued growth in automotive production in China.
Gross profit for the fourth quarter of 2009 was $9.7 million, up 185.5% from $3.4 million in the fourth quarter 2008. Gross margin was 23.6% compared to 17.1% in the same period a year ago and 23.3% in the third quarter of 2009. The year-over-year increase in gross margin was due to higher value product mix associated with an increase in products sold for the use in luxury vehicles in recent months.
Selling expenses for the fourth quarter of 2009 were $176,470, up 118.3% from $80,827 in the same period last year. As a percentage of revenue, selling expenses remained 0.4% of sales for the fourth quarter 2009 and 2008. General and administrative (G&A) expenses were $2.4 million, up 269.9% from $0.6 million for the same period of last year. The significant increase in G&A expenses was mainly attributed to stock-based compensation to employees and consultants. Research and Development ("R&D") expenses were $0.5 million, or 1.1% of total revenue, compared to $0.2 million, or 1.1% of total revenue, in the same period last year. The increase in research and development expenses was in proportion to the increase in total revenue and was associated with the Company's on-going efforts to launch new products.
Operating income for the fourth quarter of 2009 was $6.7 million, compared to an operating income of $2.5 million in the same period a year ago. Operating margin was 16.3% in the fourth quarter of 2009, compared to 12.4% in the comparable period the year before.
Other expense in the fourth quarter of 2009 was $12.6 million, including $385,212 interest expense and a non-cash charge of $12.2 million to account for the change in the fair value of warrants and derivative liabilities in connection with the preferred stock issued in the private placement financing closed in December 2009. Other expense in the fourth quarter of 2008 was $0.2 million.
EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) for the fourth quarter of 2009 was $9.0 million, a significant increase from $2.7 million in the fourth quarter of 2008. For a detailed reconciliation of adjusted EBITDA, a Non-GAAP measure, to its nearest GAAP equivalent, please see the financial tables at the end of this release.
Net loss in the fourth quarter of 2009 was $5.9 million, compared to net income of $2.2 million for the same period a year ago.
In connection with the private placement of series C preferred stock in the fourth quarter of 2009, the Company recorded a non-cash charge of $13.9 million deemed dividends for series C preferred stock.
Net loss attributable to common shareholders for the fourth quarter of 2009 was $19.8 million. Loss per share attributable to common shareholders was $0.50 per basic and fully diluted share.
Adjusted net income, excluding non-cash charges associated with stock based compensation and non-cash preferred dividend was $8.0 million, or $0.20 per basic and $0.18 per fully diluted share. For a detailed reconciliation of adjusted net income, a non-GAAP measure, to net income, please see the financial tables at the end of this release.
Full Year 2009 Results
For the full year 2009, total revenue increased 79.2% to $135.8 million compared to $75.8 million in 2008. Gross profit was $30.6 million, up 76.4% from $17.3 million in the comparable period a year ago. Gross margin was 22.5% and 22.9% for the full year 2009 and 2008, respectively. Income from operations was $17.6 million, up 95.7% from $9.0 million in 2008. Net income for the full year 2009 was $4.0 million, down 51.4% from $8.2 million in 2008. In connection with the private placement of series C preferred stock in the fourth quarter of 2009, the Company recorded non-cash charges of approximately $12.2 million to account for the change in fair value of warrants and embedded conversion feature. Net loss attributable to common shareholders is $9.9 million. Fully diluted loss per share attributable to common shareholders for the full year 2009 was $0.36. Adjusting for non-cash charges associated with stock-based compensation of $8.0 million, change in fair value of warrants and derivative liabilities embedded in the preferred stock of $12.2 million, and deemed preferred dividend of $13.9 million, adjusted net income was $24.2 million or $0.87 per basic share and $0.58 per fully diluted share.
Financial Condition
As of December 31, 2009, China XD plastics had $6.9 million in cash and cash equivalents, $30.8 million in working capital and a current ratio of 2.2. Shareholder's equity as of December 31, 2009 stood at $21.5 million compared to $24.1 million at the end of 2008.
Restatement of 2009 and 2008 Financials
The Company discovered a non-cash error regarding the accounting for recognition of stock options granted to Mr. Han during the routine course of its internal audit and review. The Options were granted to Mr. Han by Ellie Qiuyao Piao ("Ms. Piao"), the sole shareholder of XD Engineering Plastics Company Limited ("XD Engineering") which was the principal shareholder of our subsidiary Favor Sea Limited before the reverse merger pursuant to an option agreement dated May 16, 2008. The agreement provides that Mr. Han may purchase from Ms. Piao for a nominal price all of the outstanding equity (40,000 shares) in XD Engineering if, on a consolidated basis, the revenue of Favor Sea Limited ("FSL"), a subsidiary of the Company, which indirectly owns our operating subsidiaries Harbin Xinda Macromolecule Material Co., Ltd. and Harbin Xinda Macromolecule Research Institute, achieves certain revenue thresholds. Mr. Han may purchase 25% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2008 exceeds $40 million. He may purchase 14% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2009 exceeds $70 million. And he may purchase 61% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2010 exceeds $110 million. The purpose of the options is to enable Mr. Han to re-acquire ultimately the legal ownership of the Company in compliance with the laws and regulations of the People's Republic of China.
Therefore, based on the related guidance of ASC Topic 718, the Company believes such options should have been accounted for under the Company's financial statements as share-based payments awarded to an employee by a related party as compensation for services rendered. As a result of the restatement, our consolidated net income for the year ended December 31, 2008 and the second quarter of 2009 is expected to be reduced by a non-cash charge of approximately $5.5 million and $3.1 million, respectively, accounted for the above mentioned option grant arrangement. The adjustment is to be recorded in general and administrative expense in the consolidated statements of income and other comprehensive income.
The above-mentioned adjustments do not impact revenue recognition, cash balances, liquidity, or capital resources and do not impact operations.
Other Recent Events
On February 8, 2010, the Company announced selected estimated unaudited financial results for the fourth quarter and fiscal year 2009.
On February 25, 2010, China XD Plastics announced the total annual production capacity of modified plastics to increase 42.9% from 70,000 tons in 2009 to 100,000 tons. The additional 30,000 tons of annual production capacity is expected to start production at the beginning of the second quarter, 2010.
On March 4, 2010, China XD Plastics announced the signing of a one-year non-exclusive agreement with Ningbo Huading New Material Technology Company Limited ("NHNM") to distribute the Company's modified plastics for automotive applications in the Eastern Chinese Market, specifically in the area of Zhejiang Province.
Business Outlook and Guidance
The year 2009 was a key milestone for the automobile industry in China with total vehicle sales surpassing United States and Japan for the first time in history. Total vehicle sales reached 13.6 million units, representing 45% increase from 2008, with sales of passenger cars representing 10.3 million units or 76% of total.
The stimulus plan introduced by the government in China to support demand for automobiles has been extended into 2010 with minor changes. The government adjusted the reduction in sales tax on smaller passenger vehicles from 5% to 7.5% compared to the normal rate of 10%, while subsidies for farmers to purchase certain automobiles and motorcycles were maintained, and subsidies for upgrading commercial vehicles were increased. These favorable policies are expected to continue to support growth in demand for automobiles in the quarters ahead.
With the backdrop of a favorable macroeconomic environment, China XD Plastics expects to be able to capitalize on its recently announced capacity expansion to 100,000 tons per year, to continue to deliver rapid growth in revenue and profits.
The Company expects 2010 revenues to be in the range between $170 million to $200 million, and non-GAAP adjusted net income to be in the range between $27 million to $30 million, excluding any non-cash charge related to the change in fair value of the existing derivative liabilities and stock-based compensation.
"The long-term fundamentals of the automotive industry in China remain strong, driven by rising personal incomes, favorable government policies, and very low car-ownership level relative to the rest of the world. In addition, the competitive environment in our industry remains favorable due to high barriers to entry associated with costly OEM certification process," said Mr. Jie Han, Chairman and Chief Executive Officer of China XD Plastics. "As we look to the future, we continue to see significant opportunities to grow our top- and bottom-lines by leveraging our technology institute's ability to conduct breakthrough research to win additional product certifications, and gradually expand capacity to meet growing demand for our products."
Conference Call
China XD Plastics will host a conference call at 8:00 a.m. ET on Thursday, April 15, 2010, to discuss the fourth quarter and full year 2010 financial results. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 877-353-4923. International callers should dial +1-702-894-2405. The pass code for the call is 68756375. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, April 15, 2010 at 11:00 a.m. ET. To access the replay, dial 800-642-1687. International callers should dial +1-706-645-9291. The conference pass code is 68756375. The call will be broadcast live over the internet and can be accessed at http://webcast.mzdp.com.br/publico.aspx?codplataforma=1660 . The webcast will be available for replay in the IR section of the Company's website at http://www.chinaxd.net for 90 days.
About China XD Plastics Company Ltd.
China XD Plastics Company Ltd., through its wholly owned subsidiary Harbin Xinda Macromolecule Material ("Xinda"), develops, manufactures, and distributes modified plastics, primarily for automotive applications. The Company's specialized plastics are used in the exterior and interior trim and in the functional components of more than 30 automobile brands manufactured in China including Audi, Red Flag, Volkswagen and Mazda. The Company's wholly-owned research institute is dedicated to the research and development of modified plastics, and benefits from the cooperation with well-known scientists from prestigious universities in China. As of the end of December 31, 2009, 145 products that Xinda manufactured have been certified for use by one or more of the automobile manufacturers in China. For more information please visit http://www.chinaxd.net .
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's ability to raise additional capital to finance the company's activities; the effectiveness, profitability, and the marketability of its products; legal and regulatory risks associated with the share exchange; the Company's ability to successfully expand its production capacity; the future trading of the common stock of the company; the Company's ability to operate as a public company; the period of time for which its current liquidity will enable the company to fund its operations; the company's ability to protect its proprietary information; general economic and business conditions; the volatility of the company's operating results and financial condition; the company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov . These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
For further information, please contact:
China XD Plastics Company Ltd.
Mr. Taylor Zhang, Chief Financial Officer
Phone: +1-212-747-1118 (New York)
Mr. Allan Lao, IR Director
Phone: +86-451-8434-6600 (China)
Email: [email protected]
Web: http://www.chinaxd.net
CCG Investor Relations
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Mr. Ed Job, CFA
Phone: +1-646-213-1914 (New York)
Email: [email protected]
Web: http://www.ccgirasia.com
-Financial Tables Follow-
CHINA XD PLASTICS COMPANY LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE FOURTH QUARTER AND FISCAL YEAR ENDED DECEMBER 31, 2009 AND 2008
Twelve Month Ended Dec 31, Three Months Ended Dec 31,
2009 2008 2009 2008
(Restated) Unaudited Unaudited
Sales $135,745,329 $75,765,428 $41,246,714 $19,963,425
Cost of sales (105,160,568) (58,431,799) (31,504,000) (16,551,031)
Gross profit 30,584,761 17,333,629 9,742,714 3,412,394
Operating expenses
Research and
development
expenses 1,329,656 778,994 461,404 221,248
Selling expenses 400,731 322,650 176,470 80,827
General and
administrative
expenses 11,220,406 7,221,555 2,386,968 645,387
Total operating
expenses 12,950,793 8,323,199 3,024,842 947,463
Operating income 17,633,968 9,010,430 6,717,872 2,464,932
Other income
(expenses)
Interest income
(expenses) (1,418,395) (687,659) (385,212) (205,784)
Other income 107,999 28,283 45,050 2,618
Other expense (11,085) (102,139) (148) (1,258)
Changes in fair
value of warrants
and embedded
derivatives (12,221,972) -- (12,221,972) --
Total other expense (13,543,453) (761,515) (12,562,282) (204,424)
Income before income
taxes 4,090,515 8,248,915 (5,844,411) 2,260,508
Provision for income
taxes (67,249) (35,332) (36,610) (10,921)
Net income $4,023,266 $8,213,583 $(5,881,021) $2,249,587
Other comprehensive
income (loss)
Foreign currency
translation
adjustment (4,301) 908,069 42,305 (123,011)
Comprehensive income $4,018,965 $9,121,652 $(5,838,716) $2,126,576
Net income $4,023,266 $8,213,583 $(5,881,021) $2,249,587
Dividends to Series
C preferred
stockholders (77,396) -- (77,396) --
Deemed Series C
preferred stock
dividends (13,891,477) -- (13,891,477) --
Net income (loss)
attributable to
common shareholders $(9,945,607) 8,213,583 $(19,849,894) $2,249,587
Basic and diluted
earnings (loss) per
common share
Basic $(0.36) $19.81 $(0.50) $5.11
Diluted $(0.36) $0.21 $(0.50) $0.06
Weighted average
common share
outstanding
Basic 27,789,044 414,569 39,544,474 440,585
Diluted 27,789,044 38,608,641 39,544,474 38,634,657
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
GAAP results for the three months and full year ended December 31, 2009 include non-cash charges. To supplement the Company's consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of those items in this release. The Company's management believes that this non-GAAP measure provides investors with a better understanding of how the results relate to the Company's historical performance. A reconciliation of the adjustments to GAAP results appears in the table accompanying this press release. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.
2009
Q1 Q2 Q3
Adjusted Net Income - Non
GAAP 4,016,644 5,430,485 6,713,977
Change in fair value of
warrants and derivative
liabilities
Non-Cash Stock-based
compensation (1) 434,093 2,757,337
Option Arrangement Between
Shareholders (2) 3,065,388
Deemed dividends (Beneficial
conversion feature of series
C preferred stock)
Net Income - GAAP 4,016,644 1,931,004 3,956,640
Weighted average number of
shares outstanding
Basic 12,474,696 31,167,002 39,140,751
Diluted 38,999,874 39,552,722 41,637,095
Adjusted EPS
Basic 0.32 0.17 0.17
Diluted 0.10 0.14 0.16
2009
Q4 FY
Adjusted Net Income - Non GAAP 7,992,022 24,153,127
Change in fair value of warrants and
derivative liabilities 12,221,972 12,221,972
Non-Cash Stock-based compensation (1) 1,728,467 4,919,897
Option Arrangement Between
Shareholders (2) 3,065,388
Deemed dividends (Beneficial
conversion feature of series C
preferred stock) 13,891,477 13,891,477
Net Income - GAAP (19,849,894) (9,945,606)
Weighted average number of shares
outstanding
Basic 39,544,474 27,766,751
Diluted 44,583,620 41,351,753
Adjusted EPS
Basic 0.20 0.87
Diluted 0.18 0.58
(1) Non Cash Stock Based Compensation - stock option to employees and
consultants
(2) Option granted to Mr. Jie Han, the Company's Chairman from a related
party in 2008
Reconciliation of Net Income to Adjusted EBITDA
Adjusted EBITDA is a financial measure that is not defined by US GAAP.
Adjusted EBITDA was derived by calculating earnings before interest, taxes,
depreciation, stock-based compensation and amortization. The Company's
management believes that the presentation of Adjusted EBITDA provides useful
information regarding China XD Plastics' results of operations because it
assists in analyzing and benchmarking the performance and value of China XD
Plastics' business. The Company's calculation of Adjusted EBITDA may not be
consistent with similarly titled measures of other companies. The table below
provides a reconciliation of EBITDA to net income, the most comparable GAAP
measure.
Three Months Ended For the Years Ending
December 31, December 31,
2009 2008 2009 2008
Net Income $(5,881,021) $2,249,587 $4,023,266 $8,213,583
Interest Expense $385,212 $205,784 $1,418,395 $687,659
Provision for
Income Taxes $36,610 $10,921 $67,249 $35,332
Stock-based
compensation(1) $1,728,467 -- $4,919,897 --
Option
arrangement
between
shareholders
(2) -- -- $3,065,388 $5,473,907
Change in fair
value of
warrants and
derivative
liabilities $12,221,972 -- $12,221,972 --
Depreciation and
amortization $551,550 $281,245 $2,009,533 $967,105
EBITDA $9,042,790 $2,747,537 $27,725,700 $15,377,586
YoY Growth 229.12% 80.30%
(1) Non Cash Stock Based Compensation - stock option to employees and
consultants
(2) Option granted to Mr. Jie Han, the Company's Chairman from a related
party in 2008
CHINA XD PLASTICS COMPANY LIMITED
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2008
2009 2008
(Restated)
Audited Audited
ASSETS
Current assets:
Cash and cash equivalents $ 6,850,784 $ 3,869,035
Restricted cash -- 3,664,346
Notes receivable 407,487 303,437
Accounts receivable - net of
allowance for doubtful receivables of
$166,095 and $99,669, respectively 8,558,172 11,234,507
Prepaid expenses and other receivables 253,172 21,917
Inventories 18,371,485 12,438,782
Advances to employees 512,745 92,329
Advances to suppliers 20,245,861 13,131,074
Taxes receivable 406,755 --
Total current assets 55,606,461 44,755,427
Property, plant and equipment, net 31,083,389 19,332,712
Other assets:
Deferred charges -- 378,073
Intangible assets, net 241,945 247,681
Total other assets 241,945 625,754
Total assets $86,931,795 $64,713,893
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short term loans $21,678,565 $20,520,337
Bank acceptance notes payable -- 8,061,561
Accounts payable 1,258,459 113,232
Other payables 714,504 106,232
Accrued expenses 648,358 820,625
Taxes payable 4,134 17,777
Due to related parties 148,397 7,542,950
Deferred revenue 300,296 3,469,796
Dividends payable 77,396 --
Total current liabilities 24,830,109 40,652,510
Other liabilities:
Embedded conversion feature liabilities 18,798,059 --
Common stock warrant purchase liabilities 7,892,513 --
Total other liabilities 26,690,572 --
Total liabilities $51,520,681 $40,652,510
Series C convertible redeemable
preferred stock 15,188 and - 0 -
shares issued and outstanding as of
December 31, 2009 and 2008, respectively 13,891,477 --
Commitments and contingencies
Stockholders' equity
Preferred Stock, $0.0001 par value,
50,000,000 and 10,000,000 shares
authorized as of December 31, 2009
and 2008, respectively -- --
Series A Preferred Stock, - 0 -
and 1,000,000 shares issued and
outstanding as of December 31, 2009
and 2008, respectively -- 100
Series B Preferred Stock, 1,000,000
shares issued and outstanding as
of December 31, 2009
and 2008, respectively 100 100
Common Stock, $0.0001 par value,
500,000,000 and 100,000,000 shares
authorized, 40,867,050 and 805,802
shares issued and outstanding as of
December 31, 2009 and 2008,
respectively 4,087 81
Additional paid-in-capital 15,360,949 7,956,693
Retained earnings 4,631,628 14,577,235
Statutory surplus reserve fund 2,471,007 --
Accumulated other comprehensive income (948,134) 1,527,174
Total stockholders' equity 21,519,637 24,061,383
Total liabilities and stockholders' equity $86,931,795 $64,713,893
CHINA XD PLASTICS COMPANY LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
2009 2008
(Audited-
Audited Restated)
Cash flows from operating activities
Net income $ 4,023,266 $ 8,213,583
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation & amortization 2,009,533 967,105
Stock-based compensation expense 7,985,285 5,473,907
Allowance for bad debts 66,426 6,450
Changes in fair value of
warrants and embedded
derivatives 12,221,972 --
Loss on disposals of property,
plant and equipment 9,413 --
Changes in assets and liabilities:
(Increase) decrease in -
Restricted cash 3,659,730 2,101,449
Notes receivables (104,188) (293,656)
Accounts receivable 2,601,377 (5,684,397)
Prepaid expenses and other
receivables (231,652) 22,462
Inventories (5,937,387) (6,347,868)
Advance to employees (420,249) 37,740
Advances to suppliers (7,119,221) (11,061,383)
Taxes receivable (406,512) --
Deferred charge 377,595 (371,266)
Increase (decrease) in -
Accounts payable and other
payables 1,752,596 (497,713)
Accrued expenses (171,552) 759,716
Taxes payable (13,621) (1,509,948)
Deferred revenue (3,165,309) 3,309,634
Net cash provided by (used in)
operating activities 17,137,502 (4,874,185)
Cash flows from investing activities
Purchase of property, plant and
equipment (13,798,468) (12,037,135)
Proceeds from sales of property,
plant and equipment 16,000 --
Collection on due from related party -- 110,808
Net cash used in investing activities (13,782,468) (11,926,327)
Cash flows from financing activities
Proceeds from short term loans 1,171,113 18,711,534
Proceeds from bank acceptance notes -- 20,582,687
Repayment of bank acceptance
notes payable (8,051,406) (26,196,147)
Proceeds from issuance of series
C preferred stock 13,891,477 --
Repayment to related party loans (7,596,292) --
Proceeds from related party loans 206,628 7,411,175
Net cash provided by (used in)
financing activities (378,480) 20,509,249
Effect of exchange rate changes on
cash and cash equivalents 5,195 72,843
Net increase in cash and cash
equivalents 2,981,749 3,781,580
Cash and cash equivalents, beginning
of year 3,869,035 87,455
Cash and cash equivalents, end of year $ 6,850,785 $ 3,869,035
Supplemental disclosures of cash flow
information:
Interest paid $ 1,402,661 $ 700,260
Income taxes paid $ 61,943 $ 13,282
SOURCE China XD Plastics Company Ltd.
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