China Housing & Land Development Inc. Announces Second Quarter 2012 Financial Results -- Company Beats 2Q12 Revenue Guidance --

XI'AN, China, Aug. 14, 2012 /PRNewswire-Asia-FirstCall/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended June 30, 2012.

Highlights for Q2 2012:

  • Total revenue in the second quarter of 2012 increased 49.0% to $35.0 million from $23.5 million in the first quarter of 2012 and increased 72.9% from $20.3 million in the second quarter of 2011.
  • Total gross floor area ("GFA") sales were 25,908 sq. meters during the second quarter of 2012, compared to 20,366 sq. meters in the first quarter of 2012 and 12,769 sq. meters in the second quarter of 2011.
  • Average residential selling price ("ASP") in the second quarter of 2012 was RMB 5,705, compared with RMB 6,215 in the first quarter of 2012, and RMB 6,551 in the second quarter of 2011.
  • Gross profit increased 15.3% to $8.1 million from $7.0 million in the first quarter of 2012 and increased 58.6% from $5.1 million in the second quarter of 2011. Second quarter 2012 gross margin was 23.2% compared to 29.9% in the first quarter of 2012 and 25.3% in the second quarter of 2011.
  • SG&A expenses as a percentage of total revenue decreased to 11.3%, compared to 12.9% in the first quarter of 2012 and decreased from 16.4% in the second quarter of 2011.
  • Operating income decreased 10.4% to $3.1 million from $3.4 million in the first quarter of 2012, and increased 258.8% from $0.9 million in the second quarter of 2011.
  • Net income attributable to the Company in the second quarter of 2012 was $1.9 million, or $0.05 per diluted share.

Mr. Pingji Lu, China Housing's Chairman, commented, "We were pleased that our financial results for the second quarter were stronger than our original forecast. This performance was fueled by increased sales at our Puhua Phase I and II projects. Our three active projects, Puhua Phase I, Puhua Phase II and JunJing III generated the majority of our revenue with GFA sales of approximately 26 thousand square meters and a total average selling price of RMB 5,705 per square meter.  While overall GFA sales were high at two of our three main projects this quarter, our gross profit margin was lower than expected.  This was due to a change in estimated revenue and cost of sales at our JunJing III project as well as decreased ASP at our Puhua Phase II project to enhance sales. We aim to keep our gross margin in the 25% to 28% range and believe this will be achievable in the remaining half of the year."

"As we look ahead to the second half of the year, we believe market conditions will continue to improve and consumers will continue to resume their buying activity. We have one main project — Puhua Phase II, that will drive sales in the second half of the year. We also have several new projects under construction that are expected to commence pre-sales in the latter half of the year.  Recently, we have improved our debt position and believe we have sufficient levels of capital for our business expansion in the coming quarters ahead. We see a number of unique opportunities to drive demand for our residential and commercial properties in the Xi'an market and look forward to capitalizing on our growth to build China Housing into a larger, more profitable business." 

Total revenue in the second quarter of 2012 increased 49.0% to $35.0 million from $23.5 million in the first quarter of 2012 and increased 72.9% from $20.3 million in the second quarter of 2011.  In the second quarter of 2012, most of the Company's revenue came from its Puhua Phase I and Phase II projects.  Second quarter 2012 contract sales totaled $24.8 million compared to $20.1 million in the first quarter of 2012 and $12.9 million from the second quarter of 2011.  Total gross floor area ("GFA") sales were 25,908 sq. meters during the second quarter of 2012, compared to 20,366 sq. meters in the first quarter of 2012 and 12,769 sq. meters in the second quarter of 2011. The Company's ASP in the second quarter of 2012 increased to RMB 5,705 compared to RMB 6,215 in the first quarter of 2012, and RMB 6,551 in the second quarter of 2011.

Gross profit for the three months ended June 30, 2012 was $8.1 million, representing an increase of 15.3% from $7.0 million in the first quarter of 2012 and a 58.6% increase from $5.1 million in the same period of 2011. The increase in gross profit was due to increased sales from the Company's three main projects. Gross profit margin for the three months ended June 30, 2012 was 23.2%, which is below the 25.3% in the same period of 2011 and the 29.9% in the first quarter of 2012. The decrease in gross profit margin was mainly due to a change in estimated revenue and cost of sales at our JunJing III project. 

SG&A expense was $4.0 million in the second quarter of 2012, compared to $3.0 million in the first quarter of 2012 and $3.3 million in the second quarter of 2011. SG&A expense as a percentage of total revenue was 11.3%, compared to 12.9% in the first quarter of 2012 and 16.4% in the second quarter of 2011. The year-over-year increase in SG&A expense was primarily due to increased selling expenses associated with increased sales revenue.

Operating income in the second quarter of 2012 was $3.1 million, or 8.7% of total revenue, decreased from $3.4 million, or 14.5% of total revenue, in the first quarter of 2012, and increased from $0.9 million, or 4.2% of total revenue in the second quarter of 2011. The year-over-year increase was mainly due to increased revenue.

Net income attributable to China Housing in the second quarter of 2012 was $1.9 million, or $0.05 per diluted share. This performance compares to a net income of $3.4 million in the first quarter of 2012.

Sequential Quarterly Revenue Breakout Comparison

Project

Q2 2012

Q1 2012

Recognized Revenue

Contract Sales

GFA Sold

ASP

Unsold GFA

POC

Recognized Revenue

Contract Sales

GFA Sold

ASP


($)

($)

(sqm)

(RMB)

(sqm)


($)

($)

(sqm)

(RMB)

Projects Under Construction

Puhua Phase One

12,043,477

6,029,952

4,980

7,666

14,030

97.6%

4,778,151

1,245,345

1,394

5,628

Puhua Phase Two

14,541,350

15,973,143

19,343

5,228

161,106

55.3%

1,770,796

2,348,212

2,678

5,524

JunJing III

4,313,484

2,285,239

1,857

7,790

2,077

82.8%

10,629,103

13,242,856

14,198

5,876

Projects Completed

JunJing II Phase One

-

-

-

-

817

100%

3,256,293

3,256,293

2,096

9,788

JunJing I

(828,763)

(828,763)

(272)

19,938

4,825

100%

-

-

-

-

Additional Project

-

-

-

-

-

100%

-

-

-

-












Other
Income

4,945,971

-

-




3,067,428

-

-


Total

35,015,520

23,459,571

25,908

5,705

182,855

- 

23,501,771

20,092,706

20,366

6,215

Q-o-Q
Change

49.0%

16.8%

27.2%

-8.2%







Total debt outstanding as of June 30, 2012 was $201.2 million compared with $192.4 million on December 31, 2011.  Net debt outstanding (total debt less cash) as of June 30, 2012, 2012 was $105 million compared with $64.0 million on December 31, 2011. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 44.3% on June 30, 2012 and 33.0% on December 31, 2011.


Q2 2012

Projects in Planning

Unsold

GFA

First

Pre-sales

Scheduled


(sqm)


Puhua Phase Three

177,193

Q4 2012

Park Plaza

141,822

Q4 2012

Ankang Project

243,152

Q4 2012

Golden Bay

252,540

Q2 2013

Puhua Phase Four

216,611

Q3 2013

Textile City

630,000

Q3 2013

Total projects in planning

1,661,318



2012 Third Quarter Outlook

Total recognized revenue for the 2012 third quarter is expected to reach $23 to $26 million, compared to $32.1 million in the same period of 2011. The Company is reporting contract sales estimates compared to revenue as they are not subject to percentage of completion alterations.

Conference Call Information

Management will host a conference call at 8:00 am ET on August 14th, 2012.  Listeners may access the call by dialing #1-913-312-0647. 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 August 21st, 2012, by dialing #1-858-384-5517; passcode: 9513435.

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
+86-29-8258-2648 in Xi'an
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. Shuai Luo
Investor Relations
+86 29.8258.2632 in Xi'an
Laurentluo@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

Unaudited Interim Condensed Consolidated Balance Sheets

As of June 30, 2012 and December 31, 2011










June 30,



December 31,




2012



2011


 ASSETS







Cash and cash equivalents


$

12,394,253



$

22,014,953


Cash - restricted



83,809,061




105,720,400


Accounts receivable, net of allowance for                     doubtful accounts of $566,537 and                     $571,857, respectively



16,069,860




20,253,706


Other receivables, prepaid expenses and                     other assets, net



3,108,756




1,483,758


Real estate held for development or sale



217,163,574




163,482,316


Property and equipment, net



34,691,813




33,018,990


Advance to suppliers



2,179,083




889,965


Deposits on land use rights



41,921,048




65,286,137


Intangible assets, net



53,536,752




54,148,953


Goodwill



1,877,156




1,894,782


Deferred tax asset



-




308,248


Deferred financing costs



189,586




253,569


Total assets


$

466,940,942



$

468,755,777











LIABILITIES









Accounts payable


$

39,665,399



$

44,275,965


Advances from customers



49,053,224




57,541,251


Accrued expenses



7,697,765




8,380,041


Income and other taxes payable



15,374,676




14,386,133


Other payables



7,049,958




7,474,035


Loans from employees



18,872,973




14,887,431


Loans payable



149,015,279




148,402,690


Deferred tax liability



14,621,291




14,861,462


Warrants liability



976




4,162


Fair value of embedded derivatives



109,345




330,629


Convertible debt



9,639,742




9,165,591


Mandatorily redeemable non-controlling                     interests in Subsidiaries



23,658,219




19,935,482


Total liabilities



334,758,847




339,644,872











SHAREHOLDERS' EQUITY









Common stock: $.001 par value, authorized                    100,000,000 shares issued 35,438,079                     and 35,078,639, respectively











35,438




35,079


Additional paid in capital



49,774,295




48,961,658


Treasury stock at cost 351,480 shares and                     337,800 shares, respectively



(434,240)




(420,098)


Statutory reserves



7,857,612




7,857,612


Retained earnings



54,697,621




50,555,460


Accumulated other comprehensive income



20,251,369




22,121,194


Total shareholders' equity



132,182,095




129,110,905











Total liabilities and shareholders' equity


$

466,940,942



$

468,755,777


 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Income

For The Three and Six Months Ended June 30, 2012 and 2011

(Unaudited)











3 Months


3 Months


6 Months


6 Months



June 30,

2012


June 30,

2011


June 30,

2012


June 30,

2011


REVENUES









Real estate sales

$

30,069,549


$

15,573,256


$

50,503,892


$

35,230,073


Other income


4,945,971



4,678,936



8,013,399



7,579,815


Total revenues


35,015,520



20,252,192



58,517,291



42,809,888















COST OF SALES













Cost of real estate sales


23,115,905



13,150,640



37,348,769



27,789,214


Cost of other revenue


3,792,088



1,987,855



6,031,958



4,184,424


Total cost of revenues


26,907,993



15,138,495



43,380,727



31,973,638















Gross margin


8,107,527



5,113,697



15,136,564



10,836,250















OPERATING EXPENSES













Selling, general, and administrative            expenses


3,956,069



3,321,725



6,979,754



6,754,441


Stock-based compensation


690,390



17,820



812,996



17,820


Other expenses


58,455



348,901



64,888



390,478


Interest expense


100,676



365,460



330,948



962,608


Accretion expense on convertible            debt


241,665



206,813



474,151



543,804


Total operating expenses


5,047,255



4,260,719



8,662,737



8,669,151















NET INCOME FROM BUSINESS OPERATIONS


3,060,272



852,978



6,473,827



2,167,099
















CHANGES IN FAIR VALUE OF DERIVATIVES














Change in fair value of embedded derivatives


(150,181)



(409,478)



(221,284)



(1,462,232)



Change in fair value of warrants


(3,554)



(263,623)



(3,186)



(1,114,274)



Total changes in fair value of derivatives


(153,735)



(673,101)



(224,470)



(2,576,506)

















Income before provision for income taxes 


3,214,007



1,526,079



6,698,297



4,743,605

















Provision for income taxes


1,372,027



985,101



2,341,512



1,771,590



(Recovery of) provision for deferred income taxes


(64,768)



(33,922)



214,624



(71,968)

















NET INCOME

$

1,906,748


$

574,900


$

4,142,161


$

3,043,983

















WEIGHTED AVERAGE SHARES OUTSTANDING














Basic


34,914,731



35,078,639



34,822,496



34,485,897

















Diluted


34,914,731



36,694,348



34,822,496



36,101,606

















NET INCOME PER SHARE














Basic

$

0.05


$

0.02


$

0.12


$

0.09

















Diluted

$

0.05


$

0.01


$

0.12


$

0.05



 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES


 Interim Condensed Consolidated Statements of Comprehensive Income

For The Three and Six Months Ended June 30, 2012 and 2011


(Unaudited)














3 Months


3 Months


6 Months


6 Months




June 30,


June 30,


June 30,


June 30,




2012


2011


2012


2011












NET INCOME


$

1,906,748


$

574,900


$

4,142,161


$

3,043,983
















OTHER COMPREHENSIVE INCOME (LOSS)














(Loss) gain in foreign exchange



(1,763,412)



1,721,118



(1,869,825)



3,083,989
















COMPREHENSIVE INCOME


$

143,336


$

2,296,018


$

2,272,336


$

6,127,972


 

SOURCE China Housing & Land Development, Inc.



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