China Housing & Land Development Inc. Announces Third Quarter 2015 Financial Results

Nov 16, 2015, 06:00 ET from China Housing & Land Development Inc.

XI'AN, China, Nov. 16, 2015 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; NASDAQ: CHLN) today announced its financial results for the quarter ended September 30, 2015.

Third Quarter 2015 Financial Results:

  • Total revenue in the third quarter of 2015 was $19.7 million compared to $36.2 million in the second quarter of 2015 and $27.7 million in the third quarter of 2014.
  • Total gross floor area ("GFA") sales were 13,996 sq. meters during the third quarter of 2015, compared with 35,939 sq. meters in the second quarter of 2015 and 21,768 sq. meters in the third quarter of 2014.
  • Average residential selling price ("ASP") in the third quarter of 2015 was RMB5,994 compared with RMB6,061 in the second quarter of 2015, and RMB6,597 in the third quarter of 2014.
  • Gross profit was $4.0 million in the third quarter of 2015 compared to $4.7 million in the second quarter of 2015 and $5.8 in the third quarter of 2014. Gross margin in the third quarter 2015 was 20.1%, compared with 12.9% in the second quarter of 2015 and 20.9% in the third quarter of 2014.
  • SG&A expenses as a percentage of total revenue was 22.8%, compared to 10.0% in the second quarter of 2015 and 14.2% in the third quarter of 2014.
  • Operating loss was $1.9 million in the third quarter of 2015 compared to an operating income of $128,519 in the second quarter of 2015, and operating income of $0.5 million in the third quarter of 2014.
  • Net loss attributable to the Company in the third quarter of 2015 was $1.4 million, or $(0.20) per diluted share, compared to net loss of $19.0 million, or $(2.73) per diluted share, in the second quarter of 2015 and net income of $2.2 million, or $0.31 per diluted share, in the third quarter of 2014.

Mr. Pingji Lu, China Housing's Chairman, commented, "Our results for the third quarter were reflective of challenging real estate market conditions in Xi'an.  Overall unit sales remained weak as residential purchase activity remained sluggish. We are hopeful that market conditions can improve for our business as favorable government policies implemented over the last year will result in greater unit sales over time. We will continue to actively balance the pricing of our housing inventory to improve sales and cash flows, control our costs and roll out new projects including Golden Bay, Ankang II and Park Plaza II for pre-sales as market conditions stabilize."

Total revenue in the third quarter of 2015 was $19.7 million compared to $36.2 million in the second quarter of 2015 and $27.7 million in the third quarter of 2014. Other revenue in the third quarter of 2015 was $5.3 million, compared to $4.2 million in the second quarter of 2015 and $4.9 million in the third quarter of 2014.

In the third quarter of 2015, the majority of the Company's real estate revenue came from its Puhua Phase Two-East Region, Puhua Phase Three and Four projects, Park Plaza and Ankang projects. 2015 third quarter contract sales totaled $13.3 million compared with $33.5 million in the second quarter of 2015 and $23.3 million in the third quarter of 2014. GFA sales were 13,996 sq. meters during the third quarter of 2015, compared with 35,939 sq. meters in the second quarter of 2015 and 21,768 sq. meters in the third quarter of 2014. The Company's ASP in the third quarter of 2015 was RMB5,994 compared with RMB6,061 in the second quarter of 2015, and RMB6,597 in the third quarter of 2014.

Gross profit for the three months ended September 30, 2015 was $4.0 million, representing a decrease of 14.9% from $4.7 million in the second quarter of 2015 and a decrease of 31.5% from $5.8 million in the third quarter of 2014. Gross profit margin for the three months ended September 30, 2015 was 20.1%, compared to 12.9% in the second quarter of 2015 and the 20.9% in the third quarter of 2014. The year-over-year decrease in gross profit was mainly attributable to the Company's strategy of accelerating cash collection by launching certain sales promotions, but the sales are not satisfactory, resulting in lower margin than the same period of last year.

SG&A expense was $4.5 million in the third quarter of 2015, compared with $3.6 million in the second quarter of 2015 and $3.9 million in the third quarter of 2014. SG&A expense as a percentage of total revenue was 22.8%, compared with 10.0% in the second quarter of 2015 and 14.2% in the third quarter of 2014. The year-over-year increase in SG&A expense was mainly due to the Company increased its promotion efforts during the third quarter of 2015.

Operating loss in the third quarter of 2015 was $1.9 million, compared to an operating income of $128,519 in the second quarter of 2015, and operating income of $0.5 million in the third quarter of 2014. The year-over-year decrease was mainly due to the Company's increased expenditure in promotional activities and lower total revenue.

Net loss attributable to the Company in the third quarter of 2015 was $1.4 million, or $(0.20) per diluted share, compared to net loss of $19.0 million, or $(2.73) per diluted share, in the second quarter of 2015 and net income of $2.2 million, or $0.31 per diluted share, in the third quarter of 2014. The increase in net loss was mainly due to the decrease in revenue.

Sequential Quarterly Revenue Breakout Comparison

Project

Q3 2015

Q2 2015

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

Puhua Phase Two-East Region

4,853,831

3,417,690

3,748

5,747

66,368

91.40%

10,770,692

9,632,045

10,792

5,537

Ankang Phase One

1,502,796

942,882

1,583

3,754

39,828

89.21%

1,394,097

990,860

1,625

3,782

Puhua Four

4,985,823

5,949,120

6,248

6,002

97,435

34.21%

7,251,633

12,332,569

12,405

6,167

Projects Completed

Park Plaza Phase One

838,241

838,241

801

6,599

21,047

100%

5,444,449

5,683,765

6,547

5,385

Puhua Phase Three

2,159,590

2,159,590

1,616

8,424

36,025

100%

7,471,772

5,162,968

4,663

6,868

Puhua Phase One

2,695

-

-

-

9,817

100%

-605,810

-608,810

-448

8,388

Puhua Phase Two-West Region & New Coast Line

-671

1,215

14,696

100%

163,556

163,556

124

8,182

JunJing III

54,019

-

-

-

-

-

155,565

155,565

231

4,177

JunJing II Phase One

-

-

-

-

-

-

-

-

-

-

JunJing I

-

-

-

-

-

-

-

-

-

-

Other Projects

-

-

-

-

-

-

-

-

-

-

Other Income

5,305,985

-

-

-

-

-

4,175,024

-

-

-

Total

19,702,309

13,308,738

13,996

5,994

285,216

87.83%

36,220,978

33,512,518

35,939

6,061

Q-o-Q Change

-45.61%

-60.29%

-61.06%

-2.68%

-13.69%

-

52.05%

37.62%

34.25%

0.65%

Total debt outstanding as of September 30, 2015 decreased to $291.6 million from $323.5 million as of December 31, 2014. Net debt outstanding (total debt less cash and restricted cash) as of September 30, 2015 decreased to $185.9 million from $199.9 million as of December 31, 2014. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 68.5 % on September 30, 2015 and 64.4 % on December 31, 2014.

Q3 2015

Projects in Planning

Unsold GFA

First Pre-sales Scheduled

(m2)

Golden Bay

329,508

2015Q4

Ankang Project-Phase II

170,851

2016Q4

Park Plaza- Phase II

66,155

2016Q2

Total projects in planning

566,514

Fourth Quarter 2015 Outlook

The Company expects its contract revenue for the fourth quarter of 2015 to reach $15 million to $20 million. The Company is reporting revenue, which is subject to percentage of completion alterations.

Recent Developments

The Company intends to engage in a going private transaction to reduce the number of record holders of the Company's common stock, par value US$0.001 per share (the "Common Stock") to fewer than 300, thereby allowing the Company to deregister its Common Stock under Section 12 (g) of the Exchange Act and suspend its reporting obligations under Section 13(a) of the Exchange Act (the "Transaction"). To accomplish the reduction in the number of record holders of the Common Stock, the Company will effect a reverse stock split of the Common Stock, whereby every 50,000 shares of our Common Stock outstanding as of the effective date of the reverse stock split will be converted into one whole share of Common Stock (the "Reverse Stock Split"). In lieu of issuing any fractional shares held by stockholders as a result of the Reverse Stock Split, the Company will pay cash equal to US$3.00 multiplied by the number of pre-Reverse Stock Split shares of Common Stock held by such stockholders underlying the corresponding fractional shares.  Following the Reverse Stock Split, the Company will have fewer than 300 stockholders of record. As a result, the Company will be eligible to, and intends to, suspend its reporting obligations under Section 13(a) of the Exchange Act, after which time the Company will no longer be subject to the reporting requirements under the Exchange Act.  The special committee of the Board of directors of the Company and the Board of directors of the Company (the "Board") have respectively resolved to approve the going private transaction through the Reverse Stock Split on September 29, 2015.  The Board is soliciting proxies to seek approval of the going private transaction. For more information of the going private transaction, please refer to the filing of Schedule 13E-3 and Preliminary Proxy Statement on Schedule 14A with the SEC October 5, 2015 and the filing of Amendment No. 1 to Schedule 13E-3 and Amendment No. 1 to Preliminary Proxy Statement on Schedule 14A with the SEC November 2, 2015.

Conference Call Information

Management will host a conference call at 8:00 am ET on November 16, 2015. Listeners may access the call by dialing +1-913-981-5587. To listen to the live webcast of the event, please go to http://public.viavid.com/index.php?id=117269. Listeners may access the call replay, which will be available through November 23, 2015, by dialing +1-858-384-5517. The passcode is 3523409.

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, 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 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

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 Unaudited Interim Condensed Consolidated Balance Sheets As of September 30, 2015 and December 31, 2014

September 30, 2015

December 31, 2014

ASSETS

Cash

$

15,597,223

$

33,223,127

Cash - restricted

90,064,373

90,328,084

Accounts receivable, net of allowance for doubtful accounts of

     $566,147 and $579,926, respectively

11,019,825

33,041,324

Other receivables, prepaid expenses and other assets

9,068,438

9,816,076

Real estate held for development or sale

380,744,833

374,083,969

Property and equipment, net

40,841,015

43,383,002

Advance to suppliers

1,660,001

1,033,359

Deposits on land use rights

15,104,788

16,136,415

Intangible assets, net

8,515,134

23,561,951

Goodwill

1,876,388

1,922,053

Total assets

$

574,492,018

$

626,529,360

LIABILITIES

Accounts payable

$

55,911,226

$

75,845,987

Advances from customers

51,303,106

35,172,506

Accrued expenses

30,254,562

21,842,922

Income taxes payable

22,850,472

24,280,260

Other taxes payable

12,052,931

9,318,119

Other payables

15,146,605

11,692,913

Loans from employees

26,259,364

29,819,381

Loans payable

265,310,223

293,660,575

Deferred tax liability

10,107,864

14,395,327

Total liabilities

489,196,353

516,027,990

SHAREHOLDERS' EQUITY

Common stock: $0.001 par value, authorized 20,000,000 shares;

Issued 7,017,869 and 6,960,369, respectively

7,018

6,960

Additional paid in capital

52,587,192

52,511,350

Statutory reserves

11,700,198

11,700,198

Retained earnings

3,191,632

24,046,686

Accumulated other comprehensive income

17,809,625

22,236,176

Total shareholders' equity

85,295,665

110,501,370

Total liabilities and shareholders' equity

$

574,492,018

$

626,529,360

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES Unaudited Interim Condensed Consolidated Statements of Operations For The Three and Nine Months Ended September 30, 2015 and 2014

3 Months September 30, 2015

3 Months September 30, 2014

9 Months September 30, 2015

9 Months September 30, 2014

REVENUES

Real estate sales

$

14,396,324

$

22,816,765

$ 67,116,774

$

79,436,412

Other income

5,305,985

4,893,589

12,628,790

14,383,616

Total revenues

19,702,309

27,710,354

79,745,564

93,820,028

COST OF SALES

Cost of real estate sales

12,760,030

18,632,301

59,929,777

74,840,421

Cost of other revenue

2,975,985

3,290,397

7,303,851

8,692,392

Total cost of revenues

15,736,015

21,922,698

67,233,628

83,532,813

Gross margin

3,966,294

5,787,656

12,511,936

10,287,215

OPERATING EXPENSES

Selling, general, and administrative expenses

4,491,185

3,936,507

11,351,887

11,802,817

Stock-based compensation

75,900

-

75,900

1,136,304

Other expenses

34,464

6,460

47,966

20,480

Financing expense

1,242,294

1,342,370

3,249,179

3,676,752

Total operating expenses

5,843,843

5,285,337

14,724,932

16,636,353

Write off of real estate held for development

-

-

7,345,105

-

Intangible asset impairment

-

-

14,964,476

-

Loss from disposal of property and equipment

-

-

-

563,710

Gain on extinguishment of loan

-

(2,071,672)

-

(2,071,672)

(Loss)Income before provision for income taxes

(1,877,549)

2,573,991

(24,522,577)

(4,841,176)

(Recovery of) Provision for income taxes

(467,509)

414,147

106,954

559,605

Recovery of deferred taxes

(11,020)

(11,270)

(3,774,476)

(33,802)

(Recovery of) Provision for income taxes

(478,529)

402,877

(3,667,522)

525,803

NET (LOSS) INCOME

$

(1,399,020)

$

2,171,114

$ (20,855,055 )

$

(5,366,979)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

7,014,710

6,895,492

6,978,446

6,906,526

Diluted

7,014,710

6,895,492

6,978,446

6,906,526

NET (LOSS) EARNINGS PER SHARE

Basic

$

(0.20)

$ 0.31

$ (2.99)

$ (0.78)

Diluted

$

(0.20)

$ 0.31

$ (2.99)

$ (0.78)

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss For The Three and Nine Months Ended September 30, 2015 and 2014

3 Months September 30, 2015

3 Months September 30, 2014

9 Months September 30, 2015

9 Months September 30, 2014

NET (LOSS) INCOME

$

(1,399,020)

$

2,171,114

$   (20,855,055)

$         (5,366,979)

OTHER COMPREHENSIVE (LOSS) INCOME

(Loss) gain in foreign exchange

(5,066,925)

2,782,552

(4,426,551)

(3,215,708)

COMPREHENSIVE (LOSS) INCOME

$

(6,465,945)

$

4,953,666

$   (25,281,606)

$        (8,582,687)

 

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES Unaudited Interim Condensed Consolidated Statements of Cash Flows For The Three and Nine Months Ended September 30, 2015 and 2014

September 30, 2015

September 30, 2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss for the period

$

(20,855,055)

$

(5,366,979)

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

Depreciation

1,689,130

1,836,084

Stock-based compensation

75,900

1,136,304

Loss on disposal of property and equipment

-

563,710

Write off of property

7,345,105

-

Amortization of intangible assets

165,458

17,944,433

Recovery of deferred income taxes

(3,774,476)

(33,802)

Gain on extinguishment of loan

-

(2,071,672)

Intangible asset impairment

14,964,476

-

(Increase) decrease in assets:

Accounts receivable

21,610,367

4,313,651

Other receivable, prepaid expense, and other assets

372,833

(4,783,591)

Real estate held for development or sale

(22,954,538)

(82,750,198)

Advances to suppliers

(684,657)

(822,202)

 Deposit on land use right

653,831

41,899,123

Increase (decrease) in liabilities:

Accounts payable

(18,386,830)

1,160,426

Advances from customers

14,423,169

3,842,693

Accrued expenses

9,054,617

(2,387,985)

Other payables

4,006,283

1,544,722

Income and other taxes payable

1,628,051

3,537,296

Net cash provided by (used in) operating activities

9,333,664

(20,437,987)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(249,410)

(9,006,050)

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

(249,410)

(31,071,706)

CASH FLOWS FROM FINANCING ACTIVITIES:

Change in restricted cash

(1,893,832)

2,826,336

Loans from banks

1,612,071

49,943,480

Loans from external parties

100,433,277

10,979,808

Repayment on loans

(125,526,435)

(29,930,693)

Loans from employees, net

(294,765)

4,404,795

Deferred financing cost

(499,566)

-

Purchase of treasury stock

-

(634,648)

Net cash (used in) provided by financing activities

(26,169,250)

37,589,078

DECREASE IN CASH

(17,084,996)

(13,920,615)

Effects on foreign currency exchange

(540,908)

(385,669)

CASH, beginning of period

33,223,127

21,320,071

CASH, end of period

$

15,597,223

$

7,013,787

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Statements of Shareholders' Equity As of September 30, 2015 and December 31, 2014

Common Stock

Additional Paid in

Statutory

Retained

Accumulated Other Comprehensive

Shares

Par Value

Capital

Reserves

Earnings

Income

Totals

BALANCE, December 31, 2014

6,960,369

$

6,960

$

52,511,350

$

11,700,198

$

24,046,686

$

22,236,176

$

110,501,370

Net loss for the period

-

-

-

-

(478,547)

-

(478,547)

Foreign currency translation adjustment

-

-

-

-

-

614,165

614,165

BALANCE, March 31, 2015

6,960,369

6,960

52,511,350

11,700,198

23,568,139

22,850,341

110,636,988

Net loss for the period

-

-

-

-

(18,977,487)

-

(18,977,487)

Foreign currency translation adjustment

-

-

-

-

-

26,209

26,209

BALANCE, June 30, 2015

6,960,369

6,960

52,511,350

11,700,198

4,590,652

22,876,550

91,685,710

Stock-based compensation

57,500

58

75,842

-

-

-

75,900

Net loss for the period

-

-

-

-

(1,399,020)

-

(1,399,020)

Foreign currency translation adjustment

-

-

-

-

-

(5,066,925)

(5,066,925)

BALANCE, September 30, 2015

7,017,869

$

7,018

$

52,587,192

$

11,700,198

$

3,191,632

$

17,809,625

$

85,295,665

 

 

SOURCE China Housing & Land Development Inc.



RELATED LINKS

http://www.chldinc.com