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

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

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.

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
[email protected] / English and Chinese

Mr. Bill Zima, ICR
+86 10 6583 7511
[email protected]

China Housing Investor Relations Department
+1 646.308.1285

SOURCE China Housing & Land Development Inc.

Related Links

http://www.chldinc.com