China Housing & Land Development Inc. Announces Fourth Quarter 2010 Financial Results

Mar 14, 2011, 06:30 ET from China Housing & Land Development, Inc.

XI'AN, China, March 14, 2011 /PRNewswire-Asia-FirstCall/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended December 31, 2010.

Highlights for Q4 2010:

  • Total revenue in the fourth quarter of 2010 increased 5.9% to $36.1 million from $34.0 million in the third quarter of 2010 and increased 37.0% from $26.3 million in the fourth quarter of 2009.
  • Total gross floor area ("GFA") sales were 30,680 sq. meters during the fourth quarter of 2010, compared to 39,833 sq. meters in the third quarter of 2010 and 61,786 sq. meters in the fourth quarter of 2009.
  • Average residential selling price ("ASP") in the fourth quarter of 2010 was RMB 6,661, compared with RMB 5,694 in the third quarter of 2010, and represents a 42.5% increase from RMB 4,675 in the fourth quarter of 2009.
  • Gross profit decreased 25.0% to $8.2 million from $10.9 million in the third quarter of 2010 but increased 74.6% from $4.7 million in the fourth quarter of 2009. Fourth quarter 2010 gross margin was 22.7% compared to 32.0% in the third quarter of 2010 and 17.8% in the fourth quarter of 2009.
  • SG&A expenses as a percentage of total revenue increased to 10.4%, compared to 8.4% in the third quarter of 2010 and 12.6% in the fourth quarter of 2009.
  • Operating income decreased 56.7% to $3.0 million from $7.0 million in the third quarter of 2010, and increased from $(0.17 million) in the fourth quarter of 2009.
  • Net income attributable to the Company in the fourth quarter of 2010 was $2.4 million, or $0.07 per basic share and $0.15 per diluted share.  Excluding the $0.4 million or $0.01 impact on basic EPS associated with the revaluation of derivatives and warrants, net income was $2.1 million, or $0.06 per basic share.

Mr. Pingji Lu, China Housing's Chairman, commented, "We are pleased to have met our full year revenue forecast.  Once again, JunJing II Phase Two and Puhua Phase One were the primary revenue contributors in our business during the fourth quarter. Xian's residential sales in the fourth quarter of 2010 totaled 4.4 million square meters with an average selling price of RMB 6,704, a 49.3% increase in sales volume and 5.1% increase in sales price compared to the third quarter of 2010. Our fourth quarter results were consistent with the general growth trends in Xi'an. Demand for our development projects remained healthy as all three of our current projects under construction achieved sizeable ASP improvements over the prior quarter.  

We believe 2011 could be a very productive year for our business. Much of our growth will be achieved from further sales of our current projects under construction as well as from our three development projects scheduled for pre-sales in 2011.  Further, we plan to expand our development projects into surrounding areas near Xi'an. We recently announced our acquisition of a development project in nearby Hu county and plan to expand into at least one additional surrounding city this year. We also aim to concentrate on developing properties that can generate rental income and provide more stable cash flows for our business going forward. We intend to further establish China Housing as a leading developer in Xi'an and its surrounding area and are optimistic that 2011 can be a record year of growth for our company."

Gross profit for the three months ended December 31, 2010 was $8.2 million, representing a decrease of 25.0% from $10.9 million in the third quarter of 2010 and 74.6% increase from $4.7 million in the same period of 2009. The gross profit margin for the three months ended December 31, 2010 was 22.7%, which surpassed the 17.8% in the same period of 2009 and was lower than the 32.0% in the third quarter of 2010. Gross profit decreased sequentially due to the reclassification of JunJing I commercial assets that shifted on the balance sheet from "Assets held for sale" to "Property and Plant equipment", resulting in accumulated depreciation totaling $1.9 million. Excluding this impact, sequential gross margin would have increased to 28%. Fourth quarter gross margin performance was further impacted by year-end POC accounting adjustments that were taken in the fourth quarter.

SG&A expense was $3.7 million in the fourth quarter of 2010, compared to $2.9 million in the third quarter of 2010 and $3.3 million in the fourth quarter of 2009. The increase in SG&A is due to the increased marketing and administrative expenses related to the Puhua project. SG&A as a percent of total revenues for the year was 9.2% in 2010 compared to 10.6% in 2009.

Operating income in the fourth quarter of 2010 decreased to $3.0 million, or 8.4% of total revenue, from $7.0 million, or 20.6% of total revenue, in the third quarter of 2010.

Net income attributable to China Housing in the fourth quarter of 2010 was $2.4 million or $0.07 per basic share and $0.15 per diluted share. Excluding the $0.4 million, or $0.01 impact, on basic earnings per share ("PS") associated with the revaluation of derivatives and warrants, net income was $2.1 million or $0.06 per basic share. This performance compares to a net loss of $(1.1 million), or $(0.03) per basic share, in the fourth quarter of 2009, which excludes a $0.6 million non-cash loss associated with the revaluation of derivatives and warrants in the fourth quarter of 2009.

Sequential Quarterly Revenue Breakout Comparison

Project

Q4 2010

Q3 2010

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

JunJing II Phase Two

11,062,535

6,344,486

5,471

7,720

1,786

95.3%

15,022,903

8,515,737

9,931

5,803

Puhua Phase One

11,223,613

12,032,930

11,858

6,755

31,511

64.6%

10,104,983

12,108,057

14,145

5,793

Puhua Phase Two

3,607,239

7,820,587

10,021

5,195

191,493

35.7%

2,977,388

9,538,222

12,768

5,056

Projects Completed

JunJing II Phase One

5,187,178

3,141,136

2,712

7,710

1,946

100%

1,200,153

1,200,153

1,409

5,765

Tsining-24G

316,031

321,343

184

11,434

547

100%

1,565,564

1,565,565

1,190

8,904

JunJing I

498,742

526,653

434

7,650

4,827

100%

506,270

506,270

215

15,965

Additional Project

509,755

509,755

-

-

-

100%

78,659

78,659

175

3,044

Other Income

3,648,208

2,592,853

Total

36,053,301

30,696,890

30,680

6,661

234,952

34,048,774

33,512,663

39,833

5,694

Q-o-Q Change

5.9%

(8.4%)

(22.9%)

17.0%

As of December 31, 2010, China Housing reported $46.9 million in unrestricted cash, compared to $71.6 million as of September 30, 2010 and $36.9 million as of December 31, 2009. Total debt was $110.4 million on December 31, 2010, compared to $132.1 million as of September 30, 2010, and $59.8 million as of December 31, 2009. Net debt as a percentage of total capital was 22.0% on December 31, 2010, compared to 38.3% on September 30, 2010 and 15.7% on December 31, 2009.

Q1 2011

Projects in Planning

Unsold GFA

First Pre-sales Scheduled

(m2)

JunJing III

49,636

Q2 2011

Park Plaza

141,822

Q3 2011

Golden Bay

252,540

Q3 2011

Puhua Phase Three

130,000

Q2 2012

Puhua Phase Four

161,107

Q4 2013

Textile City

630,000

Q3 2012

Hu County

195,000

Q3 2011

Total projects in planning

1,560,105

2011 Outlook

Total contract sales in 2011 are expected to reach $250 to $290 million, a 140%-179% increase compared to $148 million in 2010.  Total recognized revenue in 2011 is expected to reach $200 to $220 million, a 43%-57% increase compared to $140 million in 2010. Gross margin in 2011 is expected to reach 30%-35%. The Company is reporting contract sales estimates compared to revenue as it is not subject to percentage of completion alterations.

Conference Call Information

China Housing's management will host an earnings conference call on Monday, March 14, 2011 at 8:00 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-719-457-2631. 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 March 21st, by dialing #1-858-384-5517; passcode: 5867025.

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: 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

(Financial Tables on Following Pages)

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARY

Consolidated Balance Sheets

As of December 31, 2010 and December 31, 2009

December 31,

December 31,

2010

2009

ASSETS

 

 

 

 

 

 

Cash & cash equivalents

$

46,904,161

$

36,863,216

 

Cash - restricted

 

 

 

34,756,450

 

701,017

Accounts receivable, net of allowance for doubtful  accounts of $266,493 and $389,996, respectively

9,297,505

6,088,482

Other receivables, prepaid expenses and other assets, net

7,653,925

2,484,221

 

Real estate held for development or sale

 

 

 

104,586,550

 

103,003,529

Property and equipment, net

29,735,836

15,307,478

 

Asset held for sale

 

 

 

-

 

14,301,564

Advances to suppliers

1,223,366

10,368,386

 

Deposits on land use rights

 

 

 

74,938,729

 

28,084,346

Intangible asset, net

51,846,410

41,355,134

 

Goodwill

 

 

 

1,806,905

 

816,469

Deferred financing costs

 

401,703

 

411,457

 

 

 

Total assets

 

 

 

363,151,540

 

259,785,299

LIABILITIES

 

 

 

 

 

 

Accounts payable

$

22,542,083

$

20,706,263

 

Advances from customers

 

 

 

52,229,189

 

21,301,876

Accrued expenses

2,507,638

5,587,837

 

Payable for acquisition of businesses

 

 

 

2,363,385

 

5,916,354

Income and other taxes payable

15,429,752

8,194,659

 

Other payables

 

 

 

5,663,222

 

4,524,288

Loans from employees

8,787,879

2,864,824

 

Loans payable

 

 

 

82,971,074

 

36,185,705

Deferred tax liability

14,344,712

11,505,181

 

Warrants liability

 

 

 

2,766,382

 

5,074,191

Fair value of embedded derivatives

2,027,726

3,991,047

 

Convertible debt

 

 

 

16,251,840

 

14,834,987

 

Mandatory redeemable noncontrolling interest in Subsidiaries

 

 

 

33,535,969

 

-

 

 

Total liabilities

 

 

 

261,420,851

 

140,687,212

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Common stock: $.001 par value, authorized 100,000,000 shares  issued and outstanding 32,685,331 and 31,884,969, respectively

32,685

31,885

Additional paid in capital

38,996,078

35,461,706

 

Common stock subscribed

 

 

 

59,606

 

252,118

Statutory reserves

6,654,715

4,922,248

 

Retained earnings

 

 

 

41,528,907

 

39,895,179

Accumulated other comprehensive income

 

14,458,698

 

10,163,483

 

Total China Housing & Land Development, Inc. shareholders' equity

 

 

 

101,730,689

 

90,726,619

 

Noncontrolling interest

 

 

 

-

 

28,371,468

 

 

Total shareholders' equity

 

 

 

101,730,689

 

119,098,087

 

 

 

Total liabilities and shareholders' equity

 

$

363,151,540

$

259,785,299

The accompanying notes are an integral part of these consolidated financial statements.

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Consolidated Statements of Income

For The Years Ended December 31, 2010 and 2009

December 31,

December 31,

2010

2009

REVENUE

  Sale of properties

$

131,472,461

$

78,511,269

  Other income

8,796,323

8,047,883

Total revenue

140,268,784

86,559,152

COST OF SALES

    Cost of sale of properties

99,280,358

57,625,613

    Cost of other income

6,102,184

5,276,828

Total cost of sales

104,382,242

62,902,441

Gross margin

35,886,242

23,656,711

OPERATING EXPENSES

    Selling, general and administrative expenses

12,909,946

9,182,165

    Security registration expenses

-

1,786,517

    stock based compensation

59,606

252,118

    Other expense

937,568

385,652

    Interest expense

1,834,322

2,323,141

    Accretion expense on convertible debt

1,416,871

1,213,063

Total operating expenses

17,158,313

15,142,656

NET INCOME FROM BUSINESS OPERATIONS

18,727,929

8,514,055

CHANGE IN FAIR VALUE OF DERIVATIVES

    Change in fair value of embedded derivatives and warrants from modification

2,180,492

-

    Change in fair value of embedded derivatives

(3,882,873)

3,230,649

    Change in fair value of warrants

(2,527,423)

4,365,633

Total change in fair value of derivatives

(4,229,804)

7,596,282

Income before provision for income taxes and noncontrolling interest

22,957,733

917,773

Provision for income taxes

5,513,517

(814,155)

Recovery of deferred income taxes

(151,022)

-

NET INCOME (LOSS)

17,595,238

1,731,928

Charge to noncontrolling interest

(14,229,043)

737,882

Net (loss) income attributable to China Housing & Land Development, Inc.

3,366,195

2,469,810

WEIGHTED AVERAGE SHARES OUTSTANDING

    Basic

32,854,429

31,180,246

    Diluted

35,579,398

31,180,246

NET INCOME PER SHARE

    Basic

$

0.1

$

0.08

    Diluted

$

0.02

$

0.08

The accompanying notes are an integral part of these consolidated financial statements.

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For The Years Ended December 31, 2010, 2009

December 31,

December 31,

2010

2009

NET INCOME (LOSS)

$

17,595,238

$

1,731,928

OTHER COMPREHENSIVE INCOME (LOSS)

Gain (loss) in foreign exchange

4,295,215

(234,318)

COMPREHENSIVE INCOME

21,890,453

1,497,610

Charge to noncontrolling interest

(14,229,043)

737,882

Comprehensive income attributable to China Housing & Land Development, Inc. 

$

7,661,410

$

2,235,492

The accompanying notes are an integral part of these consolidated financial statements.

SOURCE China Housing & Land Development, Inc.



RELATED LINKS

http://www.chldinc.com