Attached files
| file | filename |
|---|---|
| 8-K - China Housing & Land Development, Inc. | v223605_8k.htm |
| EX-99.2 - China Housing & Land Development, Inc. | v223605_ex99-2.htm |
China Housing & Land Development Inc. Announces
First Quarter 2011 Financial Results
Xi’an, China – May 16, 2011 -- China Housing & Land Development, Inc. (“China Housing” or the “Company”; Nasdaq: CHLN) today announced its financial results for the quarter ended March 31, 2011.
Highlights for Q1 2011:
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·
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Total revenue in the first quarter of 2011 decreased 37.4% to $22.6 million from $36.1 million in the fourth quarter of 2010 and decreased 32.8% from $33.6 million in the first quarter of 2010.
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·
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Total gross floor area (“GFA”) sales were 28,438 sq. meters during the first quarter of 2011, compared to 30,680 sq. meters in the fourth quarter of 2010 and 61,666 sq. meters in the first quarter of 2010.
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·
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Average residential selling price (“ASP”) in the first quarter of 2011 was RMB 6,115, compared with RMB 6,661 in the fourth quarter of 2010, and RMB 5,027 in the first quarter of 2010.
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·
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Gross profit decreased 30.0% to $5.7 million from $8.2 million in the fourth quarter of 2010 and decreased 11.6% from $6.5 million in the first quarter of 2010. First quarter 2011 gross margin was 25.4% compared to 22.7% in the fourth quarter of 2010 and 19.3% in the first quarter of 2010.
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·
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SG&A expenses as a percentage of total revenue increased to 15.2%, compared to 10.4% in the fourth quarter of 2010 and 7.6% in the first quarter of 2010.
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·
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Operating income decreased 56.7% to $1.3 million from $3.0 million in the fourth quarter of 2010, and decreased from $3.0 million in the first quarter of 2010.
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·
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Net income attributable to the Company in the first quarter of 2011 was $2.5 million, or $0.07 per basic share and $0.05 per diluted share. Excluding the $1.9 million or $ 0.06 gain on basic EPS associated with the revaluation of derivatives and warrants, net income was $0.6 million or $0.02 per basic share.
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Mr. Pingji Lu, China Housing’s Chairman, commented, “The first quarter was challenging for our business as sales fell short of expectations due to the impact of additional mortgage and purchase restrictions imposed by the local Xi’an government in the first quarter. Potential buyers waited for the new guidelines to determine whether they could meet new mortgage requirements as well as see if prices would soften. The Xi’an government has also extended the number of days required to secure the necessary construction permits which has delayed the timing of our new development projects. According to data from E-House (China) and the Xi’an Bureau of Statistics, during the first quarter of 2011, housing sales volume in Xi’an decreased 31.4% sequentially to 3.0 million sq. meters, but average selling prices held steady increasing 7.7% to RMB 7,220 per sq. meter compared to RMB 6,704 in the fourth quarter of 2010.”
“We are confident that buyers will return to the market as they have in the past with other rounds of government policies. Currently, we have three projects scheduled to commence pre-sales for the remainder of this year and are comfortable that the necessary permits can be secured to commence pre-sales for these projects in the second and third quarter periods. We have a stable lineup of projects that will benefit our overall performance in 2011. For the remainder of 2011, five projects will serve as primary contributors to our revenue--this includes Puhua Phase I, Puhua Phase II, JunJing III, Park Plaza, and Golden Bay. Each project develops middle to high end apartment units, which can contribute to our ASP and gross margin performance going forward. In spite of a weaker than expected first quarter, we are optimistic that 2011 will be a solid year of growth for our company.”
Total revenue in the first quarter of 2011 decreased 37.4% to $22.6 million from $36.1 million in the fourth quarter of 2010 and decreased 32.8% from $33.6 million in the first quarter of 2010. In the first quarter of 2011, most of the Company’s revenue came from its Puhua Phase I and Phase II, Tsining JunJing II Phase Two. First quarter 2011 contract sales totaled US$26.4 million representing a total GFA of 28,438 square meters. First quarter 2011 contract sales represented a 41.8% decrease compared to US$45.4 million in the first quarter of 2010. Total gross floor area (“GFA”) sales were 28,438 sq. meters during the first quarter of 2011, compared to 30,680 sq. meters in the fourth quarter of 2010 and 61,666 sq. meters in the first quarter of 2010. The Company’s average residential selling price (“ASP”) in the first quarter of 2011 was RMB 6,115, compared with RMB 6,661 in the fourth quarter of 2010, and RMB 5,027 in the first quarter of 2010.
Gross profit for the three months ended March 31, 2011 was $5.7 million, representing a decrease of 30.0% from $8.2 million in the fourth quarter of 2010 and 11.6% decrease from $6.5 million in the same period of 2010. The gross profit margin for the three months ended March 31, 2011 was 25.4%, which surpassed the 19.3% in the same period of 2010 and was higher than the 22.7% in the fourth quarter of 2010. The Company’s gross margin in the current period is consistent with the expected margin. Due to the delayed revenue recognition of JunJing III, we had fewer sales during the first quarter of 2011 compared with the same period in 2010, which resulted in reduced gross profit. However, with the improved market condition, average selling price increased on all of our projects, which led to improved gross profit margin.
SG&A expense was $3.4 million in the first quarter of 2011, compared to $3.7 million in the fourth quarter of 2010 and $2.5 million in the first quarter of 2010. SG&A expenses as a percentage of total revenue increased to 15.2%, compared to 10.4% in the fourth quarter of 2010 and 7.6% in the first quarter of 2010. The increase in SG&A is primarily due to increased expenses associated with new projects to be constructed in the near future, increased audit expense associated with SOX compliance and increased employee salaries.
Operating income in the first quarter of 2011 decreased to $1.3 million, or 5.8% of total revenue, from $3.1 million, or 8.4% of total revenue, in the fourth quarter of 2010, and decreased from $3.0 million, or 8.9% of total revenue in the first quarter of 2010 primarily due to the decreased revenues from existing projects.
Net income attributable to China Housing in the first quarter of 2011 was $2.5 million or $0.07 per basic share and $0.05 per diluted share. Excluding the $1.9 million or $0.06 gain on basic earnings per share (“PS”) associated with the revaluation of derivatives and warrants, net income was $0.6 million or $0.02 per basic share. This performance compares to a net income of $2.4 million, or $0.07 per basic share, in the fourth quarter of 2010, which excludes a $0.4 million non-cash loss associated with the revaluation of derivatives and warrants in the fourth quarter of 2010.
Sequential Quarterly Revenue Breakout Comparison
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Project
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Q1 2011
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Q4 2010
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Recognized Revenue
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Contract Sales
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GFA Sold
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ASP
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Unsold GFA
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POC
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Recognized Revenue
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Contract Sales
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GFA Sold
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ASP
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($)
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($)
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(m2)
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(RMB)
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(m2)
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($)
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($)
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(m2)
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(RMB)
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Projects Under Construction
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JunJing II Phase Two
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4,174,516
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680,484
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697
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6,421
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391
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99.6%
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11,062,535
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6,344,486
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5,471
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7,720
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Puhua Phase One
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5,219,729
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5,150,567
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3,665
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9,243
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27,219
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59.2%
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11,223,613
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12,032,930
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11,858
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6,755
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Puhua Phase Two
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8,428,480
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18,767,261
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21,984
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5,618
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213,393
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42.6%
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3,607,239
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7,820,587
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10,021
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5,195
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Projects Completed
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JunJing II Phase One
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1,080,635
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1,080,635
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1,139
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6,242
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531
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100%
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5,187,178
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3,141,136
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2,712
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7,710
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Tsining-24G
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695,439
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695,439
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953
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4,801
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71
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100%
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316,031
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321,343
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184
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11,434
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JunJing I
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-
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-
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-
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-
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1,641
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100%
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498,742
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526,653
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434
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7,650
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Additional Project
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58,018
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58,018
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-
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-
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-
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100%
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509,755
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509,755
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-
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-
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Other Income
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2,900,879
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-
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-
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3,648,208
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Total
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22,557,696
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26,432,404
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28,438
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6,115
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241,605
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-
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36,053,301
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30,696,890
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30,680
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6,661
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Q-o-Q Change
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-37.4%
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-13.9%
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-7.3%
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-8.2%
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As of March 31, 2011, China Housing reported $81.6 million in unrestricted cash, compared to $46.9 million as of December 31, 2010 and $66.3 million as of March 31, 2010. Total debt outstanding as of March 31, 2011 was $167.4 million compared with $143.9 million on December 31, 2010. Net debt outstanding (total debt less cash) as of March 31, 2011 was $46.1 million compared with $62.3 million on December 31, 2010. The company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 28.6 percent on March 31, 2011 and 38.0 percent on December 31, 2010, which decreased due to the improved cash position.
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Q1 2011
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Projects in Planning
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Unsold
GFA
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First
Pre-sales
Scheduled
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(m2)
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JunJing III
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49,636
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Q2 2011
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Park Plaza
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141,822
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Q3 2011
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Golden Bay
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252,540
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Q3 2011
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Puhua Phase Three
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130,000
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Q2 2012
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Puhua Phase Four
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161,107
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Q4 2013
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Textile City
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630,000
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Q3 2012
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Hu County
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195,000
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Q3 2011
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Total projects in planning
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1,560,105
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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, May 16, 2011 at 8:00 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-719-325-4807. 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 May 23rd, by dialing #1-858-384-5517; passcode: 7327220.
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 SUBSIDIARIES
Interim Condensed Consolidated Balance Sheets
As of March 31, 2011 (Unaudited) and December 31, 2010
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March 31,
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December 31,
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2011
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2010
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ASSETS
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Cash and cash equivalents
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$
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81,642,228
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$
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46,904,161
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Cash - restricted
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39,642,680
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34,756,450
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Accounts receivable, net of allowance for doubtful
accounts of $268,597 and $266,493, respectively
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9,292,362
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9,297,505
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Other receivables, prepaid expenses and deposits, net
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5,621,241
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7,653,925
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Real estate held for development or sale
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121,698,776
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104,586,550
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Property and equipment, net
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30,139,315
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29,735,836
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Advance to suppliers
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1,398,778
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1,223,366
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Deposits on land use rights
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68,652,286
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74,938,729
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Intangible assets, net
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52,203,130
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51,846,410
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Goodwill
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1,821,170
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1,806,905
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Deferred financing costs
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364,370
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401,703
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Total assets
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$
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412,476,336
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$
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363,151,540
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LIABILITIES
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Accounts payable
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$
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22,355,291
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$
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22,542,083
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Advances from customers
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65,773,679
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52,229,189
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||||||
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Accrued expenses
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2,474,094
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2,507,638
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||||||
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Payables for acquisition of businesses
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91,374
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2,363,385
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||||||
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Income and other taxes payable
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16,325,122
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15,429,752
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Other payables
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7,234,976
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5,663,222
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Loans from employees
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8,796,176
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8,787,879
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||||||
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Loans payable
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112,862,458
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82,971,074
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||||||
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Deferred tax liability
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14,420,790
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14,344,712
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Warrants liability
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291,572
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2,766,382
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Fair value of embedded derivatives
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974,972
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2,027,726
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||||||
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Convertible debt
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8,515,319
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16,251,840
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||||||
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Mandatorily redeemable noncontrolling interests in Subsidiaries
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37,100,199
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33,535,969
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Total liabilities
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297,216,022
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261,420,851
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SHAREHOLDERS' EQUITY
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Common stock: $.001 par value, authorized 100,000,000 shares
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||||||||
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issued and outstanding 35,078,639 and 32,685,331, respectively
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35,079
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32,685
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Additional paid in capital
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48,750,961
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38,996,078
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Common stock subscribed
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-
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59,606
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Statutory reserves
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6,654,715
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6,654,715
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Retained earnings
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43,997,990
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41,528,907
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Accumulated other comprehensive income
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15,821,569
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14,458,698
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Total shareholders’ equity
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115,260,314
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101,730,689
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Total liabilities and shareholders' equity
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$
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412,476,336
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$
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363,151,540
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||||
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Income
For The Three Months Ended March 31, 2011 and 2010
(Unaudited)
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3 Months
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3 Months
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|||||||
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March 31,
2011
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March 31,
2010
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REVENUES
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Sale of properties
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$
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19,656,817
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$
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32,391,061
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||||
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Other income
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2,900,879
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1,181,853
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||||||
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Total revenues
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22,557,696
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33,572,914
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COST OF SALES
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Cost of sale properties
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14,638,574
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26,561,887
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Cost of other income
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2,196,569
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536,773
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Total cost of sales
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16,835,143
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27,098,660
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Gross margin
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5,722,553
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6,474,254
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OPERATING EXPENSES
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||||||||
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Selling, general, and administrative expenses
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3,432,716
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2,537,884
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||||||
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Other expenses
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41,577
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122,651
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Interest expense
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597,148
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507,025
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Accretion expense on convertible debt
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336,991
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329,182
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||||||
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Total operating expenses
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4,408,432
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3,496,742
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NET INCOME FROM BUSINESS OPERATIONS
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1,314,121
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2,977,512
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CHANGE IN FAIR VALUE OF DERIVATIVES
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Change in fair value of embedded derivatives
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(1,052,754)
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(566,206)
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Change in fair value of warrants
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(850,651)
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(554,601)
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||||||
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Total change in fair value of derivatives
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(1,903,405)
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(1,120,807)
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||||||
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Income before provision for income taxes and noncontrolling interest
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3,217,526
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4,098,319
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||||||
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Provision for income taxes
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786,489
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1,009,531
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||||||
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Recovery of deferred income taxes
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(38,046)
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(29,146)
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||||||
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NET INCOME
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2,469,083
|
3,117,934
|
||||||
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Charge to noncontrolling interest
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-
|
(14,229,043)
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||||||
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Net income (loss) attributable to China Housing & Land Development, Inc.
|
$
|
2,469,083
|
$
|
(11,111,109)
|
||||
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WEIGHTED AVERAGE SHARES OUTSTANDING
|
||||||||
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Basic
|
33,916,460
|
32,584,429
|
||||||
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Diluted
|
35,532,170
|
32,579,398
|
||||||
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NET INCOME (LOSS) PER SHARE
|
||||||||
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Basic
|
0.07
|
0.10
|
||||||
|
Diluted
|
0.05
|
0.02
|
||||||
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Comprehensive Income (Loss)
For The Three Months Ended March 31, 2011 and 2010
(Unaudited)
|
|
3 Months
|
3 Months
|
||||||
|
March 31,
|
March 31,
|
|||||||
|
|
2011
|
2010
|
||||||
|
|
|
|||||||
|
NET INCOME
|
$ | 2,469,083 | $ | 3,117,934 | ||||
|
|
||||||||
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||
|
Gain (loss) in foreign exchange
|
1,362,871 | (27,684 | ) | |||||
|
|
||||||||
|
COMPREHENSIVE INCOME
|
3,831,954 | 3,090,250 | ||||||
|
|
||||||||
|
Charge to noncontrolling interest
|
- | (14,229,043 | ) | |||||
|
|
||||||||
|
Comprehensive income attributable to China Housing & Land Development, Inc.
|
$ | 3,831,954 | $ | (11,138,793 | ) | |||