Exhibit 99.1

 

 

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

 

Xi’an, China – November 16, 2015-- 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