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| 8-K - FORM 8-K - China Housing & Land Development, Inc. | v340626_8k.htm |
Exhibit 99.1
China Housing & Land Development
Inc. Announces
Fourth Quarter 2012 Financial Results
--Company Beats 4Q12 Financial Forecast—
Xi’an, China – April 1, 2013 -- China Housing & Land Development, Inc. (“China Housing” or the “Company”; Nasdaq: CHLN) today announced its financial results for the quarter ended December 31, 2012.
Highlights for Q4 2012:
| · | Total revenue in the fourth quarter of 2012 increased 112.8% to $61.5 million from $28.9 million in the third quarter of 2012 and increased 28.5% from $47.9 million in the fourth quarter of 2011. Other revenue in the fourth quarter of 2012 increased to $21.3 million from $4.8 million in the third quarter of 2012 and increased from $3.0 million in the fourth quarter of 2011. |
| · | Total gross floor area (“GFA”) sales were 27,853 sq. meters during the fourth quarter of 2012, compared to 12,773 sq. meters in the third quarter of 2012 and 44,631 sq. meters in the fourth quarter of 2011. |
| · | Average residential selling price (“ASP”) in the fourth quarter of 2012 was RMB 5,137, compared with RMB 6,359 in the third quarter of 2012, and RMB 6,301 in the fourth quarter of 2011. |
| · | Gross profit increased 280.2% to $21.1 million from $5.6 million in the third quarter of 2012 and increased 206.6% from $6.9 million in the fourth quarter of 2011. Fourth quarter 2012 gross margin was 34.3% compared to 19.2% in the third quarter of 2012 and 14.4% in the fourth quarter of 2011. |
| · | SG&A expenses as a percentage of total revenue decreased to 9.3%, compared to 12.9% in the third quarter of 2012 and increased from 7.0% in the fourth quarter of 2011. |
| · | Operating income increased significantly to $14.8 million from $1.6 million in the third quarter of 2012, and $2.4 million in the fourth quarter of 2011. |
| · | Net income attributable to the Company in the fourth quarter of 2012 was $11.5 million, or $0.33 per diluted share. |
Mr. Pingji Lu, China Housing’s Chairman, commented, “We are pleased to announce very strong financial results for the fourth quarter of 2012, which marks the fourth consecutive quarter in which we’ve exceeded our guidance forecast. Our fourth quarter 2012 revenue increased significantly compared to the prior quarter, which is reflective of the ongoing improvement in the Xi’an housing market and the successful execution of our development projects. Puhua Phase II, Puhua Phase I and JunJing III projects contributed to the majority of our revenue in the fourth quarter, GFA sales more than doubled in the fourth quarter compared to the last quarter and average selling prices increased on a sequential basis at the majority of our projects, resulting in much improved gross margin, operating income and net income results. ”
“As we look at 2013, transaction volume and housing prices in Xi’an were stable during the first two months of the year and we expect housing prices in our region to gradually increase in the months ahead. Two of our new projects, Park Plaza and Puhua Phase III, are scheduled to commence presales in the first quarter. The addition of these two projects brings our total number of active development projects to eight. We continue to concentrate our efforts on the development of high-quality housing projects for Xi’an’s growing middle class and believe we can capitalize on local market trends to enhance returns for our shareholdersand strengthen our prospects for growth in the coming years.”
Total revenue in the fourth quarter of 2012 increased 112.8% to $61.5 million from $28.9 million in the third quarter of 2012 and increased 28.5% from $47.9 million in the fourth quarter of 2011. Other Income in the fourth quarter of 2012 increased to $21.3 million from $4.8 million in the third quarter of 2012 and increased from $3.0 million in the fourth quarter of 2011. The significant year-over-year increase in other revenue was due to the commercial property sales at the Company’s JunJing II project, which totaled RMB94 million ($15.1 million) in the fourth quarter, as well as revenue generated from the Company’s Ankang project, which was classified as ‘other income’because of the construction of social housing derived from this project in the fourth quarter. Revenue from the Ankang project will be categorized as ‘real estate sales’ in the first quarter of 2013 due to the development of more normalized, non-social housing projects moving forward.
In the fourth quarter of 2012, the majority of the Company’s real estate revenue came from its Puhua Phase II project with additional revenue from its Puhua Phase I and JunJing III projects. Fourth quarter 2012 contract sales totaled $22.9 million compared to $12.8 million in the third quarter of 2012 and $44.6 million in the fourth quarter of 2011. Total gross floor area (“GFA”) sales were 27,853 sq. meters during the fourth quarter of 2012, compared to 12,773 sq. meters in the third quarter of 2012 and 44,631 sq. meters in the fourth quarter of 2011. The Company’s ASP in the fourth quarter of 2012 decreased to RMB 5,137 compared to RMB 6,359 in the third quarter of 2012, and RMB 6,301 in the fourth quarter of 2011. During the fourth quarter, the Company commenced presales at its Ankang project. Average selling prices at Ankang are lower on average compared to the Company’s other projects resulting in lower overall ASP’s, but given the low cost structure of this project, management believes gross margin of 25%-30% can be maintained at Ankang, which is in-line with the Company’s consolidated gross margin goal for 2013. Based on accounting requirements, the Company will start to recognize revenue from Ankang in the first quarter of 2013.
Gross profit for the three months ended December 31, 2012 was $21.1 million, representing an increase of 280.2% from $5.6 million in the third quarter of 2012 and a 206.6% increase from $6.9 million in the same period of 2011. Gross profit margin for the three months ended December 31, 2012 was 34.3%, which is above the 14.4% in the same period of 2011 and the 19.2% in the third quarter of 2012. The increase in gross profit and gross profit margin was mainly due to increased sales revenue and commercial property sales at the Company’s JunJing II project. The Company expects quarterly gross margin to be in the 25% to 30% range in 2013.
SG&A expense was $5.7 million in the fourth quarter of 2012, compared to $3.7 million in the third quarter of 2012 and $3.4 million in the fourth quarter of 2011. SG&A expense as a percentage of total revenue was 9.3%, compared to 12.9% in the third quarter of 2012 and 7.0% in the fourth quarter of 2011. The year-over-year increase in SG&A expense was primarily associated with increased sales revenue and higher administrative expenses from increased employee salaries.
Operating income in the fourth quarter of 2012 increased to $14.8 million, or 24.1% of total revenue, up from $1.6 million, or 5.4% of total revenue, in the third quarter of 2012, and an increase from $2.4 million, or 5.0% of total revenue in the fourth quarter of 2011. The year-over-year increase was mainly due to increased sales revenue and commercial property sales at the Company’s JunJing II project.
Net income attributable to China Housing in the fourth quarter of 2012 was $11.5 million, or $0.33 per diluted share. This performance compares to net income of $0.9 million, or $0.03 per diluted share, in the third quarter of 2012.
Sequential Quarterly Revenue Breakout Comparison
| Project | Q4 2012 | Q3 2012 | ||||||||
| Recognized Revenue | Contract Sales | GFA Sold | ASP | Unsold GFA | POC | Recognized Revenue | Contract Sales | GFA Sold | ASP | |
| ($) | ($) | (m2) | (RMB) | (m2) | ($) | ($) | (m2) | (RMB) | ||
| Projects Under Construction | ||||||||||
| Puhua Phase Two | 22,381,994 | 10,710,195 | 9,155 | 7,304 | 141,461 | 74.8% | 15,421,851 | 9,544,391 | 10,476 | 5,785 |
| Ankang | - | 6,650,461 | 11,103 | 3,739 | 236,887 | N/A | - | - | - | - |
| Projects Completed | ||||||||||
| Puhua Phase One | 6,744,760 | 6,212,359 | 3,934 | 9,859 | 8,471 | 100% | 3,814,640 | 2,474,085 | 1,716 | 9,157 |
| JunJing III | 8,459,601 | 3,385,879 | 1,782 | 11,862 | 957 | 100% | 4,863,938 | 753,382 | 539 | 8,878 |
| JunJing II Phase One | - | - | - | - | 817 | 100% | - | - | - | - |
| JunJing I | 2,608,229 | 2,608,229 | 1,879 | 8,666 | 4,699 | 100% | - | - | - | - |
| Other Projects | - | - | - | - | - | 18,897 | 18,897 | 42 | 2,888 | |
| Other Income | 21,349,820 | - | - | 4,798,239 | - | - | ||||
| Total | 61,544,404 | 22,916,662 | 27,853 | 5,137 | 393,292 | - | 28,917,565 | 12,790,755 | 12,773 | 6,359 |
| Q-o-Q Change | 112.8% | 79.2% | 96.3% | -19.2% | ||||||
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Total debt outstanding as of December 31, 2012 was $202.6 million compared with $192.4 million on December 31, 2011. Net debt outstanding (total debt less cash and restricted cash) as of December 31, 2012 was $85.9 million compared with $64.0 million on December 31, 2011. The Company’s net debt as a percentage of total capital (net debt plus shareholders’ equity) was 36.6 percent on December 31, 2012 and 33.1 percent on December 31, 2011
| Q4 2012 | ||
| Projects in Planning |
Unsold GFA |
First Pre-sales Scheduled |
| (m2) | ||
| Puhua Phase Three | 129,300 | Q1 2013 |
| Park Plaza | 141,822 | Q1 2013 |
| Golden Bay | 252,540 | Q3 2013 |
| Puhua Phase Four | 263,833 | Q3 2014 |
| Textile City | 630,000 | Q3 2014 |
| Total projects in planning | 1,417,495 | |
2013 First Quarter Outlook
Total recognized revenue for the 2013 first quarter is expected to reach $28 million to $30 million, compared to $60.1 million in the 2012 fourth quarter and $23.5 million in the first quarter of 2012. The Company is reporting revenues, which are subject to percentage of completion alterations.
Conference Call Information
Management will host a conference call at 8:00 am ET on April 1st, 2013. Listeners may access the call by dialing #1-816-581-1736. 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 April 8th, 2013, by dialing #1-858-384-5517; passcode: 1009245.
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.
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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, CFA
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
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| CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES |
| Unaudited Interim Condensed Consolidated Balance Sheets |
| As of December 31, 2012 and December 31, 2011 |
| December 31, | December 31, | |||||||
| 2012 | 2011 | |||||||
| ASSETS | ||||||||
| Cash & cash equivalents | $ | 6,121,448 | $ | 22,014,953 | ||||
| Cash - restricted | 110,576,248 | 105,720,400 | ||||||
| Accounts receivable, net of allowance for doubtful | ||||||||
| accounts of $577,713 and $571,857, respectively | 26,897,958 | 20,253,706 | ||||||
| Construction in excess of billing | 1,484,626 | - | ||||||
| Other receivables, prepaid expenses and other assets, net | 6,854,325 | 1,483,758 | ||||||
| Real estate held for development or sale | 238,111,545 | 163,482,316 | ||||||
| Property and equipment, net | 33,837,346 | 33,018,990 | ||||||
| Advances to suppliers | 1,363,817 | 889,965 | ||||||
| Deposits on land use rights | 42,748,017 | 65,286,137 | ||||||
| Intangible asset, net | 54,482,252 | 54,148,953 | ||||||
| Goodwill | 1,914,186 | 1,894,782 | ||||||
| Deferred tax asset | - | 308,248 | ||||||
| Deferred financing costs | 194,162 | 253,569 | ||||||
| Total assets | 524,585,930 | 468,755,777 | ||||||
| LIABILITIES | ||||||||
| Accounts payable | $ | 55,142,928 | $ | 44,275,965 | ||||
| Advances from customers | 48,829,289 | 57,541,251 | ||||||
| Accrued expenses | 22,229,514 | 8,380,041 | ||||||
| Income and other taxes payable | 20,929,485 | 14,386,133 | ||||||
| Other payables | 11,228,553 | 7,474,035 | ||||||
| Loans from employees | 27,868,785 | 14,887,431 | ||||||
| Loans payable | 174,749,368 | 148,402,690 | ||||||
| Deferred tax liability | 14,521,613 | 14,861,462 | ||||||
| Warrants liability | - | 4,162 | ||||||
| Fair value of embedded derivatives | - | 330,629 | ||||||
| Convertible debt | - | 9,165,591 | ||||||
| Mandatory redeemable noncontrolling interest in Subsidiaries | - | 19,935,482 | ||||||
| Total liabilities | 375,499,535 | 339,644,872 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Common stock: $.001 par value, authorized 100,000,000 shares | ||||||||
| Issued 35,438,079 and 35,078,639, respectively | 35,438 | 35,079 | ||||||
| Additional paid in capital | 49,972,174 | 48,961,658 | ||||||
| Treasury Stock | (434,240 | ) | (420,098 | ) | ||||
| Statutory reserves | 9,903,457 | 7,857,612 | ||||||
| Retained earnings | 65,057,333 | 50,555,460 | ||||||
| Accumulated other comprehensive income | 24,552,233 | 22,121,194 | ||||||
| Total shareholders' equity | 149,086,395 | 129,110,905 | ||||||
| Total liabilities and shareholders' equity | $ | 524,585,930 | $ | 468,755,777 | ||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
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| CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES |
| Interim Consolidated Statements of Income |
| For The Years Ended December 31, 2012, 2011 and 2010 |
| 3 Months | ||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2012 | 2011 | 2010 | 2012 | |||||||||||||
| REVENUES | ||||||||||||||||
| Real estate sales | $ | 114,817,802 | $ | 106,811,754 | $ | 131,472,461 | $ | 40,194,584 | ||||||||
| Other revenue | 34,161,458 | 15,992,471 | 8,796,323 | 21,349,820 | ||||||||||||
| Total revenues | 148,979,260 | 122,804,225 | 140,268,784 | 61,544,404 | ||||||||||||
| COST OF REVENUES | ||||||||||||||||
| Cost of real estate sales | 83,015,375 | 85,013,637 | 98,280,358 | 26,434,666 | ||||||||||||
| Cost of other revenue | 24,168,489 | 10,543,645 | 6,102,184 | 14,002,175 | ||||||||||||
| Total cost of revenues | 107,183,864 | 95,557,282 | 104,382,542 | 40,436,841 | ||||||||||||
| Gross margin | 41,795,396 | 27,246,944 | 35,886,242 | 21,107,563 | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Selling, general and administrative expenses | 16,414,630 | 13,036,109 | 12,909,946 | 5,717,453 | ||||||||||||
| Stock based compensation | 1,010,875 | 210,696 | 59,606 | 101,441 | ||||||||||||
| Other expenses | 122,651 | 1,380,517 | 937,568 | 80,266 | ||||||||||||
| Financing expense | 557,336 | 1,218,464 | 1,834,322 | 162,624 | ||||||||||||
| Accretion expense on convertible debt | 954,979 | 987,263 | 1,416,871 | 226,805 | ||||||||||||
| Total operating expenses | 19,060,471 | 16,833,049 | 17,158,313 | 6,288,589 | ||||||||||||
| 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 | (330,628 | ) | (1,697,097 | ) | (3,882,873 | ) | - | |||||||||
| Change in fair value of warrants | (4,162 | ) | (1,138,061 | ) | (2,527,423 | ) | - | |||||||||
| Total change in fair value of derivatives | (334,790 | ) | (2,835,158 | ) | (4,229,804 | ) | - | |||||||||
| Income before provision for income taxes | 23,069,715 | 13,249,052 | 22,957,733 | 14,818,974 | ||||||||||||
| Provision for income taxes | 7,000,110 | 3,205,013 | 5,513,517 | 3,682,953 | ||||||||||||
| Recovery of deferred income taxes | (478,114 | ) | (185,412 | ) | (151,022 | ) | (381,904 | ) | ||||||||
| NET INCOME | $ | 16,547,718 | $ | 10,229,450 | $ | 17,595,238 | $ | 11,517,924 | ||||||||
| Charge to noncontrolling interest | (14,229,043 | ) | ||||||||||||||
| Net income (loss) attributable to China Housing & Land Development, Inc. | 16,547,718 | 10,229,450 | 3,366,195 | 11,517,924 | ||||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||||||||||
| Basic | 34,954,909 | 34,741,511 | 32,854,429 | 34,954,909 | ||||||||||||
| Diluted | 34,954,909 | 36,357,220 | 35,579,398 | 34,954,909 | ||||||||||||
| NET INCOME PER SHARE | ||||||||||||||||
| Basic | $ | 0.47 | $ | 0.29 | $ | 0.10 | $ | 0.33 | ||||||||
| Diluted | $ | 0.47 | $ | 0.26 | $ | 0.02 | ||||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
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