Exhibit 99.2

 

China Housing & Land Development Inc. Announces
Third Quarter 2014 Financial Results

 

Xi’an, China – November 14, 2014 — China Housing & Land Development, Inc. (“China Housing” or the “Company”; Nasdaq: CHLN) today announced its financial results for the quarter ended September 30, 2014.

 

Highlights for Q3 2014:

 

·

Total revenue in the third quarter of 2014 was $27.7 million compared to $44.1 million in the second quarter of 2014 and $24.8 million in the third quarter of 2013.

 

·

Total gross floor area (“GFA”) sales were 21,768 sq. meters during the third quarter of 2014, compared with 30,408 sq. meters in the second quarter of 2014 and 17,846 sq. meters in the third quarter of 2013.

 

·

Average residential selling price (“ASP”) in the third quarter of 2014 was RMB 6,597, compared with RMB 6,493 in the second quarter of 2014, and RMB 6,369 in the third quarter of 2013.

 

·

Gross profit increased to $5.8 million in the third quarter of 2014 compared to gross loss of $0.8 million in the second quarter of 2014 and gross profit of $4.9 million in the third quarter of 2013. Third quarter 2014 gross margin was 20.9%, compared with negative 1.9% in the second quarter of 2014 and 19.8% in the third quarter of 2013.

 

·

SG&A expenses as a percentage of total revenue increased to 14.2%, from 8.8% in the second quarter of 2014 and decreased from 15.2% in the third quarter of 2013.

 

·

Operating income was $0.5 million in the third quarter of 2014 compared to operating loss of $6.6 million in the second quarter of 2014, and operating loss of $0.7 million in the third quarter of 2013.

 

·

Net income attributable to the Company in the third quarter of 2014 was $2.2 million, or $0.06 per diluted share, compared to net loss of $6.8 million, or $(0.20) per diluted share, in the second quarter of 2014 and net loss of $0.8 million, or $(0.02) per diluted share, in the third quarter of 2013.

 

Mr. Pingji Lu, China Housing’s Chairman, commented, “We were pleased that our third quarter contract sales met our financial guidance projections and that we returned to profitability once again compared to the prior quarter. We were able to maintain respectable average selling prices for our units, however, local real estate market conditions in Xi’an and the surrounding region continue to be difficult as home buyers remain cautious with their purchase activity. There were five projects that contributed to the majority of our sales in the third quarter, led by our Park Plaza project.”

 

“The Chinese government recently implemented several important policies to improve national housing market conditions. While we believe such initiatives may help stabilize the market and increase home purchasing activity over time, we foresee ongoing uncertainty in the near future and expect market turbulence to continue in the fourth quarter. Supply and demand conditions in the local Xi’an housing market remain challenging as competition continues to be fierce. As a result, we intend to increase our promotional efforts to drive unit volume and enhance cash flow in the fourth quarter, which can help stabilize our operations. We will maintain our focus on boosting sales and minimizing costs as we wait for market conditions to improve,” concluded Mr. Lu.

 

 

 

Total revenue in the third quarter of 2014 decreased 37.1% to $27.7 million from $44.1 million in the second quarter of 2014 and increased 11.6% from $24.8 million in the third quarter of 2013. Other revenue in the third quarter of 2014 increased to $4.9 million from $3.3 million in the second quarter of 2014 and $3.8 million in the third quarter of 2013.

 

In the third quarter of 2014, the Company’s top three real estate projects measured by revenue were Park Plaza, Puhua Phase Three and Ankang projects. Third quarter 2014 contract sales totaled $23.3 million compared with $31.7 million in the second quarter of 2014 and $18.6 million in the third quarter of 2013. Total gross floor area (“GFA”) sales were 21,768 sq. meters during the third quarter of 2014, compared with 30,408 sq. meters in the second quarter of 2014 and 17,846 sq. meters in the third quarter of 2013. The Company’s ASP in the third quarter of 2014 was RMB 6,597, compared with RMB 6,493 in the second quarter of 2014, and RMB 6,369 in the third quarter of 2013.

 

Gross profit for the three months ended September 30, 2014 was $5.8 million, compared to gross loss of $0.8 million in the second quarter of 2014 and a 17.5% increase from $4.9 million in the third quarter of 2013. Gross profit margin for the three months ended September 30, 2014 was 20.9%, compared to negative 1.9% in the second quarter of 2014 and the 19.8% in the third quarter of 2013. The improvement in gross profit margin from the second quarter of 2014 was mainly due to the gross profit margin decreased by change of estimates in the second quarter of 2014.

 

SG&A expense was $3.9 million in the third quarter of 2014, same as the second quarter of 2014 and compared with $3.8 million in the third quarter of 2013. SG&A expense as a percentage of total revenue was 14.2%, compared with 8.8% in the second quarter of 2014 and 15.2% in the third quarter of 2013. The increase in the ratio of SG&A to total revenue from the second quarter of 2014 was primarily due to the decrease in revenue.

 

Operating income in the third quarter of 2014 was $0.5 million compared to operating loss of $6.6 million in the second quarter of 2014, and operating loss of $0.7 million in the third quarter of 2013. The decrease in operating income from the second quarter of 2014 was mainly due to reduced total revenue.

 

Net income attributable to China Housing in the third quarter of 2014 was $2.2 million, or $0.06per diluted share. This performance compares with net loss of $6.8 million, or ($0.20) per diluted share, in the second quarter of 2014 and net loss of $0.8 million, or $(0.02)per diluted share, in the third quarter of 2013.

 

Sequential Quarterly Revenue Breakout Comparison  

 

Project		Q3 2014																								Q2 2014
		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
Park Plaza Phase One			8,126,813				6,150,233				4,285				8,845				40,404				98.9	%			15,503,089				12,092,922				9,117				8,265
Puhua Phase Three			5,176,650				4,573,451				3,639				7,748				55,457				83.1	%			6,472,271				1,382,502				1,412				6,101
Puhua Phase Two-East Region			2,226,757				1,916,575				1,877				6,293				87,230				81.6	%			6,890,399				5,969,853				4,875				7,631
Ankang Phase One			4,241,380				2,559,384				3,828				4,123				53,142				62.6	%			7,386,849				4,972,520				7,596				4,079
Puhua Four			2,851,066				7,772,451				7,868				6,090				127,571				26.3	%			3,485,109				6,192,960				6,323				6,102
Projects Completed
Puhua Phase One			21,271				21,271				-				-				5,506				100	%			(284,182	)			(284,182	)			—				—
Puhua Phase Two-West Region& New Coast Line			304,026				304,026				271				6,915				30,188				100	%			616,066				616,066				566				6,780
JunJing III			(131,198	)			-				-				-				647				100	%			309,952				309,952				259				7,445
JunJing I			-				-				-				-				4,107				100	%			433,310				433,310				259				10,407
Other Income			4,893,589				-				-				-				-				-				3,254,400				-				-
Total			27,710,354				23,297,391				21,768				6,597				404,252				-				44,067,263				31,685,903				30,408				6,493
Q-o-Q Change			(37.1	)%			(26.5	)%			(28.4	)%			1.6	%			-				-				99.9	%			60.0	%			48.9	%			9.7	%

 

  

Total debt outstanding as of September 30, 2014 was $333.0 million compared with $300.7 million on December 31, 2013. Net debt outstanding (total debt less cash and restricted cash) as of September 30, 2014 was $212.9 million compared with $161.8 million on December 31, 2013. The Company’s net debt as a percentage of total capital (net debt plus shareholders’ equity) was 62.2 percent on September 30, 2014 and 54.1 percent on December 31, 2013, which mainly resulted from additional debt financing for the next 12 months. Consequently, the ratio of net debt as a percentage of total capital increased as of September 30, 2014 compared with December 31, 2013.

 

		Q3 2013
Projects in Planning		Unsold GFA				First Pre-sales Scheduled
		(m2)
Golden Bay			326,494				Q22015
Ankang Project-Phase II			207,794				Q1 2015
Park Plaza- Phase II			60,057				Q3 2015
Textile City			630,000				Q2 2016
Total projects in planning			1,224,345

 

2014 Fourth Quarter Outlook guidance

 

Total contract sales for the 2014 fourth quarter are expected to reach $24.3 million to $29.2 million, compared with $23.3 million in the 2014 third quarter and $31.0 million in the fourth quarter of 2013. The Company is reporting revenues, which are subject to percentage of completion alterations.

 

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: +8629.8258.2648 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. 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

 

Interim Condensed Consolidated Balance Sheets

As of September 30, 2014 and December 31, 2013

(Unaudited) 

 

		September 30, 2014				December 31, 2013
ASSETS
Cash		$	7,013,787			$	21,320,071
Cash - restricted			113,112,130				117,534,900
Short-term investment			22,070,271				-
Accounts receivable, net of allowance for doubtful accounts of $586,219 and $594,382, respectively			36,231,894				41,158,998
Construction in excess of billing			2,078,037				2,106,975
Other receivables, prepaid expenses and other assets			10,828,324				7,188,153
Real estate held for development or sale			368,088,188				289,474,812
Property and equipment, net			42,495,001				36,281,168
Advance to suppliers			1,929,343				697,823
Deposits on land use rights			16,454,057				59,155,165
Intangible assets, net			24,208,737				42,453,473
Goodwill			1,942,908				1,969,964
Deferred financing costs			545,853				151,585
Total assets		$	646,998,530			$	619,493,087
LIABILITIES
Accounts payable		$	60,086,286			$	59,400,262
Advances from customers			46,467,941				45,441,402
Accrued expenses			14,831,813				17,439,541
Income taxes payable			23,945,300				24,534,095
Other taxes payable			10,727,679				7,139,870
Other payables			14,115,147				12,755,824
Loans from employees			29,780,976				25,759,453
Loans payable			303,233,847				274,917,332
Deferred tax liability			14,568,710				14,782,118
Total liabilities			517,757,699				482,169,897
SHAREHOLDERS’EQUITY
Common stock: $.001 par value, authorized 100,000,000 shares Issued 34,800,558 and 35,849,204, respectively			34,800				35,849
Additional paid in capital			52,483,510				51,347,620
Treasury stock at cost Nil shares and 1,166,369 shares, respectively			-				(2,400,288	)
Statutory reserves			11,535,242				11,535,242
Retained earnings			40,295,103				48,696,878
Accumulated other comprehensive income			24,892,176				28,107,889
Total shareholders’ equity			129,240,831				137,323,190
Total liabilities and shareholders’ equity		$	646,998,530			$	619,493,087

 

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

 

  

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

 

Interim Condensed Consolidated Statements of Income (Loss)

For The Three and Nine Months Ended September 30, 2014 and 2013

(Unaudited)

 

		3 Months September 30, 2014				3 Months September 30, 2013				9 Months September 30, 2014				9 Months September 30, 2013
REVENUES
Real estate sales		$	22,816,765			$	21,042,396			$	79,436,412			$	112,091,843
Other income			4,893,589				3,788,434				14,383,616				21,884,031
Total revenues			27,710,354				24,830,830				93,820,028				133,975,874
COST OF SALES
Cost of real estate sales			18,632,301				17,480,961				74,840,421				86,517,123
Cost of other revenue			3,290,397				2,423,455				8,692,392				16,192,275
Total cost of revenues			21,922,698				19,904,416				83,532,813				102,709,398
Gross margin			5,787,656				4,926,414				10,287,215				31,266,476
OPERATING EXPENSES
Selling, general, and administrative expenses			3,936,507				3,784,742				11,802,817				11,844,682
Stock-based compensation			-				135,792				1,136,304				1,240,065
Other expenses (income)			6,460				(91,766	)			20,480				358,783
Financing expense			1,342,370				1,762,724				3,676,752				6,016,604
Total operating expenses			5,285,337				5,591,492				16,636,353				19,460,134
Operating Incom (loss)			502,319				(665,078	)			(6,349,138	)			11,806,342
Loss from disposal of property and equipment			-				-				563,710				-
Gain on extinguishment of loan			(2,071,672	)			-				(2,071,672	)			-
Income (loss) before provision for income taxes			2,573,991				(665,078	)			(4,841,176	)			11,806,342
Provision for current taxes			414,147				185,950				559,605				4,044,863
Recovery of deferred taxes			(11,270	)			(11,341	)			(33,802	)			(125,989	)
Provision for income taxes			402,877				174,609				525,803				3,918,874
NET INCOME (LOSS)		$	2,171,114			$	(839,687	)		$	(5,366,979	)		$	7,887,468
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic			34,477,458				35,497,724				34,532,629				35,277,047
Diluted			34,477,458				35,497,724				34,532,629				35,277,047
NET INCOME (LOSS) PER SHARE
Basic			0.06				(0.02	)			(0.16	)			0.22
Diluted			0.06				(0.02	)			(0.16	)			0.22

 

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

 

  

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

 

 Interim Condensed Consolidated Statements of Comprehensive Income (Loss)

For The Three and Nine Months Ended September 30, 2014 and 2013

(Unaudited) 

 

		3 Months September 30, 2014				3 Months September 30, 2013				9 Months September 30, 2014				9 Months September 30, 2013
NET INCOME (LOSS)		$	2,171,114			$	(839,687	)		$	(5,366,979	)		$	7,887,468
OTHER COMPREHENSIVE INCOME (LOSS)
Gain (loss) in foreign exchange			2,782,552				656,539				(3,215,708	)			4,076,140
COMPREHENSIVE INCOME (LOSS)		$	4,953,666			$	(183,148	)		$	(8,582,687	)		$	11,963,608

 

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

 

  

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Cash Flows

For The Nine Months Ended September 30, 2014 and 2013

(Unaudited)

 

		September 30, 2014				September 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) incomefor the period		$	(5,366,979	)		$	7,887,468
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities:
Depreciation			1,836,084				1,940,103
Stock-based compensation			1,136,304				1,240,065
Loss on disposal of property and equipment			563,710				-
Amortization of deferred financing costs			-				55,326
Amortization of intangible assets			17,944,433				167,609
Recovery of deferred income taxes			(33,802	)			(125,989	)
Gain on extinguishment of loan			(2,071,672	)			-
(Increase) decrease in assets:
Accounts receivable			4,313,651				(10,322,423	)
Construction in excess of billing			-				559,202
Other receivable and prepaid expense			(4,783,591	)			(1,937,372	)
Real estate held for development or sale			(82,750,198	)			(3,011,051	)
Advances to suppliers			(1,238,311	)			597,004
Deposit on land use right			41,899,123				-
Deferred finance costs			416,109
Increase (decrease) in liabilities:
Accounts payable			1,160,426				(10,956,225	)
Advances from customers			3,842,693				5,986,114
Accrued expense and interests			(2,387,985	)			(8,669,217	)
Other payables			1,544,722				602,031
Income and other taxes payable			3,537,296				6,345,305
Net cash used in operating activities			(20,437,987	)			(9,642,050	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(9,006,050	)			(3,982,755	)
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			(31,071,706	)			(3,982,755	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash			2,826,336				(4,036,463	)
Loans from banks			49,943,480				98,841,999
Loans from Days Hotel and Dinghui			10,979,808				42,985,007
Payments on loans payable			(29,930,693	)			(40,142,194	)
Loans (repayment to) or from employees, net			4,404,795				(5,524,219	)
Purchase of treasury stock			(634,648	)			-
Net cash provided by financing activities			37,589,078				92,124,130
(DECREASE) INCREASE IN CASH			(13,920,615	)			78,499,325
Effects on foreign currency exchange			(385,669	)			1,100,396
CASH, beginning of period			21,320,071				6,121,448
CASH, end of period		$	7,013,787			$	85,721,169

 

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