China Housing & Land Development Inc. Announces First Quarter 2013 Financial Results --Company Beats 1Q13 Financial Forecast-- PR Newswire XI'AN, China, May 15, 2013 XI'AN, China, May 15, 2013 /PRNewswire/-- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended March 31, 2013. Highlights for Q1 2013: oTotal revenue in the first quarter of 2013 was $54.4 million compared to $61.5 million in the fourth quarter of 2012 and $23.5 million in the first quarter of 2012. First quarter recognized revenue significantly exceeded the Company's first quarter revenue forecast range of $28 to $30 million. oTotal gross floor area ("GFA") sales were 89,691 sq. meters during the first quarter of 2013, compared to 27,853 sq. meters in the fourth quarter of 2012 and 17,090 sq. meters in the first quarter of 2012. oAverage residential selling price ("ASP") in the first quarter of 2013 was RMB 5,695, compared with RMB 5,137 in the fourth quarter of 2012, and RMB 7,407 in the first quarter of 2012. oGross profit was $9.0 million in the first quarter of 2013 compared to $21.1 million in the fourth quarter of 2012 and $7.0 million in the first quarter of 2012. First quarter 2013 gross margin was 16.6%, compared to 34.3% in the fourth quarter of 2012 and 29.9% in the first quarter of 2012. oSG&A expenses as a percentage of total revenue decreased to 5.8%, compared to 9.3% in the fourth quarter of 2012 and 12.9% in the first quarter of 2012. oOperating income was $4.8 million in the first quarter of 2013 compared to $14.8 million in the fourth quarter of 2012, and $3.6 million in the first quarter of 2012. oNet income attributable to the Company in the first quarter of 2013 was $3.1 million, or $0.09 per diluted share. Mr. Pingji Lu, China Housing's Chairman, commented, "We are very pleased to start off 2013 with a strong quarter as our top line significantly exceeded our first quarter guidance forecast. The fundamentals in the Xi'an housing market remained healthy in the first quarter and our residential sales were stable in terms of both average selling prices and transaction volume. We commenced pre-sales of two new projects in the first quarter, Park Plaza and Puhua Phase III, both of which experienced strong demand in their first weeks on the market." "In the first quarter, we experienced a lower gross margin level which was due to an adjustment on the total estimated project cost at our Puhua Phase Two project and from lower gross profit associated with sales of low income residential units at our Ankang project. Additionally, we initiated a group purchase sale on our Puhua Phase Three project at a discounted selling price last quarter to improve our cash position which also impacted first quarter profit margins. We remain confident we can maintain our full year gross profit margin goal of 25% to 30%." "As we implement effective cost control measures at each of our development projects, we expect SG&A expenses as a percent of total revenue to normalize at around 10% for the full year. As the market shows continued signs of stability, we anticipate sustained levels of ASP and unit demand at our major projects in the second quarter. For the remainder of 2013, we remain focused on the execution of our four core development projects as well as the launch of Golden Bay which we expect will commence pre-sales in the third quarter. We are encouraged with our opportunities in Xi'an's real estate market and believe 2013 can be a strong year for China Housing," concluded Mr. Lu. Total revenue in the first quarter of 2013 decreased 11.7% to $54.4 million from $61.5 million in the fourth quarter of 2012 and increased 131.4% from $23.5 million in the first quarter of 2012. Other revenue in the first quarter of 2013 decreased to $11.1 million from $21.3 million in the fourth quarter of 2012 and increased from $3.1 million in the first quarter of 2012. The year-over-year increase was due to the revenue contribution from the construction of low income residential buildings for the Company's Ankang project. In the first quarter of 2013, the majority of the Company's real estate revenue came from its Puhua Phase III and Park Plaza projects with additional revenue from Puhua Phase II project. First quarter 2013 contract sales totaled $82.4 million compared to $22.9 million in the fourth quarter of 2012 and $20.1 million in the first quarter of 2012. Total gross floor area ("GFA") sales were 89,691 sq. meters during the first quarter of 2013, compared to 27,853 sq. meters in the fourth quarter of 2012 and 17,090 sq. meters in the first quarter of 2012. The Company's ASP in the first quarter of 2013 was RMB 5,695, compared with RMB 5,137 in the fourth quarter of 2012, and RMB 7,407 in the first quarter of 2012. During the first quarter, the Company commenced presales at its Puhua Phase III and Park Plaza projects. Gross profit for the three months ended March 31, 2013 was $9.0 million,representing a decrease of57.1% from $21.1 million in the fourth quarter of 2012 and a 28.7% increase from $7.0 million in the same period of 2012. Gross profit margin for the three months ended March 31, 2013 was 16.6%, which is below the 29.9% in the same period of 2012 and the 34.3% in the fourth quarter of 2012. The decrease in gross profit margin was mainly due to an adjustment on the total estimated project cost at the Company's Puhua Phase Two project and from lower gross profit associated with sales of low income residential units at the Company's Ankang project. Additionally, the Company initiated a group purchase sale on its Puhua Phase Three project at a discounted selling price last quarter to improve our cash position which also impacted first quarter profit margins. The Company continues to expect full year gross margin in the 25% to 30% range for 2013. SG&A expense was $3.2 million in the first quarter of 2013, compared to $5.7 million in the fourth quarter of 2012 and $3.0 million in the first quarter of 2012. SG&A expense as a percentage of total revenue was 5.8%, compared to 9.3% in the fourth quarter of 2012 and 12.9% in the first quarter of 2012. The year-over-year increase in SG&A expense is due to increased advertising expenses in connection with additional development projects beginning pre-sales and from increased employee salary expenses. Operating income in the first quarter of 2013 was $4.3 million, or 7.9% of total revenue, compared to $14.8 million, or 24.1% of total revenue, in the fourth quarter of 2012, and $3.4 million, or 14.5% of total revenue in the first quarter of 2012. The year-over-year increase in operating income was mainly due to increased sales revenue from new projects. Net income attributable to China Housing in the first quarter of 2013 was $3.1 million, or $0.09 per diluted share. This performance compares to net income of $11.5 million, or $0.33 per diluted share, in the fourth quarter of 2012 and net income of $2.2 million, or $0.06 per diluted share, in the first quarter of 2012. Sequential Quarterly Revenue Breakout Comparison Q1 2013 Q4 2012 Project Recognized Contract GFA ASP Unsold POC Recognized Contract GFA ASP Revenue Sales Sold GFA Revenue Sales Sold ($) ($) (m^2) (RMB) (m^2) ($) ($) (m^2) (RMB) Projects Under Construction Park 19,794,628 30,152,026 22,151 8,439 127,671 58.1% Plaza Puhua Phase 17,348,070 36,469,024 48,902 4,624 80,398 41.4% Three Puhua Phase 5,372,159 7,122,505 5,076 8,700 136,385 75.4% 22,381,994 10,710,195 9,155 7,304 Two Ankang - 7,876,083 12,909 4,631 223,978 N/A - 6,650,461 11,103 3,739 Projects Completed Puhua Phase 649,744 649,744 569 7,080 7,902 100% 6,744,760 6,212,359 3,934 9,859 One JunJing 109,970 109,970 84 8,118 873 100% 8,459,601 3,385,879 1,782 11,862 III JunJing II Phase - - - - 817 100% - - - - One JunJing - - - - 4,699 100% 2,608,229 2,608,229 1,879 8,666 I Other - - - - - 18,897 18,897 42 2,888 Projects Other 11,099,124 - - 21,349,820 - - Income Total 54,373,695 82,379,352 89,691 5,695 582,723 - 61,544,404 22,916,662 27,853 5,137 Q-o-Q -11.7% 259.5% 222.0% 10.9% Change Total debt outstanding as of March 31, 2013 was $243.8 million compared with $202.6 million on December 31, 2012. Net debt outstanding (total debt less cash and restricted cash) as of March 31, 2013 was $85.5 million compared with $85.9 million on December 31, 2012. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 35.8 percent on March 31, 2013 and 36.6 percent on December 31, 2012 Q1 2013 First Unsold Projects in Planning Pre-sales GFA Scheduled (m^2) Golden Bay 252,540 Q3 2013 Puhua Phase Four 263,833 Q3 2014 Textile City 630,000 Q3 2014 Total projects in planning 1,146,373 2013 Second Quarter Outlook Total recognized revenue for the 2013 second quarter is expected to reach $34 million to $36 million, compared to $54.4 million in the 2013 first quarter and $35.0 million in the second 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 8:30 am ET on May 15, 2013. Listeners may access the call by dialing #1-913-312-1489. 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 22, 2013, by dialing #1-858-384-5517; passcode: 8325823. 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: email@example.com Ms. Jing Lu Chief Operating Officer, Board Secretary, and Investor Relations Officer +86 29.8258.2639 in Xi'an firstname.lastname@example.org / 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 CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES Unaudited Interim Condensed Consolidated Balance Sheets As of March 31, 2013 and December 31, 2012 March 31, December 31, 2013 2012 ASSETS Cash $ 47,718,732 $ 6,121,448 Cash - restricted 110,641,182 110,576,248 Accounts receivable, net of allowance for doubtful accounts of $579,508 and $577,713, 35,811,101 26,897,958 respectively Construction in excess of billing 2,147,813 1,484,626 Other receivables, prepaid expenses and other 11,567,950 6,854,325 assets, net Real estate held for development or sale 221,558,302 238,111,545 Finished projects 18,820,541 13,233,641 Construction in progress 202,737,761 224,877,904 Total real estate held for 221,558,302 238,111,545 development or sale Property and equipment, net 34,091,945 33,837,346 Advances to suppliers 1,363,741 1,363,817 Deposits on land use rights 42,880,856 42,748,017 Intangible asset, net 54,596,079 54,482,252 Goodwill 1,920,134 1,914,186 Deferred financing costs 154,514 194,162 Total assets 564,452,349 524,585,930 LIABILITIES Accounts payable $ 44,578,699 $ 55,142,928 Advances from customers 44,422,436 48,829,289 Accrued expenses 27,886,201 22,229,514 Income and other taxes payable 24,073,995 20,929,485 Other payables 11,609,540 11,228,553 Loans from employees 32,878,293 27,868,785 Loans payable 211,416,437 174,749,368 Deferred tax liability 14,502,081 14,521,613 Total liabilities 411,367,682 375,499,535 SHAREHOLDERS' EQUITY Common stock: $.001 par value, authorized 100,000,000 shares; Issued 35,438,079 and 35,438,079, 35,438 35,438 respectively Additional paid in capital 50,069,711 49,972,174 Treasury Stock (434,240) (434,240) Statutory reserves 9,903,457 9,903,457 Retained earnings 68,138,020 65,057,333 Accumulated other comprehensive income 25,372,281 24,552,233 Total shareholders' equity 153,084,667 149,086,395 Total liabilities and $ 564,452,349 $ 524,585,930 shareholders' equity The accompanying notes are an integral part of these interim condensed consolidated financial statements. CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES Unaudited Interim Consolidated Statements of Income For Three Months Ended March 31, 2013 and 2012 March 31, March 31, 2013 2012 REVENUES Real estate sales $ 43,274,571 $ 20,434,343 Other revenue 11,099,124 3,067,428 Total revenues 54,373,695 23,501,771 COST OF REVENUES Cost of real estate sales 35,788,415 14,232,864 Cost of other revenue 9,535,899 2,239,870 Total cost of revenues 45,324,314 16,472,734 Gross margin 9,049,380 7,029,037 OPERATING EXPENSES Selling, general and administrative 3,161,881 3,023,685 expenses Stock-based compensation 97,537 122,606 Other expenses 59,982 6,433 Financing expense 1,446,786 230,272 Accretion expense on convertible debt - 232,486 Total operating expenses 4,766,187 3,615,482 CHANGE IN FAIR VALUE OF DERIVATIVES Change in fair value of embedded - (71,103) derivatives Change in fair value of warrants - 368 Total change in fair value of derivatives - (70,735) Income before provision for income taxes 4,283,194 3,484,290 Provision for income taxes 1,267,143 969,485 Recovery of deferred income taxes (64,635) 279,392 Provision for income taxes 1,202,507 1,248,877 NET INCOME $ 3,080,687 $ 2,235,413 WEIGHTED AVERAGE SHARES OUTSTANDING Basic 35,438,079 34,730,261 Diluted 35,438,079 34,730,261 NET INCOME PER SHARE Basic $ 0.09 $ 0.06 Diluted $ 0.09 $ 0.06 The accompanying notes are an integral part of these interim condensed consolidated financial statements. SOURCE China Housing & Land Development, Inc. Website: http://www.chldinc.com Website: http://www.viavid.net
China Housing & Land Development Inc. Announces First Quarter 2013 Financial Results
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