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China Housing & Land Development Inc. Announces Third Quarter 2013 Financial Results



 China Housing & Land Development Inc. Announces Third Quarter 2013 Financial
                                   Results

PR Newswire

XI'AN, China, Nov. 19, 2013

XI'AN, China, Nov. 19, 2013 /PRNewswire/ -- China Housing & Land Development,
Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its
financial results for the quarter ended September 30, 2013.

Highlights for Q3 2013:

  o Total revenue in the third quarter of 2013 was $24.8 million compared to
    $57.8 million in the second quarter of 2013 and $28.7 million in the third
    quarter of 2012. 
  o Total gross floor area ("GFA") sales were 17,846 sq. meters during the
    third quarter of 2013, compared with 48,439 sq. meters in the second
    quarter of 2013 and 12,773 sq. meters in the third quarter of 2012.
  o Average residential selling price ("ASP") in the third quarter of 2013 was
    RMB 6,369, compared with RMB 7,499 in the second quarter of 2013, and RMB
    6,359 in the third quarter of 2012.
  o Gross profit decreased to $4.9 million in the third quarter of 2013
    compared to $17.6 million in the second quarter of 2013 and $6.5 million
    in the third quarter of 2012. Third quarter 2013 gross margin was 19.8%,
    compared with 30.4% in the second quarter of 2013 and 22.5% in the third
    quarter of 2012.
  o SG&A expenses as a percentage of total revenue increased to 15.2%, from
    8.5% in the second quarter of 2013 and 12.9% in the third quarter of 2012.
  o Operating loss was $0.7 million in the third quarter of 2013 compared to
    operating income of $8.5 million in the second quarter of 2013, and
    operating income of $2.5 million in the third quarter of 2012.
  o Net loss attributable to the Company in the third quarter of 2013 was $0.8
    million, or $0.02 per diluted share, compared to net income of $5.9
    million, or $0.17 per diluted share, in the second quarter of 2013 and
    $1.6 million, or $0.04 per diluted share, in the third quarter of 2012.

Mr. Pingji Lu, China Housing's Chairman, commented, "We experienced a
challenging period as our current saleable project inventory did not fully
match consumer demand in the third quarter. We encountered higher levels of
interest for low and high end apartment units this quarter whereas more of our
saleable units were in the mid-tier category. Given the government's efforts
over the last year to reduce pricing speculation in Xi'an's real estate
market, consumers looking to upgrade to mid-level units were not as active
this quarter as they were in past quarters. At our Puhua and Park Plaza
projects, the limited amount of our entry-level unit inventory sold well
during the quarter, however more of our remaining inventory is intended for
customers looking to upgrade to larger, more expensive mid-level units.  At
the high end, of which sales remain steady, our Golden Bay project was delayed
to the second quarter of 2014 due to government delays issuing the required
permits to commence pre-sales activity." 

"As we move forward, we are comfortable we'll have the appropriate levels of
inventory to march customer demand.  We are preparing to develop more low-end
units early next year through our Puhua Phase 4 project.  Our unit sales at
the high end will benefit from our Golden Bay development once all permits are
secured and pre-sales begins early next year. Consequently, we expect our
performance in the fourth quarter to mirror that of the third, and that our
sales trends in 2014 can grow once again as our development projects offer a
broader array of low, mid and high-end units that can more adequately meet
customer demand."

Total revenue in the third quarter of 2013 decreased 57.1% to $24.8 million
from $57.8 million in the second quarter of 2013 and decreased 13.6% from
$28.7 million in the third quarter of 2012. Other revenue in the third quarter
of 2013 decreased to $3.8 million from $7.0 million in the second quarter of
2013 and $4.8 million in the third quarter of 2012. The year-over-year
decrease was due to the Company's available unit inventory not fully matching
the customer demand and the market condition.

In the third quarter of 2013, the majority of the Company's real estate
revenue came from its Puhua Phase Two and Three projects, Park Plaza and
Ankang projects. Third quarter 2013 contract sales totaled $18.6 million
compared with $59.0 million in the second quarter of 2013 and $12.8 million in
the third quarter of 2012. Total gross floor area ("GFA") sales were 17,847
sq. meters during the third quarter of 2013, compared with 48,439 sq. meters
in the second quarter of 2013 and 12,773 sq. meters in the third quarter of
2012. The Company's ASP in the third quarter of 2013 was RMB 6,369, compared
with RMB 7,499 in the second quarter of 2013, and RMB 6,359 in the third
quarter of 2012.

Gross profit for the three months ended September 30, 2013 was $4.9
million, representing a decrease of 72.2% from $17.6 million in the second
quarter of 2013 and a 24.6% decrease from $6.5 million in the third quarter of
2012. Gross profit margin for the three months ended September 30, 2013 was
19.8%, compared to 30.4% in the second quarter of 2013 and the 22.5% in the
third quarter of 2012. The decrease in gross profit margin was mainly due to
that We made some adjustment on the total estimate cost of Park Plaza, Puhua
Phase Two and Three according to the actual situation and recorded the
accumulated impact in the third quarter of 2013.We still expect full year
gross margin to be in the 25% to 30% range in 2013.

SG&A expense was $3.8 million in the third quarter of 2013, compared with $4.9
million in the second quarter of 2013 and $3.7 million in the third quarter of
2012. SG&A expense as a percentage of total revenue was 15.2%, compared with
8.5% in the second quarter of 2013 and 12.9% in the third quarter of 2012. The
year-over-year increase in SG&A expense was mainly due to the increase of
salary of salary.

Operating loss in the third quarter of 2013 was $0.7 million compared to
operating income of $8.5 million in the second quarter of 2013, and $2.5
million in the third quarter of 2012. The year-over-year decrease in operating
income was mainly due to reduced sales revenue and lower profit margin.

Net loss attributable to China Housing in the third quarter of 2013 was $0.8
million, or a loss of $0.02 per diluted share. This performance compares with
net income of $5.9 million, or $0.17 per diluted share, in the second quarter
of 2013 and net income of $1.6 million, or $0.04 per diluted share, in the
third quarter of 2012.

Sequential Quarterly Revenue Breakout Comparison

Project  Q3 2013                                           Q2 2013
         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     6,541,366  5,659,081  4,002  8,661  110,323 68.1% 19,958,986 25,098,516 17,348 8,903
Plaza
Puhua
Phase    3,449,098  3,685,035  3,675  6,143  68,058  50.9% 8,985,610  10,163,137 8,665  7,218
Three
Puhua
Phase    5,979,885  3,470,786  3,240  6,560  111,394 71.2% 12,512,381 14,039,803 9,181  9,411
Two-East
Region
Ankang   3,304,218  3,571,860  5,474  4,000  185,677 71.5% 5,526,291  8,024,028  12,655 3,902
Projects Completed
Puhua
Phase    642,927    889,021    662    8,232  6,649   100%  1,673,638  1,673,638  591    17,427
One
Puhua
Phase    231,686    387,717    327    7,264  13,553  100%  2,057,092  2,057,092  1,773  7,138
Two-West
Region
JunJing  -116,995   -116,995   -166   --     1,039   100%  24,132     24,132     --     --
III
JunJing
II Phase 481,746    481,746    299    9,855  518     100%  -          -          -      -
One
JunJing  528,465    528,465    333    9,277  4,366   100%  -          -          -      -
I
Other                                                      19,500     -          -      -
Projects
Other    3,788,434                                         6,996,473  -          -
Income
Total    24,830,830 18,556,716 17,846 6,369  501,577 -     57,754,103 59,023,253 48,439 7,499
Q-o-Q    -57%       -68.6%     -63.2% -15.1%               9.9%       -28.4%     -46.0% 31.7%
Change

Total debt outstanding as of September 30, 2013 was $301.6 million compared
with $202.6 million on December 31, 2012. Net debt outstanding (total debt
less cash and restricted cash) as of September 30, 2013 was $99.3 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 42.8
percent on September 30, 2013 and 36.6 percent on December 31, 2012.

                           Q3 2013
                                     First
                           Unsold
Projects in Planning                 Pre-sales
                           GFA
                                     Scheduled
                           (m^2)
Golden Bay                 250,000   Q1 2014
Puhua Phase Four           263,833   Q3 2014
Textile City               630,000   Q3 2014
Total projects in planning 1,143,833

2013 Fourth Quarter Outlook guidance

Total recognized revenue for the 2013 fourth quarter is expected to reach $18
million to $22 million, compared with $24.8 million in the 2013 third quarter
and $62.5 million in the fourth 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 the following day,
November 20^th, 2013. Listeners may access the call by dialing
+1-913-312-0406. To listen to the live webcast of the event, please go to
http://public.viavid.com; event number: 7167817. Listeners may access the call
replay, which will be available through November 27^th, 2013, by dialing
+1-858-384-5517; passcode: 7167817.

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

Ms. Sandy Jin
Assistant CFO
+86 29.8258.2638 in Xi'an
jinq@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, 2013 and December 31, 2012

(Unaudited)

 
                                                                December 31,
                                                September 30,   2012
                                                2013            (Restated )
 ASSETS
Cash                                            $ 85,721,169    $ 6,121,448
Cash - restricted                                 116,602,187     110,576,248
Accounts receivable, net of allowance for
doubtful                                          37,413,820      26,429,332
                     accounts of $588,106 and
$577,713, respectively
Construction in excess of billing                 956,447         1,484,626
Other receivables, prepaid expenses and other     9,149,087       6,854,325
assets
Real estate held for development or sale          218,980,559     212,371,875
Property and equipment, net                       36,493,568      33,837,346
Advance to suppliers                              786,453         1,363,817
Deposits on land use rights                       43,517,062      42,748,017
Intangible assets, net                            55,292,952      54,482,252
Goodwill                                          1,948,622       1,914,186
Deferred financing costs                          149,778         194,162
Total assets                                    $ 607,011,704   $ 498,377,634
LIABILITIES
Accounts payable                                $ 45,033,491    $ 55,142,928
Advances from customers                           56,123,221      49,297,915
Accrued expenses                                  13,985,716      22,229,514
Income and other taxes payable                    30,739,765      23,727,064
Other payables                                    12,307,734      11,228,553
Loans from employees                              22,871,639      27,868,785
Loans payable                                     278,747,427     174,749,368
Deferred tax liability                            14,657,144      14,521,613
Total liabilities                                 474,196,137     378,765,740
SHAREHOLDERS'EQUITY
Common stock: $.001 par value, authorized
100,000,000 shares
Issued 35,849,204 and 35,438,079, respectively    35,849          35,438
Additional paid in capital                        51,211,828      49,972,174
Treasury stock at cost 351,480 shares and         (434,240)       (434,240)
351,480 shares, respectively
Statutory reserves                                9,903,457       9,903,457
Retained earnings                                 46,461,434      38,573,966
Accumulated other comprehensive income            25,637,239      21,561,099
Total shareholders' equity                        132,815,567     119,611,894
Total liabilities and shareholders' equity      $ 607,011,704   $ 498,377,634

 

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

 

Interim Condensed Consolidated Statements of (Loss) Income

For The Three and Nine Months Ended September 30, 2013 and 2012

(Unaudited)

 
                                 3 Months                        9 Months
                 3 Months        September 30,   9 Months        September
                                                                 30,
                 September 30,   2012            September 30,   2012
                 2013                            2013
                                 (Restated )                     (Restated )
REVENUES
Real estate      $  21,042,396   $  23,931,025   $ 112,091,843   $ 74,170,706
sales
Other income        3,788,434       4,798,239      21,884,031      12,811,638
Total revenues      24,830,830      28,729,264     133,975,874     86,982,344
COST OF SALES
Cost of real        17,480,961      18,140,372     86,517,123      53,458,120
estate sales
Cost of other       2,423,455       4,134,356      16,192,275      10,166,314
revenue
Total cost of       19,904,416      22,274,728     102,709,398     63,624,434
revenues
Gross margin        4,926,414       6,454,536      31,226,476      23,357,910
OPERATING
EXPENSES
Selling,
general, and        3,784,742       3,717,178      11,884,682      10,696,590
administrative
expenses
Stock-based         135,792         96,438         1,240,065       909,434
compensation
Other (income)      (91,766)        (22,503)       358,783         42,385
expenses
Financing           1,762,724       63,764         6,016,604       394,712
expense
Accretion
expense on          -               254,023        -               728,174
convertible
debt
Total operating     5,591,492       4,108,900      19,460,134      12,771,295
expenses
 CHANGES IN
FAIR VALUE OF
DERIVATIVES
Change in fair
value of            -               (109,344)      -               (330,628)
embedded
derivatives
Change in fair
value of            -               (976)          -               (4,162)
warrants
Total changes
in fair value       -               (110,320)      -               (334,790)
of derivatives
(Loss) income
before              (665,078)       2,455,956      11,806,342      10,921,405
provision for
income taxes
    Provision
for current         185,950         1,201,523      4,044,863       3,984,823
income taxes
    Recovery of
deferred income     (11,341)        (310,834)      (125,989)       (96,210)
taxes
Provision for       174,609         890,689        3,918,874       3,888,613
income taxes
NET (LOSS)       $  (839,687)    $  1,565,267    $ 7,887,467     $ 7,032,792
INCOME
WEIGHTED
AVERAGE SHARES
OUTSTANDING
Basic               35,497,724      35,086,599     35,277,047      34,911,173
Diluted             35,497,724      35,086,599     35,277,047      34,911,173
NET (LOSS)
INCOME PER
SHARE
Basic               (0.02)          0.04           0.22            0.20
Diluted             (0.02)          0.04           0.22            0.20

 

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

 

 Interim Condensed Consolidated Statements of Comprehensive (Loss) Income

For The Three and Nine Months Ended September 30, 2013 and 2012

(Unaudited)

 

 
                                  3 Months                        9 Months
                  3 Months        September 30,   9 Months        September
                                                                  30,
                  September 30,   2012            September 30,   2012
                  2013                            2013
                                  (Restated )                     (Restated )
NET INCOME        $  (839,687)    $  1,565,267    $  7,887,468    $ 7,032,792
OTHER
COMPREHENSIVE
INCOME
Gain in foreign      656,539         1,969,140       4,076,140      397,512
exchange
COMPREHENSIVE     $  (183,148)    $  3,534,407    $  11,963,608   $ 7,430,304
(LOSS) INCOME

 

 

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Cash Flows

For The Nine Months Ended September 30, 2013 and 2012

(Unaudited)

 
                                                               September 30,
                                              September 30,    2012
                                              2013             (Restated )
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period                     $ 7,887,468      $ 7,032,792
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation                                    1,940,103        1,559,229
Stock-based compensation                        1,240,065        909,434
Gain on disposal of property and equipment      -                (70,097)
Amortization of deferred financing costs        55,326           117,155
Amortization of intangible assets               167,609          163,290
Recovery of deferred income taxes               (125,989)        (96,210)
Change in fair value of embedded derivatives    -                (330,628)
Change in fair value of warrants                -                (4,162)
Accretion expense on convertible debt           -                728,174
(Increase) decrease in assets:
Accounts receivable                             (10,322,423)     5,126,977
Construction in excess of billing               559,202          -
Other receivable and prepaid expense            (1,937,372)      (2,877,068)
Real estate held for development or sale        (3,011,051)      (66,525,427)
Advances to suppliers                           597,004          (1,611,109)
  Deposit on land use right                     -                22,754,848
Increase (decrease) in liabilities:
Accounts payable                                (10,956,225)     (17,485)
Advances from customers                         5,986,114        (5,569,449)
Accrued expense                                 (8,669,217)      9,816,101
Other payables                                  602,031          265,942
Income and other taxes payable                  6,345,305        2,807,134
Net cash used in operating activities           (9,642,050)      (25,820,559)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment              (3,982,755)      (7,995,987)
Proceeds from sale of property and equipment    -                63,476
Net cash used in investing activities           (3,982,755)      (7,932,511)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash                       (4,036,463)      20,968,025
Loans from banks                                98,841,999       30,111,889
Loans from Days Hotel and Dinghui               42,985,007       34,367,627
Payments on loans payable                       (40,142,194)     (68,685,407)
Loans (repayment to) or from employees, net     (5,524,219)      4,963,786
Purchase of treasury stock                      -                (14,142)
Net cash provided by financing activities       92,124,130       21,711,778
INCREASE (DECREASE) IN CASH                     78,499,325       (12,041,292)
Effects on foreign currency exchange            1,100,396        (27,729)
CASH, beginning of period                       6,121,448        22,014,953
CASH, end of period                           $ 85,721,169     $ 9,945,932

 

 

SOURCE China Housing & Land Development, Inc.

Website: http://www.chldinc.com
Website: http://public.viavid.com
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