China Housing & Land Development Inc.
Announces 2009 Financial Results
Press Release Source: China Housing & Land Development, Inc. On Monday March 15, 2010, 7:00 am EDT
XI'AN, China, March 15 /PRNewswire-Asia-FirstCall/ -- China Housing & Land Development, Inc., ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its audited financial results for the fourth quarter and full year ended December 31, 2009.
Highlights for 2009:
| -- | Total revenues increased 227% to $86.6 million from $26.5 million in2008. |
| -- | Total gross floor area ("GFA") sales were 145,529 sq. meters, comparedto 60,593 sq. meters in 2008, representing a 140% increase. |
| -- | Gross profit increased 374% to $23.7 million from $5.0 million in 2008. Gross margin increased to 27.3% compared to 18.9% in 2008. |
| -- | SG&A expenses as a percentage of total revenue declined to 10.6% from 32.1% in 2008. |
| -- | Operating income was $8.5 million, compared to an operating loss of ($9.8 million) in 2008. |
| -- | Net income attributable to common shares decreased 71% to $2.5 million from $8.8 million in 2008. Non-GAAP net income, which excluded a $7.6 million non-cash losses associated with the revaluation of derivatives and warrants, was $10.1 million in 2009 compared to non-GAAP net income of $0.8 million in 2008, which excluded a $8.1 million gain associated with the revaluation of derivatives and warrants, representing a 14.6% increase. |
| -- | Diluted net income per share attributable to common shareholders was $0.08, compared to $0.28 in 2008. Excluding $0.24 of non-cash losses associated with the revaluation of derivatives and warrants in 2009 and $0.27 in non-cash gains in 2008, diluted earnings per share would have been $0.32 and $0.03 for each respective period. |
Mr. Pingji Lu, China Housing's Chairman commented, "We are proud of our accomplishments in 2009, particularly due to a challenging start to the fiscal year. We finished the year with a 227% revenue increase to $86.6 million. Our revenue growth benefitted from stable market conditions, compelling customer- oriented residential unit designs and a strong pipeline of projects. We have an attractive market opportunity and plan to capitalize on stable pricing trends for residential and commercial sales in Xi'an through our planned development initiatives. The ongoing increase in local demand for residential units in Xi'an has carried over into the first two months of 2010. During the first two months of this year, contract sales totaled RMB 140 million (US$20.6 million) of residential unit sales from the JunJing II Phase One, Phase Two, and Puhua Phase One Projects, representing a total of 24,013 square meters. The Company's average residential selling price per square meter in the first two months of 2010 was RMB 5,164 (US$757). These results thus far are quite promising as they represent a sizeable increase compared to the fourth quarter residential average selling price of RMB4,675 (US$685)."
For the year ended December 31, 2009, the Company's revenues increased 227% to $86.6 million from $26.5 million, reflecting increased market stability, customer-oriented design and strong pipeline projects. Total gross floor area sold was 145,529 square meters, compared to 60,593 square meters in 2008. Average selling price per square meter increased to RMB4,872 (US$714) from RMB3,963 (US$581) in 2008.
Full year contract sales totaled US$103.9 million, representing a total GFA of 145,529 square meters, which exceeded previous full year guidance of US$86 million to US$88 million in contract sales and GFA of 130,000 to 132,000 square meters.
Gross profit increased 374% to $23.7 million from $5.0 million in 2008. The gross profit margin for the year 2009 was 27.3%, compared to 18.9% in the prior year. The increase in gross profit is a result of higher revenues due to improved market environment, while the higher gross margin stems from increased cost controls. Additionally, in 2008 the Company lowered prices on units in its JunJing II Phase One project in order to attract interests and boost sales.
Selling, general and administrative ("SG&A") expenses were $9.2 million in 2009, compared to $8.5 million in 2008. The increase was due to higher marketing expenses related to the launching of more projects in 2009. However, as a percentage of sales SG&A dropped to 10.6% in 2009 from 32.1% in 2008.
Operating income increased to $8.6 million from an operating loss of ($9.8 million) in 2008, due to increased sales of the Company's Tsining JunJing II Phase One and Phase Two units.
Net income attributable to common shares decreased 71% to $2.5 million from $8.8 million in 2008. Non-GAAP net income, which excluded a $7.6 million loss associated with the revaluation of derivatives and warrants, was $10.1 million in 2009 compared to non-GAAP net income of $0.8 million in 2008, which excluded a $8.1 million gain associated with the revaluation of derivatives and warrants, representing a 1,163% increase.
Diluted net income per share attributable to common shareholders was $0.08, compared to $0.28 in 2008. Excluding $0.24 of non-cash losses in 2009 and $0.27 in non-cash gains in 2008, diluted earnings per share would have been $0.32 and $0.03 for each respective period.
As of December 31, 2009, China Housing reported $36.9 million in cash, compared to $19.1 million as of September 30, 2009 and $37.4 million on December 31, 2008. Total debt was $59.3 million, compared to $52.6 million as of September 30, 2009 and $59.2 million on December 31, 2008. Net debt as a percentage of total capital was 21% at the end of 2009, compared to 16% at the end of 2008.
Highlights for Q4 2009:
Total revenue in the fourth quarter of 2009 increased 10.6% to $26.3 million from $23.8 million in the quarter ended September 30, 2009 and $0.9 million in the fourth quarter of 2008. The Company's GFA sales increased 90.5% to 61,786 square meters in the fourth quarter of 2009 compared to 32,436 square meters in the third quarter of 2009 and 4,753 square meters in the fourth quarter of 2008.
During the fourth quarter of 2009, contract sales totaled US$42.3 million of residential and commercial unit sales from the JunJing II Phase One, Phase Two, Puhua Phase One and other completed projects, representing a total of GFA 61,786 square meters. This exceeded previous fourth quarter 2009 guidance of US$32 to $34 million in contract sales, and GFA of 46,000 to 48,000 square meters. The Company's average selling price per square meter in the fourth quarter of 2009 was RMB 4,675 (US$685) compared to RMB 5,001 (US$733) in the third quarter of 2009 and RMB 4,747 (US$696) in the fourth quarter of 2008.
Gross profit in the fourth quarter of 2009 was $4.7 million, or 17.8% of total revenue, compared to gross profit of US$7.4 million, or 31.2% of revenue in the third quarter of 2009 and a gross loss of ($0.9 million) in the fourth quarter of 2008. The sequential quarterly reduction in gross margin was a result of finalizing the sales of the few remaining residential units at the JunJing II Phase One project, which were sold at a lower gross margin. The Company also sold several parking lots in the fourth quarter which typically sell for lower gross margin than our residential units.
SG&A expense totaled $3.3 million in the fourth quarter of 2009 compared to $2.5 million for the third quarter of 2009 and $4.3 million for the fourth quarter of 2008. As a percentage of total revenue, SG&A expenses increased to 12.6% compared to 10.5% in the third quarter of 2009 and 467% in the fourth quarter of 2008. In October 2009, we launched the marketing campaign for the Puhua Phase One project and successfully secured about $15.0 million of the contract amount. However, due to overall construction still in the beginning stage, we were not able to recognize revenue from the Puhua Phase One project. Nonetheless, we recognized approximately $1.2 million in selling and administrative expenses in the fourth quarter of 2009.
Operating loss in the fourth quarter of 2009 was ($0.17 million), compared to operating income of $4.0 million for the third quarter of 2009 and ($6.0 million) in the fourth quarter of 2008. The operating loss was primarily due to lower quarterly gross profits and higher selling and administrative expenses related to Puhua project.
Net loss in the fourth quarter of 2009 was ($1.1 million), or ($0.03) per diluted share, compared to net income of $12.6 million, or $0.24 per diluted share, in the third quarter of 2009 and $6.2 million, or $0.21 per diluted share, in the fourth quarter of 2008. Fourth quarter 2009 adjusted net loss, which excludes a $0.6 million non-cash losses associated with the revaluation of derivatives and warrants, was ($0.5 million), or ($0.02) per diluted share.
| | | Q4 2009 | | | Q3 2009 | |
| | | Revenue | | | | | | | | | | Revenue | | | GFA | | | | |
| Project | | Recognized | | | GFA Sold | | | ASP | | | Recognized | | | Sold | | | ASP | |
| | | ($) | | | | (m2) | | | (RMB) | | | ($) | | | | (m2) | | | (RMB) | |
| Projects | | | | | | | | | | | | | | | | | | | | |
| Under Con- | | | | | | | | | | | | | | | | | | | | |
| struction | | | | | | | | | | | | | | | | | | | | |
| JunJing II | | | | | | | | | | | | | | | | | | | | |
| Phase One | | | 6,224,147 | | | | 7,498 | | | | 4,287 | | | | 12,130,788 | | | | 6,801 | | | | 4,845 | |
| JunJing II | | | | | | | | | | | | | | | | | | | | | | | | |
| Phase Two | | | 16,014,055 | | | | 29,499 | | | | 4,935 | | | | 8,804,441 | | | | 23,606 | | | | 4,957 | |
| Puhua Project | | | -- | | | | 24,129 | | | | 4,377 | | | | -- | | | | -- | | | | -- | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Projects | | | | | | | | | | | | | | | | | | | | | | | | |
| Completed | | | | | | | | | | | | | | | | | | | | | | | | |
| Tsining-2 4G | | | 409,367 | | | | 220 | | | | 16,736 | | | | 1,588,845 | | | | 1507 | | | | 7,199 | |
| JunJing I | | | (1,083,459 | ) | | | 57 | | | | 11,543 | | | | -88,081 | | | | -166 | | | | 3,621 | |
| Additional | | | | | | | | | | | | | | | | | | | | | | | | |
| Projects | | | 112,068 | | | | 384 | | | | 3,070 | | | | 292,289 | | | | 688 | | | | 2,902 | |
| Other Income | | | 4,642,727 | | | | | | | | | | | | 1,065,363 | | | | -- | | | | -- | |
| Total | | | 26,318,905 | | | | 61,786 | | | | 4,675 | | | | 23,793,645 | | | | 32,436 | | | | 5,001 | |
| | | Q-o-Q Change | | | | | | | | | | | | 10.6 | % | | | 90.5 | % | | | (6.5 | %) |
2010 Outlook
2010 total contract sales in 2010 are expected to reach US$237 to $262 million, a 128%-152% increase compared to $103.9 million in 2009. Total recognized revenue in 2010 is expected to reach US$179 to $198 million, a 107%-129% increase compared to $86.6 million in 2009. The Company is reporting contract sales estimates compared to revenue as it is not subject to percentage of completion alterations.
Mr. Lu concluded, "We remain focused on adding new projects that can sustain our growth and have a strong pipeline of new development projects which positions us well in the years ahead. We have approximately 167,077 square meters of unsold GFA primarily from our JunJing II Phase One, JunJing II Phase Two and Puhua Phase One projects, and expect six new additional projects to generate sales in 2010. These projects include Puhua Phase Two to Phase Four, JunJing III, Park Plaza and Golden Bay, which together are expected to generate a total of 1,099,313 square meters of estimated GFA in the next 5 years. Our growth strategy focuses on high quality custom-built affordable housing units designed for homeowners in Tier II cities such as Xi'an. Our focus aligns us well with the newly issued government policies and should allow us to continue to take advantage of the favorable housing market condition in China. As a result, we believe that we are well-positioned for future growth and that 2010 will be another strong year for China Housing and Land Development Inc."
Conference Call Information
China Housing's management will host an earnings conference call on Monday, March 15, 2010 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-719-325-4821. 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 March 22nd, by dialing #1-719-457-0820; passcode: 5383846.
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 and only Chinese real estate development company traded on NASDAQ. The Company's news releases, project information, photographs, and more are available on the internet at http://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.
For more information, please contact:
Mr. Cangsang Huang
Chief Financial Officer
Phone: +86-29-8258-2648 in Xi'an
Email: chuang@chldinc.com
Ms. Jing Lu
Chief Operating Officer, Board Secretary,
and Investor Relations Officer
Phone: +86-29-8258-2632 in Xi'an
Email: jinglu@chldinc.com / English and Chinese
Mr. Shuai Luo
Investor Relations
Phone: +86-29-8258-2632 in Xi'an
Email: Laurentluo@chldinc.com/English and Chinese
Mr. Bill Zima, ICR
Phone: +1-203-682-8200 in United States
Email: William.Zima@icrinc.com
Ms. Annie Chen, ICR
Phone: +86-10-6599-7966 in Beijing
Email: Annie.Chen@icrinc.com
(Financial Tables on Following Pages)
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Consolidated Statements of Income
For The Years Ended December 31, 2009 and 2008
| | | 2009 | | | 2008 | |
| REVENUE | | | | | | |
| Sale of properties | | $ | 78,511,269 | | | $ | 24,306,062 | |
| Other income | | | 8,047,833 | | | | 2,159,784 | |
| | | | | | | | | |
| Total revenue | | | 86,559,152 | | | | 26,465,846 | |
| | | | | | | | | |
| Cost of sales and other | | | | | | | | |
| income | | | 62,902,441 | | | | 21,473,426 | |
| | | | | | | | | |
| Gross margin | | | 23,656,711 | | | | 4,992,420 | |
| | | | | | | | | |
| OPERATING EXPENSES | | | | | | | | |
| Selling, general and | | | | | | | | |
| administrative expenses | | | 9,182,165 | | | | 8,497,562 | |
| Stock based compensation | | | 252,118 | | | | 3,078,600 | |
| Security registration | | | | | | | | |
| expenses | | | 1,786,517 | | | | 613,483 | |
| Other expense | | | 385,652 | | | | 295,595 | |
| Interest expense | | | 2,323,141 | | | | 1,346,183 | |
| Accretion expense on | | | | | | | | |
| convertible debt | | | 1,213,063 | | | | 968,962 | |
| Total operating expenses | | | 15,142,656 | | | | 14,800,385 | |
| | | | | | | | | |
| NET INCOME (LOSS) FROM | | | | | | | | |
| BUSINESS OPERATIONS | | | 8,541,055 | | | | (9,807,965 | ) |
| | | | | | | | | |
| CHANGE IN FAIR VALUE OF | | | | | | | | |
| DERIVATIVES | | | | | | | | |
| Change in fair value of | | | | | | | | |
| embedded derivatives | | | 3,230,649 | | | | (3,166,977 | ) |
| Change in fair value of | | | | | | | | |
| warrants | | | 4,365,633 | | | | (4,932,961 | ) |
| Total change in fair value | | | | | | | | |
| of derivatives | | | 7,596,282 | | | | (8,099,938 | ) |
| | | | | | | | | |
| Income (loss) before provision for | | | | | | | | |
| income taxes and noncontrolling | | | | | | | | |
| interest | | | 917,773 | | | | (1,708,027 | ) |
| | | | | | | | | |
| (Recovery) provision for | | | | | | | | |
| income taxes | | | (814,155 | ) | | | (10,490,833 | ) |
| NET INCOME | | | 1,731,928 | | | | 8,782,806 | |
| Add: Net loss attributed | | | | | | | | |
| to noncontrolling interest | | | 737,882 | | | | (159,564 | ) |
| Net income attributable to | | | | | | | | |
| China Housing & Land | | | | | | | | |
| Development, Inc. | | | 2,469,810 | | | | 8,942,370 | |
| | | | | | | | | |
| WEIGHTED AVERAGE SHARES | | | | | | | | |
| OUTSTANDING | | | | | | | | |
| Basic | | | 31,180,246 | | | | 30,516,411 | |
| Diluted | | | 31,180,246 | | | | 30,527,203 | |
| | | | | | | | | |
| NET INCOME PER SHARE | | | | | | | | |
| Basic | | $ | 0.08 | | | $ | 0.29 | |
| Diluted | | $ | 0.08 | | | $ | 0.28 | |
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Consolidated Statements of Income
For The Quarters Ended December 31, 2009 and 2008
| | | | 2009 Q4 | | | | 2008 Q4 | |
| | | 3 Months | | | 3 Months | |
| REVENUE | | | | | | | | |
| Sale of properties | | | 21,676,178 | | | | (748,805 | ) |
| Other income | | | 4,642,727 | | | | 1,677,762 | |
| | | | | | | | | |
| Total revenue | | | 26,318,905 | | | | 928,957 | |
| | | | | | | | | |
| Cost of sales and other income | | | 21,635,586 | | | | 1,781,994 | |
| | | | | | | | | |
| Gross margin | | | 4,683,319 | | | | (853,037 | ) |
| | | | | | | | | |
| OPERATING EXPENSES | | | | | | | | |
| Selling, general and | | | | | | | | |
| administrative expenses | | | 3,328,707 | | | | 4,335,697 | |
| Stock based compensation | | | 164,341 | | | | 78,600 | |
| Security registration expenses | | | -- | | | | 613,483 | |
| Other expense | | | (88,515 | ) | | | 218,837 | |
| Interest expense | | | 1,120,355 | | | | (390,161 | ) |
| Accretion expense on convertible | | | | | | | | |
| debt | | | 323,758 | | | | 277,180 | |
| Total operating expenses | | | 4,848,646 | | | | 5,133,636 | |
| | | | | | | | | |
| NET INCOME (LOSS) FROM BUSINESS | | | | | | | | |
| OPERATIONS | | | (165,327 | ) | | | (5,986,673 | ) |
| | | | | | | | | |
| CHANGE IN FAIR VALUE OF DERIVATIVES | | | | | | | | |
| Change in fair value of embedded | | | | | | | | |
| derivatives | | | 213,377 | | | | (610,664 | ) |
| Change in fair value of warrants | | | 352,897 | | | | (1,037,346 | ) |
| Total change in fair value of | | | | | | | | |
| derivatives | | | 566,274 | | | | (1,648,010 | ) |
| | | | | | | | | |
| Income (loss) before provision for | | | | | | | | |
| income taxes and noncontrolling | | | | | | | | |
| interest | | | (731,601 | ) | | | (4,338,663 | ) |
| (Recovery) provision for income | | | | | | | | |
| taxes | | | 777,176 | | | | (10,490,833 | ) |
| NET INCOME | | | (1,508,777 | ) | | | 6,152,170 | |
| | | | | | | | | |
| Less: Net loss attributed to | | | | | | | | |
| noncontrolling interest | | | 458,727 | | | | (159,564 | ) |
| | | | | | | | | |
| Net income attributable to China | | | | | | | | |
| Housing & Land Development, Inc. | | | (1,050,050 | ) | | | 135,486 | |
| | | | | | | | | |
| WEIGHTED AVERAGE SHARES OUTSTANDING | | | | | | | | |
| Basic | | | 31,180,246 | | | | 30,516,411 | |
| Diluted | | | 31,180,246 | | | | 30,527,203 | |
| | | | | | | | | |
| NET INCOME PER SHARE | | | | | | | | |
| Basic | | | (0.03 | ) | | | 0.20 | |
| Diluted | | | (0.03 | ) | | | 0.21 | |
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARY
Consolidated Balance Sheets
As of September 30, 2009 and December 31, 2008
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
| ASSETS | | | | | | |
| Cash | | $ | 36,863,216 | | | $ | 37,425,340 | |
| Cash - restricted | | | 701,017 | | | | 805,012 | |
| Accounts receivable, net | | | | | | | | |
| of allowance for doubtful | | | | | | | | |
| accounts of $1,002,074 and | | | | | | | | |
| $1,278,156, respectively | | | 6,088,482 | | | | 813,122 | |
| Other receivables and | | | | | | | | |
| prepaid expenses, net | | | 2,484,221 | | | | 446,497 | |
| Notes receivable, net | | | -- | | | | 811,695 | |
| | | | | | | | | |
| Real estate held for | | | | | | | | |
| development or sale | | | 103,003,529 | | | | 60,650,011 | |
| Property and equipment, net | | | 15,307,478 | | | | 12,391,501 | |
| Assets held for sale | | | 14,301,564 | | | | 14,308,691 | |
| Advance to suppliers | | | 10,368,386 | | | | 704,275 | |
| Deposits on land use rights | | | 28,084,346 | | | | 47,333,287 | |
| Intangible assets, net | | | 41,355,134 | | | | 46,043,660 | |
| Goodwill | | | 816,469 | | | | -- | |
| | | | | | | | | |
| Deferred financing costs | | | 411,457 | | | | 622,118 | |
| Total assets | | | 259,785,299 | | | | 222,901,188 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 20,706,263 | | | $ | 10,525,158 | |
| Advances from customers | | | 21,301,876 | | | | 9,264,385 | |
| Accrued expenses | | | 5,587,837 | | | | 3,539,842 | |
| Accrued security | | | | | | | | |
| registration expenses | | | -- | | | | 613,483 | |
| Payable to acquisition of | | | | | | | | |
| businesses | | | 5,916,354 | | | | 8,429,889 | |
| Income taxes payable | | | 8,194,659 | | | | 8,078,709 | |
| Other payables | | | 4,524,288 | | | | 5,183,251 | |
| Loans from employees | | | 2,864,824 | | | | 1,517,039 | |
| Loans payable | | | 36,185,705 | | | | 35,617,442 | |
| Deferred tax liability | | | 11,505,181 | | | | 11,510,915 | |
| Warrants liability | | | 5,074,191 | | | | 1,117,143 | |
| Fair value of embedded | | | | | | | | |
| derivatives | | | 3,991,047 | | | | 760,398 | |
| Convertible debt | | | 14,834,987 | | | | 13,621,934 | |
| Total liabilities | | | 140,687,212 | | | | 109,779,588 | |
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARY
Consolidated Balance Sheets
As of September 30, 2009 and December 31, 2008
| SHAREHOLDERS' EQUITY | | | | | | |
| Common stock: $.001 par value, | | | | | | |
| authorized 100,000,000 shares | | | | | | |
| issued and outstanding | | | | | | |
| 31,270,679 and 30,893,757, | | | | | | |
| respectively | | | 31,885 | | | | 30,894 | |
| Additional paid in capital | | | 35,461,706 | | | | 31,390,750 | |
| Common stock subscribed | | | 252,118 | | | | -- | |
| Statutory reserves | | | 4,922,248 | | | | 3,541,226 | |
| Retained earnings | | | 39,895,179 | | | | 38,651,579 | |
| Accumulated other | | | | | | | | |
| comprehensive income | | | 10,163,483 | | | | 10,397,801 | |
| Total China Housing & Land | | | | | | | | |
| Development, Inc. | | | | | | | | |
| shareholders' equity | | | 90,726,619 | | | | 84,012,250 | |
| | | | | | | | | |
| Noncontrolling interest | | | 28,371,468 | | | | 29,109,350 | |
| | | | | | | | | |
| Total shareholders' | | | | | | | | |
| equity | | | 119,098,087 | | | | 113,121,600 | |
| | | | | | | | | |
| Total liabilities and | | | | | | | | |
| shareholders' equity | | $ | 259,785,299 | | | $ | 222,901,188 | |
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARY
Interim Condensed Consolidated Statements of Cash Flows
For The Years Ended December 31, 2009 and 2008
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | |
| Net income | | $ | 1,731,928 | | | $ | 8,782,806 | |
| Adjustments to reconcile net | | | | | | | | |
| income to cash provided by | | | | | | | | |
| (used in) operating activities: | | | | | | | | |
| Bad debt (recovery) expense | | | (603,917 | ) | | | 1,420,434 | |
| Depreciation | | | 633,930 | | | | 454,728 | |
| Exchange gain | | | -- | | | | -- | |
| Loss on disposal of fixed | | | | | | | | |
| assets | | | 108,189 | | | | 15,167 | |
| Gain on income tax | | | | | | | | |
| settlement | | | (4,859,401 | ) | | | (12,712,153 | ) |
| Amortization of deferred | | | | | | | | |
| financing costs | | | 210,661 | | | | 148,606 | |
| Amortization of stock issued | | | | | | | | |
| for investor relations fees | | | -- | | | | -- | |
| Amortization of intangible | | | | | | | | |
| asset | | | | | | | | |
| Stock based compensation | | | 252,118 | | | | 3,078,600 | |
| Security registration | | | | | | | | |
| expenses settled with | | | | | | | | |
| common stocks | | | 1,786,517 | | | | 613,483 | |
| Change in fair value of | | | | | | | | |
| warrants | | | 4,365,633 | | | | (4,932,961 | ) |
| Change in fair value of | | | | | | | | |
| embedded derivatives | | | 3,230,649 | | | | (3,166,977 | ) |
| Accretion expense on | | | | | | | | |
| convertible debt | | | 1,213,063 | | | | 968,962 | |
| Non-cash proceeds from sales | | | (43,500 | ) | | | (166,148 | ) |
| (Increase) decrease in assets: | | | | | | | | |
| Accounts receivable | | | (4,758,938 | ) | | | 10,758,758 | |
| Other receivables and | | | | | | | | |
| prepaid expenses | | | 185,426 | | | | (114,638 | ) |
| Real estate held for | | | | | | | | |
| development or sale | | | (37,698,632 | ) | | | (23,463,229 | ) |
| Advance to suppliers | | | (9,688,941 | ) | | | 1,600,308 | |
| Refund (deposit) on land | | | | | | | | |
| use rights | | | 19,198,186 | | | | (15,387,541 | ) |
| | | | | | | | | |
| Deferred financing costs | | | -- | | | | 202,888 | |
| Increase (decrease) in | | | | | | | | |
| liabilities: | | | | | | | | |
| Accounts payable | | | 10,170,003 | | | | 570,250 | |
| Advances from customers | | | 11,911,360 | | | | 3,576,253 | |
| Accrued expense | | | 1,915,238 | | | | 1,607,633 | |
| Other payable | | | (1,815,769 | ) | | | 1,003,031 | |
| Income taxes payable | | | 4,606,492 | | | | (3,934,882 | ) |
| Net cash used in | | | | | | | | |
| operating activities | | $ | 2,050,295 | | | $ | (29,076,622 | ) |
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARY
Interim Condensed Consolidated Statements of Cash Flows
For The Years Ended December 31, 2009 and 2008
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | |
| Change in restricted cash | | | 103,478 | | | | (684,040 | ) |
| Purchase of property and | | | | | | | | |
| equipment | | | (2,747,785 | ) | | | (1,063,332 | ) |
| Notes receivable collected | | | 452,054 | | | | 364,313 | |
| Cash acquired from | | | | | | | | |
| acquisition of business | | | 519,309 | | | | -- | |
| Proceeds from sale of | | | | | | | | |
| property and equipment | | | 195,035 | | | | 872,346 | |
| Net cash provided by (used in) | | | | | | | | |
| investing activities | | $ | (1,477,909 | ) | | $ | (510,713 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
| Net Proceeds from issuance | | | | | | | | |
| of convertible debt | | | -- | | | | 19,230,370 | |
| Investment and advances from | | | | | | | | |
| noncontolling interest | | | | | | | | |
| shareholder | | | -- | | | | 29,268,913 | |
| Loans from bank | | | 24,894,444 | | | | 46,054,762 | |
| Payments on loans payable | | | (24,306,429 | ) | | | (25,905,804 | ) |
| Loans from or repayment to | | | | | | | | |
| employees, net | | | 1,347,937 | | | | (1,018,357 | ) |
| Repayment of payables for | | | | | | | | |
| acquisition of businesses | | | (4,267,573 | ) | | | (3,704,820 | ) |
| Proceeds from exercise of | | | | | | | | |
| warrants | | | 1,184,662 | | | | 8,415 | |
| Net cash (used in) provided by | | | | | | | | |
| financing activities | | $ | (1,146,959 | ) | | $ | 63,933,479 | |
| | | | | | | | | |
| (DECREASE)/INCREASE IN CASH | | | (574,573 | ) | | | 34,346,144 | |
| | | | | | | | | |
| Effects on foreign currency | | | | | | | | |
| exchange | | | 12,449 | | | | 728,180 | |
| | | | | | | | | |
| CASH, beginning of period | | | 37,425,340 | | | | 2,351,015 | |
| | | | | | | | | |
| CASH, end of period | | $ | 36,863,216 | | | $ | 37,425,340 | |
