HARBIN, China, Nov. 16 /PRNewswire-Asia-FirstCall/ -- China XD
Plastics Company Ltd. ("China XD Plastics" or the "Company"), (OTC
Bulletin Board: CXDC), engaged in the development, manufacture, and
distribution of modified plastics primarily for use in automotive
applications in China, today reports financial results for the 2009
third quarter ended on September 30, 2009. Third Quarter 2009
Highlights -- Revenue was $36.2 million, an increase of 62.1% from
the third quarter of 2008 -- Gross profit was $8.4 million, an
increase of 45.9% from the third quarter of 2008 -- Gross profit
margin was 23.3%, compared to 25.8% in the third quarter of 2008 --
Net income was $4.0 million, compared to $4.2 million in the third
quarter of 2008 -- Diluted earnings per share was $0.10, compared
to $0.13 for the second quarter of 2009 -- Adjusted non-GAAP
earnings per diluted share were $0.17 compared with $0.14 in 2Q09
-- Total volume shipped was 17,914 metric tons, up 78.0% from
10,063 metric tons in the third quarter of 2008 "We are pleased
with our execution as well as our strong results for the quarter,"
said Mr. Jie Han, Chairman and Chief Executive Officer of China XD
Plastics. "During the quarter we continued to rapidly grow our
sales, by adding new products, acquiring new customers and
penetrating new markets to broaden our presence in the modified
plastics market in China. We are also honored that our success in
growing and strengthening our business created the conditions for
listing our shares on the NASDAQ Global Market. We believe this
will further strengthen our business and allow us to accelerate our
growth and create value for our shareholders." Third Quarter 2009
Results Revenue for the third quarter 2009 was up 62.1% to $36.2
million, compared to $22.3 million in the same period of 2008. The
increase in revenue is primarily attributable to the increase sales
volume driven by an improved product mix as well as the expansion
of the Company's customer base. Gross profit for the third quarter
2009 was $8.4 million, up 45.9% from $5.8 million in the third
quarter 2008. Gross margin was 23.3% compared to 25.8% in the same
period last year, and 20.9% in the second quarter 2009. The
year-over-year decrease in gross margin was due to lower value mix
associated with the surge in demand for economy vehicle models in
China in recent months. The sequential improvement is related to
the Company's successful efforts to launch new higher value-added
products to penetrate new segments of the automotive modified
plastics market in China. Selling expenses for the third quarter
2009 were $0.12 million, compared to $0.2 million in the same
period last year as the Company shut down its Changchun office and
increased its use of distributors. General and administrative
(G&A) expenses were $3.6 million, up 449.6% from $0.66 million
for the same period of last year. The year-over-year increase in
G&A expenses was mainly attributed to the increased stock based
compensation expense as well as other expenses related to being a
public company. Research and Development ("R&D") expenses were
$0.37 million compared to $0.24 million in the same period last
year. The increase in research and development expense was
primarily due to the upgrade of the research and development center
and continued efforts to launch new products during the third
quarter 2009. Operating income for the third quarter 2009 was $4.3
million, compared to $4.7 million in the same period a year ago.
Operating margin was 11.9% compared to 21.0% in the third quarter
of 2008. The year-over-year reduction in operating margin is
primarily due to the increase in operating expenses associated with
becoming a public company, including stock based compensation,
legal and reporting expenses, among others. Net Interest expense in
the third quarter 2009 was $0.34 million, compared to $0.32 million
in the third quarter of 2008. EBITDA (Earnings before Interest,
Taxes, Depreciation, and Amortization) for the third quarter of
2009 was $7.6 million, up 57.1% from $4.9 million in the third
quarter of 2008. For a detailed reconciliation of adjusted EBITDA,
a Non-GAAP measure, to its nearest GAAP equivalent, please see the
financial tables at the end of this release. Net income in the
third quarter 2009 was $4.0 million, down 6.8% from $4.2 million in
the same period last year. Fully diluted earnings per share for the
third quarter 2009 were $0.10. During the third quarter 2009, the
Company incurred a non-cash charge of $2.8 million associated with
stock-based compensation. Adjusting for this non-cash charge,
non-GAAP net income for the third quarter of 2009 was $6.7 million,
or $0.17 per basic and fully-diluted share. For a detailed
reconciliation of adjusted net income, a non-GAAP measure, to net
income, please see the financial tables at the end of this release.
Nine Months Results For the first nine months of 2009, total
revenue was $94.5 million, up 69.3% from the first nine months of
2008. Total volume shipped during the first nine months was 50,327
metric tons compared to 27,769 metric tons in the comparable period
of last year. Gross profit for the first nine months of 2009 was
$20.8 million, up 49.7% from gross profit of $13.9 million in the
comparable period a year ago. Gross margin was 22.1% and 24.9% for
the first nine months of 2009 and 2008, respectively. Income from
operations was $14.0 million, up 16.3% from $12.0 million in the
first nine months of 2008. EBITDA was $18.7 million in the first
nine months of 2009, up 47.9% from $12.6 million in first nine
months of 2008. Net income for the first nine months of 2009 was
$13.0 million, up 13.4% from $11.4 million in the first nine months
of 2008. Earnings per basic share were $0.54 and earnings per fully
diluted share were $0.33 for the first nine months of 2009.
Adjusting for non-cash charges associated with stock-based
compensation, adjusted net income, a non-GAAP measure, was $16.2
million or $0.68 basic earnings per share and $0.41 fully diluted
earnings per share. Financial Condition As of September 30, 2009,
China XD plastics had $5.1 million in cash and cash equivalents,
$20.3 million in working capital and a current ratio of 1.9.
Shareholder's equity as of September 30, 2009 stood at $40.2
million compared to $24.1 million at the end of 2008. Recent Events
On November 6, 2009, China XD Plastics announced the engagement of
Ernst & Young to assist the Company in the implementation of
Section 404 of the Sarbanes-Oxley Act of 2002. On November 2, 2009,
China XD Plastics engaged Moore Stephens Hong Kong as its new
independent auditor. Moore Stephens replaced Bagell Josephs Levine
& Company, LLC, which was dismissed on the same day. On
September 24, 2009, China XD Plastics announced that during the
third quarter of 2009 the Company was granted eight product
certifications, including three high-end modified nylon compounds
for its newly launched products by the FAW Group Corporation, one
of the leading automobile manufacturers and vanguard of automobile
industry in China with sales of over one million vehicles in the
first seven months of 2009. On August 31, 2009, China XD Plastics
announced that the Company entered into a long-term non-exclusive
agreement with Changchun Wanbofeng Plastics Company Limited
("Wanbofeng") to distribute carbon fiber reinforced nylon composite
("CFRNC"), a product newly developed by the Company. On July 30,
2009, China XD Plastics announced that the Company's information is
now made available via Standard & Poor's Market Access Program,
an information distribution service that enables subscribing
publicly traded companies to have their company information
disseminated to users of Standard & Poor's Advisor Insight. On
July 13, 2009, China XD Plastics announced it has signed a
half-year provisional agreement with Tianjin Huapu Company to
distribute its specialized modified plastics for automotive
applications in Northern China. Business Outlook and Guidance
During the first nine months of 2009, vehicle sales in China
reached 9.7 million units, up 34 percent from a year earlier and on
target to top 12 million units by the end of 2009. In October, the
2009 China automobile output has reached over 10 million units for
the first time in history, a milestone that only United States and
Japan have achieved previously. The stimulus plan implemented by
the government in China continues to have strong effect on the
demand of the automobiles in China. In addition, as the Chinese
economy recovers from the global recession, sales of high-end
automobiles are expected to expand at a faster pace, allowing China
XD Plastics to continue its push towards higher value added
products. For 2009, the Company reaffirms its guidance for annual
revenues in the range of $110 million to $130 million, and annual
adjusted net income, non-cash charges resulting from stock
compensation expense, in the range of $17 million to $20 million.
"We are on target to achieve our targets for 2009, and as we look
to 2010, we continue to see tremendous opportunities for the
continued rapid growth of our business which will position China XD
Plastics as a leader in the modified plastics industry in China,"
said Mr. Jie Han, Chairman and Chief Executive Officer of China XD
Plastics. "We will continue to pursue our strategy to invest in
technology development targeting high margin products, win new
product certifications from auto OEMs, and expand our capacity to
expand our market share as we participate in the growth of the
automotive industry in China." Conference Call China XD Plastics
will host a conference call at 8:00 a.m. ET on Monday, November 16,
2009, to discuss the 2009 third quarter financial results. To
participate in the conference call, please dial the following
number five to ten minutes prior to the scheduled conference call
time: 888-419-5570. International callers should dial
+1-617-896-9871. The pass code for the call is 47688055. If you are
unable to participate in the call at this time, a replay will be
available for 14 days starting on Monday, November 16, 2009 at
10:00 a.m. ET. To access the replay, dial 888-286-8010.
International callers should dial +1-617-801-6888. The conference
pass code is 21636927. About China XD Plastics Company Ltd. China
XD Plastics Company Ltd., through its wholly owned subsidiary
Harbin Xinda Macromolecule Material ("Xinda"), develops,
manufactures, and distributes modified plastics, primarily for
automotive applications. The Company's specialized plastics are
used in the exterior and interior trim and in the functional
components of more than 30 automobile brands manufactured in China
including Audi, Red Flag, Volkswagen and Mazda. The Company's
wholly-owned research institute is dedicated to the research and
development of modified plastics, and benefits from the cooperation
with well-known scientists from prestigious universities in China.
As of the end of September 30, 2009, 137 products that Xinda
manufactured have been certified for use by one or more of the
automobile manufacturers in China. For more information please
visit http://www.chinaxd.net/ . Safe Harbor Statement This
announcement contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. All statements other than statements of
historical fact in this announcement are forward-looking
statements, including but not limited to, the Company's ability to
raise additional capital to finance the company's activities; the
effectiveness, profitability, and the marketability of its
products; legal and regulatory risks associated with the share
exchange; the Company's ability to successfully expand its
production capacity; the future trading of the common stock of the
company; the Company's ability to operate as a public company; the
period of time for which its current liquidity will enable the
company to fund its operations; the company's ability to protect
its proprietary information; general economic and business
conditions; the volatility of the company's operating results and
financial condition; the company's ability to attract or retain
qualified senior management personnel and research and development
staff; and other risks detailed in the company's filings with the
Securities and Exchange Commission and available on its website at
http://www.sec.gov/. These forward-looking statements involve known
and unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about the
companies and the industry. The company undertakes no obligation to
update forward-looking statements to reflect subsequent occurring
events or circumstances, or to changes in its expectations, except
as may be required by law. Although the company believes that the
expectations expressed in these forward looking statements are
reasonable, they cannot assure you that their expectations will
turn out to be correct, and investors are cautioned that actual
results may differ materially from the anticipated results.
--Financial Tables Follow-- CHINA XD PLASTICS COMPANY LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE
INCOME (UNAUDITED) For the Three Months Ended For the Nine Months
Ended September 30, September 30, 2009 2008 2009 2008 Sales
$36,194,459 $22,324,847 $94,498,615 $55,802,003 Cost of sales
(27,777,237) (16,555,094) (73,656,568) (41,880,768) Gross profit
8,417,222 5,769,753 20,842,047 13,921,235 Operating expenses
Research and development expenses 370,279 237,106 868,252 557,746
Selling expenses 118,018 194,029 224,261 241,823 General and
administrative expenses 3,606,997 656,322 5,768,050 1,102,261 Total
operating expenses 4,095,294 1,087,457 6,860,563 1,901,830
Operating income 4,321,928 4,682,296 13,981,484 12,019,405 Other
income (expenses) Interest income (expenses) (340,464) (318,608)
(1,033,183) (481,875) Other income 407 485 62,949 25,665 Other
expense (1,052) (100,881) (10,937) (100,881) Total other expense
(341,109) (419,004) (981,171) (557,091) Income before income taxes
3,980,819 4,263,292 13,000,313 11,462,314 Provision for income
taxes 24,179 18,182 30,641 24,411 Net income $3,956,640 $4,245,110
$12,969,672 $11,437,903 Other comprehensive income (loss) Foreign
currency translation adjustment (19,210) 220,337 (46,606) 1,031,080
Comprehensive income $3,937,430 $4,465,447 $12,923,066 $12,468,983
Basic and diluted earnings per common share Basic $0.10 $10.46
$0.54 $28.19 Diluted $0.10 $10.46 $0.33 $28.19 Weighted average
common share outstanding Basic 39,140,751 405,802 23,797,701
405,802 Diluted 39,188,824 405,802 39,206,884 405,802 CHINA XD
PLASTICS COMPANY LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31, 2009 2008 (Unaudited) ASSETS Current
assets: Cash and cash equivalents $5,065,380 $3,869,035 Restricted
cash -- 3,664,346 Notes receivable 118,951 303,437 Accounts
receivable - net of allowance for bad debts of $99,614 and $99,669,
respectively 11,977,316 11,234,507 Other receivables 268,638 21,917
Inventories 15,276,568 12,438,782 Due from related parties 48,551
-- Advance to employees 435,516 92,329 Advance to suppliers
9,832,879 13,131,074 Taxes receivable 223,680 -- Prepaid expenses
34,796 -- Total current assets 43,282,275 44,755,427 Property,
plant and equipment, net 19,675,869 19,332,712 Other assets:
Deferred charges -- 378,073 Intangible assets, net 243,362 247,681
Total other assets 243,362 625,754 Total assets $63,201,506
$64,713,893 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Short term loans $20,215,841 $20,520,337 Bank
acceptance notes payable -- 8,061,561 Accounts payable 626,766
113,232 Other payable 147,871 106,232 Accrued expenses 303,970
820,625 Taxes payable 16,219 17,777 Due to related parties 777,462
7,542,950 Deferred revenue 937,499 3,469,796 Total current
liabilities 23,025,628 40,652,510 Commitments and contingencies
Stockholders' equity Common Stock, $0.0001 par value, 500,000,000
shares authorized, 40,809,898 and 805,802 shares issued and
outstanding as of September 30, 2009 and December 31, 2008,
respectively 4,081 81 Series A Preferred Stock, $0.0001 par value,
50,000,000 shares authorized, - 0 - and 1,000,000 shares issued and
outstanding as of September 30, 2009 and December 31 2008,
respectively -- 100 Series B Preferred Stock, $0.0001 par value,
50,000,000 shares authorized, 1,000,000 shares issued and
outstanding as of September 30, 2009 and December 31, 2008 100 100
Additional paid-in-capital 5,670,316 2,482,786 Retained earnings
33,020,813 20,051,142 Accumulated other comprehensive income
1,480,568 1,527,174 Total stockholders' equity 40,175,878
24,061,383 Total liabilities and stockholders' equity $63,201,506
$64,713,893 CHINA XD PLASTICS COMPANY LIMITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine
Months ended September 30, 2009 2008 Cash flows from operating
activities Net income $12,969,672 $11,437,903 Adjustments to
reconcile net income to net cash provided by (used in) operating
activities: Loss in disposal of property, plant and equipment
45,342 -- Depreciation & amortization 1,457,983 685,860
Stock-based compensation expense 3,191,430 -- Changes in assets and
liabilities: (Increase) decrease in - Restricted cash 3,659,063
1,403,171 Accounts receivable and other receivables (995,004)
(14,010,629) Tax receivable (223,483) -- Inventory (2,842,260)
(4,649,965) Prepaid expenses (34,796) 22,344 Notes receivables
184,153 (804,096) Due from related parties (50,389) -- Advance to
employees (341,056) -- Advances to suppliers 3,287,927 (6,900,409)
Deferred charge 377,528 -- Increase (decrease) in - Accounts
payable and other payable 554,807 3,894,526 Accrued expenses
(515,740) 644,019 Tax payable (1,536) (1,378,125) Deferred revenue
(2,528,120) 168,341 Net cash provided by (used in) operating
activities 18,195,521 (9,487,060) Cash flows from investing
activities Purchase of property, plant and equipment (1,842,306)
(5,103,516) Net cash used in investing activities (1,842,306)
(5,103,516) Cash flows from financing activities Repayment to short
term loans (292,725) -- Proceeds from short term loans --
19,758,944 Repayment of bank acceptance notes payable (8,049,938)
(3,865,880) Repayment to related party Loans (7,328,683) --
Proceeds from related party Loan 562,511 730,228 Net cash (used in)
provided by financing activities (15,108,835) 16,623,292 Effect of
exchange rate changes on cash and cash equivalents (48,035) 46,845
Net increase in cash and cash equivalents 1,196,345 2,079,561 Cash
and cash equivalents, beginning of period 3,869,035 87,455 Cash and
cash equivalents, end of period $5,065,380 $2,167,016 Supplemental
disclosures of cash flow information: Interest paid $1,033,183
$481,875 Income taxes paid $-- $-- Non-cash investing and financing
activities: Warrants issued for consulting service $46,260 --
Common stock issued for services $5,487,541 -- Reconciliation of
Net Income to Adjusted Net Income GAAP results for the three months
and nine months ended September 30, 2009 include non-cash stock
based compensation expense. To supplement the Company's condensed
consolidated financial statements presented on a GAAP basis, the
Company has provided non-GAAP financial information excluding the
impact of this item in this release. The Company's management
believes that this non-GAAP measure provides investors with a
better understanding of how the results relate to the Company's
historical performance. A reconciliation of the adjustments to GAAP
results appears in the table accompanying this press release. This
additional non-GAAP information is not meant to be considered in
isolation or as a substitute for GAAP financials. The non-GAAP
financial information that the Company provides also may differ
from the non-GAAP information provided by other companies. CHINA XD
PLASTICS COMPANY LIMITED RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30,
2009 AND 2008 Three Months Ended September 30, 2009 Net Income
Basic EPS Diluted EPS Adjusted Net Income - Non GAAP $6,713,977
$0.17 $0.17 Non-Cash Stock-based compensation (1) $2,757,337 $0.07
$0.07 Net Income - GAAP $3,956,640 $0.10 $0.10 Adjusted Net Income
Nine Months Ended September 30, 2009 Net Income (Loss) Diluted EPS
Net Income Basic EPS Diluted EPS Adjusted Net Income - Non GAAP
$16,161,103 $0.68 $0.41 Non-Cash Stock-based compensation (1)
$3,191,430 $0.14 $0.08 Net Income - GAAP $12,969,672 $0.54 $0.33
Three Months Ended September 30, 2008 Net Income Basic EPS Diluted
EPS Adjusted Net Income - Non GAAP $4,245,110 $10.46 $10.46
Non-Cash Stock-based compensation (1) -- -- -- Net Income - GAAP
$4,245,110 $10.46 $10.46 Adjusted Net Income Nine Months Ended
September 30, 2008 Net Income (Loss) Net Income Basic EPS Diluted
EPS Diluted EPS Adjusted Net Income - Non GAAP $11,437,903 $28.19
$28.19 Non-Cash Stock-based compensation (1) -- -- -- Net Income -
GAAP $11,437,903 $28.19 $28.19 (1) The adjustment to Non-GAAP is
related to the non-cash stock compensation Reconciliation of Net
Income to Adjusted EBITDA Adjusted EBITDA is a financial measure
that is not defined by US GAAP. Adjusted EBITDA was derived by
calculating earnings before interest, taxes, depreciation,
stock-based compensation and amortization. The Company's management
believes that the presentation of Adjusted EBITDA provides useful
information regarding China XD Plastics' results of operations
because it assists in analyzing and benchmarking the performance
and value of China XD Plastics' business. The Company's calculation
of Adjusted EBITDA may not be consistent with similarly titled
measures of other companies. The table below provides a
reconciliation of EBITDA to net income, the most comparable GAAP
measure. CHINA XD PLASTICS COMPANY LIMITED. Reconciliation of Net
Income to EBITDA (Amounts expressed in United States dollars) Three
Months Ended Nine Months Ended September 30, September 30, 2009
2008 2009 2008 Net Income $3,956,640 $4,245,110 $12,969,672
$11,437,903 Interest Expense $340,464 $318,608 $1,033,183 $481,875
Provision for $24,179 $18,182 $30,641 $24,411 Income Taxes
Stock-based compensation $2,757,337 $0 $3,191,430 $0 Depreciation
and amortization $558,857 $278,325 $1,457,983 $685,860 EBITDA
$7,637,476 $4,860,225 $18,682,909 $12,630,048 YoY Growth 57.1 %
47.9 % For more information, please contact: China XD Plastics
Company Ltd. Mr. Taylor Zhang, Chief Financial Officer Phone:
+1-212-747-1118 (New York) Mr. Allan Lao, IR Director Phone:
+86-451-84346600 (China) Email: Web: http://www.chinaxd.net/ CCG
Investor Relations Mr. Crocker Coulson, President Phone:
+1-646-213-1915 (New York) Mr. Ed Job, CFA Phone: +1-646-213-1914
(New York) Email: Web: http://www.ccgirasia.com/ DATASOURCE: China
XD Plastics Company Ltd. CONTACT: China XD Plastics Company Ltd.,
Mr. Taylor Zhang, Chief Financial Officer, +1-212-747-1118 (New
York); or Mr. Allan Lao, IR Director, +86-451-84346600 (China), or
; CCG Investor Relations, Mr. Crocker Coulson, President,
+1-646-213-1915 (New York), or Mr. Ed Job, CFA, +1-646-213-1914
(New York), or Web site: http://www.chinaxd.net/
http://www.ccgirasia.com/
Copyright