- Revenues of $1.3
Billion Surpassing Guidance -
- Provides Fiscal 2018 Guidance of
$1.2-$1.4
Billion in Revenue, $90-$110 Million in
Net Income, Excluding the Effect of Repatriation Tax -
HARBIN, China, March 15, 2018 /PRNewswire/ -- China XD
Plastics Company Limited (NASDAQ: CXDC) ("China XD Plastics" or the
"Company"), one of China's leading
specialty chemical companies engaged in the development,
manufacture and sale of polymer composite materials primarily for
automotive applications, today announced its financial results for
the fourth quarter and fiscal year ended December 31, 2017.
Fourth Quarter 2017 Financial
Highlights
- Revenue was $427.6 million, an increase of 13.2% YoY and
an increase of 37.3% sequentially
- Gross profit was $91.5 million, an increase of 11.2% YoY
and an increase of 93.4% sequentially
- Gross margin of 21.4%, a decrease of 38 basis points YoY and an
increase of 621 basis points sequentially
- Net Loss was $20.5 million, compared to net income
$36.7 million in the same period last
year and net income of $14.1sequentially
- EBITDA was $82.9 million, an
increase of 42.4% YoY and an increase of 112.6% sequentially
- Total volume shipped was 155,716 metric tons, up 24.1% YoY and
an increase of 39.2% sequentially
Full Year 2017 Financial Summary
- Revenue was $1,290.4 million, an
increase of 7.4% from $1,201.7
million for the full year 2016
- Gross profit was $236.7 million,
a decrease of 4.2% from $247.0
million for the full year 2016
- Gross profit margin of 18.3%, a decrease of 230 basis points
from 20.6% for the full year 2016
- Net income was $31.6 million, a
decrease of 68.9% from $101.6 million
for the full year 2016
- EBITDA was $210.6 million, an
increase of 8.2% YoY from $194.7
million for the full year 2016
- Total volume shipped was 457,385 metric tons, up 14.3% from
400,316 metric tons for the full year 2016
"We are pleased to have met our revenue guidance for 2017
abetted by strong customer demand from new growth regions in the
fourth quarter. Our robust sales results for the fourth
quarter of the year and solid results for fiscal year 2017 are
consistent with our expectations of a steady recovery throughout
China's automotive supply chain,"
said Jie Han, Chairman of the Board
of Directors and Chief Executive Officer. "According to the China
Association of Automobile Manufacturers, automobile production in
China increased by 3.2% in 2017 as
compared to 2016. An improved macroeconomic environment has
improved business conditions and helped us to improve our profit
margins."
"We are particularly pleased to see major revenue contributions
from major new growth frontiers, fostered in large part by the
gradual ramp up of our Sichuan
manufacturing facility, a key milestone in our corporate
development. The Sichuan
facility will ultimately add 300,000 metric tons of annual
production to our domestic capacity for a total domestic capacity
of 690,000 metric tons. The new facility also extends our
geographical reach beyond our established Northeast base,
generating strong growth from the South and Central China regions, in addition to our
continued and steady business development in Southwest and East
China. We installed 50 production lines with 216,000 metric tons of
annual production and construction at the complex is expected to be
completed by the end of the second quarter of 2018."
"The Sichuan facility
substantially expands the footprint of our auto business in
China and while we expect that
automotive applications will continue to be our core business, the
new facility includes precision equipment which will enable us to
diversify our product platform into such high-growth verticals as
ships, high-speed rail, airplanes, bio-degradable materials,
medical-grade materials, food packaging, electronic equipment,
electrical products, alternative energy applications and power
devices, which will help to propel the Company's
growth."
"Our new facility in Dubai also
extends our specialized high-tech products into an important new
market. We are planning to complete installing 45 production lines
with 12,000 metric tons of annual production capacity by the end of
April, 2018, and an additional 50 production lines with 13,000
metric tons of annual production capacity by the end of 2018.
This will bring the total installed production capacity in our
Dubai facility to 25,000 metric
tons. The Dubai facility will
target high-end products for the overseas market and will
ultimately enable more active inroads into the markets of
Europe, the Middle East, Russia and other international
regions."
"China XD continues to value our deep working relationships with
our customers above all, and is committed to creating value with
our culture of hard work and innovation. We anticipate that
the continued execution of our strategic plan driven by an increase
in our production capacity, our entry into new markets, a
diversified customer base and an escalation in international sales
will help to generate business growth for years to come. For
fiscal 2018, we are providing financial guidance of between $$1.2
and $1.4 billion in revenue,
$90 and $110
million in net income ", Mr. Han concluded.
Fourth Quarter 2017 Results
Revenues were $427.6 million for
the fourth quarter of 2017, compared to $377.8 million for the same period of 2016,
representing an increase of $49.8
million, or 13.2%. The year-over-year increase was primarily
due to a 24.1% increase in sales volume and a 9.2% decrease in the
average RMB selling price of our products.
The increase in revenues in the fourth quarter of 2017 was
driven by growth in demand for our products in the domestic
China market, our aggressive
efforts to expand our customer base attributable to our new plant
in Sichuan and our efforts to
expand overseas sales. We recorded sales increases of 46.6%
in North China, 23.5% in East
China, 23.3% in Central China and
4.7% in South China. Overseas
sales were $35.4 million for the
fourth quarter of 2017, accounting for 8.3 % of total sales,
reflecting the Company's resumed sales to overseas markets in
fiscal 2017.
Premium products (PA66, PA6, POM, PPO, Plastic Alloy and PLA) in
total accounted for 73.3% of revenues in the fourth quarter of
2017, compared to 82.8% in the prior year period. Since the third
quarter of 2017, the Company implemented a marketing strategy of
offering lower-end products with lower RMB pricing to further
penetrate the new regional markets in East China, Central China and Southwest China. Pending this marketing
strategy, the Company intends to shift its production mix from
traditional lower-end products to higher-end products such as PLA,
primarily due to (i) greater growth potential of advanced modified
plastics in luxury automobile models in China, (ii) the stronger demand as a result of
promotion by the Chinese government for clean energy vehicles
and (iii) better quality from end consumer recognition of
higher-end cars made by automotive manufacturers from Chinese and
Germany joint ventures,
and U.S. and Japanese joint ventures, which
manufacturers tend to use more and higher-end modified
plastics in quantity per vehicle in China.
Gross profit was $91.5 million for
the fourth quarter of 2017, compared to $82.3 million for the same period of 2016,
representing an increase $9.2
million, or 11.2%. Gross margin was 21.4% compared to
21.8% in the fourth quarter of 2016, primarily due to (i) lower
sales of higher-end products by Dubai Xinda; and (ii) implementing
a marketing strategy of offering lower-end products with lower RMB
pricing to enter the new regional markets in Central China and Southwest China, since the third quarter of
2017 as compared to that of the prior year.
General and administrative (G&A) expenses were $12.2 million for the fourth quarter of 2017,
compared to $9.9 million for the same
period of 2016, representing an increase of $2.3 million, or 23.0%. This increase was
primarily due to the increases of US$1.8
million in compensation for the terminated contracts with an
equipment supplier. On a percentage basis, G&A expenses in the
fourth quarter of 2017 were 2.9% compared to 2.6% for the same
period of 2016.
Research and development (R&D) expenses were $11.6 million for the fourth quarter of 2017,
compared to $29.3 million for the
same period of 2016, representing a decrease of $17.7 million, or 60.5%, due to the decrease of
raw materials used in two specific research and development
projects in Sichuan Xinda. As of December 31, 2017, the number of ongoing research
and development projects was 376.
Operating income was $66.6 million
for the fourth quarter of 2017, compared to $42.6 million for the same period of 2016,
representing an increase of $24.0
million, or 56.3%. This increase was primarily due to the
higher gross profit and lower R&D expenses, partially offset by
higher G&A expenses.
Net interest expense was $11.2
million for the fourth quarter of 2017, compared to net
interest expense of $7.6 million for
the same period of 2016, primarily due to (i) the increase of
interest expense due to the increase of the average short-term and
long-term loan balance in the amount of $840.7 million for the three-month period ended
December 31, 2017 compared to
$727.4 million for the same period in
2016, (ii) the increase of the weighted loan interest rate of
4.8% for the three-month period ended December 31, 2017 as compared to 4.5% for the
same period of 2016, which was partially offset by (iii) an
increase of interest income resulting from the decrease of the
average interest rate to 1.0% for the three-month period ended
December 31, 2017 compared to 1.9% of
the same period in 2016, and (iv) the increase of the average
deposit balance in the amount of $529.8
million for the three-month period ended December 31, 2017 compared to $282.6 million for the same period of 2016.
Income tax expense was $79.8
million for the fourth quarter of 2017, representing an
effective income tax rate of 134.5%, compared to an effective
income tax rate of 6.0% for the same period of 2016. The
significant increase of the effective tax rate was primarily due to
management's estimate of the amount of US$71.0 million deemed repatriation tax based on
overseas accumulated earnings mandated by the U.S. tax reform on
December 22, 2017.
Net loss was $20.5 million for the
fourth quarter of 2017, compared to net income $36.7 million for the same period of 2016,
representing a decrease of $57.2
million. Losses per share were $0.31 for the fourth quarter ended December 31, 2017, compared to $0.56 per share in the fourth quarter of
2016.
The average number of shares used in the computation of basic
and diluted earnings per share for the three months ended
December 31, 2017 was 49.7 million,
compared to 49.5 million shares for basic and diluted earnings per
share in the prior year period.
Earnings before interest, tax, depreciation and amortization
(EBITDA) was $82.9 million for the
fourth quarter of 2017, compared to EBITDA of $58.2 million for the same period of 2016,
representing an increase of $24.7
million, or 42.4%. For a detailed reconciliation of EBITDA,
a non-GAAP measure, to its nearest GAAP equivalent, please see the
financial tables at the end of this release.
Full Year 2017 Financial Results
Revenues were $1,290.4 million in
fiscal 2017, compared to $1,201.7
million in fiscal 2016, representing an increase of
$88.7 million, or 7.4%. The
year-over-year increase was primarily due to a 14.3% increase in
sales volume and a 3.9% decrease in the average RMB selling price
of our products.
We recorded sales increases of 53.8% in Central China, 33.7% in Southwest China, 21.5% in North China, 21.1% in South China, 7.6% in East China, and 1.3% in
Northeast China. Overseas sales
were decreased by US$27.7 million and
accounted for 6.4% of the total sales as compared to 9.2% of that
in 2016.
Premium products (PA66, PA6, Plastic Alloy, PLA, POM and PPO) in
total accounted for 76.9% of revenues in fiscal 2017, compared to
81.3% in fiscal 2016. The Company continued to shift production mix
from traditional lower-end products to higher-end products such as
PA66, PLA, and PPO, primarily due to (i) greater growth potential
of advanced modified plastics in luxury automobile models in
China, (ii) the stronger demand as
a result of promotion by the Chinese government for clean
energy vehicles and (iii) better quality from and consumer
recognition of higher-end cars made by automotive manufacturers
from Chinese and Germany joint
ventures, and U.S. and Japanese joint ventures, which
manufacturers tend to use more and higher-end modified
plastics in quantity per vehicle in China.
Gross profit was $236.7 million in
fiscal 2017, compared to $247.0
million in fiscal 2016, representing a decrease of
$10.3 million, or 4.2%. Our gross
margin decreased to 18.3% during the year of 2017 from 20.6% for
fiscal 2016, (i) lower sales of higher-end products in Dubai Xinda;
and (ii) implementing a marketing strategy of offering lower-end
products with lower RMB pricing to enter the new regional
markets in Central China and
Southwest China, since the third
quarter of 2017 as compared to that of the prior year..
General and administrative (G&A) expenses were $38.5 million in fiscal 2017, compared to
$30.0 million for fiscal 2016,
representing an increase of $8.5
million, or 28.5%. This increase is primarily due to the
increase of (i) US$5.6 million in
salary, bonus and welfare which was resulted from the increase in
the number of management and general staff from supporting
departments and in the average salary and bonus; (ii) US$0.7 million in depreciation; (iii) US0.5
million in non-income taxation expenses; (iv) US$1.8 million in compensation for the terminated
contracts with an equipment supplier; and partially offset by (v)
the decrease of US$ 0.1 million in
share based compensation.
Research and development expenses were $36.9 million in fiscal 2017compared with
$48.0 million in fiscal 2016, a
decrease of $11.1 million, or 23.2%.
The decrease was primarily due to the decrease of raw materials
used in two research and development projects in Sichuan Xinda. As
of December 31, 2017, the number of
ongoing research and development projects was 376. We expect to
complete and commence to realize economic benefits on approximately
25% of the projects in the near term. The remaining projects are
expected to be carried out for a longer period. The majority of the
projects are in the field of modified plastics in automotive
applications and the rest are in advanced fields such as ships,
airplanes, high-speed rail, medical devices, etc.
Operating income was $158.2
million in fiscal 2017 compared to $167.7 million for fiscal 2016, representing a
decrease of $ 9.5 million, or 5.7%.
This decrease in 2017 was due to the lower gross margin and the
higher general and administration expenses, partially offset by the
lower research and development expenses.
Income tax expense was $90.5
million in fiscal 2017, representing an effective income tax
rate of 74.1%, compared to an effective income tax rate of 14.6% in
fiscal 2016. The significant increase of our effective tax rate is
due to estimated cost of US$71.0 million mandatory deemed
repatriation of non-U.S. earning according to the Tax Cuts and Jobs
Act (the "Act") enacted on December 22, 2017 which accounted
for 78.5% of t our recognized income tax expenses for the year
ended December 31, 2017.
Excluding the impact of repatriation tax for 2017, our effective
tax rate would be 16.0% for the year ended December 31, 2017.
The effective income rate increased 1.4% (excluding the impact
of repatriation tax) from 14.6% in 2016, primarily due to the less
proportion of the consolidated profit was generated by Dubai Xinda
which was exempted from income taxes and a decrease of the 50%
additional deduction of R&D expense.
Net income was $31.6 million in
fiscal 2017, compared to $101.6
million for fiscal 2016, representing a decrease of
$70.0 million, or 68.9%.
Earnings per share were $0.48 in
fiscal 2017, compared to earnings per share of $1.54 for fiscal 2016.
The average number of shares used in the computation of basic
and diluted earnings per share for the fiscal year 2017 was 49.6
million, compared to 49.4 million shares for fiscal 2016.
Earnings before interest, tax, depreciation and amortization
(EBITDA) was $210.6 million for the
fiscal year 2017 as compared to EBITDA of $194.7 million for fiscal 2016, representing an
increase of $15.9 million, or
8.2%. For a detailed reconciliation of EBITDA, a non-GAAP
measure, to its nearest GAAP equivalent, please see the financial
tables at the end of this release.
Financial Condition
As of December 31, 2017, the
Company had $190.4 million in cash
and cash equivalents, $288.0 million
in time deposits with commercial banks, $60.5 million in working capital (current assets
minus current liabilities) and a current ratio (current assets
divided by current liabilities) of 1.0. Stockholders' equity
as of December 31, 2017 was
$712.8 million, an increase of 12.4%
as compared to $634.3 million as of
December 31, 2016.
Accounts receivable decreased by 27.1% or US$111.2 million due to the management efforts to
collect outstanding balances due from the domestic customers.
Inventory increased by 50.1% to $421.7
million as of fiscal year end 2017 as compared to fiscal
year end 2016 as a result of more purchases of the raw materials
and the Company's strategy to stock up the finished goods for the
upcoming orders. Prepayment to equipment and construction suppliers
increased by 1,242.3% mainly because advance to purchases for the
storage facility and other equipment of HLJ Xinda group. The
aggregate short-term and long-term bank loans increased by 28.1%
mainly because the Xinda Group obtained a seven-year unsecured loan
of RMB526.3 million (equivalent to
US$80.6 million) due to the
utilization of existing lines of credit to support the expansion of
the Sichuan and Dubai facilities. We believe our current
debt level is manageable. We define the manageable debt level as
the sum of aggregate short-term and long-term loans, and notes
payable over total assets.
Financial Guidance and Business Outlook
Excluding the effect from the one time repatriation tax, the
Company met its financial guidance for fiscal 2017, with revenue of
$1.3 billion, surpassing its
forecasted revenue estimate range of $1.2
billion and $1.3
billion.
In light of anticipated contribution from production capacity to
be added, our entry to new markets, diversified customer base and
escalation of sales overseas, the Company projects revenue for
fiscal 2018 to range between $1.2 and
$1.4 billion in revenue. Gross margin
in fiscal 2018 is expected to remain stable as compared to that of
fiscal 2017. The Company project net income to range between
$90 and $110
million, excluding the effect of repatriation tax. This is
based on the anticipation of a steady recovery throughout the
Chinese automotive supply chain and a stabilization of crude oil
pricing and its impact on polymer composite materials in 2018. This
forecast also assumes contributions from the Sichuan plant and the Dubai second phase project, both of which will
start production by the end of second quarter of 2018 and the end
of 2018, respectively. It also assumes the average exchange
rate of the US dollar to RMB at 6.3. This financial guidance
reflects the Company's preliminary view of its business outlook for
fiscal 2018 and is subject to revision based on changing market
conditions at any time.
Conference Call
China XD Plastics' senior management will host a conference call
at 9:00 am Eastern Time on Thursday,
March 15, 2018, to discuss its fourth quarter and fiscal 2017
financial results. The conference call can be accessed by
dialing +1- 845-675-0437 (for callers in the U.S.),
+86-4006-208-038 (for Mainland China callers) or +852- 3018-6771
(for Hong Kong callers) and
entering passcode 3594219 .
A recording of the conference call will be available through
March 22, 2018, +1-855-452-5696 (for
callers in the U.S.) and entering passcode 3594219 .
A live webcast and replay of the conference call will be
available on the investor relations page of the Company's website
at http://www.chinaxd.net
About China XD Plastics Company Limited
China XD Plastics Company Limited, through its wholly-owned
subsidiaries, develops, manufactures and sells polymer composites
materials, primarily for automotive applications. The Company's
products are used in the exterior and interior trim and in the
functional components of 30 automobile brands manufactured in
China, including without
limitation, AUDI, Mercedes Benz,
BMW, Toyota, Buick, Chevrolet, Mazda, Volvo, Ford, Citroen,
Jinbei, VW Passat, Golf, Jetta, etc.. The Company's
wholly-owned research center is dedicated to the research and
development of polymer composites materials and benefits from its
cooperation with well-known scientists from prestigious
universities in China. As of
December 31, 2017, 442 of the
Company's products have been certified for use by one or more of
the automobile manufacturers in China. For more information, please visit the
Company's English website at http://www.chinaxd.net, and the
Chinese website at http://www.xdholding.com.
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 growth
potential in international markets; the effectiveness and
profitability of the Company's product diversification strategy;
the impact of the Company's product mix shift to more advanced
products and related pricing policies; the effectiveness,
profitability, and the marketability of its the ongoing mix shift
to more advanced products; the prospect of the Company's
Dubai facility, and the associated
expansion into Middle East,
Europe and other parts of
Asia; the prospect of the
Company's Southwest China
facility, the prospects of the Company's Harbin facility, and its penetration into
Northeast China; and its
penetration into Southwest China;
the Company's projections of its revenues for performance in fiscal
2018. These forward-looking statements can be
identified by terminology such as "will," "expect," "project,"
"anticipate," "forecast," "plan," "believe," "estimate" and similar
statements. Forward-looking statements involve inherent risks and
uncertainties and are based on current expectations, assumptions,
estimates and projections about the Company and the industry. A
number of important factors could cause actual results to differ
materially from those contained in any forward-looking statement.
Potential risks and uncertainties include, but are not limited to,
the global economic uncertainty could further impair the automotive
industry and limit demand for our products; fluctuations in
automotive sales and production could have a material adverse
effect on our results of operations and liquidity; our financial
performance may be affected by the prospect of our Dubai facility and the associated expansion
into Middle East, Europe and other parts of Asia; the withdrawal of preferential
government policies and the tightening control over the Chinese
automotive industry and automobile purchase restrictions imposed in
certain major cities may limit market demand for our products; the
slowing of Chinese automotive industry's growth; the concentration
of our distributors, customers and suppliers; 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. 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, it
cannot assure you that its expectations will turn out to be
correct, and investors are cautioned that actual results may differ
materially from the anticipated results.
Contacts:
China XD Plastics
Mr. Taylor Zhang, CFO
(New York)
Phone: +1 (212) 747-1118
Email: cxdc@chinaxd.net
- Financial Tables Follow -
CHINA XD PLASTICS
COMPANY LIMITED AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
December
31,
|
|
2017
|
|
2016
|
|
US$
|
|
US$
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
|
190,392,211
|
|
|
168,086,445
|
Restricted
cash
|
|
129,699,454
|
|
|
103,489,402
|
Time
deposits
|
|
288,023,017
|
|
|
184,806,112
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
298,868,984
|
|
|
410,049,559
|
Amounts due from
a related party
|
|
-
|
|
|
229,624
|
Inventories
|
|
421,736,682
|
|
|
280,939,008
|
Prepaid expenses and
other current assets
|
|
144,326,151
|
|
|
125,310,309
|
Total current
assets
|
|
1,473,046,499
|
|
|
1,272,910,459
|
Property, plant and
equipment, net
|
|
835,561,739
|
|
|
806,363,692
|
Land use rights,
net
|
|
31,943,652
|
|
|
22,536,397
|
Long-term prepayments
to equipment and construction suppliers
|
|
190,627,514
|
|
|
14,167,702
|
Other non-current
assets
|
|
12,924,279
|
|
|
10,521,949
|
Total
assets
|
|
2,544,103,683
|
|
|
2,126,500,199
|
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
|
|
Short-term bank
loans, including current portion of long-term
bank loans
|
|
775,396,929
|
|
|
444,757,476
|
Bills
payable
|
|
252,768,510
|
|
|
148,392,677
|
Accounts
payable
|
|
227,993,140
|
|
|
320,013,040
|
Amounts due to a
related party
|
|
-
|
|
|
11,548
|
Income taxes
payable
|
|
17,710,217
|
|
|
897,625
|
Accrued expenses and
other current liabilities
|
|
138,605,509
|
|
|
119,339,366
|
Total current
liabilities
|
|
1,412,474,305
|
|
|
1,033,411,732
|
Long-term bank loans,
excluding current portion
|
|
114,208,319
|
|
|
249,520,615
|
Deferred
income
|
|
99,168,276
|
|
|
69,311,102
|
Other non-current
liabilities
|
|
107,898,318
|
|
|
42,420,619
|
Total
liabilities
|
|
1,733,749,218
|
|
|
1,394,664,068
|
|
|
|
|
|
|
Redeemable Series
D convertible preferred stock (redemption
amount of US$244,044,200 and US$212,212,300 as of December 31,
2017 and 2016, respectively)
|
|
97,576,465
|
|
|
97,576,465
|
Stockholders'
equity:
|
|
|
|
|
|
Series B preferred
stock
|
|
100
|
|
|
100
|
Common stock,
US$0.0001 par value, 500,000,000 shares authorized,
49,748,731 shares and 49,532,541 shares issued, 49,727,731
shares and
49,511,541 shares outstanding as of December 31, 2017 and
2016,
respectively
|
|
4,975
|
|
|
4,952
|
Treasury stock,
21,000 shares at cost
|
|
(92,694)
|
|
|
(92,694)
|
Additional paid-in
capital
|
|
83,159,893
|
|
|
82,606,404
|
Retained
earnings
|
|
648,790,469
|
|
|
617,168,735
|
Accumulated other
comprehensive loss
|
|
(19,084,743)
|
|
|
(65,427,831)
|
Total stockholders'
equity
|
|
712,778,000
|
|
|
634,259,666
|
Commitments and
contingencies
|
|
|
|
|
|
Total liabilities,
redeemable convertible preferred stock and
stockholders' equity
|
|
2,544,103,683
|
|
|
2,126,500,199
|
CHINA XD PLASTICS
COMPANY LIMITED AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
Years
Ended December 31,
|
|
Three-Month
Period
Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
Revenues
|
1,290,447,748
|
|
1,201,678,898
|
|
427,632,945
|
|
377,661,511
|
Cost of
revenues
|
(1,053,782,105)
|
|
(954,723,617)
|
|
(336,167,827)
|
|
(295,504,993)
|
Gross
profit
|
236,665,643
|
|
246,955,281
|
|
91,465,118
|
|
82,156,518
|
|
|
|
|
|
|
|
|
Selling
expenses
|
(3,176,928)
|
|
(1,356,843)
|
|
(1,094,039)
|
|
(351,203)
|
General and
administrative expenses
|
(38,495,704)
|
|
(29,952,304)
|
|
(12,194,264)
|
|
(9,917,384)
|
Research and
development expenses
|
(36,838,261)
|
|
(47,989,665)
|
|
(11,582,764)
|
|
(29,308,647)
|
Total operating
expenses
|
(78,510
893)
|
|
(79,298,812)
|
|
(24,871,067)
|
|
(39,577,234)
|
|
|
|
|
|
|
|
|
Operating
income
|
158,
154,750
|
|
167,656,469
|
|
66,594,051
|
|
42,579,284
|
|
|
|
|
|
|
|
|
Interest
income
|
5,290,705
|
|
5,847,274
|
|
1,262,406
|
|
1,374,799
|
Interest
expense
|
(45,370,872)
|
|
(41,370,432)
|
|
(12,504,933)
|
|
(8,966,648)
|
Foreign currency
exchange gains (losses)
|
(6,498,908)
|
|
1,951,732
|
|
(1,779,485)
|
|
1,595,060
|
Losses on foreign
currency contracts
|
(1,048,599)
|
|
-
|
|
(463,875)
|
|
-
|
Loss on debt
extinguishment
|
|
|
(18,963,834)
|
|
-
|
|
-
|
Government
grants
|
11,619,037
|
|
3,914,360
|
|
6,200,539
|
|
2,475,771
|
Total non-operating
expenses, net
|
(36,008,637)
|
|
(48,620,900)
|
|
(7,285,348)
|
|
(3,521,018))
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
122,146,113
|
|
119,035,569
|
|
59,308,703
|
|
39,058,266
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(90,524,379)
|
|
(17,422,819)
|
|
(79,788,408)
|
|
(2,335,447)
|
|
|
|
|
|
|
|
|
Net income
|
31,621,734
|
|
101,612,750
|
|
(20,479,705)
|
|
36,722,819
|
|
|
|
|
|
|
|
|
Earnings (losses)
per common share:
|
|
|
|
|
|
|
|
Basic and
diluted
|
0.48
|
|
1.54
|
|
(0.31)
|
|
0.56
|
Net Income
(loss)
|
31,621,734
|
|
101,612,750
|
|
(20,479,705)
|
|
36,722,819
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment, net
of nil income taxes
|
46,343,088
|
|
(46,085,173)
|
|
12,786,001
|
|
(27,617,945)
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss)
|
77,964,822
|
|
55,527,577
|
|
(7,693,704)
|
|
9,104,874
|
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
|
|
|
Series B Preferred
Stock
|
|
Common
Stock
|
|
|
|
Additional
|
|
|
|
Accumulated
Other
|
|
Total
|
|
|
Number
of
Shares
|
|
Amount
|
|
Number
of
Shares
|
|
Amount
|
|
Treasury
Stock
|
|
Paid-in
Capital
|
|
Retained
Earnings
|
|
Comprehensive
Income
(Loss)
|
|
Stockholders'
Equity
|
|
|
|
|
US$
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
Balance at
January 1,
2015
|
|
1,000,000
|
|
|
100
|
|
|
49,151,796
|
|
|
4,916
|
|
|
(92,694)
|
|
|
80,875,787
|
|
|
431,823,706
|
|
|
12,775,801
|
|
|
525,387,616
|
|
Net income
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
83,732,279
|
|
|
-
|
|
|
83,732,279
|
|
Other
comprehensive
loss - Foreign
currency
translation
adjustment,
net of nil
income taxes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(32,118,459)
|
|
|
(32,118,459)
|
|
Stock based
compensation
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,044,162
|
|
|
-
|
|
|
|
|
|
1,044,162
|
|
Vesting of
unvested shares
|
|
-
|
|
|
-
|
|
|
171,488
|
|
|
17
|
|
|
-
|
|
|
(17)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balance as of
December 31,
2015
|
|
1,000,000
|
|
|
100
|
|
|
49,323,284
|
|
|
4,933
|
|
|
(92,694)
|
|
|
81,919,932
|
|
|
515,555,985
|
|
|
(19,342,658)
|
|
|
578,045,598
|
|
Net income
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
101,612,750
|
|
|
-
|
|
|
101,612,750
|
|
Other
comprehensive
loss - Foreign
currency
translation
adjustment,
net of nil
income taxes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(46,085,173)
|
|
|
(46,085,173)
|
|
Stock based
compensation
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
686,491
|
|
|
-
|
|
|
|
|
|
686,491
|
|
Vesting of
unvested shares
|
|
-
|
|
|
-
|
|
|
188,257
|
|
|
19
|
|
|
-
|
|
|
(19)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balance as of
December 31,
2016
|
|
1,000,000
|
|
|
100
|
|
|
49,511,541
|
|
|
4,952
|
|
|
(92,694)
|
|
|
82,606,404
|
|
|
617,168,735
|
|
|
(65,427,831)
|
|
|
634,259,666
|
|
Net income
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
31,621,734
|
|
|
-
|
|
|
31,621,734
|
|
Other
comprehensive
income
Foreign
currency
translation
adjustment,
net of nil
income taxes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
46,343,088
|
|
|
46,343,088
|
|
Stock based
compensation
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
553,512
|
|
|
-
|
|
|
-
|
|
|
553,512
|
|
Vesting of
unvested
shares
|
|
-
|
|
|
-
|
|
|
216,190
|
|
|
23
|
|
|
-
|
|
|
(23)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balance as of
December 31,
2017
|
|
1,000,000
|
|
|
100
|
|
|
49,727,731
|
|
|
4,975
|
|
|
(92,694)
|
|
|
83,159,893
|
|
|
648,790,469
|
|
|
(19,084,743)
|
|
|
712,778,000
|
|
CHINA XD PLASTICS
COMPANY LIMITED AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
Years Ended
December 31,
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
US$
|
|
|
US$
|
|
|
US$
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
31,621,734
|
|
|
|
101,612,750
|
|
|
|
83,732,279
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net reversal for
doubtful accounts
|
|
|
-
|
|
|
|
-
|
|
|
|
(69,281)
|
Depreciation and
amortization
|
|
|
43,055,976
|
|
|
|
34,244,842
|
|
|
|
27,540,212
|
Stock-based
compensation
|
|
|
553,512
|
|
|
|
686,491
|
|
|
|
1,044,162
|
Amortization of
discount and issuance cost of the Notes
|
|
|
-
|
|
|
|
767,170
|
|
|
|
1,086,010
|
Amortization of
issuance cost of the Syndicate loan facility
|
|
|
3,750,028
|
|
|
|
1,273,438
|
|
|
|
-
|
Change in fair value
of foreign currency option contracts
|
|
|
1,048,599
|
|
|
|
-
|
|
|
|
-
|
Foreign currency
exchange losses (gains)
|
|
|
6,038,799
|
|
|
|
(2,965,949)
|
|
|
|
2,720,131
|
Losses on disposals
of property, plant and equipment
|
|
|
17,509
|
|
|
|
259,104
|
|
|
|
9,036
|
Deferred income tax
benefit
|
|
|
(2,407,706)
|
|
|
|
(2,292,830)
|
|
|
|
(2,380,236)
|
Loss on debt
extinguishment
|
|
|
-
|
|
|
|
18,963,834
|
|
|
|
-
|
Restricted
cash
|
|
|
(31,588,120)
|
|
|
|
(27,269,199)
|
|
|
|
(4,011,349)
|
Accounts
receivable
|
|
|
120,443,715
|
|
|
|
(190,860,210)
|
|
|
|
(40,614,289)
|
Amounts due from a
related party
|
|
|
243,779
|
|
|
|
-
|
|
|
|
(35,937)
|
Inventories
|
|
|
(120,026,438)
|
|
|
|
(3,764,167)
|
|
|
|
(58,103,919)
|
Prepaid expenses and
other current assets
|
|
|
(26,354,886)
|
|
|
|
21,222,125
|
|
|
|
(4,542,796)
|
Value added tax in
long-term prepayments to equipment suppliers
|
|
|
(23,267,330)
|
|
|
|
(575,483)
|
|
|
|
-
|
Other non-current
assets
|
|
|
45,674
|
|
|
|
1,386,939
|
|
|
|
(371,872)
|
Bills
payable
|
|
|
92,130,473
|
|
|
|
122,226,675
|
|
|
|
(8,119,365)
|
Accounts
payable
|
|
|
(108,053,082)
|
|
|
|
82,085,904
|
|
|
|
116,133,982
|
Amounts due to a
related party
|
|
|
(12,155)
|
|
|
|
3,792
|
|
|
|
8,167
|
Income taxes
payable
|
|
|
16,581,508
|
|
|
|
(5,807,300)
|
|
|
|
(3,889,710)
|
Accrued expenses and
other current liabilities
|
|
|
18,609,923
|
|
|
|
(75,664,932)
|
|
|
|
86,963,823
|
Deferred
income
|
|
|
(4,630,632)
|
|
|
|
(304,465)
|
|
|
|
3,371,249
|
Other non-current
liabilities
|
|
|
64,895,667
|
|
|
|
9,255,439
|
|
|
|
11,098,323
|
Net cash provided by operating
activities
|
|
|
82,696,547
|
|
|
|
84,483,968
|
|
|
|
227,370,738
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
maturity of time deposits
|
|
|
475,873,199
|
|
|
|
515,088,058
|
|
|
|
463,771,799
|
Purchase of time
deposits
|
|
|
(564,710,760)
|
|
|
|
(475,315,245)
|
|
|
|
(474,254,312)
|
Purchase of land use
rights
|
|
|
(8,279,334)
|
|
|
|
-
|
|
|
|
(13,931,804)
|
Purchases of and
deposits for property, plant and equipment
|
|
|
(456,474,007)
|
|
|
|
(210,840,098)
|
|
|
|
(267,427,681)
|
Refund of deposit
from an equipment supplier
|
|
|
280,814,137
|
|
|
|
-
|
|
|
|
-
|
Deposits for
acquisition of equity
|
|
|
(11,937,192)
|
|
|
|
|
|
|
|
|
Government grant
related to the construction of Sichuan plant
|
|
|
29,382,885
|
|
|
|
22,478,569
|
|
|
|
11,499,000
|
Net cash used in investing
activities
|
|
|
(255,331,072)
|
|
|
|
(148,588,716)
|
|
|
|
(280,342,998)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from bank
borrowings
|
|
|
842,571,025
|
|
|
|
687,164,318
|
|
|
|
504,218,741
|
Repayment of bank
borrowings
|
|
|
(682,921,893)
|
|
|
|
(537,809,334)
|
|
|
|
(339,528,477)
|
Redemption of notes
payable
|
|
|
-
|
|
|
|
(165,366,000)
|
|
|
|
-
|
Proceeds from
Syndicate loan facility
|
|
|
-
|
|
|
|
180,000,000
|
|
|
|
-
|
Proceeds from early
exercise of options
|
|
|
-
|
|
|
|
-
|
|
|
|
121,725
|
Release of restricted
cash as collateral for bank borrowings
|
|
|
92,186,142
|
|
|
|
31,375,326
|
|
|
|
-
|
Placement of
restricted cash as collateral for bank borrowings
|
|
|
(68,227,246)
|
|
|
|
(66,757,459)
|
|
|
|
(33,077,094)
|
Payments of issuance
cost of bank borrowings
|
|
|
-
|
|
|
|
(6,770,000)
|
|
|
|
-
|
Net cash provided by financing
activities
|
|
|
183,608,028
|
|
|
|
121,836,851
|
|
|
|
131,734,895
|
Effect of foreign
currency exchange rate changes on cash and cash
equivalents
|
|
|
11,332,263
|
|
|
|
(9,574,143)
|
|
|
|
(4,290,762)
|
Net increase in
cash and cash equivalents
|
|
|
22,305,766
|
|
|
|
48,157,960
|
|
|
|
74,471,873
|
Cash and cash
equivalents at beginning of year
|
|
|
168,086,445
|
|
|
|
119,928,485
|
|
|
|
45,456,612
|
Cash and cash
equivalents at end of year
|
|
|
190,392,211
|
|
|
|
168,086,445
|
|
|
|
119,928,485
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid, net of
US$2,893,630, US$ 2,562,026and US$ 231,356
capitalized for the years ended December 31, 2017, 2016 and
2015,
respectively
|
|
|
38,695,738
|
|
|
|
45,782,010
|
|
|
|
40,136,978
|
Income taxes
paid
|
|
|
13,030,643
|
|
|
|
19,521,472
|
|
|
|
8,982,167
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Government grant
related to construction in the form of repayment of bank
loans on behalf of the Company by the government
|
|
|
-
|
|
|
|
-
|
|
|
|
38,118,231
|
Government grant
related to the construction of Sichuan plant in the form of
restricted cash (note 2(e))
|
|
|
1,537,935
|
|
|
|
-
|
|
|
|
11,117,817
|
Accrual for purchase
of equipment
|
|
|
5,144,134
|
|
|
|
94,031,275
|
|
|
|
41,251,663
|
CHINA XD PLASTICS
COMPANY LIMITED
|
Reconcilation of
Net Income to EBITDA
|
(Amounts expressed
in United States Dollars)
|
|
Three-Month Period
Ended
December
31,
|
Years Ended
December 31,
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Net income
-GAAP
|
$
(20,479,705)
|
$
36,722,819
|
$
31,621,734
|
$
101,612,750
|
Interest
expense
|
12,504,933
|
8,966,648
|
45,370,872
|
41,370,432
|
Provision for income
taxes
|
79,788,408
|
2,335,447
|
90,524,379
|
17,422,819
|
Depreciation and
amortization expense
|
11,055,793
|
10,207,125
|
43,055,976
|
34,244,842
|
EBITDA
|
82,869,429
|
58,232,039
|
210,572,961
|
194,650,843
|
View original
content:http://www.prnewswire.com/news-releases/specialty-chemical-company-china-xd-plastics-announces-fourth-quarter-and-fiscal-year-2017-financial-results-300614554.html
SOURCE China XD Plastics Company Limited