HARBIN, China, May 13 /PRNewswire-Asia-FirstCall/ -- China XD
Plastics Company Ltd. ('China XD Plastics' or the 'Company'),
(OTC:CXDC) (BULLETIN BOARD: CXDC) , as the largest Chinese
manufacturer engaged in the development, manufacturing, and
distribution of modified plastics primarily for use in automotive
applications, today reported financial results for the first
quarter of 2009. First Quarter 2009 Highlights -- Revenue was $26.4
million, an increase of 154.2% from the first quarter of 2008 --
Gross profit was $5.8 million, an increase of 144.0% from the first
quarter of 2008 -- Gross profit margin was 21.8%, compared to 22.7%
in the first quarter of 2008 -- Income from operations was $4.4
million, up 114.2% from the first quarter of 2008 -- Net income was
$4.0 million, up 91.8% from $2.1 million in the first quarter of
2008 -- Diluted earnings per share was $0.10 'We are extremely
pleased to report our strong financial performance in the first
quarter as a public company. We have achieved record revenue and
during the quarter despite the global economic slowdown, a
testament to the strength of China's economy and our leadership
position within the modified plastics industry for automotive
applications,' said Mr. Jie Han, Chairman and Chief Executive
Officer of China XD Plastics. 'During the first quarter we have
continued to execute our strategy of leveraging our research and
development capabilities to launch new products and gradually
expanding our capacity to meet the increasing demand from the
domestic market. We remain optimistic on the outlook of our
business and look forward to reporting positive results in the
quarters ahead.' First Quarter 2009 Results Revenues for the first
quarter of 2009 were $26.4 million, up 154.2% compared to $10.4
million for the same period of 2008. The increase in revenue is
primarily attributable to the increase in sales volume to 17,899
tons compared to 6,328 tons during first quarter of 2008 driven by
increasing domestic demand for modified plastics for automotive
applications and strengthened by the stimulus initiatives for
automobile consumption implemented by the government in China.
Gross profit for the first quarter 2009 was $5.8 million, up 144.0%
from $2.4 million in the first quarter 2008. Gross margin is 21.8%
compared to 22.7% in the same period last year due to the slight
increase in sales of lower margin products as a percentage of total
revenue in response to increasing demand for modified plastics use
by economy vehicle models in China which benefited from the
economic stimulus plan by the Chinese government. The average
selling price for the first quarter of 2009 was $1,407 per ton
compared to $1,747 per ton in the same period of last year. Selling
expenses for the first quarter of 2009 were $0.05 million or 0.2%
of revenue, up from $0.02 million, or 0.02% of revenue in the same
period last year due to the Company's increased efforts to grow its
customer base. General and administrative (G&A) expenses were
$1.0 million, or 4.0% of revenue, up from $0.2 million, or 2.2% of
revenue for the same period of last year. The increase in G&A
expenses reflects increased salary expense, depreciation expense
and other expenses associated with the reverse merger and listing
in the U.S. Research and Development ('R&D') expenses increased
323.8% to $0.3 million, or 1.1% of revenue compared to $0.07
million, or 0.7% of revenue in the same period last year. The
increase in R&D expenses was primarily due to efforts in new
product development as the Company hired more researchers and
increased raw material usage. Operating income for the first
quarter of 2009 was $4.4 million, up 114.2% from $2.0 million in
the same period a year ago. Operating margin was 16.6% compared to
19.7% in the first quarter of 2008 due to the increase in operating
expenses. First quarter interest expense of $0.4 million was
directly associated with the Company's short term debts. An
interest income of $0.03 million was recorded in the first quarter
of 2008. Net income in the first quarter of 2009 was $4.0 million,
up 91.8% from $2.1 million in the same period last year. Fully
diluted earnings per share for the first quarter of 2009 were
$0.10. Financial Condition As of March 31, 2009, China XD plastics
had $1.9 million in cash and cash equivalents, $8.5 million in
working capital and a current ratio of 1.3. Shareholder's equity as
of March 31, 2009 stood at $28.0 million compared to $24.1 million
at the end of 2008. Recent Events On April 14, 2009, China XD
Plastics announced it was recertified for the ISO/TS16949:2002
certification of quality management system. On April 17, 2009,
China XD Plastics announced the Company's wholly owned subsidiary,
Harbin Xinda Macromolecule Material Research Institute ('Xinda
Research Institute'), is collaborating with Harbin Institute of
Technology on the pre-research of pre-foamed modified polypropylene
("PP") and has successfully completed a small trial testing. On
April 23, 2009, China XD Plastics announced that the Company
expects to increase its annual production capacity to 70,000 tons
with the addition of 7 production lines acquired at the end of
2008. On May 1, 2009, China XD Plastics announced the appointment
of Taylor Zhang as Chief Financial Officer effective immediately.
Business Outlook The Company plans to increase its annual
production capacity to 70,000 tons during 2009, up from 40,000 tons
in 2008 and 25,000 tons in 2007. The automotive industry
environment in China remains healthy, despite the overall economic
slowdown worldwide. During the first quarter of 2009, total number
of automobiles sold in China reached 2.7 million according to the
statistics data provided by the China Association of Automobile
Manufacturers. The Company expects to see continued growth of the
auto industry in China, which is expected to contribute to a
further increase in the demand for the Company's products. For
2009, the Company expects annual revenues between the range of
$110.0 million to $130.0 million, and annual net income in the
range of $17.0 million to $20.0 million. 'We continue to see
tremendous opportunity for the profitable growth of our business in
the quarters and years ahead, driven by the growth in the Chinese
economy in general as well as by our ability to leverage our
capabilities to grab market share from imports,' said Mr. Jie Han,
Chairman and Chief Executive Officer of China XD Plastics. 'In
fiscal year 2009, we will continue to drive growth through the
launch of new product offerings and by gradual expansion of our
capacity in line with the expected growth of the Chinese automotive
industry.' 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 technology collaboration with well-known
scientists from leading Universities in China. At present, Xinda
manufactures approximately 145 types of automobile-specific
modified plastic products, 117 of which 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 March 31, 2009 2008 Sales $26,391,889 $10,382,422 Cost
of sales (20,635,575) (8,023,576) Gross profit 5,756,314 2,358,846
Operating Expenses Research and development expenses 289,155 68,224
Selling expenses 45,651 17,822 General and Administrative expenses
1,045,929 230,278 Total Operating Expenses 1,380,735 316,324
Operating Income 4,375,579 2,042,522 Other Income (expenses)
Interest Income (expenses) (355,606) 26,816 Other Income (111)
25,168 Other expense (533) -- Total Other expense (356,250) 51,985
Income before income taxes 4,019,329 2,094,507 Provision for income
taxes 2,685 -- Net Income $4,016,644 $2,094,507 Other Comprehensive
Income Foreign Currency Translation Adjustment (37,617) 396,156
Comprehensive Income $3,979,027 $2,490,663 Basic and Diluted Income
per common share Basic $4.98 $5.16 Diluted $0.10 $5.16 Weighted
average common share outstanding Basic 805,802 405,802 Diluted
38,999,874 405,802 CHINA XD PLASTICS COMPANY LIMITED CONDENSED
CONSOLIDATED BALANCE SHEETS March 31, December 31, 2009 2008
(Unaudited) (audited) ASSETS Current assets: Cash and cash
equivalents $1,852,532 $3,869,035 Restricted Cash 4,360,805
3,664,346 Notes Receivable 51,696 303,437 Accounts receivable - net
of allowance for bad debts of $99,508 and $99,669, respectively
5,854,990 11,234,507 Other receivables 28,171 21,917 Inventories
15,550,381 12,438,782 Due from related parties 1,702 -- Advance to
employees 218,089 92,329 Advances to suppliers 10,365,041
13,131,074 Total current assets 38,283,407 44,755,427 Property,
plant and equipment, net 18,885,891 19,332,712 Other assets:
Deferred charges 446,359 378,073 Intangible assets, net 245,887
247,681 Total other assets 692,246 625,754 Total Assets $57,861,544
$64,713,893 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Short term loans $18,291,969 $20,520,337 Bank
acceptance notes payable 9,804,495 8,061,561 Accounts payable
232,239 113,232 Other payable 264,576 106,232 Accrued expenses
395,650 820,625 Taxes payable 132,005 17,777 Due to related party
420,846 7,542,950 Deferred revenue 279,354 3,469,796 Total current
liabilities 29,821,134 40,652,510 Stockholders' equity Common
Stock, $0.0001 par value, 100,000,000 shares authorized, 805,802
and 405,402 shares issued and outstanding as of March 31, 2009
& December 31, 2008, respectively 81 81 Series A Preferred
Stock, $0.0001 par value, 10,000,000 shares authorized, 1,000,000
and nil shares issued and outstanding as of March 31, 2009 and
December 31, 2008, respectively 100 100 Series B Preferred Stock,
$0.0001 par value, 10,000,000 shares authorized, 1,000,000 and nil
shares issued and outstanding as of March 31, 2009 and December 31,
2008, respectively 100 100 Additional Paid-in-Capital 2,482,786
2,482,786 Retained earnings 24,067,785 20,051,141 Accumulated other
comprehensive income 1,489,558 1,527,175 Total Stockholders' equity
28,040,410 24,061,383 Total Liabilities and Stockholders' Equity
$57,861,544 $64,713,893 CHINA XD PLASTICS COMPANY LIMITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Three
Months ended March 31, 2009 2008 Cash flows from operating
activities Net income $4,016,644 $2,136,711 Adjustments to
reconcile net income to net cash provided by Operating activities:
Depreciation & amortization 445,890 168,382 Changes in assets
and liabilities: (Increase) decrease in - Restricted cash (702,135)
1,619,610 Accounts receivable and other receivables 5,352,875
1,370,040 Inventories (3,130,573) (639,503) Prepaid expenses --
21,789 Notes receivables 251,150 (19,966) Advance to employees
(125,875) -- Advances to suppliers 2,743,624 (1,397,849) Deferred
charge (68,873) -- Increase (decrease) in - Accounts payable and
other payable 277,662 1,890,051 Accrued expenses (423,476) 19,287
Tax payable 114,212 (1,388,948) Deferred revenue (3,183,553)
502,720 Net cash provided by operating activities 5,567,572
4,282,324 Cash flows from investing activities Purchase of fixed
assets (29,175) (4,452,986) Collection on due from related party
(10,616) 107,488 Net cash used in investing activities (39,791)
(4,345,498) Cash flows from financing activities Proceeds from
(Repayment to) Short Term Loan (2,194,173) 4,607,512 Proceeds from
bank acceptance notes payable 1,755,338 -- Repayment of bank
acceptance notes payable -- (3,350,918) Proceeds from (Repayment
to) related party Loan (7,098,504) 69,811 Net cash provided by
(used in) financing activities (7,537,339) 1,326,405 Effect of
exchange rate changes on cash and cash equivalents (6,945) 30,587
Net increase(decrease) in cash and cash equivalents (2,016,503)
1,293,817 Cash and cash equivalents, beginning of period 3,869,035
87,455 Cash and cash equivalents, end of period $1,852,532
$1,381,272 Supplemental disclosures of cash flow information:
Interest paid $ 389,638 $ 83,079 Income taxes paid $ 8,864 $ -- For
more information, please contact: China XD Plastics Company Ltd.
Mr. Taylor Zhang, Chief Financial Officer Tel: +1-212-747-1118 (New
York) Mr. Allan Lao, IR Director Tel: +86-451-84346600 (China)
Email: Web: http://www.chinaxd.net/ CCG Investor Relations Mr.
Crocker Coulson, President Tel: +1-646-213-1915 (New York) Mr. Ed
Job, CFA Tel: +1-646-213-1914 (New York) Email: Web:
http://www.ccgirasia.com/ DATASOURCE: China XD Plastics Company
Ltd. CONTACT: Mr. Taylor Zhang, Chief Financial Officer, China XD
Plastics Company Ltd. at +1-212-747-1118 (New York); Mr. Allan Lao,
IR Director at +86-451-8434-6600 (China) or ; Or Mr. Crocker
Coulson, President, CCG Investor Relations at +1-646-213-1915 (New
York); Ed Job, CFA, +1-646-213-1914 (New York) or Web site:
http://www.chinaxd.net/
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