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Share Name | Share Symbol | Market | Type |
---|---|---|---|
China XD Plastics Company Ltd | NASDAQ:CXDC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.59 | 0.555 | 0.615 | 0 | 01:00:00 |
Nevada
|
04-3836208
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
|
PAGE
|
|
PART I. FINANCIAL INFORMATION
|
3
|
|
|
|
|
Item 1. Financial Statements
|
3
|
|
|
|
|
|
Unaudited Condensed Consolidated Balance Sheets
|
3
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Comprehensive Income
|
4
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Cash Flows
|
5
|
|
|
|
|
Notes to the Unaudited Condensed Consolidated Financial Statements
|
6
|
|
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
16
|
|
|
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
26
|
|
|
|
|
Item 4. Controls and Procedures
|
27
|
|
|
|
|
PART II. OTHER INFORMATION
|
27
|
|
|
|
|
Item 1. Legal Proceedings
|
27
|
|
|
|
|
Item 1A. Risk Factors
|
27
|
|
|
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
28
|
|
|
|
|
Item 3. Defaults Upon Senior Securities
|
28
|
|
|
|
|
Item 4. Mine Safety Disclosures
|
28
|
|
|
|
|
Item 5. Exhibits
|
28
|
|
|
|
|
Signatures
|
29
|
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
US$
|
US$
|
US$
|
US$
|
||||||||||||
|
|
|
|
|
||||||||||||
Revenues
|
264,208,995
|
202,150,358
|
487,789,670
|
373,117,929
|
||||||||||||
Cost of revenues
|
(211,909,052
|
)
|
(164,965,762
|
)
|
(388,841,389
|
)
|
(306,777,202
|
)
|
||||||||
Gross profit
|
52,299,943
|
37,184,596
|
98,948,281
|
66,340,727
|
||||||||||||
|
||||||||||||||||
Selling expenses
|
(135,625
|
)
|
(47,218
|
)
|
(257,953
|
)
|
(109,992
|
)
|
||||||||
General and administrative expenses
|
(4,553,144
|
)
|
(2,855,659
|
)
|
(8,349,508
|
)
|
(6,339,574
|
)
|
||||||||
Research and development expenses
|
(13,355,881
|
)
|
(5,775,769
|
)
|
(21,986,615
|
)
|
(10,786,688
|
)
|
||||||||
Total operating expenses
|
(18,044,650
|
)
|
(8,678,646
|
)
|
(30,594,076
|
)
|
(17,236,254
|
)
|
||||||||
|
||||||||||||||||
Operating income
|
34,255,293
|
28,505,950
|
68,354,205
|
49,104,473
|
||||||||||||
|
||||||||||||||||
Interest income
|
3,454,649
|
1,470,113
|
6,490,014
|
2,539,717
|
||||||||||||
Interest expense
|
(11,614,261
|
)
|
(3,374,738
|
)
|
(20,194,238
|
)
|
(6,310,724
|
)
|
||||||||
Foreign currency exchange gains (losses)
|
406,479
|
877,423
|
(72,711
|
)
|
1,366,616
|
|||||||||||
Losses on foreign currency forward contracts
|
(934,765
|
)
|
-
|
(934,765
|
)
|
-
|
||||||||||
Change in fair value of warrants liability
|
(906,006
|
)
|
400,007
|
(1,068,745
|
)
|
420,331
|
||||||||||
Government grant
|
12,974
|
1,172
|
1,324,213
|
210,091
|
||||||||||||
Total non-operating expense, net
|
(9,580,930
|
)
|
(626,023
|
)
|
(14,456,232
|
)
|
(1,773,969
|
)
|
||||||||
|
||||||||||||||||
Income before income taxes
|
24,674,363
|
27,879,927
|
53,897,973
|
47,330,504
|
||||||||||||
|
||||||||||||||||
Income tax expense
|
(4,837,703
|
)
|
(7,073,314
|
)
|
(12,065,262
|
)
|
(12,073,036
|
)
|
||||||||
|
||||||||||||||||
Net income
|
19,836,660
|
20,806,613
|
41,832,711
|
35,257,468
|
||||||||||||
|
||||||||||||||||
Earnings per common share:
|
||||||||||||||||
Basic and diluted
|
0.30
|
0.32
|
0.64
|
0.55
|
||||||||||||
|
||||||||||||||||
Net Income
|
19,836,660
|
20,806,613
|
41,832,711
|
35,257,468
|
||||||||||||
|
||||||||||||||||
Other comprehensive income (loss)
|
||||||||||||||||
Foreign currency translation adjustment, net of nil income taxes
|
1,346,532
|
3,758,011
|
(12,842,203
|
)
|
4,639,287
|
|||||||||||
|
||||||||||||||||
Comprehensive income
|
21,183,192
|
24,564,624
|
28,990,508
|
39,896,755
|
|
Six-Month Period Ended June 30,
|
|||||||
|
2014
|
2013
|
||||||
|
US$
|
US$
|
||||||
Cash flows from operating activities:
|
|
|
||||||
Net cash provided by operating activities
|
61,291,114
|
38,925,612
|
||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturity of time deposits
|
259,984,756
|
56,618,325
|
||||||
Purchase of time deposits
|
(362,130,254
|
)
|
(182,063,524
|
)
|
||||
Purchases of property, plant and equipment
|
(86,442,465
|
)
|
(13,419,444
|
)
|
||||
Net cash used in investing activities
|
(188,587,963
|
)
|
(138,864,643
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from bank borrowings
|
422,150,363
|
226,906,170
|
||||||
Repayments of bank borrowings
|
(383,003,049
|
)
|
(146,861,566
|
)
|
||||
Release of restricted cash
|
3,243,383
|
1,629,354
|
||||||
Placement of restricted cash as collateral for bank borrowings
|
(20,595,485
|
)
|
(888,846
|
)
|
||||
Proceeds from the exercise of Series A investor warrants
|
596,740
|
- | ||||||
Proceeds from issuance of the Notes
|
148,396,175
|
-
|
||||||
Payment of issuance costs of the Notes
|
(3,970,357
|
)
|
-
|
|||||
Net cash provided by financing activities
|
166,817,770
|
80,785,112
|
||||||
|
||||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(2,211,225
|
)
|
1,343,214
|
|||||
Net increase (decrease) in cash and cash equivalents
|
37,309,696
|
(17,810,705
|
)
|
|||||
|
||||||||
Cash and cash equivalents at beginning of period
|
95,545,904
|
83,822,602
|
||||||
Cash and cash equivalents at end of period
|
132,855,600
|
66,011,897
|
||||||
|
||||||||
Supplemental disclosure of cash flow information:
|
||||||||
Interest paid
|
12,985,268
|
4,476,797
|
||||||
Income taxes paid
|
23,029,798
|
11,108,922
|
||||||
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
RMB denominated bank deposits with:
|
|
|
||||||
Financial Institutions in the PRC
|
485,607,994
|
389,522,815
|
||||||
U.S. dollar denominated bank deposits with:
|
||||||||
Financial Institution in the U.S.
|
860,684
|
84,011
|
||||||
Financial Institutions in the PRC
|
32,201,654
|
-
|
||||||
Financial Institution in Hong Kong Special Administrative Region (“Hong Kong SAR”)
|
167,424
|
847,559
|
||||||
Financial Institution in Macau Special Administrative Region (“Macau SAR”)
|
27,025,955
|
-
|
||||||
Financial Institution in Dubai, United Arab Emirates (“UAE”)
|
593,608
|
-
|
||||||
Euro denominated bank deposits with:
|
||||||||
Financial institution in Hong Kong SAR
|
92,954
|
143,890
|
||||||
HK dollar denominated bank deposits with:
|
||||||||
Financial institution in Hong Kong
|
3,844
|
-
|
||||||
Dirham denominated bank deposits with:
|
||||||||
Financial institution in Dubai, UAE
|
295,678
|
-
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
|
|
|
||||||
Accounts receivable
|
191,339,039
|
282,466,580
|
||||||
Allowance for doubtful accounts
|
(130,955
|
)
|
(145,761
|
)
|
||||
Accounts receivable, net
|
191,208,084
|
282,320,819
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
Raw materials
|
206,779,697
|
135,120,514
|
||||||
Work in progress
|
188,117
|
2,551,621
|
||||||
Finished goods
|
20,983,593
|
7,213,553
|
||||||
Total inventories
|
227,951,407
|
144,885,688
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
|
|
|
||||||
Advances to suppliers
|
4,965,343
|
920,277
|
||||||
Value added taxes receivables
|
2,586,055
|
3,924,767
|
||||||
Interest receivable
|
3,580,703
|
2,405,666
|
||||||
Others
|
1,073,702
|
1,167,433
|
||||||
Total prepaid expenses and other current assets
|
12,205,803
|
8,418,143
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
|
|
|
||||||
Machinery, equipment and furniture
|
207,858,010
|
209,921,805
|
||||||
Motor vehicles
|
1,545,923
|
1,580,877
|
||||||
Workshops and buildings
|
78,685,983
|
62,217,256
|
||||||
Construction in progress
|
7,110,797
|
4,807,666
|
||||||
Total property, plant and equipment
|
295,200,713
|
278,527,604
|
||||||
Less accumulated depreciation
|
(54,629,452
|
)
|
(44,685,869
|
)
|
||||
Property, plant and equipment, net
|
240,571,261
|
233,841,735
|
|
Three-Month Period Ended
June 30,
|
|||||||
|
2014
|
2013
|
||||||
|
US$
|
US$
|
||||||
|
|
|
||||||
Cost of revenues
|
4,638,160
|
4,780,019
|
||||||
General and administrative expenses
|
319,502
|
85,147
|
||||||
Research and development expenses
|
527,963
|
427,981
|
||||||
Total depreciation expense
|
5,485,625
|
5,293,147
|
|
Six-Month Period Ended
June 30,
|
|||||||
|
2014
|
2013
|
||||||
|
US$
|
US$
|
||||||
|
|
|
||||||
Cost of revenues
|
9,508,815
|
8,943,524
|
||||||
General and administrative expenses
|
621,783
|
726,013
|
||||||
Research and development expenses
|
959,972
|
795,964
|
||||||
Total depreciation expense
|
11,090,570
|
10,465,501
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
Payables for purchase of property, plant and equipment
|
5,944,303
|
44,510,678
|
||||||
Accrued freight expenses
|
2,444,510
|
5,010,341
|
||||||
Accrued interest expenses
|
8,431,739
|
1,171,203
|
||||||
Others
|
3,992,564
|
5,200,782
|
||||||
Total accrued expenses and other current liabilities
|
20,813,116
|
55,893,004
|
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
|
US$
|
US$
|
||||||
|
|
|
|
||||||
Unsecured loans
|
|
77,374,428
|
169,027,897
|
||||||
Loans secured by accounts receivable
|
|
88,658,199
|
100,434,445
|
||||||
Loans secured by bank deposits
|
|
1,940,000
|
36,960,867
|
||||||
Current portion of long-term bank loans (note b)
|
|
8,059,836
|
-
|
||||||
|
|
||||||||
Total short-term bank loans, including current portion of long-term bank loans
|
(i)
|
176,032,463
|
306,423,209
|
||||||
|
|
||||||||
Interest-free loan secured by land use rights
|
(ii)
|
8,059,836
|
8,259,411
|
||||||
|
|
||||||||
Total short-term loans, including current portion of long-term bank loans
|
|
184,092,299
|
314,682,620
|
(i) | As of June 30, 2014 and December 31, 2013, the Company’s short-term bank loans (including the current portion of long-term bank loans) bear a weighted average interest rate of 5.8% and 5.9% per annum, respectively. All short-term bank loans mature at various times within one year and contain no renewal terms. |
(ii) | The Company obtained an interest-free loan in the amount of RMB50.0 million (equivalent to US$8.1 million) from a company affiliated with the People’s Government of Shunqing District, Nanchong City, Sichuan Province (“Shunqing Government”). The loan was issued to support the Company’s construction of a production plant in Sichuan. The loan will be secured by a land use right to be granted to the Company in connection with the construction. The Company repaid the loan in July 2014. |
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
Secured loans
|
70,000,000
|
-
|
||||||
Unsecured loans
|
100,425,559
|
-
|
||||||
Less: current portion
|
(8,059,836
|
) |
-
|
|||||
Total long-term bank loans, excluding current portion
|
162,365,723
|
-
|
Year
|
Redemption Price
|
|||
|
|
|||
2017
|
105.875
|
%
|
||
2018
|
102.938
|
%
|
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
US$
|
US$
|
US$
|
US$
|
||||||||||||
Costs and expenses resulting from transactions with related parties:
|
|
|
|
|
||||||||||||
Rental expenses for plant and office spaces
|
195,677
|
200,218
|
395,588
|
398,270
|
|
June 30, 2014
|
December 31, 2013
|
||||||
|
US$
|
US$
|
||||||
Amounts due from a related party:
|
|
|
||||||
Prepaid rent expenses to Xinda High-Tech
|
-
|
225,752
|
||||||
Prepaid rent expenses to Mr. Han’s son
|
8,060
|
-
|
||||||
Total
|
8,060
|
225,752
|
Amounts due to a related party:
|
|
|
||||||
Rent payable to Xinda High-Tech
|
54,710
|
-
|
Premise Leased
|
Area (M
2
)
|
Annual Rental Fee (US$)
|
Period of Lease
|
||||||
Plant and office building
|
20,250
|
664,878
|
Between May 1, 2012 and December 31, 2013
|
||||||
Office building
|
250
|
8,108
|
Between January 1, 2012 and December 31, 2013
|
||||||
Office building
|
3,394
|
110,080
|
Between May 1, 2012 and April 30, 2013
|
||||||
Office building
|
3,394
|
110,080
|
Between May 1, 2013 and December 31, 2013
|
||||||
Office building
|
23,894
|
774,959
|
Between January 1, 2014 and December 31, 2018
|
Warrants
|
Exercise Price
|
Number of Warrants
Outstanding
|
Remaining
Contractual Life
|
|||||||||
|
US$
|
|
Years
|
|||||||||
Series A investor warrants
|
4.58
|
438,038
|
0.42
|
|||||||||
Series A placement agent warrants
|
5.50
|
117,261
|
0.42
|
|||||||||
Total
|
555,299
|
|
|
Series A Investor
Warrants
|
|
|
Series A Placement
Agent Warrants
|
|
Volatility
|
|
78.3%
|
|
|
78.3%
|
|
Expected dividends yield
|
|
0%
|
|
|
0%
|
|
Fair value of underlying common stock (per share)
|
|
8.39
|
|
|
8.39
|
|
Risk-free interest rate (per annum)
|
|
0.08%
|
|
|
0.08%
|
|
|
Series B Preferred Stock
|
Common Stock
|
|
|
|
Accumulated
Other
|
Total
|
|||||||||||||||||||||||||||||
|
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Treasury Stock
|
Additional Paid-in
Capital
|
Retained
Earnings
|
Comprehensive
Income
|
Stockholders’
Equity
|
|||||||||||||||||||||||||||
|
|
US$
|
|
US$
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance as of January 1, 2014
|
1,000,000
|
100
|
47,875,133
|
4,789
|
(92,694
|
)
|
76,341,659
|
311,047,337
|
25,043,914
|
412,345,105
|
||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
41,832,711
|
-
|
41,832,711
|
|||||||||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(12,842,203
|
)
|
(12,842,203
|
)
|
|||||||||||||||||||||||||
Exercise of Series A investor warrants
|
570,568
|
57
|
596,683
|
596,740
|
||||||||||||||||||||||||||||||||
Vesting of unvested shares
|
-
|
-
|
674,205
|
67
|
-
|
(67
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Stock based
compensation
|
-
|
-
|
-
|
-
|
-
|
532,939
|
-
|
-
|
532,939
|
|||||||||||||||||||||||||||
Balance as of June 30, 2014
|
1,000,000
|
100
|
49,119,906
|
4,913
|
(92,694
|
)
|
77,471,214
|
352,880,048
|
12,201,711
|
442,465,292
|
|
Number of Nonvested
Shares
|
Weighted Average
Grant date Fair Value
|
||||||
|
|
US$
|
||||||
Outstanding as of December 31, 2013
|
1,090,575
|
4.89
|
||||||
Vested
|
(674,205
|
)
|
4.32
|
|||||
Forfeited
|
(27,730
|
)
|
4.40
|
|||||
Outstanding as of June 30, 2014
|
388,640
|
4.37
|
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
US$
|
US$
|
US$
|
US$
|
||||||||||||
Net income
|
19,836,660
|
20,806,613
|
41,832,711
|
35,257,468
|
||||||||||||
Less:
|
||||||||||||||||
Earnings allocated to participating Series D convertible
preferred stock
|
(4,869,197
|
)
|
(5,195,421
|
)
|
(10,284,553
|
)
|
(8,803,806
|
)
|
||||||||
Earnings allocated to participating nonvested shares
|
(119,614
|
)
|
(93,518
|
)
|
(352,376
|
)
|
(183,776
|
)
|
||||||||
Net income for basic and diluted earnings per share
|
14,847,849
|
15,517,674
|
31,195,782
|
26,269,886
|
||||||||||||
|
||||||||||||||||
Denominator
|
||||||||||||||||
Denominator for basic and diluted earnings per share
|
48,789,480
|
47,788,772
|
48,532,252
|
47,742,778
|
||||||||||||
|
||||||||||||||||
Earnings per share:
|
||||||||||||||||
Basic and diluted
|
0.30
|
0.32
|
0.64
|
0.55
|
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
|
|
|
|
||||||||||||
Shares issuable upon conversion of Series D convertible preferred stock
|
16,000,000
|
16,000,000
|
16,000,000
|
16,000,000
|
||||||||||||
Shares issuable upon exercise of Series A investor warrant
|
438,038
|
1,320,696
|
438,038
|
1,320,696
|
||||||||||||
Shares issuable upon exercise of Series A placement agent warrant
|
117,261
|
117,261
|
117,261
|
117,261
|
||||||||||||
Shares issuable upon exercise of Series C placement agent warrant
|
-
|
166,667
|
-
|
166,667
|
||||||||||||
Shares issuable upon exercise of stock options
|
-
|
148,500
|
-
|
148,500
|
(1) | Lease commitments |
|
US$
|
|||
Period from July 1, 2014 to December 31, 2014
|
567,204
|
|||
Years ending December 31,
|
||||
2015
|
1,116,039
|
|||
2016
|
995,142
|
|||
2017
|
839,327
|
|||
2018
|
774,959
|
|||
2019 and thereafter
|
-
|
(2)
|
Plant construction
|
(3)
|
Equipment acquisition
|
|
|
(in millions, except percentage)
|
Three Month Period Ended
|
|
Six Month Period Ended
|
|
||||||||||||||||||||
|
June 30,
|
Change
|
June 30,
|
Change
|
||||||||||||||||||||
|
2014
|
2013
|
%
|
2014
|
2013
|
%
|
||||||||||||||||||
Revenues
|
264.2
|
202.2
|
30.7
|
%
|
487.8
|
373.1
|
30.7
|
%
|
||||||||||||||||
Cost of revenues
|
(211.9
|
)
|
(165.0
|
)
|
28.4
|
%
|
(388.9
|
)
|
(306.8
|
)
|
26.8
|
%
|
||||||||||||
Gross profit
|
52.3
|
37.2
|
40.6
|
%
|
98.9
|
66.3
|
49.2
|
%
|
||||||||||||||||
Total operating expenses
|
(18.0
|
)
|
(8.7
|
)
|
106.9
|
%
|
(30.6
|
)
|
(17.2
|
)
|
77.9
|
%
|
||||||||||||
Operating income
|
34.3
|
28.5
|
20.4
|
%
|
68.3
|
49.1
|
39.1
|
%
|
||||||||||||||||
Income before income taxes
|
24.7
|
27.9
|
(11.5
|
)%
|
53.8
|
47.3
|
13.7
|
%
|
||||||||||||||||
Income tax expense
|
(4.9
|
)
|
(7.1
|
)
|
(31.0
|
)%
|
(12.0
|
)
|
(12.0
|
)
|
(0.0
|
)%
|
||||||||||||
Net income
|
19.8
|
20.8
|
(4.8
|
)%
|
41.8
|
35.3
|
18.4
|
%
|
(in millions, except percentage)
|
Revenues
For the Three-Month Period Ended June 30,
|
|
|
|||||||||||||||||||||
|
2014
|
2013
|
|
|
||||||||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
Change in
Amount
|
Change in
%
|
||||||||||||||||||
Modified Polyamide 66 (PA66)
|
53.3
|
20.2
|
%
|
36.9
|
18.3
|
%
|
16.4
|
44.4
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polyamide 6 (PA6)
|
62.6
|
23.7
|
%
|
39.9
|
19.7
|
%
|
22.7
|
56.9
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Plastic Alloy
|
79.0
|
29.9
|
%
|
53.2
|
26.3
|
%
|
25.8
|
48.5
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polypropylene (PP)
|
55.6
|
21.1
|
%
|
60.8
|
30.1
|
%
|
(5.2
|
)
|
(8.6
|
)%
|
||||||||||||||
|
||||||||||||||||||||||||
Modified Acrylonitrile butadiene styrene (ABS)
|
9.6
|
3.6
|
%
|
9.5
|
4.7
|
%
|
0.1
|
1.1
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Polyoxymethylenes (POM)
|
0.9
|
0.3
|
%
|
1.4
|
0.7
|
%
|
(0.5
|
)
|
(35.7
|
)%
|
||||||||||||||
|
||||||||||||||||||||||||
Polyphenylene Oxide (PPO)
|
3.2
|
1.2
|
%
|
-
|
0.0
|
%
|
3.2
|
N/
|
A
|
|||||||||||||||
|
||||||||||||||||||||||||
Sub-total
|
264.2
|
100.0
|
%
|
201.7
|
99.8
|
%
|
62.5
|
31.0
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Service revenue
|
-
|
0.0
|
%
|
0.5
|
0.2
|
%
|
(0.5
|
)
|
(100.0
|
)%
|
||||||||||||||
Total Revenues
|
264.2
|
100
|
%
|
202.2
|
100
|
%
|
62.0
|
30.7
|
%
|
(in MTs, except percentage)
|
Sales Volume
For the Three-Month Period Ended June 30,
|
|
|
|||||||||||||||||||||
|
2014
|
2013
|
|
|
||||||||||||||||||||
|
MT
|
%
|
MT
|
%
|
Change in
MT
|
Change in
%
|
||||||||||||||||||
Modified Polyamide 66 (PA66)
|
9,448
|
11.6
|
%
|
7,232
|
10.3
|
%
|
2,216
|
30.6
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polyamide 6 (PA6)
|
12,481
|
15.4
|
%
|
7,940
|
11.4
|
%
|
4,541
|
57.2
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Plastic Alloy
|
25,426
|
31.3
|
%
|
20,606
|
29.5
|
%
|
4,820
|
23.4
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polypropylene (PP)
|
29,500
|
36.3
|
%
|
30,337
|
43.4
|
%
|
(837
|
)
|
(2.8
|
)%
|
||||||||||||||
|
||||||||||||||||||||||||
Modified Acrylonitrile butadiene styrene (ABS)
|
3,727
|
4.6
|
%
|
3,350
|
4.8
|
%
|
377
|
11.3
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Polyoxymethylenes (POM)
|
271
|
0.3
|
%
|
450
|
0.6
|
%
|
(179
|
)
|
(39.8
|
)%
|
||||||||||||||
|
||||||||||||||||||||||||
Polyphenylene Oxide (PPO)
|
431
|
0.5
|
%
|
-
|
0.0
|
%
|
431
|
N/
|
A
|
|||||||||||||||
|
||||||||||||||||||||||||
Total Sales Volume
|
81,284
|
100
|
%
|
69,915
|
100
|
%
|
11,369
|
16.3
|
%
|
|
Three-Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Gross Profit
|
$
|
52.3
|
$
|
37.2
|
$
|
15.1
|
40.6
|
%
|
||||||||
Gross Profit Margin
|
19.8
|
%
|
18.4
|
%
|
1.4
|
%
|
|
Three-Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
General and Administrative Expenses
|
$
|
4.5
|
$
|
2.9
|
$
|
1.6
|
55.2
|
%
|
||||||||
as a percentage of revenues
|
1.8
|
%
|
1.4
|
%
|
0.4
|
%
|
|
Three–Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Research and Development Expenses
|
$
|
13.4
|
$
|
5.8
|
$
|
7.6
|
131.0
|
%
|
||||||||
as a percentage of revenues
|
5.1
|
%
|
2.9
|
%
|
2.2
|
%
|
|
Three-Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Interest Income
|
$
|
3.5
|
$
|
1.5
|
$
|
2.0
|
133.3
|
%
|
||||||||
Interest Expenses
|
(11.7
|
)
|
(3.4
|
)
|
(8.3
|
)
|
244.1
|
%
|
||||||||
Net Interest Expenses
|
$
|
(8.2
|
)
|
$
|
(1.9
|
)
|
$
|
(6.3
|
)
|
331.6
|
%
|
|||||
as a percentage of revenues
|
(3.1
|
)%
|
(1.0
|
)%
|
(2.1
|
)%
|
|
Three–Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Losses on foreign currency forward contracts
|
$
|
(0.9
|
)
|
$
|
-
|
$
|
(0.9
|
)
|
N/
|
A
|
||||||
as a percentage of revenues
|
(0.4
|
)%
|
-
|
(0.4
|
)%
|
|
Three–Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Income before Income Taxes
|
$
|
24.7
|
$
|
27.9
|
$
|
(3.2
|
)
|
(11.5
|
)%
|
|||||||
Income Tax Expense
|
(4.9
|
)
|
(7.1
|
)
|
2.2
|
(31.0
|
)%
|
|||||||||
Effective income tax rate
|
19.8
|
%
|
25.4
|
%
|
(5.6
|
)%
|
(in millions, except percentage)
|
|
Revenues
For the Six-Month Period Ended June 30,
|
|
|
|
|
||||||||
|
|
2014
|
|
2013
|
|
|
|
|
||||||
|
|
Amount
|
|
|
%
|
|
Amount
|
|
|
%
|
|
Change in
Amount
|
|
Change in
%
|
Modified Polyamide 66 (PA66)
|
|
112.2
|
|
|
23.0%
|
|
69.7
|
|
|
18.7%
|
|
42.5
|
|
61.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified Polyamide 6 (PA6)
|
|
114.7
|
|
|
23.5%
|
|
70.1
|
|
|
18.8%
|
|
44.6
|
|
63.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plastic Alloy
|
|
130.5
|
|
|
26.8%
|
|
97.7
|
|
|
26.2%
|
|
32.8
|
|
33.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified Polypropylene (PP)
|
|
104.9
|
|
|
21.5%
|
|
118.2
|
|
|
31.6%
|
|
(13.3)
|
|
(11.3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified Acrylonitrile butadiene styrene (ABS)
|
|
19.2
|
|
|
3.9%
|
|
14.4
|
|
|
3.9%
|
|
4.8
|
|
33.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyoxymethylenes (POM)
|
|
2.1
|
|
|
0.4%
|
|
2.0
|
|
|
0.5%
|
|
0.1
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyphenylene Oxide (PPO)
|
|
4.2
|
|
|
0.9%
|
|
-
|
|
|
0.0%
|
|
4.2
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-total
|
|
487.8
|
|
|
100.0%
|
|
372.1
|
|
|
99.7%
|
|
115.7
|
|
31.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue
|
|
-
|
|
|
0.0%
|
|
1.0
|
|
|
0.3%
|
|
(1.0
|
)
|
(100.0%)
|
Total Revenues
|
|
487.8
|
|
|
100%
|
|
373.1
|
|
|
100%
|
|
114.7
|
|
30.7%
|
(in MTs, except percentage)
|
|
Sales Volume
For the Six-month period ended June 30,
|
|
|
|
|
||||||||
|
|
2014
|
|
2013
|
|
|
|
|
||||||
|
|
MT
|
|
|
%
|
|
MT
|
|
|
%
|
|
Change in
MT
|
|
Change in
%
|
Modified Polyamide 66 (PA66)
|
|
19,759
|
|
|
13.2%
|
|
13,877
|
|
|
10.6%
|
|
5,882
|
|
42.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified Polyamide 6 (PA6)
|
|
22,814
|
|
|
15.2%
|
|
14,159
|
|
|
10.8%
|
|
8,655
|
|
61.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plastic Alloy
|
|
45,824
|
|
|
30.5%
|
|
38,026
|
|
|
29.0%
|
|
7,798
|
|
20.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified Polypropylene (PP)
|
|
53,559
|
|
|
35.6%
|
|
59,209
|
|
|
45.2%
|
|
(5,650)
|
|
(9.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified Acrylonitrile butadiene styrene (ABS)
|
|
7,100
|
|
|
4.7%
|
|
5,120
|
|
|
3.9%
|
|
1,980
|
|
38.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyoxymethylenes (POM)
|
|
601
|
|
|
0.4%
|
|
670
|
|
|
0.5%
|
|
(69
|
)
|
(10.3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyphenylene Oxide (PPO)
|
|
571
|
|
|
0.4%
|
|
-
|
|
|
0.0%
|
|
571
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sales Volume
|
|
150,228
|
|
|
100%
|
|
131,061
|
|
|
100%
|
|
19,167
|
|
14.6%
|
|
Six Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Gross Profit
|
$
|
98.9
|
$
|
66.3
|
$
|
32.6
|
49.2
|
%
|
||||||||
Gross Profit Margin
|
20.3
|
%
|
17.8
|
%
|
2.5
|
%
|
|
Six Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
General and Administrative Expenses
|
$
|
8.3
|
$
|
6.3
|
$
|
2.0
|
31.7
|
%
|
||||||||
as a percentage of revenues
|
1.7
|
%
|
1.7
|
%
|
0.0
|
%
|
|
Six Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Research and Development Expenses
|
$
|
22.0
|
$
|
10.8
|
$
|
11.2
|
103.7
|
%
|
||||||||
as a percentage of revenues
|
4.5
|
%
|
2.9
|
%
|
1.6
|
%
|
|
|
Six Month Period Ended June 30,
|
|
|
Change
|
|
||||||||||
(in millions, except percentage)
|
|
2014
|
|
|
2013
|
|
|
Amount
|
|
|
%
|
|
||||
Interest Income
|
|
$
|
6.5
|
|
|
$
|
2.5
|
|
|
$
|
4.0
|
|
|
|
160.0
|
%
|
Interest Expenses
|
|
|
(20.2)
|
|
|
|
(6.3)
|
|
|
|
(13.9)
|
|
|
|
220.6
|
%
|
Net Interest Expenses
|
|
$
|
(13.7)
|
|
|
$
|
(3.8)
|
|
|
$
|
(9.9)
|
|
|
|
260.5
|
%
|
as a percentage of revenues
|
|
|
(2.9)%
|
|
|
|
(1.0)%
|
|
|
|
|
|
|
|
(1.9)
|
%
|
|
Six Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Forward contract losses
|
$
|
(0.9
|
)
|
$
|
-
|
$
|
(0.9
|
)
|
N/
|
A
|
||||||
as a percentage of revenues
|
(0.2
|
)%
|
-
|
(0.2
|
)%
|
|
Six Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2014
|
2013
|
Amount
|
%
|
||||||||||||
Income before Income Taxes
|
$
|
53.8
|
$
|
47.3
|
$
|
6.5
|
13.7
|
%
|
||||||||
Income Tax Expense
|
(12.0
|
)
|
(12.0
|
)
|
0.0
|
0.0
|
%
|
|||||||||
Effective income tax rate
|
22.3
|
%
|
25.5
|
%
|
(3.2
|
)%
|
|
June 30, 2014
|
December 31, 2013
|
Change
|
|||||||||||||
(
in millions, except percentage)
|
|
|
Amount
|
%
|
||||||||||||
Cash and cash equivalents
|
132.8
|
95.5
|
37.3
|
39.1
|
%
|
|||||||||||
Restricted cash
|
20.2
|
13.7
|
6.5
|
47.4
|
%
|
|||||||||||
Time deposits
|
376.1
|
281.3
|
94.8
|
33.7
|
%
|
|||||||||||
Accounts receivable, net of allowance for doubtful accounts
|
191.2
|
282.3
|
(91.1
|
)
|
(32.3)
|
%
|
||||||||||
Inventories
|
228.0
|
144.9
|
83.1
|
57.3
|
%
|
|||||||||||
Property, plant and equipment, net
|
240.6
|
233.8
|
6.8
|
2.9
|
%
|
|||||||||||
Land use rights, net
|
12.0
|
12.5
|
(0.5
|
)
|
(4.0)
|
%
|
||||||||||
Other non-current assets
|
48.6
|
3.2
|
45.4
|
1418.8
|
%
|
|||||||||||
Total assets
|
1,261.7
|
1,075.9
|
185.8
|
17.3
|
%
|
|||||||||||
Short-term loans, including current portion of long-term bank loans
|
184.1
|
314.7
|
(130.6
|
)
|
(41.5)
|
%
|
||||||||||
Bills payable
|
38.9
|
25.6
|
13.3
|
52.0
|
%
|
|||||||||||
Accounts payable
|
130.5
|
122.5
|
8.0
|
6.5
|
%
|
|||||||||||
Income taxes payable, including noncurrent portion
|
16.3
|
26.8
|
(10.5
|
)
|
(39.2)
|
%
|
||||||||||
Accrued expenses and other current liabilities
|
20.8
|
55.9
|
(35.1
|
)
|
(62.8)
|
%
|
||||||||||
Long-term bank loans, excluding current portion
|
162.4
|
-
|
162.4
|
N/A
|
||||||||||||
Notes payable
|
148.5
|
-
|
148.5
|
N/A
|
||||||||||||
Redeemable Series D convertible preferred stock
|
97.6
|
97.6
|
-
|
-
|
||||||||||||
Stockholders’ equity
|
442.4
|
412.3
|
30.1
|
7.3
|
%
|
|
Six-Month Period Ended June 30,
|
|||||||
(in millions US$)
|
2014
|
2013
|
||||||
Net cash provided by operating activities
|
61.3
|
38.9
|
||||||
Net cash used in investing activities
|
(188.6
|
)
|
(138.9
|
)
|
||||
Net cash provided by financing activities
|
166.8
|
80.8
|
||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(2.2
|
)
|
1.4
|
|||||
Net increase (decrease) in cash and cash equivalents
|
37.3
|
(17.8
|
)
|
|||||
Cash and cash equivalents at the beginning of period
|
95.5
|
83.8
|
||||||
Cash and cash equivalents at the end of period
|
132.8
|
66.0
|
|
Six-month period ended June 30, 2014
|
Year ended December 31, 2013
|
Customer Payment Term
|
Payment in advance/up to 90 days
|
Payment in advance/up to 90 days
|
Supplier Payment Term
|
Payment in advance/up to 60 days
|
Payment in advance/up to 30 days
|
Contractual obligations
|
Total
|
Payment due
less than 1 year
|
1 – 3 years
|
3-5 years
|
More than 5
years
|
|||||||||||||||
Lease commitments
|
4,292,670
|
1,129,845
|
1,991,192
|
1,171,633
|
-
|
|||||||||||||||
Purchase of land use rights, plant equipment, and construction in progress
|
56,416,372
|
56,416,372
|
-
|
-
|
-
|
|||||||||||||||
Long-term bank Loans (1)
|
176,962,213
|
7,883,985
|
169,078,228
|
-
|
-
|
|||||||||||||||
Notes payable (2)
|
230,966,013
|
10,466,013
|
35,250,000
|
185,250,000
|
-
|
|||||||||||||||
Total
|
468,637,268
|
75,896,215
|
206,319,420
|
186,421,633
|
-
|
(1) |
Includes interest of US$16.0 million accrued at the interest rate under the loan agreements. For borrowings with a floating rate, the most recent rate as of June 30, 2014 was applied.
|
(2)
|
On February 4, 2014, Favor Sea Limited, a wholly owned subsidiary of the Company, issued US$150,000,000 aggregate principal amount of 11.75% Guaranteed Senior Notes due 2019 with issuance price of 99.080% (the ’Notes’). The Notes bear interest at a rate of 11.75% per annum, payable on February 4 and August 4 of each year, commencing August 4, 2014. The Notes will mature on February 4, 2019.
|
(3)
|
On March 8, 2013, Xinda Holding (HK) Company Limited (“Xinda Holding (HK)“), a wholly owned subsidiary of the Company, entered into an investment agreement with Shunqing Government, pursuant to which Xinda Holding (HK) will invest RMB1.8 billion (equivalent to US$290 million) in property, plant and equipment and approximately RMB0.6 billion (equivalent to US$97 million) in working capital, for the construction of Sichuan plant.
|
|
|
Exhibit
No.
|
|
Document Description
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
101
|
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T.
|
|
China XD Plastics Company Limited
|
|
|
|
|
Date: August 12, 2014
|
By:
|
/s/ Jie Han
|
|
Name: Jie Han
|
|
|
Title: Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: August 12, 2014
|
By:
|
/s/ Taylor Zhang
|
|
Name: Taylor Zhang
|
|
|
Title: Chief Financial Officer
|
Exhibit
No.
|
|
Document Description
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
101
|
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T.
|
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