Nevada
|
04-3836208
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
PAGE
|
||
PART I. FINANCIAL INFORMATION
|
||
Item 1. Financial Statements
|
2
|
|
Unaudited Condensed Consolidated Balance Sheets
|
2
|
|
Unaudited Condensed Consolidated Statements of Comprehensive Income
|
3
|
|
Unaudited Condensed Consolidated Statements of Cash Flows
|
4
|
|
Notes to the Unaudited Condensed Consolidated Financial Statements
|
5
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
13
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
20
|
|
Item 4. Controls and Procedures
|
20
|
|
PART II. OTHER INFORMATION
|
||
Item 1. Legal Proceedings
|
21
|
|
Item 1A. Risk Factors
|
21
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
21
|
|
Item 3. Defaults Upon Senior Securities
|
21
|
|
Item 4. Mine Safety Disclosures
|
21
|
|
Item 5. Exhibits
|
21
|
|
Signatures
|
22
|
March 31,
|
December 31,
|
|||||
2012
|
2011
|
|||||
US$
|
US$
|
|||||
ASSETS
|
||||||
Current assets:
|
||||||
Cash and cash equivalents
|
127,220,393
|
135,482,386
|
||||
Restricted cash
|
11,115,522
|
11,128,106
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
57,451,130
|
45,232,013
|
||||
Amounts due from related parties
|
11,909
|
78,912
|
||||
Inventories
|
60,411,014
|
44,953,958
|
||||
Prepaid expenses and other current assets
|
5,582,358
|
12,857,223
|
||||
Total current assets
|
261,792,326
|
249,732,598
|
||||
Property, plant and equipment, net
|
98,439,568
|
100,933,429
|
||||
Land use rights, net
|
4,046,517
|
4,055,363
|
||||
Deposits for purchase of land use rights and plant
|
5,605,559
|
5,608,765
|
||||
Other non-current assets
|
264,511
|
264,662
|
||||
Total assets
|
370,148,481
|
360,594,817
|
||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCKS AND STOCKHOLDERS’ EQUITY
|
||||||
Current liabilities:
|
||||||
Short-term bank loans
|
18,737,594
|
31,459,032
|
||||
Bills payable
|
22,231,044
|
22,243,760
|
||||
Accounts payable
|
854,433
|
398,043
|
||||
Amounts due to a related party
|
13,074
|
-
|
||||
Income taxes payable
|
6,717,344
|
5,814,988
|
||||
Accrued expenses and other current liabilities
|
4,232,791
|
3,213,181
|
||||
Total current liabilities
|
52,786,280
|
63,129,004
|
||||
Deferred income tax liabilities
|
21,697,278
|
22,102,431
|
||||
Warrants liability
|
3,529,222
|
3,862,927
|
||||
Embedded derivative liability
|
596
|
610
|
||||
Total liabilities
|
78,013,376
|
89,094,972
|
||||
Redeemable Series C convertible preferred stock
|
1,829
|
1,829
|
||||
Redeemable Series D convertible preferred stock
|
97,576,465
|
97,576,465
|
||||
Stockholders’ equity:
|
||||||
Series B preferred stock
|
100
|
100
|
||||
Common stock, US$0.0001 par value, 500,000,000 shares authorized,
47,548,367 shares issued, 47,527,367 shares outstanding as of
March 31, 2012 and December 31, 2011, respectively
|
4,754
|
4,754
|
||||
Treasury stock, at cost: 21,000 shares as of March 31, 2012 and December 31, 2011, respectively
|
(92,694)
|
|
(92,694
|
)
|
||
Additional paid-in capital
|
71,343,364
|
71,190,659
|
||||
Retained earnings
|
111,903,233
|
91,340,855
|
||||
Accumulated other comprehensive income
|
11,398,054
|
11,477,877
|
||||
Total stockholders’ equity
|
194,556,811
|
173,921,551
|
||||
Commitments and contingencies
|
-
|
-
|
||||
Total liabilities, redeemable convertible preferred stocks and stockholders’ equity
|
370,148,481
|
360,594,817
|
Three-Month Period Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
US$
|
US$
|
|||||||
Revenues
|
123,176,815
|
76,138,290
|
||||||
Cost of revenues
|
(91,955,249
|
)
|
(57,633,888
|
)
|
||||
Gross profit
|
31,221,566
|
18,504,402
|
||||||
Selling expenses
|
(129,688
|
)
|
(183,617
|
)
|
||||
General and administrative expenses
|
(2,362,787
|
)
|
(1,449,874
|
)
|
||||
Research and development expenses
|
(2,455,039
|
)
|
(2,283,897
|
)
|
||||
Total operating expenses
|
(4,947,514)
|
(3,917,388
|
)
|
|||||
Operating income
|
26,274,052
|
14,587,014
|
||||||
Interest income
|
1,001,729
|
10,723
|
||||||
Interest expense
|
(485,400
|
)
|
(357,184
|
)
|
||||
Other income
|
-
|
4,245
|
||||||
Other expense
|
-
|
(53
|
)
|
|||||
Change in fair value of embedded conversion option
|
14
|
328
|
||||||
Change in fair value of warrants liability
|
333,705
|
541,129
|
||||||
Total non-operating income, net
|
850,048
|
199,188
|
||||||
Income before income taxes
|
27,124,100
|
14,786,202
|
||||||
Income tax expense
|
(6,561,692
|
)
|
(2,880,080
|
)
|
||||
Net income
|
20,562,408
|
11,906,122
|
||||||
Earnings per share of common stock:
|
||||||||
Basic
|
0.32
|
0.25
|
||||||
Diluted
|
0.32
|
0.24
|
||||||
Net income
|
20,562,408
|
11,906,122
|
||||||
Other comprehensive income (loss)
|
||||||||
Foreign currency translation adjustment, net of nil income taxes
|
(79,823
|
)
|
1,179,904
|
|||||
Comprehensive income
|
20,482,585
|
13,086,026
|
Three-Month Period Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
US$
|
US$
|
|||||||
Cash flows from operating activities:
|
||||||||
Net cash provided by operating activities
|
4,520,959
|
1,441,708
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property, plant and equipment
|
(30,587
|
)
|
(89,784
|
)
|
||||
Net cash used in investing activities
|
(30,587
|
)
|
(89,784
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from bank borrowings
|
15,850,121
|
27,360,674
|
||||||
Repayments of bank borrowings
|
(28,530,218
|
)
|
(21,280,524
|
)
|
||||
Dividends paid to redeemable Series C convertible preferred stockholders
|
-
|
(120
|
)
|
|||||
Advance from a related party
|
-
|
259,021
|
||||||
Net cash provided by (used in) financing activities
|
(12,680,097
|
)
|
6,339,051
|
|||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(72,268
|
)
|
424,020
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(8,261,993
|
)
|
8,114,995
|
|||||
Cash and cash equivalents at beginning of period
|
135,482,386
|
22,720,766
|
||||||
Cash and cash equivalents at end of period
|
127,220,393
|
30,835,761
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||
Interest paid
|
485,400
|
353,803
|
||||||
Income taxes paid
|
6,049,473
|
72,255
|
||||||
Non-cash investing and financing activities:
|
||||||||
Accrual for purchase of equipment
|
-
|
2,091,324
|
March 31,
2012
|
December 31,
2011
|
|||||||
US$
|
US$
|
|||||||
RMB denominated bank deposits with financial institutions in the PRC
|
137,503,497
|
137,503,064
|
||||||
US dollar denominated bank deposits with a financial institution in the U.S.
|
145,289
|
36,280
|
||||||
US dollar denominated bank deposits with financial institutions in the PRC
|
122
|
8,589,666
|
||||||
US dollar denominated bank deposits with a financial institution in Hong Kong Special Administrative Region
|
686,588
|
478,832
|
March 31,
2012
|
December 31,
2011
|
|||||
US$
|
US$
|
|||||
Accounts receivables
|
57,564,889
|
45,345,837
|
||||
Allowance for doubtful accounts
|
(113,759
|
)
|
(113,824)
|
|||
Accounts receivable, net
|
57,451,130
|
45,232,013
|
March 31,
2012
|
December 31,
2011
|
||||||
US$
|
US$
|
||||||
Raw materials
|
52,280,185 | 37,645,204 | |||||
Work in progress
|
203,216 | 164,144 | |||||
Finished goods
|
7,927,613 | 7,144,610 | |||||
Total inventories
|
60,411,014 | 44,953,958 |
March 31,
2012
|
December 31,
2011
|
|||||
US$
|
US$
|
|||||
Advances to suppliers
|
5,101,623
|
12,522,985
|
||||
Others
|
480,735
|
334,238
|
||||
Total prepaid expenses and other current assets
|
5,582,358
|
12,857,223
|
March 31,
2012
|
December 31,
2011
|
|||||||
US$
|
US$
|
|||||||
Machinery, equipment and furniture
|
92,324,139
|
92,363,611
|
||||||
Motor vehicles
|
960,602
|
961,130
|
||||||
Plant and buildings
|
17,757,350
|
17,762,660
|
||||||
Construction in progress
|
1,468,098
|
1,468,408
|
||||||
Total property, plant and equipment
|
112,510,189
|
112,555,809
|
||||||
Less accumulated depreciation
|
(14,070,621
|
)
|
(11,622,380
|
)
|
||||
Property, plant and equipment, net
|
98,439,568
|
100,933,429
|
March 31,
2012
|
December 31,
2011
|
|||||||
US$
|
US$
|
|||||||
Unsecured loans under the line of credit
|
15,879,317
|
-
|
||||||
Loans secured by property, plant and equipment and land use rights
|
2,858,277
|
15,570,632
|
||||||
Loans secured by equipment of Harbin Xinda High-Tech Co., Ltd. (“Xinda High-Tech”) and guaranteed by Mr. Han Jie, (“Mr. Han”), the chief executive officer and controlling stockholder of the Company and his wife
|
-
|
15,888,400
|
||||||
Total short-term bank loans
|
18,737,594
|
31,459,032
|
March 31,
2012
|
December 31,
2011
|
|||||||
US$
|
US$
|
|||||||
Payables for purchase of property, plant and equipment
|
2,198,694
|
2,199,951
|
||||||
Others
|
2,034,097
|
1,013,230
|
||||||
Total accrued expenses and other current liabilities
|
4,232,791
|
3,213,181
|
Three-Month Period Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
US$
|
US$
|
|||||||
Costs and expenses resulting from transactions with related parties:
|
||||||||
Rental expenses for plant and office spaces
|
(a)
|
95,735
|
83,602
|
March 31,
2012
|
December 31,
2011
|
||||||
US$
|
US$
|
||||||
Amounts due from related parties:
|
|||||||
Prepaid rental expenses to Xinda High-Tech
|
(a)
|
-
|
78,912
|
||||
Prepaid rental expenses to Mr. Han’s son
|
(a)
|
11,909
|
-
|
||||
Total
|
11,909
|
78,912
|
|||||
Amounts due to a related party:
|
|||||||
Rental payable to Xinda High-Tech
|
(a)
|
13,074
|
-
|
(a)
|
The Company rents the following plant and office buildings in Harbin, Heilongjiang province from Xinda High-Tech:
|
Premise Leased
|
Area (M2)
|
Annual Rental Fee (US$)
|
Period of Lease
|
||||||
Plant and office building
|
23,894 | 317,002 |
Between May 1, 2009 and April 30, 2012
|
||||||
Office building
|
2,800 | 31,700 |
Between June 1, 2010 and May 31, 2013
|
||||||
Office building
|
500 | 9,510 |
Between January 1, 2011 and December 31, 2013
|
||||||
Office building
|
213 | 8,876 |
Between January 1, 2012 and December 31, 2012
|
|
The Company also rents a facility of approximately 3,134 square meters in Harbin, Heilongjiang province from Mr. Han’s son for an annual rental fee of RMB100,000 (approximately US$15,850). The period of the lease is from January 1, 2012 to December 31, 2012.
|
|
Total rental expenses paid or payable to Xinda High-Tech and Mr. Han’s son amounted to US$95,735 and US$83,602 during the three-month periods ended March 31, 2012 and 2011, respectively.
|
Warrants
|
Exercise Price
|
Number of Warrants
Outstanding
|
Remaining
Contractual Life
|
|||||||
US$
|
Years
|
|||||||||
Series A investor warrants
|
4.9 | 1,320,696 | 2.67 | |||||||
Series A placement agent warrants
|
5.5 | 117,261 | 2.67 | |||||||
Series C placement agent warrants
|
7.5 | 166,667 | 1.27 | |||||||
1,604,624 |
Series A Investor
Warrants
|
Series A Placement
Agent Warrants
|
Series C Placement
Agent Warrants
|
|||||
Volatility
|
64.5%
|
64.5%
|
53.8%
|
||||
Expected dividends yield
|
0%
|
0%
|
0%
|
||||
Fair value of underlying common stock (per share)
|
5.45
|
5.45
|
5.45
|
||||
Risk-free interest rate (per annum)
|
0.48%
|
0.48%
|
0.27%
|
Series B Preferred Stock
|
Common Stock
|
||||||||||||||||||||
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Treasury Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated Other
Comprehensive
Income
|
Total
Stockholders’ Equity
|
|||||||||||||
US$
|
US$
|
||||||||||||||||||||
Balance as of January 1, 2012
|
1,000,000 | 100 | 47,527,367 | 4,754 | (92,694 | ) | 71,190,659 | 91,340,855 | 11,477,877 | 173,921,551 | |||||||||||
Net income
|
- | - | - | - | - | - | 20,562,408 | - | 20,562,408 | ||||||||||||
Other comprehensive loss
|
- | - | - | - | - | - | - | (79,823 | ) | (79,823 | ) | ||||||||||
Dividends to redeemable Series C convertible preferred stockholders
|
- | - | - | - | - | - | (30 | ) | - | (30 | ) | ||||||||||
Stock based compensation
|
- | - | - | - | - | 152,705 | - | - | 152,705 | ||||||||||||
Balance as of March 31, 2012
|
1,000,000 | 100 | 47,527,367 | 4,754 | (92,694 | ) | 71,343,364 | 111,903,233 | 11,398,054 | 194,556,811 |
Number of
Options
Outstanding
|
Weighted Average
Exercise Price
US$
|
Weighted Average
Remaining
Contractual Life
Years
|
Aggregate Intrinsic Value
US$
|
||||||||
Outstanding as of December 31, 2011
|
297,000
|
8.01
|
|||||||||
Grant
|
-
|
-
|
|||||||||
Forfeited
|
-
|
-
|
|||||||||
Exercised
|
-
|
-
|
|||||||||
Expired
|
-
|
-
|
|||||||||
Outstanding as of March 31, 2012
|
297,000
|
8.01
|
8.36
|
-
|
|||||||
Vested and expected to vest as of March 31, 2012
|
297,000
|
8.01
|
8.36
|
-
|
|||||||
Exercisable as of March 31, 2012
|
-
|
-
|
Number of
Nonvested Shares
|
Weighted Average
Grant Date Fair Value
Per share
|
||||
US$
|
|||||
Balance as of December 31, 2011
|
106,405
|
6.03
|
|||
Vested
|
-
|
-
|
|||
Outstanding as of March 31, 2012
|
106,405
|
6.03
|
Three-Month Period
Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
US$
|
US$
|
|||||||
Numerator:
|
||||||||
Net income
|
20,562,408
|
11,906,122
|
||||||
Less: Dividends to Series C convertible preferred stockholders
|
(30
|
)
|
(30
|
)
|
||||
Net income available to common stockholders
|
20,562,378
|
11,906,092
|
||||||
Less:
|
||||||||
Earnings allocated to participating Series C convertible preferred stock
|
(140
|
)
|
(109
|
)
|
||||
Earnings allocated to participating Series D convertible preferred stock
|
(5,170,145
|
)
|
-
|
|||||
Earnings allocated to participating nonvested shares
|
(34,383
|
)
|
(22,094
|
)
|
||||
Net income for basic earnings per share
|
15,357,710
|
11,883,889
|
||||||
Changes in fair value of derivative liabilities - Series A investor warrants
|
(287,794
|
)
|
(239,191
|
)
|
||||
Changes in fair value of derivative liabilities - Series A placement agent warrants
|
-
|
(20,670
|
)
|
|||||
Changes in fair value of derivative liabilities - Series C investor warrants
|
-
|
(196,701
|
)
|
|||||
Net income for diluted earnings per share
|
15,069,916
|
11,427,327
|
||||||
Denominator:
|
||||||||
Denominator for basic earnings per share:
|
||||||||
Weighted average number of common stock outstanding
|
47,527,367
|
47,539,983
|
||||||
Contract to be settled in common stock
|
-
|
144,022
|
||||||
Series A investor warrants
|
119,639
|
288,122
|
||||||
Series A placement agent warrants
|
-
|
14,355
|
||||||
Series C investor warrants
|
-
|
71,073
|
||||||
Denominator for diluted earnings per share
|
47,647,006
|
48,057,555
|
||||||
Earnings per share:
|
||||||||
Basic
|
0.32
|
0.25
|
||||||
Diluted
|
0.32
|
0.24
|
Three-Month Period
Ended March 31,
|
|||||
2012
|
2011
|
||||
Shares issuable upon conversion of Series C convertible preferred stock
|
435
|
435
|
|||
Shares issuable upon conversion of Series D convertible preferred stock
|
16,000,000
|
-
|
|||
Shares issuable upon exercise of Series A placement agent warrant
|
117,261
|
-
|
|||
Shares issuable upon exercise of Series C placement agent warrant
|
166,667
|
166,667
|
|||
Shares issuable upon exercise of stock options
|
297,000
|
445,500
|
(1)
|
Lease commitments
|
US$
|
||||
Period from April 1, 2012 to December 31, 2012
|
120,617
|
|||
Years ending December 31,
|
||||
2013
|
41,741
|
|||
2014
|
-
|
|||
2015
|
-
|
|||
2016
|
-
|
|||
2017 and thereafter
|
-
|
Three-Month Ended March 31, | ||||||||||||||||
(in thousands, except percentages)
|
2012
|
2011
|
||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Revenues
|
$
|
123,177
|
100
|
%
|
$
|
76,138
|
100
|
%
|
||||||||
Cost of revenues
|
$
|
91,955
|
75
|
%
|
$
|
57,634
|
76
|
%
|
||||||||
Gross profit
|
$
|
31,222
|
25
|
%
|
$
|
18,504
|
24
|
%
|
||||||||
Total operating expenses
|
$
|
4,948
|
4
|
%
|
$
|
3,917
|
5
|
%
|
||||||||
O Operating income
|
$
|
26,274
|
21
|
%
|
$
|
14,587
|
19
|
%
|
||||||||
InIncome before income taxes
|
$
|
27,124
|
22
|
%
|
$
|
14,786
|
20
|
%
|
||||||||
Income tax expenses
|
$
|
6,562
|
5
|
%
|
$
|
2,880
|
4
|
%
|
||||||||
Net income
|
$
|
20,562
|
17
|
%
|
$
|
11,906
|
16
|
%
|
(in millions, except percentage)
|
Revenues
For the Three Months Ended March 31,
|
|||||||||||||||||||||||
2012
|
2011
|
|||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Change in Amount
|
Change in %
|
|||||||||||||||||||
Modified Polypropylene (PP)
|
64.6 | 52.4 | % | 46.8 | 61.6 | % | 17.8 | 37.5 | % | |||||||||||||||
Engineering Plastics
|
24.8 | 20.1 | % | 10.3 | 13.6 | % | 14.5 | 139.9 | % | |||||||||||||||
Modified Polyamide (PA)
|
10.9 | 8.9 | % | 4.4 | 5.8 | % | 6.5 | 147.9 | % | |||||||||||||||
Alloy Plastics
|
6.4 | 5.2 | % | 3.6 | 4.7 | % | 2.8 | 79.8 | % | |||||||||||||||
Environment Friendly Plastics
|
9.7 | 7.9 | % | 5.3 | 6.9 | % | 4.4 | 83.7 | % | |||||||||||||||
Modified Acrylonitrile Butadiene Styrene (ABS)
|
4.8 | 3.9 | % | 3.0 | 3.9 | % | 1.8 | 63.6 | % | |||||||||||||||
Sub-total
|
121.2 | 98.4 | % | 73.4 | 96.5 | % | 47.8 | 64.9 | % | |||||||||||||||
After-sales Service
|
2.0 | 1.6 | % | 2.7 | 3.5 | % | (0.7 | ) | (24.7 | )% | ||||||||||||||
Total Revenues
|
123.2 | 100 | % | 76.1 | 100 | % | 47.1 | 61.8 | % |
(in MTs, except percentage)
|
Sales Volume
For the Three Months Ended March 31,
|
|||||||||||||||||||||||
2012
|
2011
|
|||||||||||||||||||||||
MT
|
%
|
MT
|
%
|
Change in
MT
|
Change in
%
|
|||||||||||||||||||
Modified Polypropylene (PP)
|
30,994
|
67.6
|
% |
26,196
|
75.8
|
% |
4,798
|
18.3 | % | |||||||||||||||
Engineering Plastics
|
4,805 | 10.5 | % | 2,445 | 7.1 | % | 2,360 | 96.6 | % | |||||||||||||||
Modified Polyamide (PA)
|
2,213 | 4.8 | % | 1,187 | 3.4 | % | 1,026 | 86.4 | % | |||||||||||||||
Alloy Plastics
|
1,893 | 4.1 | % | 1,301 | 3.8 | % | 592 | 45.6 | % | |||||||||||||||
Environment Friendly Plastics
|
4,150 | 9.1 | % | 2,251 | 6.5 | % | 1,899 | 84.4 | % | |||||||||||||||
Modified Acrylonitrile Butadiene Styrene (ABS)
|
1,780 | 3.9 | % | 1,178 | 3.4 | % | 602 | 51.1 | % | |||||||||||||||
Total sales volume
|
45,835 | 100 | % | 34,558 | 100 | % | 11,277 | 32.6 | % |
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2012
|
2011
|
Amount
|
%
|
||||||||||||
Gross Profit
|
$
|
31.2
|
$
|
18.5
|
$
|
12.7
|
68.7
|
%
|
||||||||
Gross Margin
|
25.3
|
% |
24.3
|
% |
1.0
|
%
|
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2012
|
2011
|
Amount
|
%
|
||||||||||||
General and Administrative Expenses
|
$
|
2.3
|
$
|
1.4
|
$
|
0.9
|
63.0
|
%
|
||||||||
as a percentage of revenues
|
1.9
|
%
|
1.8
|
%
|
0.1
|
%
|
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2012
|
2011
|
Amount
|
%
|
||||||||||||
Research and Development Expenses
|
$
|
2.5
|
$
|
2.3
|
$
|
0.2
|
7.5
|
%
|
||||||||
as a percentage of revenues
|
2.0
|
%
|
3.0
|
%
|
(1.0)
|
%
|
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2012
|
2011
|
Amount
|
%
|
||||||||||||
Interest Income
|
$
|
1.0
|
$
|
-
|
$
|
1.0
|
N/A
|
|||||||||
Interest Expenses
|
(0.5)
|
(0.3)
|
(0.2)
|
35.9
|
%
|
|||||||||||
Net Interest Income (Expenses)
|
$
|
0.5
|
$
|
(0.3)
|
$
|
0.8
|
249.0
|
%
|
||||||||
as a percentage of revenues
|
0.4
|
%
|
(0.5)
|
%
|
0.9
|
%
|
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2012
|
2011
|
Amount
|
%
|
||||||||||||
Change in fair value of warrants liabilities
|
$
|
0.3
|
$
|
0.5
|
$
|
(0.2)
|
38.3
|
%
|
||||||||
as a percentage of revenues
|
0.3
|
%
|
0.7
|
%
|
(0.4)
|
%
|
Three Months Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2012
|
2011
|
Amount
|
%
|
||||||||||||
Income before Income Taxes
|
$
|
27.1
|
$
|
14.8
|
$
|
12.3
|
83.4
|
%
|
||||||||
Income Tax Expense
|
(6.5
|
) |
(2.9
|
) |
(3.6
|
) |
(127.8)
|
%
|
||||||||
Effective income tax rate
|
24.2
|
% |
19.5
|
% |
4.7
|
%
|
March 31,
2012
|
December 31,
2011
|
Change
|
|||||||
(in millions, except percentage)
|
Amount
|
%
|
|||||||
Cash and cash equivalents
|
127.2
|
135.5
|
(8.3)
|
(6.1)
|
%
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
57.5
|
45.2
|
12.3
|
27.0
|
%
|
||||
Inventories
|
60.4
|
45.0
|
15.4
|
34.4
|
%
|
||||
Property, plant and equipment, net
|
98.4
|
101.0
|
(2.6)
|
(2.5)
|
%
|
||||
Total assets
|
370.1
|
360.6
|
9.5
|
2.6
|
%
|
||||
Short-term bank loans
|
18.7
|
31.5
|
(12.8)
|
(40.4)
|
%
|
||||
Bills payable
|
22.2
|
22.2
|
-
|
0.0
|
%
|
||||
Income tax payable
|
6.7
|
5.8
|
0.9
|
15.5
|
%
|
||||
Stockholders' equity
|
194.5
|
173.9
|
20.6
|
11.9
|
%
|
Three Months Ended
March 31,
|
||||||||
(in millions US$)
|
2012
|
2011
|
||||||
Net cash provided by operating activities
|
4.5
|
1.4
|
||||||
Net cash used in investing activities
|
-
|
(0.1)
|
||||||
Net cash provided by (used in) financing activities
|
(12.7)
|
6.4
|
||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(0.1)
|
0.4
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(8.3)
|
8.1
|
||||||
Cash and cash equivalents at the beginning of period
|
135.5
|
22.7
|
||||||
Cash and cash equivalents at the end of period
|
127.2
|
30.8
|
Three months ended March 31, 2012
|
Year ended December 31, 2011
|
|||
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 30 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
|
|||||||||||||||
Operating lease
|
162,358
|
120,617
|
41,741
|
-
|
-
|
|||||||||||||||
Renovation of plant facilities
|
783,279
|
783,279
|
-
|
-
|
-
|
|||||||||||||||
Commitments for purchase of land use rights and construction in progress
|
50,327,574
|
50,327,574
|
-
|
-
|
-
|
|||||||||||||||
Commitments for purchase of plant equipment
|
2,912,902
|
2,912,902
|
-
|
-
|
-
|
|||||||||||||||
Total
|
54,186,113
|
54,144,372
|
41,741
|
-
|
-
|
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: May 10, 2012
|
By:
|
/s/ Jie Han
|
Name: Jie Han
|
||
Title: Chief Executive Officer
(Principal Executive Officer)
|
Date: May 10, 2012
|
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.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of China XD Plastics Company Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 10, 2012
|
By:
|
/s/ Jie Han
|
|
Jie Han, Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of China XD Plastics Company Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 10, 2012
|
By:
|
/s/ Taylor Zhang
|
|
Taylor Zhang, Chief Financial Officer
(Princiapl Financial and Accounting Officer)
|
Date: May 10, 2012
|
By:
|
/s/ Jie Han
|
|
Jie Han, Chief Executive Officer
(Principal Executive Officer)
|
Date: May 10, 2012
|
By:
|
/s/ Taylor Zhang
|
|
Taylor Zhang, Chief Financial Officer
(Princiapl Financial and Accounting Officer)
|
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Prepaid expenses and other current assets
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets |
Note4 Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following:
Consistent with the common industry practice in the PRC, the Company is required to pay deposits to the suppliers for the principal raw materials ordered. The Company makes advanced orders of raw materials based upon (1) the demand and supply situation in the raw materials market and (2) the forecasted demand of products. All advances to suppliers as of March 31, 2012 are related to the purchase of raw materials, which were subsequently received by the Company in April 2012. |