Nevada
|
04-3836208
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
PAGE
|
||
PART I. FINANCIAL INFORMATION
|
2 | |
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
|
14
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
22
|
|
Item 4. Controls and Procedures
|
23
|
|
PART II. OTHER INFORMATION
|
24 | |
Item 1. Legal Proceedings
|
24
|
|
Item 1A. Risk Factors
|
24
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
24
|
|
Item 3. Defaults Upon Senior Securities
|
24
|
|
Item 4. Mine Safety Disclosures
|
24
|
|
Item 5. Exhibits
|
24
|
|
Signatures
|
25
|
March 31, 2013
|
December 31, 2012
|
|||||||
US$
|
US$
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
113,749,846
|
83,822,602
|
||||||
Restricted cash
|
14,048,110
|
16,915,359
|
||||||
Time deposits
|
111,901,848
|
47,955,923
|
||||||
Accounts receivable, net of allowance for doubtful accounts
|
151,262,256
|
143,843,764
|
||||||
Amounts due from related parties
|
37,718
|
219,360
|
||||||
Inventories
|
84,396,710
|
78,263,071
|
||||||
Prepaid expenses and other current assets
|
2,119,123
|
6,090,232
|
||||||
Total current assets
|
477,515,611
|
377,110,311
|
||||||
Property, plant and equipment, net
|
219,551,928
|
223,780,133
|
||||||
Land use rights, net
|
10,502,373
|
10,524,451
|
||||||
Other non-current assets
|
169,940
|
169,414
|
||||||
Total assets
|
707,739,852
|
611,584,309
|
||||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCKS AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Short-term bank loans
|
191,561,474
|
162,076,050
|
||||||
Bills payable
|
20,528,756
|
15,810,340
|
||||||
Accounts payable
|
56,038,308
|
7,061,259
|
||||||
Amounts due to a related party
|
10,000
|
-
|
||||||
Income taxes payable
|
7,951,661
|
8,511,679
|
||||||
Accrued expenses and other current liabilities
|
32,680,605
|
34,442,983
|
||||||
Total current liabilities
|
308,770,804
|
227,902,311
|
||||||
Deferred income tax liabilities
|
20,344,854
|
20,733,959
|
||||||
Warrants liability
|
988,426
|
1,008,750
|
||||||
Total liabilities
|
330,104,084
|
249,645,020
|
||||||
Redeemable Series D convertible preferred stock
|
97,576,465
|
97,576,465
|
||||||
Stockholders’ equity:
|
||||||||
Series B preferred stock
|
100
|
100
|
||||||
Common stock, US$0.0001 par value, 500,000,000 shares authorized, 47,809,772 shares and 47,584,772 shares issued, 47,788,772 shares and 47,563,772 shares outstanding as of March 31, 2013 and December 31, 2012, respectively
|
4,781
|
4,758
|
||||||
Treasury stock, 21,000 shares at cost as of March 31, 2013 and December 31, 2012, respectively.
|
(92,694
|
)
|
(92,694
|
)
|
||||
Additional paid-in capital
|
72,948,235
|
72,583,910
|
||||||
Retained earnings
|
191,659,347
|
177,208,492
|
||||||
Accumulated other comprehensive income
|
15,539,534
|
14,658,258
|
||||||
Total stockholders’ equity
|
280,059,303
|
264,362,824
|
||||||
Commitments and contingencies
|
-
|
-
|
||||||
Total liabilities, redeemable convertible preferred stocks and stockholders’ equity
|
707,739,852
|
611,584,309
|
Three-Month Period Ended March 31,
|
||||||||
2013
|
2012
|
|||||||
US$
|
US$
|
|||||||
Revenues
|
170,967,571
|
123,176,815
|
||||||
Cost of revenues
|
(141,811,440
|
)
|
(91,955,249
|
)
|
||||
Gross profit
|
29,156,131
|
31,221,566
|
||||||
Selling expenses
|
(62,774
|
)
|
(129,688
|
)
|
||||
General and administrative expenses
|
(3,483,915
|
)
|
(2,417,370
|
)
|
||||
Research and development expenses
|
(5,010,919
|
)
|
(2,455,039
|
)
|
||||
Total operating expenses
|
(8,557,608
|
)
|
(5,002,097
|
)
|
||||
Operating income
|
20,598,523
|
26,219,469
|
||||||
Interest income
|
1,069,604
|
1,001,729
|
||||||
Interest expense
|
(2,935,986
|
)
|
(485,400
|
)
|
||||
Foreign currency exchange gains
|
489,193
|
54,583
|
||||||
Government grant
|
208,919
|
-
|
||||||
Change in fair value of embedded conversion option
|
-
|
14
|
||||||
Change in fair value of warrants liability
|
20,324
|
333,705
|
||||||
Total non-operating income (expenses), net
|
(1,147,946
|
)
|
904,631
|
|||||
Income before income taxes
|
19,450,577
|
27,124,100
|
||||||
Income tax expense
|
(4,999,722
|
)
|
(6,561,692
|
)
|
||||
Net income
|
14,450,855
|
20,562,408
|
||||||
Earnings per share of common stock:
|
||||||||
Basic and diluted
|
0.23
|
0.32
|
||||||
Net income
|
14,450,855
|
20,562,408
|
||||||
Other comprehensive income (loss)
|
||||||||
Foreign currency translation adjustment, net of nil income taxes
|
881,276
|
(79,823
|
)
|
|||||
Comprehensive income
|
15,332,131
|
20,482,585
|
Three-Month Period Ended March 31,
|
||||||||
2013
|
2012
|
|||||||
US$
|
US$
|
|||||||
Cash flows from operating activities:
|
||||||||
Net cash provided by operating activities
|
68,826,607
|
4,520,959
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of time deposits
|
(87,783,014
|
)
|
-
|
|||||
Purchases of property, plant and equipment
|
(4,678,651
|
)
|
(30,587
|
)
|
||||
Proceeds from maturity of time deposits
|
24,106,067
|
-
|
||||||
Net cash used in investing activities
|
(68,355,598
|
)
|
(30,587
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from bank borrowings
|
105,865,810
|
15,850,121
|
||||||
Repayments of bank borrowings
|
(76,938,530
|
)
|
(28,530,218
|
)
|
||||
Net cash provided by (used in) financing activities
|
28,927,280
|
(12,680,097
|
)
|
|||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
528,955
|
(72,268
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
29,927,244
|
(8,261,993)
|
||||||
Cash and cash equivalents at beginning of period
|
83,822,602
|
135,482,386
|
||||||
Cash and cash equivalents at end of period
|
113,749,846
|
127,220,393
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||
Interest paid
|
825,939
|
485,400
|
||||||
Income taxes paid
|
6,036,785
|
6,049,473
|
||||||
For the Three-Month Period Ended March 31,
|
||||||||||||||||
2013
|
2012
|
|||||||||||||||
US$
|
%
|
US$
|
%
|
|||||||||||||
Distributor A
|
43,531,918
|
25.5%
|
40,135,842
|
32.6%
|
||||||||||||
Distributor B
|
43,001,855
|
25.2%
|
8,859,500
|
7.2%
|
||||||||||||
Distributor C
|
23,024,899
|
13.5%
|
18,762,041
|
15.2%
|
||||||||||||
Distributor D
|
22,864,098
|
13.4%
|
19,588,881
|
15.9%
|
||||||||||||
Distributor E
|
22,921,894
|
13.4%
|
9,726,154
|
7.9%
|
||||||||||||
Total
|
155,344,664
|
91.0%
|
97,072,418
|
78.8%
|
March 31, 2013
|
December 31, 2012
|
|||||||
US$
|
US$
|
|||||||
RMB denominated bank deposits with financial institutions in the PRC
|
239,655,789
|
140,788,222
|
||||||
U.S. dollar denominated bank deposits with a financial institution in the U.S.
|
39,656
|
18,391
|
||||||
U.S. dollar denominated bank deposits with financial institutions in the PRC
|
-
|
7,828,156
|
||||||
U.S. dollar denominated bank deposits with a financial institution in Hong Kong Special Administrative Region (“SAR”)
|
2,926
|
11,287
|
March 31, 2013
|
December 31, 2012
|
||||
US$
|
US$
|
||||
Accounts receivable
|
151,409,482
|
143,991,818
|
|||
Allowance for doubtful accounts
|
(147,226
|
)
|
(148,054)
|
||
Accounts receivable, net
|
151,262,256
|
143,843,764
|
March 31, 2013
|
December 31, 2012
|
|||||||
US$
|
US$
|
|||||||
Raw materials
|
55,899,933 | 70,672,300 | ||||||
Work in progress
|
224,052 | 110,964 | ||||||
Finished goods
|
28,272,725 | 7,479,807 | ||||||
Total inventories
|
84,396,710 | 78,263,071 |
March 31, 2013
|
December 31, 2012
|
||||
US$
|
US$
|
||||
Advances to suppliers
|
213,145
|
4,355,607
|
|||
Interest receivable
|
1,296,849
|
1,145,244
|
|||
Other
|
609,129
|
589,381
|
|||
Total prepaid expenses and other current assets
|
2,119,123
|
6,090,232
|
March 31, 2013
|
December 31, 2012
|
|||||||
US$
|
US$
|
|||||||
Machinery, equipment and furniture
|
201,549,066
|
193,999,396
|
||||||
Motor vehicles
|
1,442,948
|
1,438,596
|
||||||
Workshops and buildings
|
40,504,023
|
40,357,145
|
||||||
Construction in progress
|
3,787,105
|
10,471,463
|
||||||
Total property, plant and equipment
|
247,283,142
|
246,266,600
|
||||||
Less accumulated depreciation
|
(27,731,214
|
)
|
(22,486,467
|
)
|
||||
Property, plant and equipment, net
|
219,551,928
|
223,780,133
|
Thee-Month Period Ended
March 31,
|
|||||||
2013
|
2012
|
||||||
US$
|
US$
|
||||||
Cost of revenues
|
4,163,505
|
1,986,199
|
|||||
General and administrative expenses
|
640,866
|
229,263
|
|||||
Research and development expenses
|
367,983
|
257,508
|
|||||
Total depreciation expense
|
5,172,354
|
2,472,970
|
March 31, 2013
|
December 31, 2012
|
|||||||
US$
|
US$
|
|||||||
Unsecured loans
|
95,156,824
|
65,970,048
|
||||||
Loans secured by accounts receivable
|
72,454,434
|
72,229,981
|
||||||
Loans secured by bank deposits
|
23,950,216
|
23,876,021
|
||||||
Total short-term bank loans
|
191,561,474
|
162,076,050
|
March 31, 2013
|
December 31, 2012
|
|||||||
US$
|
US$
|
|||||||
Payables for purchase of property, plant and equipment
|
25,609,764
|
30,029,901
|
||||||
Others
|
7,070,841
|
4,413,082
|
||||||
Total accrued expenses and other current liabilities
|
32,680,605
|
34,442,983
|
Three-Month Period Ended March 31,
|
|||||||||
2013
|
2012
|
||||||||
US$
|
US$
|
||||||||
Costs and expenses resulting from transactions with related parties:
|
|||||||||
Rental expenses for plant and office spaces
|
(a)
|
198,052
|
95,735
|
March 31, 2013
|
December 31, 2012
|
|||||
US$
|
US$
|
|||||
Amounts due from related parties:
|
||||||
Prepaid rent expenses to Xinda High-Tech
|
(a)
|
25,642
|
219,360
|
|||
Prepaid rent expenses to Mr. Han’s son
|
(a)
|
12,076
|
-
|
|||
Total
|
37,718
|
219,360
|
||||
Amounts due to a related party:
|
||||||
Advances payable to Mr. Han
|
(b)
|
10,000
|
-
|
(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
|
20,250
|
660,125
|
Between May 1, 2012 and April 30, 2015
|
||||||
Office building
|
250
|
8,050
|
Between January 1, 2012 and April 30, 2013
|
||||||
Office building
|
3,394
|
109,293
|
Between May 1, 2012 and April 30, 2013
|
(b)
|
In March 2013, Mr. Han advanced US$10,000 to Xinda Holding (HK) US Sub Inc. ("Xinda Holding (US)"), a subsidiary of China XD Plastics, to facilitate timely payment of certain expenses of Xinda Holding (US). The advance was non-interest bearing and due on demand. In April 2013, the balance of US$10,000 was repaid to Mr. Han by Xinda Holding (US) in cash. The imputed interest of the advance was insignificant.
|
Warrants
|
Exercise Price
|
Number of Warrants
Outstanding
|
Remaining
Contractual Life
|
||||||
US$
|
Years
|
||||||||
Series A investor warrants
|
4.9
|
1,320,696
|
1.67
|
||||||
Series A placement agent warrants
|
5.5
|
117,261
|
1.67
|
||||||
Series C placement agent warrants
|
7.5
|
166,667
|
0.27
|
||||||
1,604,624
|
Series A Investor
Warrants
|
Series A Placement
Agent Warrants
|
Series C Placement
Agent Warrants
|
||||||||
Volatility
|
47.5%
|
47.5%
|
93.9%
|
|||||||
Expected dividends yield
|
0%
|
0%
|
0%
|
|||||||
Fair value of underlying common stock (per share)
|
4.0
|
4.0
|
4.0
|
|||||||
Risk-free interest rate (per annum)
|
0.23%
|
0.23%
|
0.08%
|
Series B Preferred Stock
|
Common Stock
|
Accumulated Other
|
Total | |||||||||||||||||||||||||||||||||
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Treasury Stock
|
Paid-in
Capital
|
Retained
Earnings
|
Comprehensive
Income
|
Stockholders’ Equity
|
||||||||||||||||||||||||||||
US$
|
US$
|
|||||||||||||||||||||||||||||||||||
Balance as of January 1, 2013
|
1,000,000 | 100 | 47,563,772 | 4,758 | (92,694 | ) | 72,583,910 | 177,208,492 | 14,658,258 | 264,362,824 | ||||||||||||||||||||||||||
Net income
|
- | - | - | - | - | - | 14,450,855 | - | 14,450,855 | |||||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | - | - | 881,276 | 881,276 | |||||||||||||||||||||||||||
Vesting of unvested shares | - | - | 225,000 | 23 | - | (23 | ) | - | - | - | ||||||||||||||||||||||||||
Stock based
compensation
|
- | - | - | - | - | 364,348 | - | - | 364,348 | |||||||||||||||||||||||||||
Balance as of
March 31, 2013
|
1,000,000 | 100 | 47,788,772 | 4,781 | (92,694 | ) | 72,948,235 | 191,659,347 | 15,539,534 | 280,059,303 |
Number of
Options
Outstanding
|
Weighted Average
Exercise Price
US$
|
Weighted Average
Remaining
Contractual Life
Years
|
Aggregate Intrinsic Value
US$
|
||||||||
Outstanding as of December 31, 2012
|
148,500
|
8.01
|
|||||||||
Expired
|
-
|
-
|
|||||||||
Outstanding as of March 31, 2013
|
148,500
|
8.01
|
7.36
|
-
|
|||||||
Vested and expected to vest as of March 31, 2013
|
148,500
|
8.01
|
7.36
|
-
|
|||||||
Exercisable as of March 31, 2013
|
-
|
-
|
Number of
Nonvested Shares
|
Weighted Average
Grant Date Fair Value
Per share
|
|||
US$
|
||||
Balance as of December 31, 2012
|
513,000
|
4.66
|
||
Vested
|
(225,000)
|
4.35
|
||
Outstanding as of March 31, 2013
|
288,000
|
4.86
|
Three-Month Period
Ended March 31,
|
||||||||
2013
|
2012
|
|||||||
US$
|
US$
|
|||||||
Numerator:
|
||||||||
Net income
|
14,450,855
|
20,562,408
|
||||||
Less: Dividends to Series C convertible preferred stockholders
|
-
|
(30
|
)
|
|||||
Net income available to common stockholders
|
14,450,855
|
20,562,378
|
||||||
Less:
|
||||||||
Earnings allocated to participating Series C convertible preferred stock
|
-
|
(140
|
)
|
|||||
Earnings allocated to participating Series D convertible preferred stock
|
(3,608,385
|
)
|
(5,170,145
|
) | ||||
Earnings allocated to participating nonvested shares
|
(85,812
|
)
|
(34,383
|
)
|
||||
Net income for basic earnings per share
|
10,756,658
|
15,357,710
|
||||||
Changes in fair value of derivative liabilities - Series A investor warrants
|
-
|
(287,794
|
)
|
|||||
Net income for diluted earnings per share
|
10,756,658
|
15,069,916
|
||||||
Denominator:
|
||||||||
Denominator for basic earnings per share:
|
||||||||
Weighted average number of common stock outstanding
|
47,696,272
|
47,527,367
|
||||||
Series A investor warrants
|
-
|
119,639
|
||||||
Denominator for diluted earnings per share
|
47,696,272
|
47,647,006
|
||||||
Earnings per share:
|
||||||||
Basic and diluted
|
0.23
|
0.32
|
Three-Month Period
Ended March 31,
|
|||||
2013
|
2012
|
||||
Shares issuable upon conversion of Series C convertible preferred stock
|
-
|
435
|
|||
Shares issuable upon conversion of Series D convertible preferred stock
|
16,000,000
|
16,000,000
|
|||
Shares issuable upon exercise of Series A investor warrant
|
1,320,696
|
-
|
|||
Shares issuable upon exercise of Series A placement agent warrant
|
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
|
297,000
|
(1)
|
Lease commitments
|
US$
|
||||
Period from April 1, 2013 to December 31, 2013
|
||||
Years ending December 31,
|
||||
2013
|
578,567
|
|||
2014
|
754,707
|
|||
2015
|
251,569
|
|||
2016
|
-
|
|||
2017 and thereafter
|
-
|
(2)
|
Plant construction
|
(3)
|
Warehouse construction
|
(4)
|
Equipment acquisition
|
Three-Month Period Ended March 31,
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
|||||||||||||
|
Amount
|
%
|
Amount
|
%
|
|||||||||||
Revenues
|
$
|
170,968
|
100
|
%
|
$
|
123,177
|
100
|
%
|
|||||||
Cost of revenues
|
$
|
141,811
|
83
|
%
|
$
|
91,955
|
75
|
%
|
|||||||
Gross profit
|
$
|
29,157
|
17
|
%
|
$
|
31,222
|
25
|
%
|
|||||||
Total operating expenses
|
$
|
8,558
|
5
|
%
|
$
|
5,003
|
4
|
%
|
|||||||
O Operating income
|
$
|
20,599
|
12
|
%
|
$
|
26,219
|
21
|
%
|
|||||||
Income before income taxes
|
$
|
19,451
|
11
|
%
|
$
|
27,124
|
22
|
%
|
|||||||
Income tax expenses
|
$
|
5,000
|
2
|
%
|
$
|
6,562
|
5
|
%
|
|||||||
Net income
|
$
|
14,451
|
9
|
%
|
$
|
20,562
|
17
|
%
|
(in millions, except percentage)
|
Three-Month Period Ended March 31,
|
|||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Change in Amount
|
Change in
%
|
|||||||||||||||||||
Modified Polypropylene (PP)
|
57.3 | 33.5 | % | 64.6 | 52.4 | % | (7.3 | ) | (11.3 | )% | ||||||||||||||
Engineering Plastics
|
39.7 | 23.2 | % | 24.8 | 20.1 | % | 14.9 | 60.1 | % | |||||||||||||||
Modified Polyamide (PA)
|
29.9 | 17.5 | % | 10.9 | 8.9 | % | 19.0 | 174.3 | % | |||||||||||||||
Environmentally Friendly Plastics
|
25.9 | 15.1 | % | 9.7 | 7.9 | % | 16.2 | 167.0 | % | |||||||||||||||
Alloy Plastics
|
12.9 | 7.6 | % | 6.4 | 5.2 | % | 6.5 | 101.6 | % | |||||||||||||||
Modified Acrylonitrile Butadiene Styrene (ABS)
|
4.8 | 2.8 | % | 4.8 | 3.9 | % | - | - | ||||||||||||||||
Sub-total
|
170.5 | 99.7 | % | 121.2 | 98.4 | % | 49.3 | 40.7 | % | |||||||||||||||
After-sales Service
|
0.5 | 0.3 | % | 2.0 | 1.6 | % | (1.5 | ) | (75.0 | )% | ||||||||||||||
Total Revenues
|
171.0 | 100 | % | 123.2 | 100 | % | 47.8 | 38.8 | % |
(in MTs, except percentage)
|
Three-Month Period Ended March 31,
|
|||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
MT
|
%
|
MT
|
%
|
Change in
MT
|
Change in
%
|
|||||||||||||||||||
Modified Polypropylene (PP)
|
28,871 | 47.3 | % | 30,994 | 67.6 | % | (2,123 | ) | (6.8 | )% | ||||||||||||||
Engineering Plastics
|
8,145 | 13.3 | % | 4,805 | 10.5 | % | 3,340 | 69.5 | % | |||||||||||||||
Modified Polyamide (PA)
|
6,369 | 10.4 | % | 2,213 | 4.8 | % | 4,156 | 187.8 | % | |||||||||||||||
Environmentally Friendly Plastics
|
11,869 | 19.4 | % | 4,150 | 9.1 | % | 7,719 | 186.0 | % | |||||||||||||||
Alloy Plastics
|
4,121 | 6.7 | % | 1,893 | 4.1 | % | 2,228 | 117.7 | % | |||||||||||||||
Modified Acrylonitrile Butadiene Styrene (ABS)
|
1,770 | 2.9 | % | 1,780 | 3.9 | % | (10 | ) | (0.6 | ) % | ||||||||||||||
Total sales volume
|
61,145 | 100 | % | 45,835 | 100 | % | 15,310 | 33.4 | % |
Three-Month Period Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2013
|
2012
|
Amount
|
%
|
||||||||||||
Gross Profit
|
$
|
29.2
|
$
|
31.2
|
$
|
(2.0
|
)
|
(6.4)
|
%
|
|||||||
Gross Margin
|
17.1%
|
25.3%
|
(8.2)
|
%
|
Three-Month Period Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2013
|
2012
|
Amount
|
%
|
||||||||||||
General and Administrative Expenses
|
$
|
3.5
|
$
|
2.4
|
$
|
1.1
|
45.8
|
%
|
||||||||
as a percentage of revenues
|
2.0
|
%
|
1.9
|
%
|
0.1
|
%
|
Three–Month Period Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2013
|
2012
|
Amount
|
%
|
||||||||||||
Research and Development Expenses
|
$
|
5.0
|
$
|
2.5
|
$
|
2.5
|
100
|
%
|
||||||||
as a percentage of revenues
|
3.0
|
%
|
2.0
|
%
|
1.0
|
%
|
Three-Month Period Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2013
|
2012
|
Amount
|
%
|
||||||||||||
Interest Income
|
$
|
1.1
|
$
|
1.0
|
$
|
0.1
|
10.0
|
%
|
||||||||
Interest Expenses
|
(2.9)
|
(0.5)
|
(2.4)
|
480.0
|
%
|
|||||||||||
Net Interest Income (Expenses)
|
$
|
(1.8)
|
$
|
0.5
|
$
|
(2.3)
|
460.0
|
%
|
||||||||
as a percentage of revenues
|
(1.1)
|
%
|
0.4
|
%
|
(1.5)
|
%
|
Three–Month Period Ended March 31,
|
Change
|
|||||||||||||||
(in millions, except percentage)
|
2013
|
2012
|
Amount
|
%
|
||||||||||||
Income before Income Taxes
|
$
|
19.5
|
$
|
27.1
|
$
|
(7.6)
|
(28.0
|
)%
|
||||||||
Income Tax Expense
|
(5.0)
|
(6.5)
|
1.5
|
(23.1
|
)%
|
|||||||||||
Effective income tax rate
|
25.7%
|
24.2%
|
1.5
|
%
|
March 31,
2013
|
December 31,
2012
|
Change
|
||||||||||||||
(in millions, except percentage)
|
Amount
|
%
|
||||||||||||||
Cash and cash equivalents
|
113.7 | 83.8 | 29.9 | 35.7 | % | |||||||||||
Restricted cash
|
14.0 | 16.9 | (2.9 | ) | (17.2 | )% | ||||||||||
Time deposits
|
111.9 | 48.0 | 63.9 | 133.1 | % | |||||||||||
Accounts receivable, net of allowance for doubtful accounts
|
151.3 | 143.8 | 7.5 | 5.2 | % | |||||||||||
Inventories
|
84.4 | 78.3 | 6.1 | 7.8 | % | |||||||||||
Property, plant and equipment, net
|
219.5 | 223.8 | (4.3 | ) | (1.9 | )% | ||||||||||
Total assets
|
707.7 | 611.6 | 96.1 | 15.7 | % | |||||||||||
Short-term bank loans
|
191.6 | 162.1 | 29.5 | 18.2 | % | |||||||||||
Accounts payable
|
56.0 | 7.1 | 48.9 | 688.7 | % | |||||||||||
Bills payable
|
20.5 | 15.8 | 4.7 | 29.7 | % | |||||||||||
Income tax payable
|
8.0 | 8.5 | (0.5 | ) | (5.9 | )% | ||||||||||
Accrued expenses and other current liabilities
|
32.7 | 34.4 | (1.7 | ) | (4.9 | )% | ||||||||||
Redeemable Series D convertible preferred stock
|
97.6 | 97.6 | - | - | ||||||||||||
Stockholders' equity
|
280.0 | 264.4 | 15.6 | 5.9 | % |
(in millions)
|
March 31, 2013
|
||||||||||||
Lines of Credit, Obtained
|
Remaining Available
|
||||||||||||
Name of Financial Institution
|
Date of Approval
|
RMB
|
USD
|
USD
|
|||||||||
Bank of Communication
|
January 5, 2013
|
100.0
|
16.1
|
0.0
|
|||||||||
Bank of Longjiang, Heilongjiang
|
March 14, 2013
|
200.0
|
32.2
|
0.0
|
|||||||||
Bank of China
|
March 14, 2013
|
350.0
|
56.4
|
24.4
|
|||||||||
HSBC
|
June 28, 2012
|
93.2
|
15.0
|
2.0
|
|||||||||
China Guangfa Bank
|
August 28, 2012
|
30.0
|
4.8
|
0.0
|
|||||||||
Industrial and Commercial Bank of China
|
October 11, 2012
|
300.0
|
48.3
|
0.0
|
|||||||||
Agriculture Bank of China
|
December 7, 2012
|
200.0
|
32.2
|
0.0
|
|||||||||
China Construction Bank
|
December 19, 2012
|
175.0
|
28.2
|
15.3
|
|||||||||
Total
|
1,448.2
|
233.2
|
41.7
|
Three-Month Period Ended
March 31,
|
||||||||
(in millions US$)
|
2013
|
2012
|
||||||
Net cash provided by operating activities
|
68.8
|
4.5
|
||||||
Net cash used in investing activities
|
(68.4)
|
-
|
||||||
Net cash provided by (used in) financing activities
|
28.9
|
(12.7)
|
||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
0.6
|
(0.1)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
29.9
|
(8.3)
|
||||||
Cash and cash equivalents at the beginning of period
|
83.8
|
135.5
|
||||||
Cash and cash equivalents at the end of period
|
113.7
|
127.2
|
Three-month period ended March 31, 2013
|
Year ended December 31, 2012
|
|||
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
|
2 – 3 years
|
4-5 years
|
More than 5
years
|
|||||||||||||||
Lease commitments
|
1,584,843
|
578,567
|
1,006,276
|
-
|
-
|
|||||||||||||||
Plant construction
|
27,846,221
|
27,846,221
|
-
|
-
|
-
|
|||||||||||||||
Warehouse construction
|
794,213
|
794,213
|
-
|
-
|
||||||||||||||||
Equipment acquisition
|
1,456,054
|
1,456,054
|
-
|
-
|
-
|
|||||||||||||||
Total
|
31,681,331
|
30,675,055
|
1,006,276
|
-
|
-
|
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 14, 2013
|
By:
|
/s/ Jie Han
|
Name: Jie Han
|
||
Title: Chief Executive Officer
(Principal Executive Officer)
|
Date: May 14, 2013
|
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 14, 2013
|
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 14, 2013
|
By:
|
/s/ Taylor Zhang
|
|
Taylor Zhang, Chief Financial Officer
(Princiapl Financial and Accounting Officer)
|
Date: May 14, 2013
|
By:
|
/s/ Jie Han
|
|
Jie Han, Chief Executive Officer
(Principal Executive Officer)
|
Date: May 14, 2013
|
By:
|
/s/ Taylor Zhang
|
|
Taylor Zhang, Chief Financial Officer
(Princiapl Financial and Accounting Officer)
|
Property, plant and equipment, net (Details) (USD $)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 247,283,142 | $ 246,266,600 |
Less accumulated depreciation | (27,731,214) | (22,486,467) |
Property, plant and equipment, net | 219,551,928 | 223,780,133 |
Machinery, equipment and furniture [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 201,549,066 | 193,999,396 |
Motor vehicles [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 1,442,948 | 1,438,596 |
Workshops and buildings [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 40,504,023 | 40,357,145 |
Construction in progress [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 3,787,105 | $ 10,471,463 |
Warrants (Warrants Fair Value Assumptions) (Details) (USD $)
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Series A Investors Warrants [Member]
|
|
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Volatility | 47.50% |
Expected dividend yield | 0.00% |
Fair value of underlying common stock (per share) | $ 4.0 |
Risk-free interest rate (per annum) | 0.23% |
Series A Placement Agents Warrants [Member]
|
|
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Volatility | 47.50% |
Expected dividend yield | 0.00% |
Fair value of underlying common stock (per share) | $ 4.0 |
Risk-free interest rate (per annum) | 0.23% |
Series C Placement Agents Warrants [Member]
|
|
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Volatility | 93.90% |
Expected dividend yield | 0.00% |
Fair value of underlying common stock (per share) | $ 4.0 |
Risk-free interest rate (per annum) | 0.08% |
Commitments and contingencies (Narrative) (Details)
|
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
Plant Construction [Member]
USD ($)
|
Mar. 31, 2013
Plant Construction [Member]
CNY
|
Mar. 31, 2013
Warehouse Construction [Member]
USD ($)
|
Mar. 31, 2013
Warehouse Construction [Member]
CNY
|
Mar. 31, 2013
Equipment Acquisition [Member]
USD ($)
|
Mar. 31, 2013
Equipment Acquisition [Member]
CNY
|
|
Long-term Purchase Commitment [Line Items] | ||||||
Commitments | $ 27,846,221 | 172,947,312 | $ 794,213 | 4,932,698 | $ 1,456,054 | 9,043,260 |
Income Taxes (Narrative) (Details) (USD $)
|
3 Months Ended | 36 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
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Dec. 31, 2013
Harbin Xinda [Member]
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Mar. 31, 2013
Xinda Group [Member]
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Dec. 31, 2011
Xinda Group [Member]
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Income Tax [Line Items] | ||||||
Effective income tax rate | 25.70% | 24.20% | 15.00% | 25.00% | 25.00% | |
PRC statutory income tax rate | 25.00% | |||||
Valuation Allowance | $ 625,390 | $ 556,677 |
Commitments and contingencies (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Commitments and contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments | Future minimum lease payments under non-cancellable operating leases agreements as of March 31, 2013 were as follows. The company's leases do not contain any contingent rent payments terms.
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Property, plant and equipment, net (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Property, plant and equipment, net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following:
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Schedule of the Allocation of Depreciation Expense on Property, Plant and Equipment | Depreciation expense on property, plant and equipment was allocated to the following expense items:
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Stock based compensation (Narrative) (Details) (USD $)
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3 Months Ended | |
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Mar. 31, 2013
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Mar. 31, 2012
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Stock Options [Member]
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to stock options | $ 101,693 | |
Unrecognized compensation cost, recognition period | 4 months 6 days | |
Stock Options [Member] | General and administration expenses [Member]
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 9,791 | 81,923 |
Nonvested Shares [Member]
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | 835,305 | |
Unrecognized compensation cost, recognition period | 1 year 11 months 9 days | |
Nonvested Shares [Member] | General and administration expenses [Member]
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 354,557 | $ 70,782 |
Accrued expenses and other current liabilities (Details) (USD $)
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Mar. 31, 2013
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Dec. 31, 2012
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Accrued expenses and other current liabilities [Abstract] | ||
Payables for purchase of property, plant and equipment | $ 25,609,764 | $ 30,029,901 |
Others | 7,070,841 | 4,413,082 |
Total accrued expenses and other current liabilities | $ 32,680,605 | $ 34,442,983 |
Inventories (Details) (USD $)
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Mar. 31, 2013
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Dec. 31, 2012
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Inventories [Abstract] | ||
Raw materials | $ 55,899,933 | $ 70,672,300 |
Work in progress | 224,052 | 110,964 |
Finished goods | 28,272,725 | 7,479,807 |
Total inventories | $ 84,396,710 | $ 78,263,071 |
Stock based compensation (Summary of Nonvested Shares Activity) (Details) (Nonvested Shares [Member], USD $)
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3 Months Ended |
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Mar. 31, 2013
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Nonvested Shares [Member]
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Number of Nonvested Shares | |
Balance as of December 31, 2012 | 513,000 |
Vested | (225,000) |
Balance as of March 31, 2013 | 288,000 |
Weighted Average Grant Date Fair Value Per Share | |
Balance as of December 31, 2012 | $ 4.66 |
Vested | $ 4.35 |
Outstanding as of March 31, 2013 | $ 4.86 |
Warrants (Summary of Outstanding Warrants) (Details)
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Mar. 31, 2013
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Class of Warrant or Right [Line Items] | |
Number of Warrants Outstanding | 1,604,624 |
Series A Investors Warrants [Member]
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Class of Warrant or Right [Line Items] | |
Exercise Price | 4.9 |
Number of Warrants Outstanding | 1,320,696 |
Remaining Contractual Life | 1 year 8 months 1 day |
Series A Placement Agents Warrants [Member]
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Class of Warrant or Right [Line Items] | |
Exercise Price | 5.5 |
Number of Warrants Outstanding | 117,261 |
Remaining Contractual Life | 1 year 8 months 1 day |
Series C Placement Agents Warrants [Member]
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Class of Warrant or Right [Line Items] | |
Exercise Price | 7.5 |
Number of Warrants Outstanding | 166,667 |
Remaining Contractual Life | 3 months 7 days |
Prepaid expenses and other current assets
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Mar. 31, 2013
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Prepaid expenses and other current assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | Note 4 - Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following:
The Company is required to pay deposits to 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, 2013 are related to the purchase of raw materials, which were subsequently received by the Company in April 2013. Interest receivable mainly represents the interests earned from the 3 month or 6 month time deposits, as well as from the restricted cash. Other mainly includes other prepaid expenses and staff advances. |