HARBIN, April 15-China XD Plastics Company Ltd. ("China XD Plastics" or the "Company"), (Nasdaq: CXDC), a leading Chinese developer, manufacturer, and distributor of modified plastics primarily for use in the automotive applications in China, today announced financial results for the fourth quarter and fiscal year ended December 31, 2009.
"We are delighted with our 2009 results, as we were able to deliver strong growth in revenue and operating profits, and reach several important milestones in the execution of our business strategy. In addition to delivering exceptional results, we also won 28 new OEM certifications, listed our shares on the Nasdaq Global Market and successfully raised capital to fund our capacity expansion," commented Mr. Jie Han, Chairman and Chief Executive Officer of China XD Plastics. "As we move into the first quarter, we have increased our capacity by 42.9% to 100,000 tons, and expanded our distribution network in Eastern China, positioning our business well to continue our rapid growth in the quarters ahead."
Fourth Quarter 2009 Results
Revenue for the fourth quarter of 2009 increased 106.6% to a record of $41.2 million, compared to $20.0 million in the same period of 2008. The increase in revenue is primarily attributable to the increased sales volume driven by the strong demand for the Company's modified plastic products supported by continued growth in automotive production in China.
Gross profit for the fourth quarter of 2009 was $9.7 million, up 185.5% from $3.4 million in the fourth quarter 2008. Gross margin was 23.6% compared to 17.1% in the same period a year ago and 23.3% in the third quarter of 2009. The year-over-year increase in gross margin was due to higher value product mix associated with an increase in products sold for the use in luxury vehicles in recent months.
Selling expenses for the fourth quarter of 2009 were $176,470, up 118.3% from $80,827 in the same period last year. As a percentage of revenue, selling expenses remained 0.4% of sales for the fourth quarter 2009 and 2008. General and administrative (G&A) expenses were $2.4 million, up 269.9% from $0.6 million for the same period of last year. The significant increase in G&A expenses was mainly attributed to stock-based compensation to employees and consultants. Research and Development ("R&D") expenses were $0.5 million, or 1.1% of total revenue, compared to $0.2 million, or 1.1% of total revenue, in the same period last year. The increase in research and development expenses was in proportion to the increase in total revenue and was associated with the Company's on-going efforts to launch new products.
Operating income for the fourth quarter of 2009 was $6.7 million, compared to an operating income of $2.5 million in the same period a year ago. Operating margin was 16.3% in the fourth quarter of 2009, compared to 12.4% in the comparable period the year before.
Other expense in the fourth quarter of 2009 was $12.6 million, including $385,212 interest expense and a non-cash charge of $12.2 million to account for the change in the fair value of warrants and derivative liabilities in connection with the preferred stock issued in the private placement financing closed in December 2009. Other expense in the fourth quarter of 2008 was $0.2 million.
EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) for the fourth quarter of 2009 was $9.0 million, a significant increase from $2.7 million in the fourth quarter of 2008. For a detailed reconciliation of adjusted EBITDA, a Non-GAAP measure, to its nearest GAAP equivalent, please see the financial tables at the end of this release.
Net loss in the fourth quarter of 2009 was $5.9 million, compared to net income of $2.2 million for the same period a year ago.
In connection with the private placement of series C preferred stock in the fourth quarter of 2009, the Company recorded a non-cash charge of $13.9 million deemed dividends for series C preferred stock.
Net loss attributable to common shareholders for the fourth quarter of 2009 was $19.8 million. Loss per share attributable to common shareholders was $0.50 per basic and fully diluted share.
Adjusted net income, excluding non-cash charges associated with stock based compensation and non-cash preferred dividend was $8.0 million, or $0.20 per basic and $0.18 per fully diluted share. For a detailed reconciliation of adjusted net income, a non-GAAP measure, to net income, please see the financial tables at the end of this release.
Full Year 2009 Results
For the full year 2009, total revenue increased 79.2% to $135.8 million compared to $75.8 million in 2008. Gross profit was $30.6 million, up 76.4% from $17.3 million in the comparable period a year ago. Gross margin was 22.5% and 22.9% for the full year 2009 and 2008, respectively. Income from operations was $17.6 million, up 95.7% from $9.0 million in 2008. Net income for the full year 2009 was $4.0 million, down 51.4% from $8.2 million in 2008. In connection with the private placement of series C preferred stock in the fourth quarter of 2009, the Company recorded non-cash charges of approximately $12.2 million to account for the change in fair value of warrants and embedded conversion feature. Net loss attributable to common shareholders is $9.9 million. Fully diluted loss per share attributable to common shareholders for the full year 2009 was $0.36. Adjusting for non-cash charges associated with stock-based compensation of $8.0 million, change in fair value of warrants and derivative liabilities embedded in the preferred stock of $12.2 million, and deemed preferred dividend of $13.9 million, adjusted net income was $24.2 million or $0.87 per basic share and $0.58 per fully diluted share.
Financial Condition
As of December 31, 2009, China XD plastics had $6.9 million in cash and cash equivalents, $30.8 million in working capital and a current ratio of 2.2. Shareholder's equity as of December 31, 2009 stood at $21.5 million compared to $24.1 million at the end of 2008.
Restatement of 2009 and 2008 Financials
The Company discovered a non-cash error regarding the accounting for recognition of stock options granted to Mr. Han during the routine course of its internal audit and review. The Options were granted to Mr. Han by Ellie Qiuyao Piao ("Ms. Piao"), the sole shareholder of XD Engineering Plastics Company Limited ("XD Engineering") which was the principal shareholder of our subsidiary Favor Sea Limited before the reverse merger pursuant to an option agreement dated May 16, 2008. The agreement provides that Mr. Han may purchase from Ms. Piao for a nominal price all of the outstanding equity (40,000 shares) in XD Engineering if, on a consolidated basis, the revenue of Favor Sea Limited ("FSL"), a subsidiary of the Company, which indirectly owns our operating subsidiaries Harbin Xinda Macromolecule Material Co., Ltd. and Harbin Xinda Macromolecule Research Institute, achieves certain revenue thresholds. Mr. Han may purchase 25% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2008 exceeds $40 million. He may purchase 14% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2009 exceeds $70 million. And he may purchase 61% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2010 exceeds $110 million. The purpose of the options is to enable Mr. Han to re-acquire ultimately the legal ownership of the Company in compliance with the laws and regulations of the People's Republic of China.
Therefore, based on the related guidance of ASC Topic 718, the Company believes such options should have been accounted for under the Company's financial statements as share-based payments awarded to an employee by a related party as compensation for services rendered. As a result of the restatement, our consolidated net income for the year ended December 31, 2008 and the second quarter of 2009 is expected to be reduced by a non-cash charge of approximately $5.5 million and $3.1 million, respectively, accounted for the above mentioned option grant arrangement. The adjustment is to be recorded in general and administrative expense in the consolidated statements of income and other comprehensive income.
The above-mentioned adjustments do not impact revenue recognition, cash balances, liquidity, or capital resources and do not impact operations.
Other Recent Events
On February 8, 2010, the Company announced selected estimated unaudited financial results for the fourth quarter and fiscal year 2009.
On February 25, 2010, China XD Plastics announced the total annual production capacity of modified plastics to increase 42.9% from 70,000 tons in 2009 to 100,000 tons. The additional 30,000 tons of annual production capacity is expected to start production at the beginning of the second quarter, 2010.
On March 4, 2010, China XD Plastics announced the signing of a one-year non-exclusive agreement with Ningbo Huading New Material Technology Company Limited ("NHNM") to distribute the Company's modified plastics for automotive applications in the Eastern Chinese Market, specifically in the area of Zhejiang Province.
Business Outlook and Guidance
The year 2009 was a key milestone for the automobile industry in China with total vehicle sales surpassing United States and Japan for the first time in history. Total vehicle sales reached 13.6 million units, representing 45% increase from 2008, with sales of passenger cars representing 10.3 million units or 76% of total.
The stimulus plan introduced by the government in China to support demand for automobiles has been extended into 2010 with minor changes. The government adjusted the reduction in sales tax on smaller passenger vehicles from 5% to 7.5% compared to the normal rate of 10%, while subsidies for farmers to purchase certain automobiles and motorcycles were maintained, and subsidies for upgrading commercial vehicles were increased. These favorable policies are expected to continue to support growth in demand for automobiles in the quarters ahead.
With the backdrop of a favorable macroeconomic environment, China XD Plastics expects to be able to capitalize on its recently announced capacity expansion to 100,000 tons per year, to continue to deliver rapid growth in revenue and profits.
The Company expects 2010 revenues to be in the range between $170 million to $200 million, and non-GAAP adjusted net income to be in the range between $27 million to $30 million, excluding any non-cash charge related to the change in fair value of the existing derivative liabilities and stock-based compensation.
"The long-term fundamentals of the automotive industry in China remain strong, driven by rising personal incomes, favorable government policies, and very low car-ownership level relative to the rest of the world. In addition, the competitive environment in our industry remains favorable due to high barriers to entry associated with costly OEM certification process," said Mr. Jie Han, Chairman and Chief Executive Officer of China XD Plastics. "As we look to the future, we continue to see significant opportunities to grow our top- and bottom-lines by leveraging our technology institute's ability to conduct breakthrough research to win additional product certifications, and gradually expand capacity to meet growing demand for our products."
Conference Call
China XD Plastics will host a conference call at 8:00 a.m. ET on Thursday, April 15, 2010, to discuss the fourth quarter and full year 2010 financial results. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 877-353-4923. International callers should dial +1-702-894-2405. The pass code for the call is 68756375. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, April 15, 2010 at 11:00 a.m. ET. To access the replay, dial 800-642-1687. International callers should dial +1-706-645-9291. The conference pass code is 68756375. The call will be broadcast live over the internet and can be accessed at http://webcast.mzdp.com.br/publico.aspx?codplataforma=1660 . The webcast will be available for replay in the IR section of the Company's website at http://www.chinaxd.net for 90 days.
About China XD Plastics Company Ltd.
China XD Plastics Company Ltd., through its wholly owned subsidiary Harbin Xinda Macromolecule Material ("Xinda"), develops, manufactures, and distributes modified plastics, primarily for automotive applications. The Company's specialized plastics are used in the exterior and interior trim and in the functional components of more than 30 automobile brands manufactured in China including Audi, Red Flag, Volkswagen and Mazda. The Company's wholly-owned research institute is dedicated to the research and development of modified plastics, and benefits from the cooperation with well-known scientists from prestigious universities in China. As of the end of December 31, 2009, 145 products that Xinda manufactured have been certified for use by one or more of the automobile manufacturers in China. For more information please visit http://www.chinaxd.net .
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's ability to raise additional capital to finance the company's activities; the effectiveness, profitability, and the marketability of its products; legal and regulatory risks associated with the share exchange; the Company's ability to successfully expand its production capacity; the future trading of the common stock of the company; the Company's ability to operate as a public company; the period of time for which its current liquidity will enable the company to fund its operations; the company's ability to protect its proprietary information; general economic and business conditions; the volatility of the company's operating results and financial condition; the company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov . These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
GAAP results for the three months and full year ended December 31, 2009 include non-cash charges. To supplement the Company's consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of those items in this release. The Company's management believes that this non-GAAP measure provides investors with a better understanding of how the results relate to the Company's historical performance. A reconciliation of the adjustments to GAAP results appears in the table accompanying this press release. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.
SOURCE China XD Plastics Company Ltd.
"We are delighted with our 2009 results, as we were able to deliver strong growth in revenue and operating profits, and reach several important milestones in the execution of our business strategy. In addition to delivering exceptional results, we also won 28 new OEM certifications, listed our shares on the Nasdaq Global Market and successfully raised capital to fund our capacity expansion," commented Mr. Jie Han, Chairman and Chief Executive Officer of China XD Plastics. "As we move into the first quarter, we have increased our capacity by 42.9% to 100,000 tons, and expanded our distribution network in Eastern China, positioning our business well to continue our rapid growth in the quarters ahead."
Fourth Quarter 2009 Results
Revenue for the fourth quarter of 2009 increased 106.6% to a record of $41.2 million, compared to $20.0 million in the same period of 2008. The increase in revenue is primarily attributable to the increased sales volume driven by the strong demand for the Company's modified plastic products supported by continued growth in automotive production in China.
Gross profit for the fourth quarter of 2009 was $9.7 million, up 185.5% from $3.4 million in the fourth quarter 2008. Gross margin was 23.6% compared to 17.1% in the same period a year ago and 23.3% in the third quarter of 2009. The year-over-year increase in gross margin was due to higher value product mix associated with an increase in products sold for the use in luxury vehicles in recent months.
Selling expenses for the fourth quarter of 2009 were $176,470, up 118.3% from $80,827 in the same period last year. As a percentage of revenue, selling expenses remained 0.4% of sales for the fourth quarter 2009 and 2008. General and administrative (G&A) expenses were $2.4 million, up 269.9% from $0.6 million for the same period of last year. The significant increase in G&A expenses was mainly attributed to stock-based compensation to employees and consultants. Research and Development ("R&D") expenses were $0.5 million, or 1.1% of total revenue, compared to $0.2 million, or 1.1% of total revenue, in the same period last year. The increase in research and development expenses was in proportion to the increase in total revenue and was associated with the Company's on-going efforts to launch new products.
Operating income for the fourth quarter of 2009 was $6.7 million, compared to an operating income of $2.5 million in the same period a year ago. Operating margin was 16.3% in the fourth quarter of 2009, compared to 12.4% in the comparable period the year before.
Other expense in the fourth quarter of 2009 was $12.6 million, including $385,212 interest expense and a non-cash charge of $12.2 million to account for the change in the fair value of warrants and derivative liabilities in connection with the preferred stock issued in the private placement financing closed in December 2009. Other expense in the fourth quarter of 2008 was $0.2 million.
EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) for the fourth quarter of 2009 was $9.0 million, a significant increase from $2.7 million in the fourth quarter of 2008. For a detailed reconciliation of adjusted EBITDA, a Non-GAAP measure, to its nearest GAAP equivalent, please see the financial tables at the end of this release.
Net loss in the fourth quarter of 2009 was $5.9 million, compared to net income of $2.2 million for the same period a year ago.
In connection with the private placement of series C preferred stock in the fourth quarter of 2009, the Company recorded a non-cash charge of $13.9 million deemed dividends for series C preferred stock.
Net loss attributable to common shareholders for the fourth quarter of 2009 was $19.8 million. Loss per share attributable to common shareholders was $0.50 per basic and fully diluted share.
Adjusted net income, excluding non-cash charges associated with stock based compensation and non-cash preferred dividend was $8.0 million, or $0.20 per basic and $0.18 per fully diluted share. For a detailed reconciliation of adjusted net income, a non-GAAP measure, to net income, please see the financial tables at the end of this release.
Full Year 2009 Results
For the full year 2009, total revenue increased 79.2% to $135.8 million compared to $75.8 million in 2008. Gross profit was $30.6 million, up 76.4% from $17.3 million in the comparable period a year ago. Gross margin was 22.5% and 22.9% for the full year 2009 and 2008, respectively. Income from operations was $17.6 million, up 95.7% from $9.0 million in 2008. Net income for the full year 2009 was $4.0 million, down 51.4% from $8.2 million in 2008. In connection with the private placement of series C preferred stock in the fourth quarter of 2009, the Company recorded non-cash charges of approximately $12.2 million to account for the change in fair value of warrants and embedded conversion feature. Net loss attributable to common shareholders is $9.9 million. Fully diluted loss per share attributable to common shareholders for the full year 2009 was $0.36. Adjusting for non-cash charges associated with stock-based compensation of $8.0 million, change in fair value of warrants and derivative liabilities embedded in the preferred stock of $12.2 million, and deemed preferred dividend of $13.9 million, adjusted net income was $24.2 million or $0.87 per basic share and $0.58 per fully diluted share.
Financial Condition
As of December 31, 2009, China XD plastics had $6.9 million in cash and cash equivalents, $30.8 million in working capital and a current ratio of 2.2. Shareholder's equity as of December 31, 2009 stood at $21.5 million compared to $24.1 million at the end of 2008.
Restatement of 2009 and 2008 Financials
The Company discovered a non-cash error regarding the accounting for recognition of stock options granted to Mr. Han during the routine course of its internal audit and review. The Options were granted to Mr. Han by Ellie Qiuyao Piao ("Ms. Piao"), the sole shareholder of XD Engineering Plastics Company Limited ("XD Engineering") which was the principal shareholder of our subsidiary Favor Sea Limited before the reverse merger pursuant to an option agreement dated May 16, 2008. The agreement provides that Mr. Han may purchase from Ms. Piao for a nominal price all of the outstanding equity (40,000 shares) in XD Engineering if, on a consolidated basis, the revenue of Favor Sea Limited ("FSL"), a subsidiary of the Company, which indirectly owns our operating subsidiaries Harbin Xinda Macromolecule Material Co., Ltd. and Harbin Xinda Macromolecule Research Institute, achieves certain revenue thresholds. Mr. Han may purchase 25% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2008 exceeds $40 million. He may purchase 14% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2009 exceeds $70 million. And he may purchase 61% of the total outstanding equity in XD Engineering if FSL's revenue during the first three quarters of 2010 exceeds $110 million. The purpose of the options is to enable Mr. Han to re-acquire ultimately the legal ownership of the Company in compliance with the laws and regulations of the People's Republic of China.
Therefore, based on the related guidance of ASC Topic 718, the Company believes such options should have been accounted for under the Company's financial statements as share-based payments awarded to an employee by a related party as compensation for services rendered. As a result of the restatement, our consolidated net income for the year ended December 31, 2008 and the second quarter of 2009 is expected to be reduced by a non-cash charge of approximately $5.5 million and $3.1 million, respectively, accounted for the above mentioned option grant arrangement. The adjustment is to be recorded in general and administrative expense in the consolidated statements of income and other comprehensive income.
The above-mentioned adjustments do not impact revenue recognition, cash balances, liquidity, or capital resources and do not impact operations.
Other Recent Events
On February 8, 2010, the Company announced selected estimated unaudited financial results for the fourth quarter and fiscal year 2009.
On February 25, 2010, China XD Plastics announced the total annual production capacity of modified plastics to increase 42.9% from 70,000 tons in 2009 to 100,000 tons. The additional 30,000 tons of annual production capacity is expected to start production at the beginning of the second quarter, 2010.
On March 4, 2010, China XD Plastics announced the signing of a one-year non-exclusive agreement with Ningbo Huading New Material Technology Company Limited ("NHNM") to distribute the Company's modified plastics for automotive applications in the Eastern Chinese Market, specifically in the area of Zhejiang Province.
Business Outlook and Guidance
The year 2009 was a key milestone for the automobile industry in China with total vehicle sales surpassing United States and Japan for the first time in history. Total vehicle sales reached 13.6 million units, representing 45% increase from 2008, with sales of passenger cars representing 10.3 million units or 76% of total.
The stimulus plan introduced by the government in China to support demand for automobiles has been extended into 2010 with minor changes. The government adjusted the reduction in sales tax on smaller passenger vehicles from 5% to 7.5% compared to the normal rate of 10%, while subsidies for farmers to purchase certain automobiles and motorcycles were maintained, and subsidies for upgrading commercial vehicles were increased. These favorable policies are expected to continue to support growth in demand for automobiles in the quarters ahead.
With the backdrop of a favorable macroeconomic environment, China XD Plastics expects to be able to capitalize on its recently announced capacity expansion to 100,000 tons per year, to continue to deliver rapid growth in revenue and profits.
The Company expects 2010 revenues to be in the range between $170 million to $200 million, and non-GAAP adjusted net income to be in the range between $27 million to $30 million, excluding any non-cash charge related to the change in fair value of the existing derivative liabilities and stock-based compensation.
"The long-term fundamentals of the automotive industry in China remain strong, driven by rising personal incomes, favorable government policies, and very low car-ownership level relative to the rest of the world. In addition, the competitive environment in our industry remains favorable due to high barriers to entry associated with costly OEM certification process," said Mr. Jie Han, Chairman and Chief Executive Officer of China XD Plastics. "As we look to the future, we continue to see significant opportunities to grow our top- and bottom-lines by leveraging our technology institute's ability to conduct breakthrough research to win additional product certifications, and gradually expand capacity to meet growing demand for our products."
Conference Call
China XD Plastics will host a conference call at 8:00 a.m. ET on Thursday, April 15, 2010, to discuss the fourth quarter and full year 2010 financial results. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 877-353-4923. International callers should dial +1-702-894-2405. The pass code for the call is 68756375. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, April 15, 2010 at 11:00 a.m. ET. To access the replay, dial 800-642-1687. International callers should dial +1-706-645-9291. The conference pass code is 68756375. The call will be broadcast live over the internet and can be accessed at http://webcast.mzdp.com.br/publico.aspx?codplataforma=1660 . The webcast will be available for replay in the IR section of the Company's website at http://www.chinaxd.net for 90 days.
About China XD Plastics Company Ltd.
China XD Plastics Company Ltd., through its wholly owned subsidiary Harbin Xinda Macromolecule Material ("Xinda"), develops, manufactures, and distributes modified plastics, primarily for automotive applications. The Company's specialized plastics are used in the exterior and interior trim and in the functional components of more than 30 automobile brands manufactured in China including Audi, Red Flag, Volkswagen and Mazda. The Company's wholly-owned research institute is dedicated to the research and development of modified plastics, and benefits from the cooperation with well-known scientists from prestigious universities in China. As of the end of December 31, 2009, 145 products that Xinda manufactured have been certified for use by one or more of the automobile manufacturers in China. For more information please visit http://www.chinaxd.net .
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's ability to raise additional capital to finance the company's activities; the effectiveness, profitability, and the marketability of its products; legal and regulatory risks associated with the share exchange; the Company's ability to successfully expand its production capacity; the future trading of the common stock of the company; the Company's ability to operate as a public company; the period of time for which its current liquidity will enable the company to fund its operations; the company's ability to protect its proprietary information; general economic and business conditions; the volatility of the company's operating results and financial condition; the company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov . These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
GAAP results for the three months and full year ended December 31, 2009 include non-cash charges. To supplement the Company's consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of those items in this release. The Company's management believes that this non-GAAP measure provides investors with a better understanding of how the results relate to the Company's historical performance. A reconciliation of the adjustments to GAAP results appears in the table accompanying this press release. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.
SOURCE China XD Plastics Company Ltd.
