CHINA XINIYA FASHION LTD (ADR) XIAMEN, China, Oct. 7, 2015 /PRNewswire/ -- China Xiniya Fashion Limited ("Xiniya" or the "Company" NYSE: XNY), a leading provider of men's business casual apparel in China, today reported financial results for the second quarter of 2015. The unaudited consolidated financial statements and other financial information included in this press release have been prepared in conformity with International Financial Reporting Standards ("IFRS").
The Company publishes its consolidated financial statements in Renminbi ("RMB").
Second Quarter 2015 Highlights
-- Revenue during the second quarter of 2015 decreased by 47.2% to RMB106.4
million, as compared to RMB201.7 million in the second quarter of 2014.
-- Gross margin was 20.8% of revenue in the second quarter of 2015 as
compared to 27.0% in the second quarter of 2014.
-- Loss before taxation during the second quarter of 2015 was RMB8.7
million as compared to profit before taxation of RMB18.4 million in the
second quarter of 2014.
-- Net loss in the second quarter of 2015 was RMB6.8 million as compared to
net profit of RMB13.3 million in the second quarter of 2014.
-- Loss per ADS amounted $0.08 in the second quarter of 2015 as compared to
earnings per ADS of $0.15 per ADS in the second quarter of 2014.
-- Xiniya's network of authorized retailers had a net increase of 31
authorized retail outlets in the second quarter of 2015, consisting of
64 new retail outlets opened and 33 retail outlets closed. The total
number of authorized retail outlets was 635 as of June 30, 2015.
Recent development
-- The Company successfully held its 2015 Winter Collection Sales Fair in
June 2015 in Xiamen City, Fujian Province. The Company's distributors
and authorized retailers in attendance placed their orders for Xiniya's
latest 2015 Winter collection. Xiniya exhibited over 500 new products
during the sales fair including apparel, shoes, bags and accessories for
distributors and authorized retailers to select from based on each
store's location, climate and local consumer taste. Deliveries will take
place during the fourth quarter of 2015. The distributors will then
either deliver these products to authorized retailers or display them in
their own retail outlets. The total orders for the 2015 Winter
Collection increased 15%, when compared to the total orders from the
corresponding period last year.
Chairman's statement
"I am pleased to report that orders for our 2015 Winter Collection Sales Fair increased 15% despite the continued challenging economic environment and increased competition in China's menswear industry," commented Mr. Qiming Xu, Xiniya's Chairman and Chief Executive Officer. "To further support and stabilize our retail network during this transition period, we implemented the second phase of our inventory buyback. We are beginning to see a definite positive impact on our business from the buyback initiatives and expect this progress to continue for the rest of the year. Confidence from our distributors and existing and prospective authorized retailers has improved, evidenced by the increase in orders from our sales fair and the net increase in number of authorized retail outlets. While we expect the economic environment to remain challenging, we are confident that our strategy to adjust our business will ensure the long-term sustainability of our business and brand."
Second Quarter 2015 Results
Revenue for the second quarter of 2015 was RMB106.4 million, a 47.2% decrease from RMB201.7 million during the second quarter of 2014. The Company delivered approximately 730,000 units to its distributors during the second quarter of 2015, compared with 1,192,000 units during the second quarter of 2014. As of June 30, 2015, the Company had a total of 635 retail outlets. The table below sets forth the number of retail outlets by outlet type:
As of As of
December 31, June 30,
Outlet Type: 2014 2015
Company-operated flagship store 1 1
Distributor-operated stores 81 99
Distributor-operated flagship stores 3 3
Distributor-operated retail website 1 1
Managed by authorized retailers 812 531
Total outlet count 898 635
=== ===
Gross profit during the second quarter of 2015 was RMB22.1 million, a decrease from RMB54.4 million during the second quarter of 2014. Gross margin was 20.8% of revenue in the second quarter of 2015 as compared with 27.0% in the second quarter of 2014. The decrease in gross margin was primarily due to an increase in research and development expenses as a percentage of total sales in the second quarter of 2015 and a decrease in retail prices to improve the price competitiveness and attractiveness of the Company's products to consumers.
Interest and other income was RMB4.7 million in the second quarter of 2015 as compared to RMB5.3 million in the second quarter of 2014. The decrease was mainly due to lower time deposits of RMB370 million placed with banks in the second quarter of 2015 as compared to time deposits of RMB600 million placed with banks during the same period last year.
Selling and distribution expenses were RMB29.8 million in the second quarter of 2015, a decrease from RMB34.4 million during the second quarter of 2014. The decrease was primarily due to a decrease of RMB4.1 million in rack expenses for authorized retailers, as well as a decrease in packaging expenses.
Administrative expenses were RMB5.7 million in the second quarter of 2015, a decrease from RMB7.0 million during the second quarter of 2014. The decrease was primarily due to reduction of headcounts, office and other miscellaneous expenses during the second quarter of 2015.
Loss before taxation was RMB8.7 million in the second quarter of 2015, as compared to profit before taxation of RMB18.4 million during the second quarter of 2014.
Income tax benefit in the second quarter of 2015 was RMB2.0 million, as compared to income tax expense of RMB5.0 million during the second quarter of 2014.
Loss after taxation for the second quarter of 2015 was RMB6.8 million, as compared to profit after taxation of RMB13.3 million during the second quarter of 2014. Loss per ADS was $0.08 in the second quarter of 2015, compared to earnings per ADS of $0.15 in the second quarter of 2014.
Financial Position
As of June 30, 2015, the Company had cash and cash equivalents of RMB699.0 million, and time deposits of RMB120.0 million held at banks with maturities of more than three months.
As of June 30, 2015, the Company had inventory of RMB217.7 million. The increase in inventory, as compared to December 31, 2014, was primarily due to the Company's repurchase of approximately RMB211.3 million of inventory from certain distributors in the second quarter of 2015. This inventory was written down by RMB115.6 million. Correspondingly, the provision for this liability, which was recorded in 2014, was reduced by RMB115.6 million.
Conference Call
Xiniya will host a conference call and live webcast at 8 a.m. Eastern Daylight Time (EDT) on October 8, 2015, (8 p.m. Beijing time on the same day).
The toll free dial-in details for the live conference call are as follows:
- USA: 1877-679-2987
- China: 800-803-6152
- Hong Kong: 800-908-575
- International access: +852 3056 2688
Participant PIN Code: 647733#
A live webcast of the conference call will be available on: http://www.corpasia.net/cancast/us/index.php?id=usXNY_37&version=e
A telephone replay of the call will be available 2 hours after the end of the conference through November 6, 2015 at 8 a.m. EST.
The dial-in details for the replay are as follows:
Hong Kong 3060-0238
China 1080-0265-2561 Southern
China -CT
1080-0650-0588 Northern
China -CNC
USA 1866-345-5132
Conference Reference: 216646#
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
Exchange Rate Information
The United States dollar ($) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the certified exchange rate of $1.00 = RMB6.2000 on June 30, 2015 as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into $ at that rate on June 30, 2015, or at any other date. The percentages stated are calculated based on RMB amounts.
About China Xiniya Fashion Limited
Xiniya is a leading provider of men's business casual apparel in China. The Company designs men's business casual and business formal apparel and accessories, which are marketed under the Xiniya brand, and sells through its distribution network that includes 22 distributors. Its products are sold to consumers at over 600 authorized retail outlets owned and managed by third parties located in 22 provinces, four autonomous regions, and four municipalities in China. This retail network focuses on second and lower-tier cities, where increasing affluence has led to an improvement in living standards and where most international men's apparel brands do not have a significant presence. The Company's target consumers are male working professionals in China between the ages of 25 and 45 who seek fashionable clothing to suit their working and lifestyle needs. For more information, please visit the Company's website at http://www.xiniya.com.
For additional information, please contact:
China Xiniya Fashion Limited
Mr. Chee Jiong Ng
Chief Financial Officer
Telephone: +86 1365 5939 932
Email: ngcheejiong@xiniya.com
Christensen
Ms. Linda Bergkamp
Phone: +1-480-614-3004 in U.S.A.
Email: lbergkamp@ChristensenIR.com
or
Mr. Christian Arnell
Telephone +86 10 5900-1548 in Beijing
email: carnell@christensenir.com
CHINA XINIYA FASHION LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(Expressed in thousands, except per share and per ADS amounts)
Three months ended June 30 Six months ended June 30
2014 2015 2015 2014 2015 2015
RMB RMB USD RMB RMB USD
--- --- --- --- --- ---
Revenue 201,715 106,378 17,158 406,306 214,274 34,560
Cost of sales (147,313) (84,244) (13,588) (291,435) (162,019) (26,132)
-------- ------- ------- -------- -------- -------
Gross profit 54,402 22,134 3,570 114,871 52,255 8,428
Interest and other income 5,287 4,666 753 10,521 10,493 1,692
Selling and distribution expenses (34,355) (29,807) (4,808) (54,772) (36,991) (5,966)
Administrative expenses (6,959) (5,736) (925) (16,083) (12,420) (2,003)
------ ------ ---- ------- ------- ------
Profit/(loss) before taxation 18,375 (8,743) (1,410) 54,537 13,337 2,151
Income tax (expense)/benefit (5,037) 1,968 317 (14,600) (3,773) (608)
------ ----- --- ------- ------ ----
Profit/(loss) for the period 13,338 (6,775) (1,093) 39,937 9,564 1,543
Other comprehensive income/(loss) for the period:
Exchange differences on translation of financial statements of entities outside the mainland of the People's Republic of China
(44) (4) (1) 695 14 2
Total comprehensive income/(loss) for the period
13,294 (6,779) (1,094) 40,632 9,578 1,545
====== ====== ====== ====== ===== =====
Earnings/(loss) per share - basic and diluted (in RMB)
0.06 (0.03) 0.18 0.04
Earnings/(loss) per ADS - basic and diluted (in USD)
0.15 (0.08) 0.45 0.11
Weighted average shares outstanding in the period ('000)
227,717 227,717 227,717 227,717
Weighted average ADS outstanding in the period ('000)
14,232 14,232 14,232 14,232
One ADS represents 16 ordinary shares.
CHINA XINIYA FASHION LIMITED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in thousands)
As of As of
December 31, June 30,
2014 2015 2015
---- ---- ----
RMB RMB USD
Unaudited Unaudited
Assets
Non-current assets
Property, plant
and equipment 5,316 4,737 764
Intangible assets 6,379 5,285 852
Deposit for land
use right 8,854 8,854 1,428
Deferred tax
assets 54,760 50,987 8,224
------ ------ -----
Total non-
current assets 75,309 69,863 11,268
------ ------ ------
Current assets
Cash and cash
equivalents 985,097 699,060 112,752
Time deposits held at banks with maturity over
three months
70,000 120,000 19,355
Trade receivables 278,446 241,023 38,875
Prepayments to
suppliers 48,140 58,200 9,387
Inventories 97,800 217,738 35,119
Other receivables
and prepayments 58,106 105,960 17,090
------ ------- ------
Total current
assets 1,537,589 1,441,981 232,578
--------- --------- -------
Total assets 1,612,898 1,511,844 243,846
========= ========= =======
Equity and liabilities
Equity
Share capital 77 77 12
Additional paid-
in capital 519,077 519,077 83,722
Statutory reserve 122,615 122,615 19,777
Currency
translation
reserve (19,469) (19,483) (3,142)
Retained earnings 708,804 718,368 115,866
------- ------- -------
Total equity 1,331,104 1,340,654 216,235
--------- --------- -------
Current liabilities
Trade payables 45,288 38,219 6,164
Deposits received
from
distributors 63,400 69,600 11,226
Other payables
and accruals 34,493 40,350 6,508
Provision for
liability 136,200 20,608 3,324
Current income
tax payable 2,413 2,413 389
----- ----- ---
Total current
liabilities 281,794 171,190 27,611
------- ------- ------
Total equity and
liabilities 1,612,898 1,511,844 243,846
========= ========= =======
CHINA XINIYA FASHION LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands)
Six months ended June 30
2014 2015 2015
RMB RMB USD
Cash flows from operating activities:
Profit before taxation 54,537 13,337 2,151
Adjustments for:
Depreciation of property, plant
and equipment 2,091 1,591 257
Amortization of intangible
assets 1,093 1,094 176
Loss on disposal of property,
plant and equipment - 387 62
Interest income (9,976) (8,618) (1,390)
Foreign exchange (gains)/losses (751) 11 2
Share-based compensation 458 - -
Operating profit before working
capital changes 47,452 7,802 1,258
Decrease in trade receivables 315,434 37,423 6,036
Increase in prepayments to
suppliers (11,438) (10,060) (1,623)
Increase in inventories (3,839) (235,530) (37,989)
Increase in other receivables
and prepayments (21,036) (46,347) (7,475)
Increase/(decrease) in trade
payables 14,736 (7,069) (1,140)
Increase in deposits received
from distributors 6,500 6,200 1,000
(Decrease)/increase in other
payables and accruals (14,626) 5,857 945
------- ----- ---
Cash generated by/(used in)
operating activities 333,183 (241,724) (38,988)
Income tax paid (25,846) - -
------- --- ---
Net cash generated by/(used in)
operating activities 307,337 (241,724) (38,988)
------- -------- -------
Cash flows from investing activities:
Increase in time deposits held at banks with maturity over
three months
(160,000) (50,000) (8,064)
Acquisition of property, plant
and equipment (40) (3,397) (548)
Proceeds from the disposal of
property, plant and equipment - 1,998 322
Interest received 4,369 7,111 1,147
Net cash used in investing
activities (155,671) (44,288) (7,143)
-------- ------- ------
Net increase/(decrease) in cash
and cash equivalents 151,666 (286,012) (46,131)
Cash and cash equivalents at
beginning of the period 806,467 985,097 158,887
Exchange gains/(losses) on cash
and cash equivalents 1,446 (25) (4)
----- --- ---
Cash and cash equivalents at end
of the period 959,579 699,060 112,752
======= ======= =======
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SOURCE China Xiniya Fashion Limited
