Specialty Chemical Company China XD Plastics Provides Update on Impact of Coronavirus Outbreak
HARBIN, China, April 2, 2020 /PRNewswire/ -- China XD Plastics Company Limited (NASDAQ: CXDC) ("China XD Plastics" or the "Company"), one of China's leading specialty chemical companies engaged in the development, manufacture and sale of polymer composite materials primarily for automotive applications, today provided an update on the impact of the coronavirus outbreak on its business and operations.
While the Company's business operations and financial results for the year ended December 31, 2019 were not affected by this global pandemic, the Company had temporarily closed its manufacturing factories and corporate offices from January 24th to February 9th, 2020, as a result of the Outbreak and widespread public concerns. All company personnel had been required to stay at home until February 9th by the government based on the development of this health epidemic. The preparation of Company's financial statements and audit process have been delayed due to government-imposed quarantines, office closings and travel restrictions on Company's personnel and service providers, including auditors. In the short term, the Company expects the outbreak to have a material impact on its operations in the first quarter of 2020. The overall impact of the Coronavirus on the Company's operations and financial results for 2020 remains to be seen. Presently, the pandemic in China has been well contained. As of the date of this press release, approximately 50% of employees of the Company's administrative offices return to work. Our factories in Heilongjiang and Sichuan provinces were running at 20% capacity utilization at the end of this March and are expected to reach 70% capacity utilization by the end of this April and normal utilization rate by the end of this May. Our factory in Dubai was not impacted by the coronavirus outbreak during January and February but only 20% employees from private sectors are now allowed to go to work due to the recent rise of coronavirus cases in UAE.
On March 4, 2020, in a public statement, Securities and Exchange Commission (SEC) Chairman Jay Clayton stated "The health and safety of all participants in our markets is of paramount importance. While timely public filing of Exchange Act reports is a cornerstone of well-functioning markets, we recognize that this situation may prevent certain issuers from compiling these reports within required timeframes." To address potential compliance issues, the Commission has issued an order that, subject to certain conditions, provides publicly traded companies with an additional 45 days to file certain disclosure reports that would otherwise have been due between March 1 and April 30, 2020. Among other conditions, companies must convey through a current report a summary of why the relief is needed in their particular circumstances. The Commission may extend the time period for the relief, with any additional conditions it deems appropriate, or provide additional relief as circumstances warrant.
The Company is working to file its annual report for fiscal year ended December 31, 2019 prior to the above referenced extended deadline. Chairman and CEO, Mr. Jie Han, stated, "We are continuing to work closely with our provincial government to take all necessary precautions during this outbreak until such time as conditions to fully resume operations are suitable. As always, our top priority is the safety and security of our employees, customers, and their families. We expect to provide further updates as we evaluate any impact of the coronavirus outbreak on our operations in the coming weeks."
About China XD Plastics Company Limited
China XD Plastics Company Limited, through its wholly-owned subsidiaries, develops, manufactures and sells polymer composites materials, primarily for automotive applications. The Company's products are used in the exterior and interior trim and in the functional components of 31 automobile brands manufactured in China, including without limitation, Audi, Mercedes Benz, BMW, Toyota, Buick, Chevrolet, Mazda, Volvo, Ford, Citroen, Jinbei and VW Passat, Golf, Jetta, etc. The Company's wholly-owned research center is dedicated to the research and development of polymer composites materials and benefits from its cooperation with well-known scientists from prestigious universities in China. As of September 30, 2019, 601 of the Company's products have been certified for use by one or more of the automobile manufacturers in China. For more information, please visit the Company's English website at http://chinaxd.irpass.com/, and the Chinese website at http://www.xdholding.com.
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 growth potential in international markets; the effectiveness and profitability of the Company's product diversification strategy; the impact of the Company's product mix shift to more advanced products and related pricing policies; the effectiveness, profitability, and the marketability of its the ongoing mix shift to more advanced products; the prospect of the Company's Dubai facility, and the associated expansion into Middle East, Europe and other parts of Asia; the prospect of the Company's Southwest China facility, the prospects of the Company's Harbin facility, and its penetration into Northeast China; and its penetration into Southwest China; the Company's projections of its revenues for performance in fiscal 2019. These forward-looking statements can be identified by terminology such as "will," "expect," "project," "anticipate," "forecast," "plan," "believe," "estimate" and similar statements. Forward-looking statements involve inherent risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the global economic uncertainty could further impair the automotive industry and limit demand for our products; fluctuations in automotive sales and production could have a material adverse effect on our results of operations and liquidity; our financial performance may be affected by the prospect of our Dubai facility and the associated expansion into Middle East, Europe and other parts of Asia; the withdrawal of preferential government policies and the tightening control over the Chinese automotive industry and automobile purchase restrictions imposed in certain major cities may limit market demand for our products; the slowing of Chinese automotive industry's growth; the concentration of our distributors, customers and suppliers; 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. 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, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
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