NEW YORK, May 27, 2016 /PRNewswire/ -- Wins Finance Holdings
Inc. ("Wins Finance" or the "Company") (NASDAQ: WINS), a diversified investment and asset management company that provides
integrated financing solutions to small and medium enterprises ("SMEs") in China, today
announced its unaudited financial results for the quarter ended March 31, 2016.
Fiscal Third Quarter Financial and Operational Highlights
- Revenues were $2.5 million, compared to $4.5 million for the
comparable period last year.
- Interest on short-term investments was $3.5 million,compared to $5.4
million for the comparable period last year.
- Net income attributable to Wins Finance was $0.2 million for the quarter ended March 31, 2016, compared to $8.5 million for the same period ended March 31, 2015.
"As we expected, the financial results of this quarter was impacted by our current exposure to the financial guarantee
business in China and will continue to be impacted by such exposure in the coming quarters. One
of our clients defaulted the payment of a $4.7 million loan, due to slow down of the Chinese
economy and the cash flow difficulties for Chinese Small and Medium Enterprise (SME). We made a provision of $3.2 million for the potential loss," said Renhui Mu, Co-CEO and COO of Wins
Finance. "In response to the challenges we are encountering in our guarantee business, we are taking aggressive measures to
control the exposure to current economic situation."
"We remain optimistic in our long-term outlook. We are focusing our attention on development of our leasing business in the
medical equipment and new energy sectors, both of which offer significant opportunities for investment. We expect these two
sectors to continue to grow despite the economic slowdown and other macroeconomic factors. We also expect our pipeline of leasing
opportunities to increase during in the first half year, with associated revenues to begin in the second half of 2016," added by
Mr. Mu.
Quarter Ended March 31, 2016 Results
Revenue
Wins Finance's revenue for the quarter ended March 31, 2016 was $2.5
million, which consists of $1.5 million of commissions and fees generated from its financial
guarantee services, and $1.0 million of direct financing lease interest income.
Commissions and fees on financial guarantee services generated from financial guarantee services the Company provides to
customers decreased by $0.2 million, or 8.1%, to $1.5 million for the
quarter ended March 31, 2016, compared to $1.7 million for the
quarter ended March 31, 2015. The decrease was primarily attributable to the expiration of Wins
Finance's two largest contracts in March 2015. The two largest customers accounted for $0.61 million of revenue, or 37% of the total commissions and fees on financial guarantee services for the
three months ended March 31, 2015. After the contracts for these two customers expired, Wins
Finance was no longer able to provide guarantees for loans exceeding 10% of its net assets for any single customer in order to
comply with the requirements of Interim Measures for Guarantee Business of the PRC. Provision on financial guarantee services was
$3.1 million for the quarter ended March 31, 2016, an increase of
$4.0 million from a reversal of $0.9 million for the quarter ended
March 31, 2015. The increase was primarily due to a provision loss of $3.2
million due to a loan in default totaling $4.7 million (RMB30
million), with $0.9 million being written-off due to management's assessment.
Direct financing lease interest income generated from payments under direct financing leases with customers decreased by
$0.2 million, or 19.4%, to $1 million for the quarter ended
March 31, 2016, compared to $1.2 million for the quarter ended
March 31, 2015. Provision for lease payment receivable decreased by $0.2
million to $0.1 million for the quarter ended March 31, 2015,
from $0.3 million for the quarter ended March 31, 2015. The decrease
was primarily attributable to the expired direct financing leases contracts were not fully replaced with new contracts.
Financial advisory and lease agency income decreased to nil for the quarter ended March 31,
2016, compared to $1.7 million for the quarter ended March 31,
2015. The decrease was primarily attributable to there being no new advisory and lease agency contracts in this
quarter.
Interest on short-term investment
Interest on short-term investments decreased by $1.9 million to $3.5
million for the quarter ended March 31, 2016, compared to $5.4
million for the same period ended March 31, 2015. The decrease was primarily due to a
decrease in the rate of return caused by decreased return in the local capital markets, partially offset by an increase in the
average balances of the short-term investments.
Non-interest expenses
Non-interest expenses increased by $1.8 million, or 248.1%, to $2.5
million for the quarter ended March 31, 2016, compared to $0.7
million for the same period ended March 31, 2015. The increase was primarily attributable to
an increase of $1.2 million in share-based compensation to the company's directors and executive
officers commencing on December 16, 2015 and increases in salaries, legal fees, auditing fees and
consulting fees for investor relations in connection with being a public company.
Income taxes
Income tax expense decreased by $1.5 million, or 137.3%, to $0.4
million for the three months ended March 31, 2016, compared to $1.1
million for the three months ended March 31, 2015. The decrease was primarily attributable
to a decrease in taxable income excluding interest on short-term investment, which is exempt from taxation.
Net income
Net income decreased by $8.3 million, or 97.3%, to $0.2 million
for the quarter ended March 31, 2016, compared to $8.5 million for
the same period ended March 31, 2015.
Other Significant Events
On March 21, 2016, JinzhongBank Co., Ltd. withdrew $0.9 million
(RMB 6 million) for interest and penalties from the Company's deposit account for the default
payment of a loan of $4.7 million (RMB 30 million) borrowed by
Jinzhong Houfeng Trading Co., Ltd., one of the Company's clients in its guarantee business. The Company evaluated the potential
default losses based on Jinzhong Houfeng Trading Co., Ltd.'s financial position and counter-guarantee collateral and accrued
about $3.2 million as provision of guarantee losses.
About Wins Finance
Wins Finance is a diversified investment and asset management company headquartered in New
York and listed on NASDAQ. The company is focused on identifying value accretive investment opportunities and assets in
China and the United States that can be enhanced through the
strategic involvement of Wins' established management team and its familiarity with the Chinese investment community to help
generate long-term value for shareholders. Wins Finance is well positioned to leverage its expertise and existing operations in
China to build a comprehensive platform for the provision of lending and other financing
solutions to the under-served small and medium enterprise segment. For more information, please visit www.winsholdings.com.
Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended, and 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" and similar statements. All statements other than
statements of historical fact in this press release are forward-looking statements and involve certain risks and uncertainties
that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking
statements are based on management's current expectations, assumptions, estimates and projections about the Company and the
industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding
these and other risks are described in the Company's Current Report on Form 8-K dated October 26,
2015 and in the Company's other filings with the U.S. Securities and Exchange Commission. The Company undertakes no
obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or 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 such expectations will turn out to be correct, and actual results
may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the
forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements,
which are qualified in their entirety by these cautionary statements.
Company Contacts:
Richard Xu, President
Wins Finance Holdings Inc.
590 Madison Avenue, 21st FL
New York, NY 10022
Tel: 646-480-9882
Email: richard.xu@winsholdings.com
WINS FINANCE HOLDINGS INC.
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
As of
|
|
|
March 31, 2016
|
|
June 30, 2015
|
|
|
US$
|
|
US$
|
ASSETS
|
|
|
|
|
Cash
|
|
34,074,730
|
|
40,019,968
|
Restricted cash
|
|
27,237,745
|
|
28,494,217
|
Short-term investment
|
|
185,049,556
|
|
184,160,555
|
Guarantee paid on behalf of guarantee service customers
|
|
509,668
|
|
633,313
|
Interest receivable
|
|
3,277,783
|
|
247,912
|
Net investment in direct financing leases
|
|
50,490,303
|
|
25,829,055
|
Deferred tax assets, net
|
|
901,509
|
|
414,479
|
Property and equipment, net
|
|
1,210,066
|
|
915,416
|
Other assets
|
|
436,483
|
|
474,412
|
TOTAL ASSETS
|
|
303,187,843
|
|
281,189,327
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Bank loan for capital lease business
|
|
14,733,176
|
|
511,825
|
Interest payable
|
|
122,892
|
|
49,719
|
Income tax payable
|
|
3,371,023
|
|
3,067,757
|
Unearned income from financial guarantee services
|
|
1,351,870
|
|
3,659,062
|
Other liabilities
|
|
7,356,981
|
|
4,123,385
|
Convertible debt
|
|
8,500,000
|
|
-
|
Allowance on guarantee
|
|
3,511,284
|
|
1,261,868
|
Deferred income tax liability
|
|
-
|
|
1,123,742
|
Total Liabilities
|
|
38,947,226
|
|
13,797,358
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
Common stock (par value $0.0001 per share, 100,000,000 shares
authorized; 21,526,747 and 21,526,747 shares issued and outstanding at
March 31, 2016 and June 30, 2015, respectively)
|
|
2,153
|
|
2,153
|
Additional paid-in capital
|
|
230,857,721
|
|
229,493,290
|
Statutory reserve
|
|
2,364,245
|
|
325
|
Retained Earnings
|
|
39,238,961
|
|
33,490,567
|
Accumulated other comprehensive income/(loss)
|
|
(8,222,463)
|
|
4,405,634
|
Total Equity
|
|
264,240,617
|
|
267,391,969
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
303,187,843
|
|
281,189,327
|
WINS FINANCE HOLDINGS INC.
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
|
March 31,
2016
|
|
March 31,
2015
|
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
Guarantee service income
|
|
|
|
|
|
|
|
|
|
|
Commissions and fees on financial guarantee services
|
|
1,527,729
|
|
1,664,116
|
|
1,661,669
|
|
4,943,424
|
|
6,089,105
|
(Provision)/reversal of provision on financial guarantee
services
|
|
(3,129,142)
|
|
(74,014)
|
|
919,687
|
|
(3,202,837)
|
|
955,625
|
Commission and fees on guarantee services,
net
|
|
(1,601,413)
|
|
1,590,102
|
|
2,581,356
|
|
1,740,587
|
|
7,044,730
|
|
|
|
|
|
|
|
|
|
|
|
Direct financing lease income
|
|
|
|
|
|
|
|
|
|
|
Direct financing lease interest income
|
|
952,796
|
|
497,613
|
|
1,182,720
|
|
1,924,161
|
|
2,352,215
|
Interest expense for direct financing lease
|
|
(386,779)
|
|
(19,590)
|
|
(357,660)
|
|
(411,719)
|
|
(636,451)
|
Provision for lease payment receivable
|
|
(118,071)
|
|
(180,275)
|
|
(282,470)
|
|
(302,483)
|
|
(411,598)
|
Net direct financing lease interest income after provision for
receivables
|
|
447,946
|
|
297,748
|
|
542,590
|
|
1,209,959
|
|
1,304,166
|
|
|
|
|
|
|
|
|
|
|
|
Financial advisory and lease agency income
|
|
-
|
|
405,603
|
|
1,704,131
|
|
405,603
|
|
3,253,521
|
Net revenue
|
|
(1,153,467)
|
|
2,293,453
|
|
4,828,077
|
|
3,356,149
|
|
11,602,417
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income
|
|
|
|
|
|
|
|
|
|
|
Interest on short-term investment
|
|
3,465,229
|
|
3,522,153
|
|
5,405,584
|
|
10,574,522
|
|
13,333,364
|
Total non-interest income
|
|
3,465,229
|
|
3,522,153
|
|
5,405,584
|
|
10,574,522
|
|
13,333,364
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense
|
|
|
|
|
|
|
|
|
|
|
Business taxes and surcharge
|
|
(6,091)
|
|
(45,876)
|
|
(38,838)
|
|
(178,928)
|
|
(220,185)
|
Salaries and employees surcharge
|
|
(462,169)
|
|
(363,376)
|
|
(108,710)
|
|
(1,006,864)
|
|
(297,078)
|
Rental expenses
|
|
(67,083)
|
|
(68,048)
|
|
(32,140)
|
|
(199,566)
|
|
(114,377)
|
Other operating expenses
|
|
(1,948,527)
|
|
(1,573,216)
|
|
(533,764)
|
|
(4,092,247)
|
|
(1,280,590)
|
Total non-interest expense
|
|
(2,483,870)
|
|
(2,050,516)
|
|
(713,452)
|
|
(5,477,605)
|
|
(1,912,230)
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
(172,108)
|
|
3,765,090
|
|
9,520,209
|
|
8,453,066
|
|
23,023,551
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
(541,964)
|
|
(267,364)
|
|
(1,574,502)
|
|
(1,920,472)
|
|
(4,089,065)
|
Deferred tax (expense)/benefit
|
|
938,406
|
|
(85,253)
|
|
510,237
|
|
1,579,720
|
|
1,584,523
|
NET INCOME
|
|
224,334
|
|
3,412,473
|
|
8,455,944
|
|
8,112,314
|
|
20,519,009
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment
|
|
1,612,392
|
|
(4,663,119)
|
|
851,753
|
|
(12,628,097)
|
|
1,305,112
|
COMPREHENSIVE INCOME
(LOSS)
|
|
1,836,726
|
|
(1,250,646)
|
|
9,307,697
|
|
(4,515,783)
|
|
21,824,121
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average ordinary shares outstanding – basic and diluted
|
|
21,526,747
|
|
21,526,747
|
|
21,526,747
|
|
21,526,747
|
|
21,526,747
|
Earnings per share – Basic and diluted
|
|
0.01
|
|
0.16
|
|
0.39
|
|
0.38
|
|
0.95
|
NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures below are provided to enhance investors' overall understanding of the company current
financial performance and prospects for the future. A limitation of using non-GAAP other operating expenses and net income,
excluding share-based compensation expenses, is that these items have been and may continue to be a significant expense in the
Company's business for the foreseeable future. In order to mitigate these limitations the Company has provided specific
information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the
reconciliation between GAAP financial measures that are most directly comparable to the non-GAAP financial measures the Company
has presented.
WINS FINANCE HOLDINGS INC.
|
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
|
|
|
|
Three months ended
|
|
|
Nine months ended
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
|
|
March 31,
2016
|
|
March 31,
2015
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
US$
|
|
US$
|
Other operating expenses
under GAAP
|
|
(1,948,527)
|
|
(1,573,216)
|
|
(533,764)
|
|
|
(4,092,247)
|
|
(1,280,590)
|
Adjustment (a)
|
|
1,160,489
|
|
204,042
|
|
-
|
|
|
1,364,531
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Other
operating expenses
|
|
(788,038)
|
|
(1,369,174)
|
|
(533,764)
|
|
|
(2,727,716)
|
|
(1,280,590)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income under GAAP
|
|
224,334
|
|
3,412,473
|
|
8,455,944
|
|
|
8,112,314
|
|
20,519,009
|
Adjustment (a)
|
|
1,160,489
|
|
204,042
|
|
-
|
|
|
1,364,531
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
1,384,823
|
|
3,616,515
|
|
8,455,944
|
|
|
9,476,845
|
|
20,519,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted shares
outstanding
|
|
21,526,747
|
|
21,526,747
|
|
21,526,747
|
|
|
21,526,747
|
|
21,526,747
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per
share, basic and diluted
|
|
0.06
|
|
0.17
|
|
0.39
|
|
|
0.44
|
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjustment to exclude the share-based compensation expenses for each
period
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wins-finance-holdings-inc-reports-unaudited-fiscal-third-quarter-2016-financial-results-300276106.html
SOURCE Wins Finance Holdings Inc.