BEIJING and NEW YORK, Nov. 13,
2017 /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 financial results
for the fiscal year ended June 30,
2017.
Fiscal Twelve Months Financial and Operational
Highlights
- Gross revenue was $9.2 million
for the twelve months ended June 30,
2017, compared to $9.8 million
for the corresponding period ended June 30,
2016.
- Interest income on short-term investments was $13.8 million for the twelve months ended
June 30, 2017, compared to
$14.0 million for the corresponding
period ended June 30, 2016.
- Net income attributable to Wins Finance was $20.3 million for the twelve months ended
June 30, 2017, compared to
$12.1 million for the corresponding
period ended June 30, 2016.
"Our gross revenue decreased 6% for fiscal 2017 as compared to
the fiscal 2016 as our financial guarantee business decreased by
54%, though this was offset by an 91% increase in our financial
leasing business. However, our net income rose 68%, primarily due
to the reversal of a provision on financial guarantee services and
a decrease in non-interest expenses primarily attributable to the
reversal of share-based compensation granted in fiscal 2016," said
Renhui Mu, Chairman and Chief
Executive Officer of Wins Finance.
"We anticipate that the slowdown of the Chinese economy will
continue to negatively affect financial services businesses in
China, and could substantially
affect our financial guarantee business in the coming quarters.
Further, our outstanding guarantee balance declined 22%
year-over-year as fewer potential clients passed our risk control
assessments."
"However, we experienced growth in our direct leasing business
in fiscal year 2017 as we continue to see new opportunities in this
sector and are exploring expansion into new verticals. Our direct
finance lease interest income increased substantially during fiscal
2017 as we acquired new leasing contracts of approximately
$35.6 million."
"In order to take advantage of strong growth in the direct
leasing business, we are looking for opportunities and clients
across China rather than limiting
ourselves to specific regions. We are currently focused on the new
energy, vehicles, education equipment and medical devices sectors
as we have gained expertise in these areas. We also plan upon
expanding our business development efforts to include new industry
sectors to diversify both our business risk and broaden our income
stream, and are currently evaluating new sectors that we believe
offer significant growth opportunities," concluded Mr. Mu.
Twelve Months Ended June 30,
2017 Financial Results
Gross revenue
Gross revenue for Wins Finance for the twelve months ended
June 30, 2017 was $9.2 million, which was comprised of $2.8 million of commissions and fees generated
from its financial guarantee services, $6.0
million of direct financing lease interest income, and
$0.4 million of financial advisory
and lease agency income.
Commissions and fees from financial guarantee services decreased
$3.4 million, or 54.2%, to
$2.8 million for the twelve months
ended June 30, 2017, compared to
$6.2 million for the corresponding
twelve months ended June 30, 2016.
The decrease was primarily attributable to reduced lending
activities due to the economic recession in Shanxi Province and the Company's increased scrutiny of potential clients as a
result.
Direct financing lease interest income generated from payments
under direct financing leases with customers increased by
$2.9 million, or 91.1%, to
$6.0 million for the twelve months
ended June 30, 2017, compared to
$3.2 million for the corresponding
twelve months ended June 30, 2016.
The increase was primarily attributable to new leasing contracts of
approximately $35.6 million
(principal and contractual interest) during fiscal year
2017.
Financial advisory and lease agency income slightly decreased to
$0.36 million for the twelve months
ended June 30, 2017, compared to
$0.40 million for the corresponding
twelve months ended June 30,
2016.
Interest income on short-term investment
Interest income from short-term investments decreased by
$0.2 million to $13.8 million for the twelve months ended
June 30, 2017, compared to
$14.0 million for the corresponding
twelve months ended June 30, 2016.
The decrease was primarily due to a decreased return on short-term
investments in the local capital markets.
Non-interest expenses
Non-interest expenses were $1.2
million for the twelve months ended June 30, 2017, as compared to $6.6 million for the corresponding twelve months
ended June 30, 2016. Share-based
compensation charged as non-interest expenses in fiscal 2016 was
$1.9 million, relating to the options
granted to the Company's directors and executive officers. The
Company recorded a negative amount of $1.5
million of share-based compensation for fiscal 2017,
primarily resulting from the termination of the options granted in
fiscal 2016 prior to vesting. In addition, salaries and employee
surcharges decreased by $0.6 million
primarily due to a reduction in headcount.
Income taxes
Income tax expense increased by $1.2
million to $2.0 million for
the twelve months ended June 30,
2017, compared to $0.8 million
for the corresponding twelve months ended June 30, 2016. The increase was attributable to
the increase in taxable income, which mainly consisted of income
before taxes excluding the interest on short-term investments that
was tax-exempt.
Net income
Net income increased by $8.2
million, or 67.9% to $20.3
million for the twelve months ended June 30, 2017, compared to $12.1 million for the corresponding twelve months
ended June 30, 2016.
Current Outlook
Management continues not to be confident that the
Company's operating results will continue to improve in the
foreseeable future in view of the slowdown of the Chinese economy,
which directly effects China's
financial sector. Therefore, the Company's business could be
adversely affected, especially its financial guarantee services
business. The Company's exposure to defaulted loans is expected to
increase and counter guarantees or collateral provided may become
insufficient to cover repayments. Management is undergoing a review
of the risk controls for the Company's financial guarantee business
and may take measures as appropriate including, but not limited to,
restructuring or disposing of this business in order to minimize
the risks of the Company's exposure.
We believe that the financial leasing business offers
substantial growth opportunities as small and medium-sized
enterprises (SMEs) have become an indispensable driver of promoting
economic and employment growth and continue to contribute to
China's economic transformation.
Many SMEs need to upgrade their equipment and adopt new
technologies but have limited access to the capital markets. We
plan to expand through our existing business relationships through
our "Industry Chain" network, whereby we identify well-qualified
clients through past or existing clients as trusted members and
core enterprises of industry chains within our network. Through our
business connections, extensive due diligence, risk management and
leasing structuring metrics, we believe that we have developed the
expertise to compete in the sector and support the under-serviced
market of SMEs in China.
We note that certain subsidiaries of the Company in China may be required from time to time to
report information on operational and/or financial matters to
relevant governmental regulatory bodies in China for statistical purposes. Such
information may not be prepared in accordance with US GAAP and
therefore not consistent with the information the Company reports
in its filings with the SEC.
Other Significant Events
As previously reported, on August 2,
2017, Spectacular Bid Limited, a wholly owned subsidiary of
Freeman FinTech Corporation Limited, a company listed on the Hong
Kong Stock Exchange, has acquired approximately 67% of the
Company's outstanding shares. As the Company also previously
disclosed, at the closing, Haiming
Guo, Guo Chen and Jinqxian
Zhang resigned from the Board of Directors and Xiaofeng Zhong, Shihai
Wang and Weiqi Chen were
appointed to the Board of Directors.
On October 19, 2017, the Company
received a letter from the Staff of the Listing Qualifications
Department (the "Listing Qualifications Staff") of The Nasdaq Stock
Market LLC ("Nasdaq") stating that the Listing Qualifications Staff
has withdrawn its August 4, 2017
delisting determination letter. Accordingly, the Company's
securities remain listed on Nasdaq. Notwithstanding the
withdrawal of the August 4, 2017
delisting determination letter, the Company has been further
advised by Nasdaq that the Company's securities will remain halted
pending the receipt and review by Nasdaq of additional information
from the Company.
As of November 13, 2017, there is
one lawsuit pending in China
against the Company, and Management believes that resolution of
this matter will not result in any payment that, in the aggregate,
would be material to the financial position or results of
operations of the Company. Two class action lawsuits have
been filed in the United States
against the Company. On June 19,
2017, the plaintiff in one of the class actions filed a
notice of voluntary discontinuance. The directors of the
Company believe that the claims from the second class action
proceeding are without merit and are vigorously defending this
proceeding.
About Wins Finance
Wins Finance is a diversified investment and asset management
company 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 Annual Report
on Form 20-F for the year ended June 30,
2017 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:
Wins Finance Holdings Inc.
641 Lexington Ave, 29th FL
New York, NY 10022
Tel: 212-488-4974
E-mail: info@winsholdings.com
WINS FINANCE
HOLDINGS INC.
CONSOLIDATED
BALANCE SHEETS
(In US dollars,
except share data, or otherwise noted)
|
|
|
|
|
|
|
|
June 30,
2017
|
|
June 30,
2016
|
ASSETS
|
|
|
|
|
|
Cash
|
$
|
17,002,282
|
|
$
|
47,163,965
|
Restricted
cash
|
|
24,282,208
|
|
|
27,962,846
|
Short-term
investments
|
|
187,944,184
|
|
|
149,841,838
|
Guarantee paid on
behalf of guarantee service customers
|
|
1,560,615
|
|
|
2,039,684
|
Net investment in
direct financing leases
|
|
76,723,457
|
|
|
74,705,647
|
Interest
receivable
|
|
3,514,075
|
|
|
1,021,306
|
Property and
equipment, net
|
|
594,148
|
|
|
854,719
|
Deferred tax assets,
net
|
|
327,137
|
|
|
428,524
|
Other
assets
|
|
815,984
|
|
|
608,751
|
TOTAL
ASSETS
|
$
|
312,764,090
|
|
$
|
304,627,280
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Bank loans for
capital lease business
|
$
|
28,281,541
|
|
$
|
43,308,617
|
Other loans for
capital lease business
|
|
9,509,597
|
|
|
-
|
Interest
payable
|
|
222,510
|
|
|
208,947
|
Income tax
payable
|
|
2,772,631
|
|
|
2,510,847
|
Unearned income from
financial guarantee services
|
|
538,215
|
|
|
423,801
|
Allowance on
guarantee
|
|
673,147
|
|
|
3,079,684
|
Deposits from direct
financing leases
|
|
10,854,121
|
|
|
9,134,946
|
Other
liabilities
|
|
893,569
|
|
|
964,109
|
Due to related party
(Notes 13 and 18)
|
|
464,000
|
|
|
464,000
|
Deferred tax
liabilities
|
|
746,884
|
|
|
477,398
|
Total
Liabilities
|
|
54,956,215
|
|
|
60,572,349
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
Common stock (par
value $0.0001 per share, 100,000,000 shares
authorized; 19,837,642 and 20,041,647 shares issued and
outstanding at June 30, 2017 and 2016, respectively)
|
|
1,984
|
|
|
2,004
|
Additional paid-in
capital
|
|
211,934,432
|
|
|
213,400,296
|
Statutory
reserve
|
|
3,530,458
|
|
|
2,364,245
|
Retained
earnings
|
|
62,427,622
|
|
|
43,244,044
|
Accumulated other
comprehensive loss
|
|
(20,086,621)
|
|
|
(14,955,658)
|
Total
Stockholders' Equity
|
|
257,807,875
|
|
|
244,054,931
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
312,764,090
|
|
$
|
304,627,280
|
|
See the accompanying
notes to the audited consolidated financial statements in the
Company's fiscal year 2017 20-F as filed with the SEC
|
WINS FINANCE
HOLDINGS INC.
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE LOSS
(In US dollars,
except share data, or otherwise noted)
|
|
|
|
For the years
ended June 30,
|
|
|
2017
|
|
2016
|
Guarantee service
income
|
|
|
|
|
|
|
Commissions and fees
on financial guarantee services
|
|
$
|
2,839,194
|
|
$
|
6,193,225
|
Reversal of provision
(provision) on financial guarantee services
|
|
|
3,208,827
|
|
|
(2,907,999)
|
Commission and
fees on guarantee services, net
|
|
|
6,048,021
|
|
|
3,285,226
|
|
|
|
|
|
|
|
Direct financing
lease income
|
|
|
|
|
|
|
Direct financing
lease interest income
|
|
|
6,047,172
|
|
|
3,164,317
|
Interest expense for
direct financing lease
|
|
|
(2,094,587)
|
|
|
(524,409)
|
Business
collaboration fee and commission expenses for leasing
projects
|
|
|
(603,873)
|
|
|
(222,206)
|
Provision for lease
payment receivable
|
|
|
(27,332)
|
|
|
(597,444)
|
Net direct
financing lease interest income after provision for
receivables
|
|
|
3,321,380
|
|
|
1,820,258
|
|
|
|
|
|
|
|
Financial advisory
and lease agency income
|
|
|
357,284
|
|
|
402,800
|
Net
revenue
|
|
|
9,726,685
|
|
|
5,508,284
|
|
|
|
|
|
|
|
Non-interest
income
|
|
|
|
|
|
|
Interest on
short-term investments
|
|
|
13,752,538
|
|
|
13,958,540
|
Total non-interest
income
|
|
|
13,752,538
|
|
|
13,958,540
|
|
|
|
|
|
|
|
Non-interest
expense
|
|
|
|
|
|
|
Business taxes and
surcharge
|
|
|
(4,406)
|
|
|
(167,867)
|
Salaries and
employees surcharge
|
|
|
(879,595)
|
|
|
(1,524,720)
|
Rental
expenses
|
|
|
(247,684)
|
|
|
(271,357)
|
Other operating
expenses
|
|
|
(46,258)
|
|
|
(4,621,038)
|
Total non-interest
expense
|
|
|
(1,177,943)
|
|
|
(6,584,982)
|
|
|
|
|
|
|
|
Income before
taxes
|
|
|
22,301,280
|
|
|
12,881,842
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
(1,951,489)
|
|
|
(764,445)
|
|
|
|
|
|
|
|
NET
INCOME
|
|
|
20,349,791
|
|
|
12,117,397
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(5,130,963)
|
|
|
(19,361,292)
|
COMPREHENSIVE
INCOME (LOSS)
|
|
$
|
15,218,828
|
|
$
|
(7,243,895)
|
|
|
|
|
|
|
|
Weighted-average
ordinary shares outstanding
|
|
|
|
|
|
|
Basic
|
|
|
19,926,510
|
|
|
20,012,356
|
Diluted
|
|
|
20,082,089
|
|
|
20,012,356
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
Basic
|
|
$
|
1.02
|
|
$
|
0.61
|
Diluted
|
|
$
|
1.01
|
|
$
|
0.61
|
|
See the accompanying
notes to the audited consolidated financial statements in the
Company's fiscal year 2017 20-F as filed with the SEC
|
WINS FINANCE
HOLDINGS INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In US
dollars)
|
|
|
For the years
ended June 30,
|
|
2017
|
|
2016
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income
|
$
|
20,349,791
|
|
$
|
12,117,397
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
Depreciation
|
|
320,842
|
|
|
411,635
|
Share-based
compensation
|
|
(1,465,680)
|
|
|
1,889,733
|
Interest expense for
convertible debt
|
|
-
|
|
|
113,644
|
Loss on sale of
property, plant and equipment
|
|
-
|
|
|
-
|
Provision for lease
payment receivables
|
|
27,332
|
|
|
597,444
|
Deferred tax expense
(benefit)
|
|
370,019
|
|
|
(622,928)
|
(Reversal of
provision) provision for guarantee
|
|
(3,208,827)
|
|
|
2,907,999
|
Changes in assets
and liabilities:
|
|
|
|
|
|
Net investment in
direct financing leases
|
|
(3,638,296)
|
|
|
(53,059,622)
|
Commission
receivable
|
|
-
|
|
|
-
|
Guarantee paid on
behalf of guarantee service customers
|
|
1,313,577
|
|
|
(2,432,997)
|
Unearned income from
financial guarantee services
|
|
122,923
|
|
|
(3,036,771)
|
Interest
receivable
|
|
(2,443,076)
|
|
|
(783,680)
|
Other
assets
|
|
(546,486)
|
|
|
(330,841)
|
Lease receivables in
lease agency transactions
|
|
-
|
|
|
-
|
Lease payables in
lease agency transactions
|
|
-
|
|
|
-
|
Interest
payable
|
|
17,979
|
|
|
168,109
|
Income tax
payable
|
|
314,334
|
|
|
(324,831)
|
Deposits from direct
financing leases
|
|
1,719,175
|
|
|
6,096,934
|
Other
liabilities
|
|
(52,009)
|
|
|
676,794
|
Net Cash Provided
by (Used in) Operating Activities
|
|
13,201,598
|
|
|
(35,611,981)
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES
|
|
|
|
|
|
Purchase of
short-term investments
|
|
(73,395,616)
|
|
|
(23,873,645)
|
Proceeds from
maturities of short-term investments
|
|
32,294,070
|
|
|
44,287,804
|
Deposits paid to
banks for financial guarantee services
|
|
(19,753,815)
|
|
|
(24,152,739)
|
Deposits released
from banks for financial guarantee services
|
|
22,815,354
|
|
|
26,642,584
|
Placement of pledged
bank deposits
|
|
(4,403,737)
|
|
|
(4,661,874)
|
Withdrawal of pledged
bank deposits
|
|
4,403,737
|
|
|
406,461
|
Purchase of property,
plant and equipment
|
|
(79,955)
|
|
|
(418,999)
|
Consideration
received on disposal of WHL (Note 1)
|
|
270,000
|
|
|
-
|
Loan repaid by
owners
|
|
-
|
|
|
-
|
Loan lent to
owners
|
|
-
|
|
|
-
|
Net Cash (Used in)
Provided by Investing Activities
|
|
(37,849,962)
|
|
|
18,229,592
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Capital paid in by
owners
|
|
-
|
|
|
29,669,019
|
Proceeds from
loans
|
|
11,751,680
|
|
|
46,618,743
|
Repayment of
loans
|
|
(16,311,241)
|
|
|
(2,476,782)
|
Proceeds of
convertible debt
|
|
-
|
|
|
8,500,000
|
Repayment of
convertible debt
|
|
-
|
|
|
(8,613,644)
|
Repayment of share
repurchase
|
|
-
|
|
|
(17,060,180)
|
Proceeds from short
term loans
|
|
-
|
|
|
-
|
Repayment of short
term loans
|
|
-
|
|
|
-
|
Loan repaid to
owners
|
|
-
|
|
|
-
|
Loan borrowed from
owners
|
|
-
|
|
|
-
|
Net Cash (Used in)
Provided by Financing Activities
|
|
(4,559,561)
|
|
|
56,637,156
|
|
|
|
|
|
|
EFFECT OF FOREIGN
CURRENCY TRANSLATION ON CASH
|
|
(953,758)
|
|
|
(1,973,893)
|
|
|
|
|
|
|
NET (DECREASE)
INCREASE IN CASH
|
|
(30,161,683)
|
|
|
37,280,874
|
Cash and cash
equivalent at beginning of year
|
|
47,163,965
|
|
|
9,883,091
|
Cash and cash
equivalent at end of year
|
$
|
17,002,282
|
|
$
|
47,163,965
|
|
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION:
|
|
|
|
|
|
Cash paid for income
taxes
|
$
|
1,267,135
|
|
$
|
1,535,840
|
Cash paid for
interest expense
|
$
|
2,076,609
|
|
$
|
356,295
|
|
See the accompanying
notes to the audited consolidated financial statements in the
Company's fiscal year 2017 20-F as filed with the SEC
|
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
limitation, 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
|
|
|
|
|
|
Twelve months
ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
|
|
US$
|
|
US$
|
Other operating
expenses under GAAP
|
|
(46,258)
|
|
(4,621,038)
|
Adjustment (Note
(a))
|
|
(1,465,680)
|
|
1,889,733
|
|
|
|
|
|
Non-GAAP Other
operating expenses
|
|
(1,511,938)
|
|
(2,731,305)
|
|
|
|
|
|
Net income under
GAAP
|
|
20,349,791
|
|
12,881,842
|
Adjustment
(a)
|
|
(1,465,680)
|
|
1,889,733
|
|
|
|
|
|
Non-GAAP net
income
|
|
18,884,111
|
|
14,007,130
|
|
|
|
|
|
Weighted average
shares used in computation:
|
|
|
|
|
Basic -
Common
|
|
19,926,510
|
|
20,012,356
|
Diluted -
Common
|
|
20,082,089
|
|
20,012,356
|
Non-GAAP earnings
per share
|
|
|
|
|
Basic -
Common
|
|
0.95
|
|
0.70
|
Diluted -
Common
|
|
1.06
|
|
0.70
|
|
|
|
|
|
Note (a):
Adjusted exclusion on share-based compensation
expenses
|
View original
content:http://www.prnewswire.com/news-releases/wins-finance-holdings-inc-reports-fiscal-year-2017-financial-results-300554984.html
SOURCE Wins Finance Holdings Inc.