Fincera Reports 2015 Year-End Financial Results
/EINPresswire.com/ -- SHIJIAZHUANG, CHINA -- (Marketwired) -- 05/03/16 -- Fincera Inc. ("Fincera" or the "Company") (OTCQB: AUTCF), a leading provider of web-based financing and ecommerce services for small and medium-sized businesses and individuals in China, today reported financial results for the year ended December 31, 2015.
Operational Highlights
- The Company continued the wind down of its legacy truck-leasing business, which is now classified as a discontinued operation, and expects to continue servicing and collecting payments on existing commercial vehicle leases until all obligations related to the individual leases are met.
- The Company's Internet-based business segment, which was launched in November 2014 and consists of financial services, payment and settlement, and ecommerce offerings, continues to grow: the electronic payments platform CeraPay was used to make payment transactions totaling over RMB9.7 billion during 2015. The online marketplace lending platform CeraVest originated over RMB2.6 billion in loans during 2015, an increase of over twenty times the 2014 amount, and had a loan portfolio of approximately $251 million at December 31, 2015.
Full-year 2015 Financial Highlights (comparisons are year over year)
- Total revenues of $56.3 million, compared to $5.4 million. Both 2015 and 2014 reported revenues no longer include the Company's legacy truck-leasing business, which is now treated as discontinued operations.
- Net income from continuing operations of $76,000, or $0.003 per diluted share, compared to a net loss of $16.3 million, or $0.68 per diluted share, primarily as a result of the reclassification of the legacy truck-leasing business as a discontinued operation while the Company's overhead is still included in continuing operations.
Management Comments
Mr. Yong Hui Li, Chairman and CEO of Fincera, stated, "We undertook a bold transition in the third quarter of 2015 with the decision to begin winding down our legacy truck-leasing business in order to focus all efforts on our Internet-based businesses. We are pleased with the rapid adoption of these business lines in the marketplace. CeraVest, CeraPay, TruShip, and the recently introduced AutoChekk reflect our long-term vision for the Company to be a leading provider of web-based financing and ecommerce service for small and medium-sized businesses and individuals in China. These platforms allow the Company to leverage its history in the heavy vehicle market by providing products and services which appeal to wide array of customers, while also yielding stronger margins for Fincera. We designed and built these products and applications to work harmoniously with each other in order to create a better user experience while also allowing the Company to take advantage of cross-selling opportunities. An example of this is the integration of CeraPay in the TruShip and AutoChekk products. Using this valuable tool, the Company is also able to gain important data which can then be used to enhance the underwriting metrics utilized by the CeraVest platform. We continue to explore ways in which we can help small businesses take advantage of technology to thrive in today's digital age."
Internet-based Business
From its inception in November 2014 through December 31, 2015, the Company's small business lending platform CeraVest (https://www.qingyidai.com/) has originated over RMB2.7 billion in loans. CeraVest had a loan portfolio of approximately $251 million at December 31, 2015. Fincera created CeraVest as an online lending marketplace that provides short-term operating capital for small and medium-sized businesses. CeraVest is also a platform through which Fincera can originate loans and then sell these loans to the public. Currently, individuals may invest on the CeraVest platform and earn an annual interest rate of up to approximately 8.6%. Fincera earns origination fees on CeraVest loans.
Also launched in November 2014, the Company's electronic payments platform CeraPay (https://www.dianfubao.com/) was used to make payment transactions totaling approximately RMB9.7 billion during 2015. Fincera developed CeraPay as a convenient platform through which customers could make electronic payments and the Company could make credit advances to its customers, allowing customers to pay for their everyday truck-operating needs at participating merchants within the CeraPay network. Fincera earns transaction fees through its CeraPay platform. The Company continues to actively market CeraPay to potential customers and merchants in an effort to increase the user base.
The Company continued to expand its ecommerce offerings with the introduction of TruShip in October 2015. Built for trucking industry merchants such as dealerships and leasing companies, TruShip allows users to establish an online store-front and seamlessly conduct sales transactions through CeraPay. It allows participants in China's fragmented long-haul trucking industry to publish, browse, and connect on shipping jobs across the country at no cost. Booked connections made on the platform accept CeraPay, which also facilitates the collection of data that Fincera can use to fine-tune its underwriting metrics for its CeraVest platform.
Subsequent to year-end and as discussed in the Company's recent Q1 2016 business update, Fincera announced the launch of AutoChekk, an ecommerce platform for the passenger vehicle industry in China. Built for Chinese consumers, AutoChekk is designed to make researching and purchasing passenger cars or maintenance services convenient and affordable. The platform provides information regarding passenger cars that are available for sale and facilitates purchases. AutoChekk also provides consumers with search tools and a procurement platform for maintenance services. Similar to Fincera's TruShip Logistics feature, payment transactions resulting from connections made on AutoChekk can be completed with CeraPay, and the resulting data can be used to enhance underwriting metrics for CeraVest loans to small businesses.
Financial Review
The Company now classifies its legacy truck-leasing business as a discontinued operation for all periods presented below. Continuing operations consist of the Company's Internet-based business and its property lease and management business. The Company has also updated the classifications in its financial statements to provide more transparent and comprehensive information. The principal reclassifications are related to 1) the reclassification of overdue CeraVest and CeraPay receivables into the balances of loans and other financing receivables, respectively, from accounts receivable; 2) the reclassification of accounts payable and customer deposits into the balance of other payable and accrued liabilities; 3) the reclassification of accounts payable, related parties and due to related parties into financing payable, related parties; and 4) the separate presentation of provision for credit losses, which were previously included in general and administrative expenses.
Full-year 2015
Income (Revenues)
- Total income for the year ended December 31, 2015, was $56.3 million, compared to $5.4 million in the prior-year period.
(in thousands) Year ended Year ended
December 31, 2015 December 31, 2014
--------------------- ---------------------
Amount % of Amount % of
Revenue Revenue
--------- ----------- --------- -----------
Service charges $ 35,564 63.2% $ 301 5.6%
--------- ----------- --------- -----------
Interest income 11,021 19.5% 137 2.5%
--------- ----------- --------- -----------
Property lease and management 9,726 17.3% 4,937 91.9%
--------- ----------- --------- -----------
Total income $ 56,311 100.0% $ 5,375 100.0%
--------- ----------- --------- -----------
- Service charges, which represents CeraVest origination fees, CeraPay transaction fees, and penalty and late fees for both CeraVest and CeraPay, increased to $35.6 million from $301,000 in the prior-year period, primarily as a result of a significant increase in the amount of CeraPay loans facilitated along with an increase in the volume of CeraPay transactions processed.
- Interest income, which represents interest earned on CeraVest loans and bank deposits, increased to $11.0 million, or 19.5% of total revenues, during the year ended December 31, 2015, compared to $137,000 in the prior-year period, as a result of the increase in the volume of CeraVest loans facilitated by the Company.
- Property lease and management from the Company's office-leasing business increased 97.0% to $9.7 million during the period from $4.9 million in the prior-year period, due to a greater percentage of space in the Kai Yuan Finance Center being leased out to tenants.
Net Income
- Net income from continuing operations for the year ended December 31, 2015, totaled $76,000, or $0.003 per share based on 24.1 million diluted weighted average shares outstanding, from a loss from continuing operations of $16.3 million, or $0.68 per share based on 23.8 million diluted weighted average shares outstanding, in the prior-year period. The swing to net income was primarily due to the ramp-up of the Company's Internet-based business segment.
Balance Sheet Highlights
At December 31, 2015, Fincera's cash and cash equivalents (not including restricted cash) were $62.0 million, working capital was $162.6 million, total liabilities were $494.2 million (including discontinued operations, due to affiliates and accounts payable, related parties), and stockholders' equity was $256.1 million, compared to $26.0 million, $132.7 million, $349.6 million, and $263.1 million, respectively, at December 31, 2014.
About Fincera Inc.
Founded in 2005, Fincera Inc. (OTCQB: AUTCF) provides innovative web-based financing and ecommerce services for small and medium-sized businesses and individuals in China. The Company also operates a network of branch offices in 31 provinces, municipalities, and autonomous regions across China. Fincera's current service offerings include a B2B payment network, a web-based small business lending platform, and a B2B ecommerce marketplace for the trucking industry. The Company's website is http://www.fincera.net. Fincera trades on the OTCQB venture stage marketplace for early stage and developing U.S. and international companies. OTCQB companies are current in their reporting and undergo an annual verification and management certification process.
Safe Harbor Statement
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the Company. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of the Company's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to meaningfully differ from those set forth in the forward-looking statements:
- Changing principles of generally accepted accounting principles;
- Continued compliance with government regulations;
- Legislation or regulatory environments, requirements or changes adversely affecting the transportation or financial services industry in China;
- Fluctuations in consumer demand in the transportation industry;
- Management of rapid growth;
- General economic conditions;
- Changes in government policy;
- China's overall economic conditions and local market economic conditions;
- The Company's ability to expand through strategic acquisitions;
- The Company's business strategy and plans, including whether its new financial services products are accepted by consumers;
- The results of future financing efforts; and
- Geopolitical events.
The information set forth herein should be read in light of such risks. The Company does not assume any obligation to update the information contained in this press release.
FINCERA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE (LOSS) INCOME
(in thousands except share and per share data)
Years ended December 31,
------------------------------
2015 2014
-------------- --------------
Income
Service charges $ 35,564 $ 301
Interest income 11,021 137
Property lease and management 9,726 4,937
-------------- --------------
Total income 56,311 5,375
-------------- --------------
Operating Costs and Expenses
Interest expense 16,694 7,292
Interest expense, related parties 7,006 1,409
Provision for credit losses 10,021 209
Property and management cost 2,063 2,532
Selling and marketing 3,038 493
General and administrative 17,139 8,810
Litigation expense -- 4,350
Total operating costs and expenses 55,961 25,095
-------------- --------------
Income (loss) from continuing operations
before income taxes 350 (19,720)
Income tax provision (benefit) 274 (3,398)
-------------- --------------
Income (loss) from continuing operations 76 (16,322)
Income from discontinued operations, net of
taxes 8,205 26,488
Net income $ 8,281 $ 10,166
Foreign currency translation adjustment (15,656) (1,172)
-------------- --------------
Comprehensive (loss) income $ (7,375) $ 8,994
============== ==============
Earnings per share
Basic
Continuing operations $ 0.003 $ (0.69)
Discontinued operations 0.35 1.12
-------------- --------------
$ 0.35 $ 0.43
============== ==============
Diluted
Continuing operations $ 0.003 $ (0.68)
Discontinued operations 0.34 1.11
-------------- --------------
$ 0.34 $ 0.43
============== ==============
Weighted average shares outstanding
Basic 23,550,145 23,549,112
============== ==============
Diluted 24,080,249 23,840,644
============== ==============
FINCERA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share data)
December 31, December 31,
2015 2014
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 61,957 $ 26,027
Restricted cash 157 988
Other financing receivables, net 235,349 12,832
Loans, net, related party -- 782
Loans, net 250,659 19,105
Prepaid expenses, related party -- 50
Prepaid expenses and other current assets 1,520 645
Current assets of discontinued operations 104,595 398,062
------------ ------------
Total current assets 654,237 458,491
Noncurrent assets
Property, equipment and leasehold improvements,
net 73,817 80,152
Deferred income tax assets 7,011 4,919
Non-current assets of discontinued operations 15,250 69,083
------------ ------------
Total assets $ 750,315 $ 612,645
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term bank borrowings (including short-term
bank borrowings of the consolidated VIEs
without recourse to Fincera of $56,363 and
$138,912 as of December 31, 2015 and 2014,
respectively) $ 75,921 $ 155,254
Long-term bank borrowings, current portion
(including long-term bank borrowings, current
portion of the consolidated VIEs without
recourse to Fincera of nil and nil as of
December 31, 2015 and 2014, respectively) 13,860 2,451
Borrowed funds from CeraVest investors, related
party (including borrowed funds from CeraVest
investors, related party of the consolidated
VIEs without recourse to Fincera of $2,716 and
nil as of December 31, 2015 and 2014,
respectively) 2,716 --
Borrowed funds from CeraVest investors
(including borrowed funds from CeraVest
investors of the consolidated VIEs without
recourse to Fincera of $202,725 and $88 as of
December 31, 2015 and 2014, respectively) 202,725 88
Financing payables, related parties (including
financing payables, related parties of the
consolidated VIEs without recourse to Fincera
of $58,620 and $9,799 as of December 31, 2015
and 2014, respectively) 106,869 34,072
Other payables and accrued liabilities
(including other payables and accrued
liabilities of the consolidated VIEs without
recourse to Fincera of $14,334 and $5,501 as of
December 31, 2015 and 2014, respectively) 35,806 14,924
Income tax payable (including income tax payable
of the consolidated VIEs without recourse to
Fincera of $2,562 and $1,559 as of December 31,
2015 and 2014, respectively) 3,317 1,582
Current liabilities of discontinued operations
(including current liabilities of discontinued
operations of the consolidated VIEs without
recourse to Fincera of 9,868 and 106,879 as of
December 31, 2015 and 2014, respectively) 50,445 117,412
------------ ------------
Total current liabilities 491,659 325,783
FINCERA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - Continued
(in thousands except share and per share data)
December 31, December 31,
2015 2014
------------ ------------
Noncurrent liabilities
Long-term bank borrowings (including long-term
bank borrowings of the consolidated VIEs without
recourse to Fincera of nil and nil as of
December 31, 2015 and 2014, respectively) -- 14,708
Non-current liabilities of discontinued
operations (including non-current liabilities of
discontinued operations of the consolidated VIEs
without recourse to Fincera of nil and nil as of
December 31, 2015 and 2014, respectively) 2,587 9,102
------------ ------------
Total liabilities 494,246 349,593
------------ ------------
Commitments and Contingencies -- --
Stockholders' equity
Preferred shares, $0.001 par value authorized -
1,000,000 shares; issued - none -- --
Ordinary shares - $0.001 par value authorized -
1,000,000,000 shares; issued and outstanding -
23,550,993 shares at December 31, 2015; and
$0.001 par value authorized - 100,000,000
shares; issued and outstanding - 23,549,644
shares at December 31, 2014 24 24
Additional paid-in capital 329,276 328,884
Statutory reserves 27,014 26,222
Accumulated deficit (115,229) (122,718)
Accumulated other comprehensive income 14,984 30,640
------------ ------------
Total stockholders' equity 256,069 263,052
------------ ------------
Total liabilities and stockholders' equity $ 750,315 $ 612,645
============ ============
FINCERA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
December 31,
------------------------
2015 2014
----------- -----------
Cash flow from operating activities:
Net Income $ 8,281 $ 10,166
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 3,671 3,926
Provision for credit losses 19,373 13,599
Deferred income taxes (5,402) (5,203)
Stock-based compensation expenses 392 1,253
Changes in operating assets and liabilities, net of
acquisitions and divestitures:
Restricted cash 808 251
Accounts receivable (11,111) (13,121)
Other financing receivables from peer store, net 16,513 (12,953)
Short term net investment in sales-type leases 50,052 (57,328)
Long-term net investment in direct financing and
sales-type leases 270,923 42,984
Inventories 143 568
Prepaid expense and other current assets 645 (329)
Other payables and accrued liabilities 22,085 7,151
Income tax payable 1,100 (1,070)
Long-term payable (6,260) 147
----------- -----------
Net cash provided by (used in) operating activities 371,213 (9,959)
----------- -----------
Cash flow from investing activities:
Change in loans (244,092) (20,004)
----------- -----------
Change in other financing receivables (239,673) (16,716)
----------- -----------
Purchase of property, equipment and leasehold
improvements (4,433) (7,389)
----------- -----------
Net cash (used in) investing activities (488,198) (44,109)
----------- -----------
Cash flow from financing activities:
Changes in borrowed funds from CeraVest investors 213,868 87
Proceeds from financing payables, related parties 269,550 761,773
Repayment to financing payables, related parties (288,008) (723,508)
Proceeds from bank borrowings 149,314 244,089
Repayment to bank borrowings (188,048) (233,273)
----------- -----------
Net cash provided by financing activities 156,676 49,168
----------- -----------
Effect of exchange rate fluctuation on cash and
cash equivalents (3,761) (443)
----------- -----------
Net increase (decrease) in cash and cash
equivalents 35,930 (5,343)
Cash and cash equivalents, beginning of the year 26,027 31,370
----------- -----------
Cash and cash equivalents, end of the year $ 61,957 $ 26,027
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid $ 12,759 $ 13,587
=========== ===========
Income taxes paid $ 6,517 $ 11,818
=========== ===========
CONTACT
At the Company
Jason Wang
Chief Financial Officer
(858) 997-0680
jcwang@fincera.net
Investor Relations
The Equity Group Inc.
Carolyne Y. Sohn
Senior Associate
(415) 568-2255
csohn@equityny.com
Adam Prior
Senior Vice President
(212) 836-9606
aprior@equityny.com
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