-- Exited the legacy marketplace lending platform required by the regulators--
-- Significant decrease in expenses resulting in meaningful increase in cash--
-- Company may reinstate share repurchase program --
SHANGHAI, Dec. 16, 2019 /PRNewswire/ -- China Rapid Finance Limited (NYSE: XRF) ("XRF" or "the Company"), one of China's leading Fintech companies, today reported its unaudited financial results for the six and nine months ended June 30, 2019 and September 30, 2019, respectively.
Dr. Zane Wang, Founder, Chairman and Chief Executive Officer of the Company, noted: "Our first half and nine-month results reflect both the regulatory changes impacting our industry, and the proactive approach we are taking to position ourselves as one of leading Fintech companies. As required by the changing regulatory policy, we exited the legacy marketplace lending business in April and are transitioning to only facilitating lending capital from financial institutions, while we are engaged in rigid cost cutting program, these resulted in cash flow improvements for 9-month and 6-month results. In addressing potential delisting due to our currently low market capitalization, we obtained the NYSE approval for our restructuring plan, and we undertook a change in our ADS-to-share ratio to increase our share price, and now that we have become current in our financial reporting, we may choose to reinstate our previously disclosed share repurchase program."
Steven Foo, Chief Financial Officer of the Company, noted: "During this period, we remain committed to tightly control our operating expenses. The cost-cutting efforts we initiated in the first nine months are bearing fruit, as shown in our lower operating expense in the period, which resulted in cash flow improvements during the period. As we are transitioning to the new business model, we have also engaged in discussions regarding various forms and mechanisms for raising capital."
Highlights for the First Half and First Nine Months of 2019
The Company noted the following operating highlights:
[1] The default rate for consumption loans is defined as total unpaid loan principal (net of recovery) that remains delinquent for more than 90 days as a percentage of total principal amount facilitated for borrowers of consumption loans that were issued since January 1, 2011 through April 15, 2019. The default rate for lifestyle loan is defined as total unpaid loan principal (net of recovery) that remains delinquent for more than 180 days as a percentage of total principal amount facilitated for borrowers of lifestyle loans that were issued since January 1, 2011 through April 15, 2019. |
First Half of 2019 Financial Highlights
Please note that all figures refer to the first six months of 2019, unless stated otherwise.
Revenue
Operating Expenses
The Company reduced operating expense by $31.7 million to $39.7 million as compared to the same period in 2018.
Net Loss
Balance Sheet and Cash Flow
As of June 30, 2019, the Company had cash and cash equivalents of $12.5 million, Shareholders' equity was US$-20.7 million.
Net cash used in operating activities was $17.3 million.
First Nine months of 2019 Financial Highlights
Please note that all figures refer to the first nine months of 2019, unless stated otherwise.
Revenue
Other revenue was $1.8 million, compared with $6.1 million in the same period in 2018. The decrease is mainly attributable to the decline in the volume of credit loans facilitated through the Company's e-commerce platforms.
Operating Expenses
The Company reduced operating expense by $54.6 million to $46.1 million as compared to the same period in 2018, indicating company's continuous efforts on improving operating efficiency and positioning for business transition.
Net Loss
Balance Sheet and Cash Flow
As of September 30, 2019, the Company had cash and cash equivalents of $15.5 million a 24% increase compared with that of second quarter in 2019, indicating the cost cutting efforts continued to bear fruit. The shareholders' equity was US$-20.3 million.
Net cash used in operating activities in the nine months was $19.8 million.
The Company regularly monitors its current and expected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.
Conference Call:
The Company will hold a conference call on December 16, 2019 at 8:00 a.m. U.S. Eastern Time (December 16, 2019 at 9:00 p.m. China Standard Time) to discuss its financial results.
Participants may access the call by dialing the following numbers:
United States Toll Free: |
1-888-346-8982 |
International: |
1-412-902-4272 |
Singapore Toll Free: |
|
Hong Kong Local Toll: |
852-301-84992 |
Mainland China Toll Free: |
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A replay will be accessible through December 20, 2019 by dialing the following numbers:
United States: |
1-877-344-7529 |
International: |
1-412-317-0088 |
Replay Access Code: |
10137522 |
A live and archived webcast of the conference call will be available through the Company's investor relations website at .
About China Rapid Finance
China Rapid Finance (NYSE: XRF) is a leading fintech company that offers award-winning decisioning technology and marketing services that addresses China's growing consumer credit market. The Company utilizes its proprietary technology and 18 years of experience to provide its services. The Company is establishing partnerships and is currently developing strategic alternatives and new businesses in financial technology, marketing services and portfolio management. For more information, please visit .
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as "may," "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's ability to regain compliance with NYSE continued listing standards, unexpected difficulties in the Company's pursuit of its goals and strategies; the unexpected developments, including slow growth, in the consumer lending market; reduced demand for, and market acceptance of, the Company's products and services; difficulties keeping and strengthening relationships with borrowers or investors; difficulties of expanding data and channel partnerships, potentially costly servicing activities; competition in the consumer lending market; PRC governmental regulations and policies; and general economic and business conditions in the regions where the Company provides products and services. Further information regarding these and other risks is included in the Company's reports filed with, or furnished to, the Securities and Exchange Commission. All information provided in this announcement and in the attachments is as of the date of this announcement, and the Company undertakes no duty to update such information except as required under applicable law.
CHINA RAPID FINANCE LIMITED |
|||||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF |
|||||
COMPREHENSIVE LOSS |
|||||
(US$ in thousands, except share data and per share data, or otherwise noted) |
|||||
For the Six Months Ended |
For the Nine Months Ended |
||||
June 30, |
June 30, |
September 30, |
September 30, |
||
Revenue: |
|||||
Transaction and service fees (net of |
39,057 |
22,236 |
51,329 |
30,685 |
|
Other revenue |
695 |
1,400 |
6,060 |
1,819 |
|
39,752 |
23,636 |
57,389 |
32,504 |
||
Net interest income/(expense) |
(107) |
2,050 |
(177) |
1,706 |
|
(Provision)/Reversal for loan losses |
0 |
(1,483) |
0 |
(2,398) |
|
Discretionary Payments |
(9,052) |
(4,881) |
(9,052) |
(8,306) |
|
Business and related taxes and surcharges |
0 |
(51) |
0 |
(50) |
|
Net revenue |
30,593 |
19,271 |
48,160 |
23,456 |
|
Operating expense: |
|||||
Servicing expenses |
(6,049) |
(2,974) |
(8,239) |
(3,630) |
|
Sales and marketing expenses |
(20,506) |
(11,381) |
(28,273) |
(11,724) |
|
General and administrative expenses |
(36,380) |
(21,953) |
(51,242) |
(26,388) |
|
Product development expenses |
(8,427) |
(3,401) |
(12,982) |
(4,335) |
|
Total operating expenses |
(71,362) |
(39,709) |
(100,736) |
(46,077) |
|
Other income (expense): |
|||||
Other income (expense), net |
407 |
(43) |
1,223 |
(82) |
|
Loss before income tax expense |
(40,362) |
(20,481) |
(51,353) |
(22,703) |
|
Income tax expense |
(379) |
(96) |
(415) |
(137) |
|
Net loss |
(40,741) |
(20,577) |
(51,768) |
(22,840) |
|
Net loss attributable to ordinary |
(40,741) |
(20,577) |
(51,768) |
(22,840) |
|
Net loss |
(40,741) |
(20,577) |
(51,768) |
(22,840) |
|
Foreign currency translation adjustment, net |
249 |
(1,203) |
(54) |
1,244 |
|
Comprehensive loss |
(40,492) |
(21,780) |
(51,822) |
(21,596) |
|
Weighted average number of ordinary |
|||||
Basic |
65,244,600 |
66,164,360 |
65,281,771 |
66,261,608 |
|
Diluted |
65,199,459 |
65,199,459 |
65,199,459 |
65,199,459 |
|
Loss per share attributable to ordinary |
|||||
Basic |
(0.62) |
(0.31) |
(0.79) |
(0.34) |
|
Diluted |
(0.62) |
(0.31) |
(0.79) |
(0.34) |
CHINA RAPID FINANCE LIMITED |
||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
(US$ in thousands, except share data and per share data, or otherwise noted) |
||||
As of |
||||
June 30, |
June 30, |
September 30, |
September 30, |
|
Assets |
||||
Cash and cash equivalents |
58,809 |
12,477 |
39,217 |
15,458 |
Restricted cash |
2,708 |
57,574 |
2,501 |
28,533 |
Short-term investment |
797 |
|||
Loans receivable, net of allowance for loan losses |
1,917 |
8,678 |
10,816 |
789 |
Contract assets, net |
283 |
25 |
||
Safeguard Program asset |
13,841 |
0 |
10,959 |
0 |
Receivables, prepayments and other assets |
20,978 |
28,331 |
21,738 |
23,591 |
Property equipment and software, net |
5,551 |
4,175 |
5,077 |
3,529 |
Total assets |
103,804 |
111,518 |
91,105 |
71,925 |
LIABILITIES, MEZZANINE EQUITY AND |
||||
Liabilities: |
||||
Safeguard Program payable |
14,057 |
0 |
11,099 |
0 |
Accrued liabilities |
54,464 |
129,327 |
58,759 |
88,422 |
Income tax payable |
1,981 |
1,832 |
1,906 |
2,770 |
Deferred revenue |
8,220 |
1,046 |
4,673 |
1,012 |
Total liabilities |
78,722 |
132,205 |
76,437 |
92,204 |
Commitments and contingencies (Note 15) |
||||
Shareholders' (deficit)/equity |
||||
Ordinary shares, US$0.0001 par value, |
6 |
6 |
6 |
6 |
Additional paid-in capital |
282,833 |
284,064 |
283,749 |
284,288 |
Accumulated other comprehensive income |
(494) |
(1,002) |
(797) |
1,445 |
Accumulated deficit |
(257,263) |
(303,755) |
(268,290) |
(306,018) |
Total shareholders' (deficit)/equity |
25,082 |
(20,687) |
14,668 |
(20,279) |
Total liabilities and shareholders' |
103,804 |
111,518 |
91,105 |
71,925 |
CHINA RAPID FINANCE LIMITED |
||||
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW DATA |
||||
(US$ in thousands, except share data and per share data, or otherwise noted) |
||||
June 30, |
September 30, |
|||
US$ |
US$ |
|||
Net cash used in operating activities |
(17,278) |
(19,812) |
||
Net cash used in investing activities |
19,803 |
(4,311) |
||
Net cash provided by financing activities |
- |
- |
||
Effect of exchange rate changes on cash, |
(1,335) |
(747) |
||
Net increase/(decrease) in cash, cash |
1,190 |
(24,870) |
||
Cash, cash equivalent and restricted cash at |
68,861 |
68,861 |
||
Cash, cash equivalent and restricted cash at |
70,051 |
43,991 |
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