BEIJING, Aug. 17, 2018 (GLOBE NEWSWIRE) -- China Commercial Credit, Inc. (Nasdaq: GLG) (the "Company"), an emerging used luxurious car rental service provider in China, today announced its financial results for the second quarter ended June 30, 2018.
Mr. Long Yi, the Chief Financial Officer of the Company, stated, “The first half of 2018 was marked by our successful disposition of subsidiaries and our continued strategic transformation. Going forward we expect our new business to provide greater shareholder value. Our second quarter results reflect these changes, with a net income of $9.50 million and a balance sheet with positive net asset value, reversing our long trend of losses. We expect our new pre-owned luxury car rental business under the “BatCar” brand to benefit from our extensive experience in financial services as we position ourselves to drive investment to our largest growth opportunities with a revitalized balance sheet.”
Currently, the Company has six used luxurious cars, and intends to purchase thirty pre-owned luxurious vehicles by the end of 2018. These cars can be rented by customers from the Company’s store in Beijing, on a daily, weekly, and monthly basis.
The Company’s entrance to the luxury car rental market is intended to take advantage of the growing demand for luxury cars driven by the China’s rapid expansion of its middle class. Overall, the revenue of China's car rental market is to be 78.3 billion yuan (US$12.5 billion) in 2018, representing a 15% year-over-year increase, and revenue in the market will rise to 89.9 billion yuan in 2019, according to latest estimates by iResearch Consulting Group, a professional market research and consulting company focused on China's Internet industry.
Second Quarter 2018 Operational Highlights
- Launched a used luxurious car leasing business under the brand name “BatCar” in May 2018.
Second Quarter 2018 Financial Highlights
- Total lease income and other interest income reached $97,036.
- Net income from discontinued operations was $9.90 million, compared with net loss from discontinued operations of $1.88 million for the second quarter of 2017.
- Net income was $9.50 million, compared with net loss of $4.92 million for the second quarter of 2017.
- Basic and diluted earnings per share was $0.428, compared with basic and diluted loss per share of $0.284 for the second quarter of 2017.
Six Months Ended June 30, 2018 Financial Highlights
- Total lease income and other interest income reached $97,036.
- Net income from discontinued operations was $10.07 million, compared with net loss from discontinued operations of $2.67 million for the six months ended June 30, 2017.
- Net income was $9.12 million, compared with net loss of $6.15 million for the six months ended June 30, 2017.
- Basic and diluted earnings per share was $0.432, compared with basic and diluted loss per share of $0.361 for the six months ended June 30, 2017.
- Shareholders’ equity was $4.13 million as of June 30, 2018, compared with shareholders’ deficit of $4.57 as of December 31, 2017.
Second Quarter 2018 Financial Results
Total Lease income and other interest
Total lease income and other interest income was $97,036 for the three months ended June 30, 2018. The operating lease income is recognized on a straight-line basis over the scheduled lease term, income from operating lease was $96,721 for the three months ended June 30, 2018. Because the Company just launched its new business of lease services of used luxury cars in May 2018 and it did not have any operations, the Company did not generate any revenues for the three months ended June 30, 2017. Interests on deposits with banks was $315 for the three months ended June 30, 2018.
Net depreciation expense on operating lease assets
The net depreciation expense on operating lease assets represents the depreciation expenses of used luxurious cars. For the three months ended June 30, 2018, net depreciation expense on operating lease assets was $12,458.
Non-interest Expenses
Non-interest expenses decreased by $2.58 million, or 85%, to $0.46 million for the three months ended June 30, 2018 from $3.04 million for the same period of last year. Non-interest expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, changes in fair value of other noncurrent liabilities, professional service fees, and other office supplies. The decrease was mainly attributable to combined effects of a decrease of $2.03 million of changes in fair value of noncurrent liabilities, as the changes in share price during the period between April 1, 2018 and the date of share settlement is far less than that during the three months ended June 30, 2018; and a decrease of legal and consulting expenses of $0.62 million as the Company engaged advisors for seeking financial support during the period ended three months ended June 30, 2017.
Net income (loss) from discontinued operations
For the three months ended June 30, 2018, net income from discontinued operations was $9.90 million, compared with net loss from discontinued operations of $1.88 million for the same period of last year. The net income from discontinued operation was comprised of a net income of $0.10 million from discontinued operations and a gain of $9.79 million from disposal of the discontinued operations.
Net income (loss)
Net income was $9.50 million for the three months ended June 30, 3018, compared with net loss of $4.92 million for the same period of last year. Basic and diluted earnings per share was $0.428 for the three months ended June 30, 2018, compared with basic and diluted loss per share of $0.284 for the same period of last year.
Six Months Ended June 30, 2018 Financial Results
Total lease income and other interest
Total lease income and other interest income was $97,036 for the six months ended June 30, 2018. The operating lease income is recognized on a straight-line basis over the scheduled lease term, income from operating lease was $96,721 for the six months ended June 30, 2018. Because the Company just launched its new business of lease services of used luxury cars in May 2018 and it did not have any operations, the Company did not generate any revenues for the six months ended June 30, 2017. Interests on deposits with banks decreased by $34,685 or 99%, to $315 for the six months ended June 30, 2018 from $35,000 for the same period of last year.
Net depreciation expense on operating lease assets
The net depreciation expense on operating lease assets represents the depreciation expenses of used luxurious cars. For the six months ended June 30, 2018, net depreciation expense on operating lease assets was $12,458.
Non-interest Expenses
Non-interest expenses decreased by $2.48 million, or 71%, to $1.03 million for the six months ended June 30, 2018 from $3.51 million for the same period of last year. Non-interest expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, changes in fair value of other noncurrent liabilities, professional service fees, and other office supplies. The decrease was mainly attributable to combined effects of a decrease of $1.83 million of changes in fair value of noncurrent liabilities, as the changes in share price during the period between January 1, 2018 and the date of share settlement is far less than that during the three months ended June 30, 2018; and a decrease of legal and consulting expenses of $0.51 million as the Company engaged advisors for seeking financial support during the period ended six months ended June 30, 2017.
Net income (loss) from discontinued operations
For the six months ended June 30, 2018, net income from discontinued operations was $10.07 million, compared with net loss from discontinued operations of $2.67 million for the same period of last year. The net income from discontinued operations was comprised of a net income of $0.28 million from discontinued operations and a gain of $9.79 million from disposal of the discontinued operations.
Net income (loss)
Net income was $9.12 million for the six months ended June 30, 3018, compared with net loss of $6.15 million for the same period of last year. Basic and diluted earnings per share was $0.432 for the six months ended June 30, 2018, compared with basic and diluted loss per share of $0.361 for the same period of last year.
Financial Conditions
As of June 30, 2018, the Company had cash and cash equivalents of $1.36 million, compared with $1.36 million as of December 31, 2017.
Net cash used in operating activities was $0.81 million for the six months ended June 30, 2018, compared to $1.82 million for the same period of last year.
Net cash used in investing activities was $2.73 million for the six months ended June 30, 2018, compared to net cash provided by investing activities of $1.24 million for the same period of last year.
Net cash provided by financing activities was $3.27 million for the twelve months ended March 31, 2018, compared to $0.56 million for the same period of last year.
About China Commercial Credit, Inc.
China Commercial Credit Inc. (Nasdaq: GLG) is an emerging used luxurious car rental service provider in China. The used luxurious car business is conducted under the brand name “BatCar” by the Company’s VIE entity, Beijing Youjiao Technology Limited, from its headquarters in Beijing. Utilizing a streamlined, digital, transaction process, the Company ensures the best possible rental experience for its customers. For more information please visit https://www.imbatcar.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Commercial Credit, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
CHINA COMMERCIAL CREDIT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | ||||||||
| 2018 | 2017 | ||||||||
| (unaudited) | |||||||||
| ASSETS | |||||||||
| Cash | $ | 1,362,718 | $ | 1,359,630 | |||||
| Other current assets | 909,242 | - | |||||||
| Assets of discontinued operations | - | 5,805,654 | |||||||
| Total current assets | 2,271,960 | 7,165,284 | |||||||
| Operating lease assets, net | 1,870,983 | - | |||||||
| Property and equipment, net | 5,076 | - | |||||||
| Total Assets | $ | 4,148,019 | $ | 7,165,284 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | |||||||||
| Liabilities | |||||||||
| Other current liabilities | $ | 15,246 | $ | - | |||||
| Liabilities of discontinued operations | - | 10,426,771 | |||||||
| Total current liabilities | 15,246 | 10,426,771 | |||||||
| Other noncurrent liabilities | - | 1,311,000 | |||||||
| Total Liabilities | 15,246 | 11,737,771 | |||||||
| Shareholders’ Equity (Deficit) | |||||||||
| Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at June 30, 2018 and December 31, 2017, respectively; nil and nil shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively) | $ | - | $ | - | |||||
| Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at June 30, 2018 and December 31, 2017, respectively; nil and nil shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively) | - | - | |||||||
| Common stock (par value $0.001 per share, 100,000,000 shares authorized; 24,445,612 and 19,250,915 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively) | 24,446 | 19,251 | |||||||
| Subscription fee advanced from a shareholder | 524,974 | 699,974 | |||||||
| Additional paid-in capital | 27,906,598 | 71,424,031 | |||||||
| Accumulated deficit | (23,986,877 | ) | (81,534,396 | ) | |||||
| Accumulated other comprehensive (loss) income | (336,368 | ) | 4,818,653 | ||||||
| Total Shareholders’ Equity (Deficit) | 4,132,773 | (4,572,487 | ) | ||||||
| Total Liabilities and Shareholders’ Equity (Deficit) | $ | 4,148,019 | $ | 7,165,284 | |||||
CHINA COMMERCIAL CREDIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Lease income and other interest income | |||||||||||||||||
| Income from operating lease | $ | 96,721 | $ | - | $ | 96,721 | $ | - | |||||||||
| Interests on deposits with banks | 315 | - | 315 | 35,000 | |||||||||||||
| Total lease income and other interest income | 97,036 | - | 97,036 | 35,000 | |||||||||||||
| Net depreciation expense on operating lease assets | (12,458 | ) | - | (12,458 | ) | - | |||||||||||
| Net Revenue | 84,578 | - | 84,578 | 35,000 | |||||||||||||
| Non-interest expense | |||||||||||||||||
| Salaries and employee surcharge | (103,946 | ) | (125,093 | ) | (225,599 | ) | (428,204 | ) | |||||||||
| Rental expenses | (14,250 | ) | (7,370 | ) | (26,389 | ) | (14,780 | ) | |||||||||
| Business taxes and surcharge | (144 | ) | - | (144 | ) | - | |||||||||||
| Class action settlement expenses – changes in fair value of stock portion | (19,000 | ) | (2,052,000 | ) | (166,540 | ) | (1,995,000 | ) | |||||||||
| Other operating expenses | (326,046 | ) | (857,257 | ) | (607,141 | ) | (1,070,166 | ) | |||||||||
| Total non-interest expense | (463,386 | ) | (3,041,720 | ) | (1,025,813 | ) | (3,508,150 | ) | |||||||||
| Loss from acquisition of a variable interest entity | (14,004 | ) | - | (14,004 | ) | - | |||||||||||
| Net loss from continuing operations before income taxes | (392,812 | ) | (3,041,720 | ) | (955,239 | ) | (3,473,150 | ) | |||||||||
| Income tax expense | (20 | ) | - | (20 | ) | - | |||||||||||
| Net loss from continuing operations | $ | (392,832 | ) | $ | (3,041,720 | ) | $ | (955,259 | ) | $ | (3,473,150 | ) | |||||
| Net income (loss) from discontinued operations | 9,896,100 | (1,876,655 | ) | 10,072,629 | (2,673,302 | ) | |||||||||||
| Net income (loss) | $ | 9,503,268 | $ | (4,918,375 | ) | $ | 9,117,370 | $ | (6,146,452 | ) | |||||||
| Income (loss) per share- basic and diluted | 0.428 | (0.284 | ) | 0.432 | (0.361 | ) | |||||||||||
| Net loss per share from continuing operations – basic and diluted | (0.018 | ) | (0.176 | ) | (0.045 | ) | (0.204 | ) | |||||||||
| Net income (loss) per share from discontinued operations – basic and diluted | 0.446 | (0.108 | ) | 0.478 | (0.157 | ) | |||||||||||
| Weighted Average Shares Outstanding-Basic and Diluted | 22,211,600 | 17,308,319 | 21,080,665 | 17,004,613 | |||||||||||||
| Net income (loss) | $ | 9,503,268 | $ | (4,918,375 | ) | $ | 9,117,370 | $ | (6,146,452 | ) | |||||||
| Other comprehensive (loss) income | |||||||||||||||||
| Foreign currency translation adjustment | (117,085 | ) | 7,673 | (242,305 | ) | 29,288 | |||||||||||
| Comprehensive income (loss) | $ | 9,386,183 | $ | (4,910,702 | ) | $ | 8,875,065 | $ | (6,117,164 | ) | |||||||
CHINA COMMERCIAL CREDIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For The Six Months Ended June 30, | ||||||||
| 2018 | 2017 | |||||||
| (unaudited) | (unaudited) | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | 9,117,370 | $ | (6,146,452 | ) | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation of operating leased assets | 12,458 | - | ||||||
| Depreciation of property and equipment | 98 | - | ||||||
| Gain on disposal of discontinued operations | (9,794,873 | ) | - | |||||
| Loss on acquisition of a variable interest entity | 14,004 | - | ||||||
| Shares issued for settlement against legal proceedings | 943,860 | - | ||||||
| Shares issued to executive officers and professional services | - | 913,180 | ||||||
| Changes in fair value of noncurrent liabilities | 166,540 | 1,995,000 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Other current assets | (945,180 | ) | - | |||||
| Other current liabilities | (1,460 | ) | - | |||||
| Other noncurrent liabilities | (1,311,000 | ) | - | |||||
| Net cash provided by operating activities from discontinued operations | 992,334 | 1,417,164 | ||||||
| Net Cash Used in Operating Activities | (805,849 | ) | (1,821,108 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Proceeds from disposal of discontinued operations | 500,000 | - | ||||||
| Acquisition of subsidiary, net of cash acquired | 245 | - | ||||||
| Purchase of operating lease assets | (1,957,391 | ) | - | |||||
| Purchase of property and equipment | (5,376 | ) | - | |||||
| Net cash (used in) provided by investing activities from discontinued operations | (1,270,070 | ) | 1,238,159 | |||||
| Net Cash (Used in) Provided by Investing Activities | (2,732,592 | ) | 1,238,159 | |||||
| Cash Flows From Financing Activities: | ||||||||
| Cash raised in private placement | 3,265,371 | 560,000 | ||||||
| Net Cash Provided by Financing Activities | 3,265,371 | 560,000 | ||||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | 276,158 | 17,979 | ||||||
| Net Increase (Decrease) In Cash and Cash Equivalents | 3,088 | (4,970 | ) | |||||
| Cash and Cash Equivalents at Beginning of Period | 1,359,630 | 697,866 | ||||||
| Cash and Cash Equivalents at End of Period | $ | 1,362,718 | $ | 692,896 | ||||