China Liberal Education Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2020
Ms. Ngai Ngai Lam, Chairwoman and CEO of China Liberal, commented, "We are pleased with our results for the first half of 2020 as our revenue increased 20.8% compared to the same period of last year, which positions us well to meet or exceed our projections for fiscal 2020. Our focus has always been long-term growth as we execute on our business strategy, which calls for increasing market share, diversifying offerings and expanding sales network. Through leveraging our keen and accurate understanding of the market and customer demand, we independently developed and successfully launched AI-Space, an all-in-one machine designed to provide highly integrated visualization solutions for various application scenarios with strict reliability requirements. Also, we are proactively seeking new opportunities as we cooperate with
First Six Months of Fiscal Year 2020 Financial Highlights
For the Six Months Ended |
||||||
($ millions, except per share data) |
2020 |
2019 |
%Change |
|||
Revenue |
2.27 |
1.88 |
20.8% |
|||
Gross profit |
0.79 |
0.86 |
-8.1% |
|||
Gross margin |
34.7% |
45.6% |
-10.9% |
|||
(Loss)/Income from operations |
(0.11) |
0.19 |
NM |
|||
Operating (loss)/profit margin |
-5.0% |
10.1% |
NM |
|||
Net (loss)/income |
(0.08) |
0.14 |
NM |
|||
Basic and diluted (loss)/earnings per share |
(0.02) |
0.03 |
NM |
- Revenue increased by 20.8% year-over-year to
$2.27 million for the six months endedJune 30, 2020 from$1.88 million for the same period last year. - Gross profit decreased by 8.1% to
$0.79 million for the six months endedJune 30, 2020 from$0.86 million for the same period last year. - Gross margins were 34.7% and 45.6% for the six months ended
June 30, 2020 and 2019, respectively. - Loss from operations was
$0.11 million for the six months endedJune 30, 2020 , compared to income from operations of$0.19 million for the same period last year. Operating loss margin was 5.0% for the six months endedJune 30, 2020 , compared to operating profit margin of 10.1% for the same period last year. - Net loss was
$0.08 million for the six months endedJune 30, 2020 , compared to$0.14 million for the same period last year. - Basic and diluted loss per share were
$0.02 for the six months endedJune 30, 2020 , compared to basic and diluted earnings per share of$0.03 for the same period last year.
First Six Months of Fiscal Year 2020 Financial Results
Revenue
Revenue increased by 20.8% year-over-year to
For the Six Months Ended |
||||||||
($ millions) |
2020 |
2019 |
||||||
Revenue |
Revenue |
Cost of |
Gross |
Revenue |
Cost of |
Gross |
||
Sino-foreign joint managed academic programs |
1.27 |
0.26 |
79.2% |
1.24 |
0.53 |
56.8% |
||
Technological consulting services for smart campus |
0.93 |
1.21 |
-29.3% |
0.63 |
0.48 |
23.4% |
||
Overseas study consulting services |
0.07 |
0.01 |
82.9% |
- |
- |
- |
||
Textbook and course material sales |
- |
- |
- |
0.01 |
0.01 |
42.7% |
||
Total |
2.27 |
1.48 |
34.7% |
1.88 |
1.02 |
45.6% |
Revenue from Sino-foreign jointly managed academic programs increased by
Revenue from providing smart campus related technological consulting service increased by
Revenue from overseas study consulting services was
Revenue from textbooks and course materials sales was nil for the six months ended
Cost of Revenues
Cost of revenue increased by
Gross Profit
Gross profit decreased by
Operating Expenses
Selling expenses decreased by
General and administrative expenses increased by
Interest Income
Interest income increased by
Other Expense
Other expense was
Provision for Income Taxes
Provision for income taxes was
Net (Loss)/Income
Net loss was
Financial Condition
As of
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financing activities was
Recent Developments
On
On
On
COVID-19
In
Because of the shelter-in-place orders and travel restrictions mandated by the Chinese government, the services and revenue activities of the Company were temporarily reduced during the end of January and
About
China Liberal, headquartered in Beijing, is an educational services provider in China. It provides a wide range of services, including those under Sino-foreign jointly managed academic programs; overseas study consulting services; technological consulting services for Chinese universities to improve their campus information and data management system and to optimize their teaching, operating and management environment, creating a "smart campus"; and tailored job readiness training to graduating students. For more information, visit the company's website at ir.chinaliberal.com.
Forward-Looking Statements
This document contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as "may," "should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential," or "hopes" or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this press release and other statements made from time to time by us or our representatives might not occur.
Investor Relations Contact
Email: ir@chinaliberal.com
Ascent Investor Relations LLC
Ms.
Email: tina.xiao@ascent-ir.com
Tel: +1 917 609 0333
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
|
December |
|||||||
2020 |
2019 |
|||||||
Assets |
||||||||
Current Assets |
||||||||
Cash |
$ |
6,223,083 |
$ |
1,702,279 |
||||
Accounts receivable, net |
339,465 |
518,191 |
||||||
Contract receivable, net |
2,726,953 |
1,639,213 |
||||||
Advance to suppliers |
256,037 |
836,766 |
||||||
Deferred initial public offering costs |
- |
649,451 |
||||||
Prepaid expenses and other current assets |
213,143 |
339,260 |
||||||
Total current assets |
9,758,681 |
5,685,160 |
||||||
Property and equipment, net |
50,017 |
77,782 |
||||||
Operating lease right-of-use assets, net |
- |
18,372 |
||||||
Contract receivable, net– non-current |
1,764,806 |
1,071,826 |
||||||
Total non-current assets |
1,814,823 |
1,167,980 |
||||||
Total Assets |
$ |
11,573,504 |
$ |
6,853,140 |
||||
Liabilities and STOCKHOLDERS' Equity |
||||||||
CURRENT LIABILITIES |
||||||||
Account payable |
$ |
382,234 |
$ |
51,071 |
||||
Deferred revenue |
165,299 |
562,056 |
||||||
Taxes payable |
476,033 |
404,453 |
||||||
Due to a related party |
556,311 |
461,633 |
||||||
Operating lease liabilities - current |
- |
10,326 |
||||||
Accrued expenses and other current liabilities |
226,438 |
178,276 |
||||||
TOTAL CURRENT LIABILITIES |
1,806,315 |
1,667,815 |
||||||
Operating lease liabilities – non-current |
- |
5,350 |
||||||
TOTAL LIABILITIES |
1,806,315 |
1,673,165 |
||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
STOCKHOLDERS' EQUITY |
||||||||
Ordinary shares, |
6,333 |
5,000 |
||||||
Additional paid-in capital |
9,358,487 |
4,579,116 |
||||||
Statutory reserve |
407,534 |
379,952 |
||||||
Retained earnings |
421,111 |
528,315 |
||||||
Accumulated other comprehensive loss |
(426,276) |
(312,408) |
||||||
Total Equity |
9,767,189 |
5,179,975 |
||||||
Total Liabilities and STOCKHOLDERS' Equity |
$ |
11,573,504 |
$ |
6,853,140 |
|
||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
||||||||
(Unaudited) |
||||||||
For the six months ended |
||||||||
2020 |
2019 |
|||||||
REVENUE, NET |
$ |
2,270,788 |
$ |
1,880,068 |
||||
COST OF REVENUE |
(1,482,515) |
(1,022,655) |
||||||
GROSS PROFIT |
788,273 |
857,413 |
||||||
OPERATING EXPENSES |
||||||||
Selling expenses |
(130,465) |
(156,061) |
||||||
General and administrative expenses |
(770,618) |
(511,024) |
||||||
Total operating expenses |
(901,083) |
(667,085) |
||||||
(LOSS) INCOME FROM OPERATIONS |
(112,810) |
190,328 |
||||||
OTHER INCOME |
||||||||
Interest income |
82,770 |
3,617 |
||||||
Other expense, net |
(907) |
(2,179) |
||||||
Total other income, net |
81,863 |
1,438 |
||||||
(LOSS) INCOME BEFORE INCOME TAXES |
(30,947) |
191,766 |
||||||
INCOME TAX PROVISION |
(48,675) |
(52,756) |
||||||
NET (LOSS) INCOME |
(79,622) |
139,010 |
||||||
COMPREHENSIVE (LOSS) INCOME |
||||||||
Total foreign currency translation adjustment |
(113,868) |
(18,085) |
||||||
TOTAL COMPREHENSIVE (LOSS) INCOME |
(193,490) |
120,925 |
||||||
Weighted average number of shares, basic and diluted |
5,366,300 |
5,000,000 |
||||||
Basic and diluted (loss) earnings per ordinary share |
$ |
(0.02) |
$ |
0.03 |
|
||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Changes in Stockholders' Equity |
||||||||||||||||||||||||||||||||||||
For the Six Months Ended |
||||||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||||||
Ordinary shares |
Additional Paid-in |
Statutory |
Retained |
Accumulated Other Comprehensive |
Total Stockholders' |
Non-Controlling |
Total |
|||||||||||||||||||||||||||||
Shares |
Amount |
Capital |
Reserve |
Earnings |
Loss |
Equity |
Interest |
Equity |
||||||||||||||||||||||||||||
Balance at |
5,000,000 |
$ |
5,000 |
$ |
4,579,116 |
$ |
294,158 |
$ |
88,967 |
$ |
(234,237) |
$ |
4,733,004 |
$ |
518,575 |
$ |
5,251,579 |
|||||||||||||||||||
Acquisition |
- |
- |
- |
- |
87,238 |
- |
87,238 |
(540,907) |
(453,669) |
|||||||||||||||||||||||||||
Appropriation |
- |
- |
- |
28,612 |
(28,612) |
- |
- |
- |
- |
|||||||||||||||||||||||||||
Net income |
- |
- |
- |
- |
139,010 |
- |
139,010 |
- |
139,010 |
|||||||||||||||||||||||||||
Foreign |
- |
- |
- |
- |
- |
(18,085) |
(18,085) |
22,332 |
4,247 |
|||||||||||||||||||||||||||
Balance at |
5,000,000 |
$ |
5,000 |
$ |
4,579,116 |
$ |
322,770 |
$ |
286,603 |
$ |
(252,322) |
$ |
4,941,167 |
$ |
- |
$ |
4,941,167 |
|||||||||||||||||||
Balance at |
5,000,000 |
$ |
5,000 |
$ |
4,579,116 |
$ |
379,952 |
$ |
528,315 |
$ |
(312,408) |
$ |
5,179,975 |
$ |
- |
$ |
5,179,975 |
|||||||||||||||||||
Issuance of |
1,333,333 |
1,333 |
4,779,371 |
- |
- |
- |
4,780,704 |
- |
4,780,704 |
|||||||||||||||||||||||||||
Appropriation |
- |
- |
- |
27,582 |
(27,582) |
- |
- |
- |
- |
|||||||||||||||||||||||||||
Net loss |
- |
- |
- |
- |
(79,622) |
- |
(79,622) |
- |
(79,622) |
|||||||||||||||||||||||||||
Foreign |
- |
- |
- |
- |
- |
(113,868) |
(113,868) |
- |
(113,868) |
|||||||||||||||||||||||||||
Balance at |
6,333,333 |
$ |
6,333 |
$ |
9,358,487 |
$ |
407,534 |
$ |
421,111 |
$ |
(426,276 |
)) |
$ |
9,767,189 |
$ |
- |
$ |
9,767,189 |
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
For the Six Months Ended |
||||||||
|
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities |
||||||||
Net (loss) income |
$ |
(79,622) |
$ |
139,010 |
||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: |
||||||||
Depreciation and amortization |
12,234 |
20,320 |
||||||
Loss from disposal of property and equipment |
27,381 |
- |
||||||
Amortization of right-of-use assets |
18,181 |
- |
||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
172,176 |
(99,777) |
||||||
Contract receivable |
(1,834,390) |
297,936 |
||||||
Advances to suppliers |
571,128 |
(339,463) |
||||||
Prepaid expenses and other current assets |
745,854 |
(511,104) |
||||||
Due from related party |
- |
73,685 |
||||||
Deferred initial public offering costs |
- |
(321,569) |
||||||
Accounts payable |
332,972 |
67,350 |
||||||
Deferred revenue |
(390,331) |
470,410 |
||||||
Taxes payable |
77,397 |
90,591 |
||||||
Accrued expenses and other current liabilities |
33,843 |
9,208 |
||||||
Net cash used in operating activities |
(313,177) |
(103,403) |
||||||
Cash flows from investing activities |
||||||||
Purchase of property and equipment |
(12,831) |
(13,026) |
||||||
Acquisition of 8.8228% non-controlling interest in |
- |
(453,669) |
||||||
Net cash used in investing activities |
(12,831) |
(466,695) |
||||||
Cash flows from financing activities |
||||||||
Proceeds from borrowing from a related party |
94,804 |
481,431 |
||||||
Net proceeds from initial public offering |
4,780,704 |
- |
||||||
Net cash provided by financing activities |
4,875,508 |
481,431 |
||||||
Effect of exchange rate changes on cash |
(28,696) |
3,988 |
||||||
Net increase (decrease) in cash |
4,520,804 |
(84,679) |
||||||
Cash, beginning of period |
1,702,279 |
2,077,166 |
||||||
Cash, end of period |
$ |
6,223,083 |
$ |
1,992,487 |
||||
Supplemental disclosure information: |
||||||||
Income taxes paid |
$ |
20,321 |
$ |
19,911 |
||||
Interest paid |
$ |
- |
$ |
- |
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