China Liberal Education Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2022
Ms. Ngai Ngai Lam, Chairwoman and CEO of China Liberal, commented, "We are delighted to mark a positive financial turnaround in the first half of fiscal year 2022, despite several headwinds including COVID-19 lockdowns in
First Six Months of Fiscal Year 2022 Financial Highlights
For the Six Months Ended |
||||||
($ millions, except for percentages or per share data) |
2022 |
2021 |
%Change |
|||
Revenue |
2.74 |
1.85 |
47.9 % |
|||
Gross profit |
2.28 |
1.37 |
66.3 % |
|||
Gross margin |
83.5 % |
74.2 % |
9.2 pp |
|||
Income from operations |
1.49 |
0.30 |
392.1 % |
|||
Operating profit margin |
54.3 % |
16.3 % |
38.0 pp |
|||
Net income |
1.50 |
0.23 |
564.9 % |
|||
Basic and diluted earnings (loss) per share |
0.09 |
0.03 |
200.0 % |
|||
Note: pp represents percentage points. |
- Revenue increased by 47.9% year-over-year to
$2.74 million for the six months endedJune 30, 2022 , from$1.85 million for the same period last year. - Gross profit increased by 66.3% to
$2.28 million for the six months endedJune 30, 2022 , from$1.37 million for the same period last year. - Gross margins were 83.5% and 74.2% for the six months ended
June 30, 2022 and 2021, respectively. - Income from operations increased by 392.1% to
$1.49 million for the six months endedJune 30, 2022 , from$0.30 million for the same period last year. - Operating profit margin was 54.3% for the six months ended
June 30, 2022 , compared to 16.3% for the same period last year. - Net income was
$1.50 million for the six months endedJune 30, 2022 , compared to$0.23 million for the same period last year. - Basic and diluted earnings per share were
$0.09 for the six months endedJune 30, 2022 , compared to$0.03 for the same period last year.
First Six Months of Fiscal Year 2022 Financial Results
Revenue
Revenue increased by 47.9% year-over-year to
For the Six Months Ended |
||||||||
($ millions, except for percentages) |
2022 |
2021 |
||||||
Revenue |
Revenue |
Cost of |
Gross |
Revenue |
Cost of |
Gross |
||
Sino-foreign Jointly Managed Academic Programs |
2.15 |
0.14 |
93.4 % |
1.42 |
0.23 |
84.0 % |
||
Overseas Study Consulting Services |
0.33 |
0.09 |
73.7 % |
0.03 |
0.02 |
29.3 % |
||
Technological Consulting Services for Smart Campus |
0.17 |
0.18 |
-6.7 % |
0.34 |
0.19 |
43.9 % |
||
Tailored Job Readiness Training Services |
0.09 |
0.05 |
50.5 % |
0.07 |
0.04 |
37.9 % |
||
Total |
2.74 |
0.45 |
83.5 % |
1.85 |
0.48 |
74.2 % |
Revenue from Sino-foreign Jointly Managed Academic Programs increased by
Revenue from Overseas Study Consulting Services increased by
Revenue from technological consulting service decreased by
Revenue from tailored job readiness training services increased by
Cost of Revenue
Cost of revenue decreased by
Gross Profit
Gross profit increased by $0.91 million, or 66.3%, to $2.28 million for the six months ended June 30, 2022, from $1.37 million for the same period last year, while gross profit margin increased by 9.2%, to 83.5% for the six months ended June 30, 2022, from 74.2% for the same period last year. The increase in gross profit and gross margin was primarily due to higher gross profit and gross margin associated with our technological consulting service projects, as the projects during the six months ended
Operating Expenses
Selling expenses increased by $34,019, or 244.4%, to $110,612 for the six months ended June 30, 2022, from $76,593 for the same period last year. The increase in selling expenses was primarily attributable to an increase in salaries and welfare expenses of marketing employees.
General and administrative expenses decreased by $306,451, or 30.8%, to $689,000 for the six months ended June 30, 2022, from $995,451 for the same period last year, primarily due to a decrease in professional services fees of
Interest Income
Interest income decreased by
Other Income (Expense)
Other income was
Income Tax Provision
Income tax provision was
Net Income
Net income was $1.50 million for the six months ended June 30, 2022, compared to a net income of $0.23 million for the same period last year. Basic and diluted earnings per share were
Financial Condition
As of June 30, 2022, the Company had cash of $12.25 million, compared to
Net cash provided by operating activities was $6.70 million for the six months ended June 30, 2022, compared to net cash used in operating activities of $1.89 million for the same period last year.
Net cash used in investing activities was $39.14 million for the six months ended June 30, 2022, compared to net cash provided by investing activities of $1.46 million for the same period last year.
Net cash provided by financing activities was $12.30 million for the six months ended June 30, 2022, compared to $29.05 million for the same period last year.
COVID-19
The Company's operations may be further affected by the ongoing COVID-19 pandemic. For the six months ended
The continued uncertainties associated with the COVID-19 pandemic has caused many Chinese universities / colleges to temporarily hold their "smart campus" project construction plans and accordingly the Company did not obtain large "smart campus" project contract during the six months ended
About China Liberal Education Holdings Limited
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, please visit the company's website at ir.chinaliberal.com/.
Forward-Looking Statements
This document contains forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's expectations and projections about future events, which the Company derives from the information currently available to the Company. 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. 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 the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review risk factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission.
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 |
|||
June 30, |
December 31, |
||
2022 |
2021 |
||
(Unaudited) |
|||
ASSETS |
$ |
$ |
|
CURRENT ASSETS |
|||
Cash |
|
|
|
Account receivables |
3,172,192 |
2,462,550 |
|
Contract assets |
- |
2,014,146 |
|
Advance to suppliers |
- |
4,525,794 |
|
Prepayment to acquire subsidiaries |
60,000,000 |
1,492,772 |
|
Inventories |
215,701 |
201,091 |
|
Prepaid expenses and other current assets |
145,985 |
175,956 |
|
TOTAL CURRENT ASSETS |
|
|
|
NON-CURRENT ASSETS |
|||
Property and equipment, net |
26,439 |
35,384 |
|
Right-of-use assets |
- |
47,617 |
|
TOTAL NON-CURRENT ASSETS |
|
|
|
TOTAL ASSETS |
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
CURRENT LIABILITIES |
|||
Account payables |
|
|
|
Contract liabilities |
- |
291,833 |
|
Contingent consideration |
19,400,299 |
- |
|
Taxes payable |
714,848 |
740,966 |
|
Due to related parties |
22,852 |
23,557 |
|
Lease liability |
- |
47,617 |
|
Loan from a third party |
304,568 |
- |
|
Accrued expenses and other current liabilities |
382,684 |
402,233 |
|
TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES |
|
|
|
COMMITMENTS AND CONTINGENCIES |
|||
SHAREHOLDERS' EQUITY |
|||
Ordinary shares, |
|
|
|
Additional paid-in capital |
52,668,260 |
40,686,311 |
|
Statutory reserve |
898,405 |
719,804 |
|
Retained earnings |
1,471,552 |
147,278 |
|
Accumulated other comprehensive (loss) income |
(160,743) |
391,147 |
|
Total shareholders' equity |
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
||||
Condensed Consolidated Statements of Operations and Comprehensive Income |
||||
(Unaudited) |
||||
For the six months ended |
||||
2022 |
2021 |
|||
REVENUE |
|
|
||
COST OF REVENUE |
(452,663) |
(476,727) |
||
GROSS PROFIT |
2,284,747 |
1,373,824 |
||
OPERATING EXPENSES |
||||
Selling expenses |
(110,612) |
(76,593) |
||
General and administrative expenses |
(689,000) |
(995,451) |
||
Total operating expenses |
(799,612) |
(1,072,044) |
||
INCOME FROM OPERATIONS |
1,485,135 |
301,780 |
||
OTHER INCOME |
||||
Interest income |
8,673 |
59,973 |
||
Other income (expenses), net |
9,110 |
(7,249) |
||
Total other income, net |
17,783 |
52,724 |
||
INCOME BEFORE INCOME TAXES |
1,502,918 |
354,504 |
||
INCOME TAX EXPENSE |
(42) |
(128,482) |
||
NET INCOME |
|
|
||
COMPREHENSIVE INCOME |
||||
Total foreign currency translation adjustment |
(551,890) |
143,416 |
||
TOTAL COMPREHENSIVE INCOME |
|
|
||
Weighted average number of shares, basic and diluted |
17,627,339 |
8,756,372 |
||
Basic and diluted earnings per ordinary share |
|
|
|
|||
Condensed Consolidated Statements of Cash Flows |
|||
(Unaudited) |
|||
For the six months ended |
|||
2022 |
2021 |
||
Cash flows from operating activities |
|||
Net income |
|
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|||
Depreciation and amortization |
7,402 |
10,810 |
|
Non-cash lease expenses |
- |
45,148 |
|
Loss from disposal of property and equipment |
- |
606 |
|
Share-based compensation |
- |
53,250 |
|
Changes in operating assets and liabilities: |
|||
Account receivables, net |
(858,161) |
(621,655) |
|
Contract asset, net |
1,972,732 |
2,239,613 |
|
Advance to suppliers |
4,415,107 |
(3,937,025) |
|
Inventory, net |
(25,401) |
- |
|
Prepaid expenses and other current assets |
40,899 |
64,982 |
|
Account payables |
(77,703) |
(43,011) |
|
Contract liabilities |
(285,832) |
(38,853) |
|
Taxes payable |
11,175 |
126,429 |
|
Accrued expenses and other current liabilities |
99 |
(18,412) |
|
Net cash provided by (used in) operating activities |
6,703,193 |
(1,892,096) |
|
Cash flows from investing activities |
|||
Purchase of property and equipment |
- |
(3,500) |
|
Prepayment for acquisitions |
(39,137,623) |
- |
|
Repayment of advance to a related party |
- |
1,466,239 |
|
Net cash (used in) provided by investing activities |
(39,137,623) |
1,462,739 |
|
Cash flows from financing activities |
|||
Proceeds from advance from a third party |
313,966 |
- |
|
Net proceeds from issuance of ordinary shares |
11,989,949 |
29,047,088 |
|
Net cash provided by financing activities |
12,303,915 |
29,047,088 |
|
Effect of changes of foreign exchange rates on cash |
(298,326) |
73,491 |
|
Net (decrease) increase in cash |
(20,428,842) |
28,691,222 |
|
Cash, beginning of year |
32,678,421 |
5,007,449 |
|
Cash, end of year |
|
|
|
Supplemental disclosure of cash flow information: |
|||
Cash paid for interest expense |
- |
|
|
Cash paid for income tax |
|
- |
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