Tarena International, Inc. Announces Third Quarter 2020 Results
BEIJING,
Third Quarter 2020 Highlights
- Net revenues decreased by 5.8% year-over-year to
RMB620.8 million (US$88.8 million ), fromRMB659.2 million in the same period of 2019. - Net revenue from adult education business, which represented 53.4% of the total net revenues, decreased by 38.8% year-over-year to
RMB331.2 million (US$47.4 million ), fromRMB541.5 million in the same period of 2019. - Net revenue from K-12 education business, which represented 46.6% of the total net revenues, increased by 146.0% year-over-year to
RMB289.6 million (US$41.4 million ), fromRMB117.7 million in the same period of 2019. - Gross profit decreased by 6.4% year-over-year to
RMB350.0 million (US$50.1 million ), fromRMB374.1 million in the same period of 2019. - Gross profit margin decreased by 0.4% year-over-year to 56.4%, from 56.8% in the same period of 2019.
- Operating loss decreased by 52.6% to a loss of
RMB56.6 million (US$8.1 million ), from a loss of RMB119.4 million in the same period of 2019. - Non-GAAP operating loss, which excluded share-based compensation expenses, was
RMB49.2 million (US$7.0 million ), compared to non-GAAP operating loss ofRMB95.1 million in the same period of 2019. - Net loss was RMB63.9 million (
US$9.1 million ), compared to net loss of RMB110.0 million in the same period of 2019. - Non-GAAP net loss, which excluded share-based compensation expenses, was
RMB56.5 million (US$8.1 million ), compared to non-GAAP net loss ofRMB85.7 million in the same period of 2019. - Basic and diluted loss per American Depositary Share ("ADS") was
RMB1.16 (US$0.17 ). - Cash, cash equivalents and time deposits, including current and non-current, and restricted cash totaled
RMB374 .7 million (US$55.0 million ) as ofSeptember 30, 2020 , compared toRMB621.2 million as ofDecember 31, 2019 . - Net cash outflow from operating activities in the third quarter of 2020 was
RMB11.7 million (US$1.7 million ). Capital expenditures in the third quarter of 2020 wereRMB13.0 million (US$1.9 million ). - Deferred revenue totaled
RMB1,963.4 million (US$288.3 million ) as ofSeptember 30, 2020 , compared toRMB1,586.0 million as ofDecember 31, 2019 , representing an increase of 23.8%. - Total student enrollments in adult education business, defined as the total number of courses enrolled in by students during that period, including multiple courses enrolled in by the same student, in the third quarter of 2020 decreased by 29.4% year-over-year to 38,400.
- Total number of learning centers in adult education decreased to 106 as of
September 30, 2020 , from 134 as ofSeptember 30, 2019 . - Total student enrollments in K-12 education business, defined as the total number of students who attended at least one paid lesson during that period or have deposit balances in their accounts at the end of that period, in the third quarter of 2020 reached 122,800, increasing by 62.0%, compared to the student enrollments of 75,800 in the same period of 2019.
- Total number of learning centers in K-12 education increased to 236 as of
September 30, 2020 , from 209 as ofSeptember 30, 2019 .
Nine Months Ended
- Net revenues decreased by 19.1% year-over-year to
RMB1,247.6 million (US$178.5 million ), fromRMB1,541.8 million in the same period of 2019. - Net revenue from adult education business, which represented 62.8% of the total net revenues, decreased by 34.6% year-over-year to
RMB783.7 million (US$112.1 million ), fromRMB1,198.6 million in the same period of 2019 - Net revenue from K-12 education business, which represented 37.2% of the total net revenues increased by 35.2% year-over-year to
RMB463.9 million (US$66.4 million ), fromRMB343.2 million in the same period of 2019. - Gross profit decreased by 30.3% year-over-year to
RMB472.3 million (US$67.6 million ), fromRMB678.1 million in the same period of 2019. - Gross profit margin decreased by 6.1% year-over-year to 37.9%, from 44.0% in the same period of 2019.
- Operating loss decreased by 5.9% to a loss of
RMB721.3 million (US$103.2 million ), from a loss of RMB766.3 million in the same period of 2019. - Non-GAAP operating loss, which excluded share-based compensation expenses, was
RMB692.6 million (US$99.1 million ), compared to non-GAAP operating loss ofRMB717.2 million in the same period of 2019. - Net loss was RMB676.5 million (
US$96.8 million ), compared to net loss of RMB735.1 million in the same period of 2019. - Non-GAAP net loss, which excluded share-based compensation expenses, was
RMB647.8 million (US$92.7 million ), compared to non-GAAP net loss ofRMB686.1 million in the same period of 2019. - Basic and diluted loss per American Depositary Share ("ADS") was
RMB12 .42 (US$1.78 ). - Total student enrollments in adult education business, defined as the total number of courses enrolled in by students during that period, including multiple courses enrolled in by the same student, in the first nine months of 2020 decreased by 35.9% year-over-year to 60,800.
- Total student enrollments in K-12 education programs, defined as the total number of students who attended at least one paid lesson during that period or have deposit balances in their accounts at the end of that period, in the first nine months of 2020 reached 123,200, increasing by 50.4%, compared to the student enrollments of 81,900 in the same period of 2019.
Key Financial Results
For the Three Months Ended |
Variance |
% of |
For the Nine Months Ended |
Variance |
% of |
||||||||
2019 |
2020 |
2019 |
2020 |
||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
||||||||
(in thousands, except for percentages) |
|||||||||||||
Net revenues |
659,185 |
620,802 |
(38,383) |
-5.8 |
1,541,798 |
1,247,628 |
(294,170) |
-19.1 |
|||||
Cost of revenues(a)(b) |
(285,060) |
(270,842) |
14,218 |
-5.0 |
(863,686) |
(775,369) |
88,317 |
-10.2 |
|||||
Gross profit |
374,125 |
349,960 |
(24,165) |
-6.5 |
678,112 |
472,259 |
(205,853) |
-30.4 |
|||||
Gross margin |
56.8% |
56.4% |
-0.4% |
44.0% |
37.9% |
-6.1% |
|||||||
Selling and marketing |
(272,291) |
(239,211) |
33,080 |
-12.1 |
(814,555) |
(682,995) |
131,560 |
-16.2 |
|||||
General and administrative |
(195,588) |
(143,072) |
52,516 |
-26.9 |
(525,256) |
(435,296) |
89,960 |
-17.1 |
|||||
Research and development |
(25,638) |
(24,256) |
1,382 |
-5.4 |
(104,590) |
(75,219) |
29,371 |
-28.1 |
|||||
Total operating expenses |
(493,517) |
(406,539) |
86,978 |
-17.6 |
(1,444,401) |
(1,193,510) |
250,891 |
-17.4 |
|||||
Operating loss |
(119,392) |
(56,579) |
62,813 |
-52.6 |
(766,289) |
(721,251) |
45,038 |
-5.9 |
Notes:
(a) Includes share-based compensation expenses.
(b) There were reclassification adjustments of the financials during the nine months ended
"As the COVID-19 pandemic has been properly controlled and contained in
"Looking ahead, our strategies are two-folded. Firstly, we will continue to uplift efficiency of our operation to improve our margins. Secondly, in order to strengthen our market leading position and expand our market share, we will focus on further streamlining our product lines, optimizing online and offline programs and curriculums, and further improving our tutoring qualities and user experience," concluded
"Our cash and cash equivalents and time deposits, including current and non-current, and restricted cash, decreased by 39.7%, from
Third Quarter 2020 Results
Net Revenues
Total net revenues decreased by 5.8% to
Net revenue from adult education business decreased by 38.8% to
Net revenue from K-12 education business increased by 146.0% to
Cost of Revenues
Cost of revenues decreased by 5.0% to
Gross Profit and Gross Margin
Gross profit decreased by 6.4% to
Operating Expenses
Total operating expenses decreased by 17.6% to
Selling and marketing expenses decreased by 12.2% to
General and administrative expenses decreased by 26.8% to
Research and development expenses decreased by 5.1% to
Operating Loss
Operating loss was
Interest Income
Interest income was
Other Income
Other income was
Foreign Exchange Gain / (loss)
Foreign exchange loss was
Income Tax Benefit / (expense)
The Company recorded an income tax expense of
Net Loss
As a result of the foregoing, net loss was
Basic and Diluted Loss per ADS
Loss per ADS was
Cash Flow
Net cash outflow from operating activities in the third quarter of 2020 was
Nine Months Ended
Net Revenues
Net revenues decreased by 19.1% to
Cost of Revenues
Cost of revenues decreased by 10.2% to
Gross Profit and Gross Margin
Gross profit decreased by 30.3% to
Operating Expenses
Total operating expenses decreased by 17.4% to
Selling and marketing expenses decreased by 16.2% to
General and administrative expenses decreased by 17.1% to
Research and development expenses decreased by 28.1% to
Operating Loss
Operating loss was
Interest Income
Interest income was
Other Income / (expense)
Other income was
Foreign Exchange Gain / (loss)
Foreign exchange loss was
Income Tax Benefit
The Company recorded an income tax benefit of
Net Loss
As a result of the foregoing, net loss was
Basic and Diluted Loss per ADS
Loss per ADS was
Cash Flow
Net cash outflow from operating activities in the first nine months of 2020 was
Business Outlook
Based on the Company's current estimates, total net revenues for the fourth quarter of 2020 are expected to be in the range of
This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions, which are subject to change, particularly as to the potential impact of COVID-19 on the economy in
Conference Call
Company management will hold an earnings conference call and live webcast to discuss the Company's results at
Please register in advance of the conference, using the link provided below. Upon registering, you will be provided with participant dial-in numbers, passcode and unique registrant ID.
Conference call registration link: http://apac.directeventreg.com/registration/event/5295689. It will automatically direct you to the registration page of "Third Quarter 2020 Tarena International Inc Earnings Conference Call" where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter "5295689".
In the 10 minutes prior to the call start time, you may use the conference access information (including dial in number(s), direct event passcode and registrant ID) provided in the confirmation email received at the point of registering.
A replay of the conference call may be accessed by phone at the following number until November 21, 2020,
INTERNATIONAL: +61 2 8199 0299
Conference ID: 5295689
Additionally, a live and archived webcast of this call will be available on the Investor Relations section of
About
Safe Harbor Statement
This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the
About Non-GAAP Financial Measures
Beginning in the second quarter of 2016, the Company revised its non-GAAP financial measures to exclude gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact, in addition to its historical practice of excluding share-based compensation expenses for non-GAAP results.
To supplement
The non-GAAP financial measures are provided to enhance investors' overall understanding of
|
||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(in thousands, except share data and per share data) |
||||||
As of |
||||||
|
|
|
||||
2019 |
2020 |
2020 |
||||
Audited |
Unaudited |
Unaudited |
||||
RMB |
RMB |
USD |
||||
ASSETS |
||||||
Current assets: |
||||||
Cash and cash equivalents |
537,701 |
352,426 |
51,750 |
|||
Time deposits |
83,081 |
6,000 |
881 |
|||
Restricted cash |
- |
16,034 |
2,354 |
|||
Accounts receivable, net of allowance for doubtful accounts |
31,442 |
14,412 |
2,116 |
|||
Amounts due from related parties |
16,492 |
253 |
37 |
|||
Prepaid expenses and other current assets |
132,539 |
146,979 |
21,583 |
|||
Total current assets |
801,255 |
536,104 |
78,721 |
|||
Time deposits-non current |
406 |
217 |
32 |
|||
Accounts receivable, net of allowance for doubtful accounts-non current |
724 |
502 |
74 |
|||
Property and equipment, net |
576,633 |
487,219 |
71,544 |
|||
Intangible assets, net |
17,669 |
14,426 |
2,118 |
|||
|
52,782 |
52,781 |
7,750 |
|||
Right-of-use assets |
773,472 |
642,775 |
94,386 |
|||
Long-term investments, net |
67,773 |
67,219 |
9,870 |
|||
Deferred income tax assets |
99,789 |
145,561 |
21,374 |
|||
Other non-current assets |
121,517 |
113,350 |
16,644 |
|||
Total assets |
2,512,020 |
2,060,154 |
302,513 |
|||
LIABILITIES AND EQUITY |
||||||
Current liabilities: |
||||||
Short-term bank loans |
89,162 |
99,872 |
14,665 |
|||
Accounts payable |
16,563 |
8,223 |
1,207 |
|||
Amounts due to related parties |
239 |
103 |
15 |
|||
Operating lease liabilities-current |
241,710 |
197,291 |
28,970 |
|||
Income taxes payable |
69,671 |
73,077 |
10,731 |
|||
Deferred revenue-current |
1,554,431 |
1,938,384 |
284,634 |
|||
Accrued expenses and other current liabilities |
397,558 |
298,102 |
43,774 |
|||
Total current liabilities |
2,369,334 |
2,615,052 |
383,996 |
|||
Deferred revenue-non current |
31,539 |
25,043 |
3,677 |
|||
Operating lease liabilities-non current |
508,810 |
467,851 |
68,700 |
|||
Other non-current liabilities |
5,401 |
5,163 |
758 |
|||
Total liabilities |
2,915,084 |
3,113,109 |
457,131 |
|||
Commitments and contingencies |
- |
- |
- |
|||
Shareholders' equity: |
||||||
Class A ordinary shares |
337 |
342 |
50 |
|||
Class B ordinary shares |
74 |
75 |
11 |
|||
|
(457,169) |
(459,815) |
(67,520) |
|||
Additional paid-in capital |
1,284,573 |
1,315,170 |
193,121 |
|||
Accumulated other comprehensive income |
51,386 |
49,729 |
7,302 |
|||
Accumulated deficit |
(1,279,248) |
(1,951,660) |
(286,584) |
|||
Total deficit attributable to the shareholders of |
(400,047) |
(1,046,159) |
(153,620) |
|||
Non-controlling interest |
(3,017) |
(6,796) |
(998) |
|||
Total liabilities and equity |
2,512,020 |
2,060,154 |
302,513 |
|
||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
||||||||||||
(in thousands, except share data and per share data) |
||||||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||
2019 |
2020 |
2020 |
2019 |
2020 |
2020 |
|||||||
RMB |
RMB |
USD |
RMB |
RMB |
USD |
|||||||
Net revenues |
659,185 |
620,802 |
88,799 |
1,541,798 |
1,247,628 |
178,459 |
||||||
Cost of revenues(a)(b) |
(285,060) |
(270,842) |
(38,741) |
(863,686) |
(775,369) |
(110,908) |
||||||
Gross profit |
374,125 |
349,960 |
50,058 |
678,112 |
472,259 |
67,551 |
||||||
Selling and marketing |
(272,291) |
(239,211) |
(34,217) |
(814,555) |
(682,995) |
(97,695) |
||||||
General and administrative |
(195,588) |
(143,072) |
(20,465) |
(525,256) |
(435,296) |
(62,264) |
||||||
Research and development |
(25,638) |
(24,256) |
(3,470) |
(104,590) |
(75,219) |
(10,759) |
||||||
Operating loss |
(119,392) |
(56,579) |
(8,094) |
(766,289) |
(721,251) |
(103,167) |
||||||
Interest income |
5,749 |
3,337 |
477 |
15,176 |
1,273 |
182 |
||||||
Other income (expense) |
481 |
2,864 |
410 |
(2) |
3,171 |
454 |
||||||
Foreign exchange gains (loss) |
2,020 |
(3,393) |
(485) |
3,126 |
(1,744) |
(249) |
||||||
Loss before income taxes |
(111,142) |
(53,771) |
(7,692) |
(747,989) |
(718,551) |
(102,780) |
||||||
Income tax benefit (expense) |
1,135 |
(10,113) |
(1,447) |
12,872 |
42,061 |
6,016 |
||||||
Net loss |
(110,007) |
(63,884) |
(9,139) |
(735,117) |
(676,490) |
(96,764) |
||||||
Less: Net loss attributable to |
(1,077) |
(931) |
(133) |
(2,133) |
(4,079) |
(583) |
||||||
Net loss attributable to Class |
(108,930) |
(62,953) |
(9,006) |
(732,984) |
(672,411) |
(96,181) |
||||||
Net loss per Class A and |
||||||||||||
Basic and diluted |
(2.04) |
(1.16) |
(0.17) |
(13.76) |
(12.42) |
(1.78) |
||||||
Weighted average number of |
||||||||||||
Basic and diluted |
53,392,184 |
54,443,291 |
54,443,291 |
53,266,054 |
54,151,656 |
54,151,656 |
||||||
Net loss |
(110,007) |
(63,884) |
(9,139) |
(735,117) |
(676,490) |
(96,764) |
||||||
Other comprehensive |
||||||||||||
Foreign currency translation |
(6,783) |
(1,856) |
(265) |
1,490 |
(1,657) |
(237) |
||||||
Comprehensive loss |
(116,790) |
(65,740) |
(9,404) |
(733,627) |
(678,147) |
(97,001) |
||||||
Notes: |
||||||||||||
(a) Includes share-based compensation expenses as follows: |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||
2019 |
2020 |
2020 |
2019 |
2020 |
2020 |
|||||||
RMB |
RMB |
USD |
RMB |
RMB |
USD |
|||||||
Cost of revenues |
288 |
80 |
11 |
741 |
322 |
46 |
||||||
Selling and marketing expenses |
3,566 |
343 |
49 |
5,546 |
1,381 |
198 |
||||||
General and administrative expenses |
12,874 |
6,143 |
879 |
29,490 |
19,861 |
2,841 |
||||||
Research and development expenses |
7,583 |
794 |
114 |
13,274 |
7,092 |
1,014 |
||||||
(b) There were reclassification adjustments for the financials without impact on net loss in the first half of 2019. |
|
||||||||||||
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES |
||||||||||||
(in thousands, except share data and per share data) |
||||||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||
2019 |
2020 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
2020 |
2020 (Unaudited) |
|||||||
RMB |
RMB |
USD |
RMB |
RMB |
USD |
|||||||
GAAP Cost of revenues |
285,060 |
270,842 |
38,741 |
863,686 |
775,369 |
110,908 |
||||||
Share-based compensation expense in |
288 |
80 |
11 |
741 |
322 |
46 |
||||||
Non-GAAP Cost of revenues |
284,772 |
270,762 |
38,730 |
862,945 |
775,047 |
110,862 |
||||||
GAAP Selling and marketing expenses |
272,291 |
239,211 |
34,217 |
814,555 |
682,995 |
97,695 |
||||||
Share-based compensation expense in |
3,566 |
343 |
49 |
5,546 |
1,381 |
198 |
||||||
Non-GAAP Selling and marketing |
268,725 |
238,868 |
34,168 |
809,009 |
681,614 |
97,497 |
||||||
GAAP General and administrative |
195,588 |
143,072 |
20,465 |
525,256 |
435,296 |
62,264 |
||||||
Share-based compensation expense in |
12,874 |
6,143 |
879 |
29,490 |
19,861 |
2,841 |
||||||
Non-GAAP General and |
182,714 |
136,929 |
19,586 |
495,766 |
415,435 |
59,423 |
||||||
|
25,638 |
24,256 |
3,470 |
104,590 |
75,219 |
10,759 |
||||||
Share-based compensation expense in |
7,583 |
794 |
114 |
13,274 |
7,092 |
1,014 |
||||||
|
18,055 |
23,462 |
3,356 |
91,316 |
68,127 |
9,745 |
||||||
Operating loss |
(119,392) |
(56,579) |
(8,094) |
(766,289) |
(721,251) |
(103,167) |
||||||
Share-based compensation expenses |
24,311 |
7,360 |
1,053 |
49,051 |
28,656 |
4,099 |
||||||
Non-GAAP Operating loss |
(95,081) |
(49,219) |
(7,041) |
(717,238) |
(692,595) |
(99,068) |
||||||
Net loss |
(110,007) |
(63,884) |
(9,139) |
(735,117) |
(676,490) |
(96,764) |
||||||
Share-based compensation expenses |
24,311 |
7,360 |
1,053 |
49,051 |
28,656 |
4,099 |
||||||
Non-GAAP Net loss |
(85,696) |
(56,524) |
(8,086) |
(686,066) |
(647,834) |
(92,665) |
||||||
Less: Net loss attributable to non- |
(1,077) |
(931) |
(133) |
(2,133) |
(4,079) |
(583) |
||||||
Non-GAAP net loss attributable to |
(84,619) |
(55,593) |
(7,953) |
(683,933) |
(643,755) |
(92,082) |
||||||
Non-GAAP net loss per Class A and |
||||||||||||
Basic and diluted |
(1.58) |
(1.02) |
(0.15) |
(12.84) |
(11.89) |
(1.70) |
||||||
Weighted average number of ordinary |
||||||||||||
Basic and diluted |
53,392,184 |
54,443,291 |
54,443,291 |
53,266,054 |
54,151,656 |
54,151,656 |
||||||
Notes: |
||||||||||||
(a) The Non-GAAP net loss per share is computed using Non-GAAP net loss attributable to ordinary shareholders and the same number |
||||||||||||
(b) There was no tax impact of share-based compensation expenses for the third quarter and first nine months of 2020 and 2019, |
View original content:http://www.prnewswire.com/news-releases/tarena-international-inc-announces-third-quarter-2020-results-301172665.html
SOURCE
Amanda Wang, Investor Relations Contact, Tarena International, Inc., Email: ir@tedu.cn, +86-10-5621-9451