Tarena International, Inc. Announces Unaudited First Half Fiscal Year 2020 Results
BEIJING,
First Half Fiscal Year 2020 Highlights
- Net revenues decreased by 29.0% year-over-year to
RMB626.8 million (US$89.2 million ), fromRMB882.6 million in the same period in 2019. - Gross profit decreased by 60.9% year-over-year to
RMB122.3 million (US$17.4 million ), fromRMB312.8 million in the same period in 2019. - Operating loss was
RMB664.7 million (US$94.6 million ), compared to an operating loss of RMB646.9 million in the same period in 2019. - Non-GAAP operating loss, which excluded share-based compensation expenses, was
RMB643.4 million (US$91.6 million ), compared to non-GAAP operating loss ofRMB622.2 million in the same period in 2019. - Net loss was RMB612.6 million (
US$87.2 million ), compared to a net loss of RMB625.1 million in the same period in 2019. - Non-GAAP net loss, which excluded share-based compensation expenses, was
RMB591.3 million (US$84.2 million ), compared to a non-GAAP net loss ofRMB600.4 million in the same period in 2019. - Basic and diluted loss per American Depositary Share ("ADS") was
RMB11.29 (US$1.6 ). - Cash, cash equivalents and time deposits, including current and non-current, and restricted cash totaled
RMB414 .9 million (US$58.6 million ) as ofJune 30, 2020 , compared toRMB621.2 million as ofDecember 31, 2019 . - Deferred revenue totaled
RMB1,988.0 million (US$280.8 million ) as ofJune 30, 2020 , compared toRMB1,586.0 million as ofDecember 31, 2019 , representing an increase of 25.3%. - 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 half of 2020 decreased by 18.0% year-over-year to 51,600.
- Total number of learning centers in adult education decreased to 108 as of
June 30, 2020 , from 130 as ofDecember 31, 2019 . - 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 half of 2020 reached 105,500, increased by 80.7% compared to the first half of 2019, when the K-12 student enrollment was at 58,400.
- Total number of learning centers in K-12 education increased to 232 as of
June 30, 2020 , from 217 as ofDecember 31, 2019 .
"Due to the COVID-19 pandemic, total net revenue decreased by 29.0% from
"For the rest of 2020, we will continue to focus on improving our learning centers' operational efficiency, increasing per capita productivity and implementing effective cost and expenses controls. We do not plan to open new learning center in the second half of this year. Returning to profitability is our goal. We believe COVID-19 can be properly controlled and contained in China. Since
"Our cash and cash equivalents and time deposits, including current and non-current, decreased by 33.2%, from
First Half Fiscal Year 2020 Results
Net Revenues
Net revenues decreased by 29.0% to
Cost of Revenues
Cost of revenues decreased by 11.5% to
Gross Profit and Gross Margin
Gross profit decreased by 60.9% to
Operating Expenses
Total operating expenses decreased by 18.0% to
Selling and marketing expenses decreased by 23.0% to
General and administrative expenses decreased by 0.8% to
Research and development expenses decreased by 42.7% to
Operating Loss
Operating loss was
Interest Income (expense)
Interest expense was
Other Income
Other income was
Foreign Exchange Gain
Foreign exchange gain was
Income Tax Expense
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 were
Cash Flow
Net cash outflow from operating activities for the first half of 2020 was
Business Outlook
Based on the Company's current estimates, total net revenues for the third 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: https://apac.directeventreg.com/registration/event/8448098. It will automatically direct you to the registration page of "First Half 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 "8448098".
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 August 20, 2020,
|
+1 855 452 5696 |
INTERNATIONAL: |
+61 2 8199 0299 |
Conference ID: |
8448098 |
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 |
395,685 |
55,892 |
|||
Time deposits |
83,081 |
6,000 |
848 |
|||
Restricted cash |
- |
13,145 |
1,857 |
|||
Accounts receivable, net of allowance for |
31,442 |
21,560 |
3,045 |
|||
Amounts due from related parties |
16,492 |
275 |
39 |
|||
Prepaid expenses and other current assets |
132,539 |
150,878 |
21,312 |
|||
Total current assets |
801,255 |
587,543 |
82,993 |
|||
Time deposits-non current |
406 |
116 |
16 |
|||
Accounts receivable, net of allowance for |
724 |
271 |
38 |
|||
Property and equipment, net |
576,633 |
508,048 |
71,763 |
|||
Intangible assets, net |
17,669 |
15,662 |
2,212 |
|||
|
52,782 |
52,782 |
7,456 |
|||
Right-of-use assets |
773,472 |
719,387 |
101,616 |
|||
Long-term investments, net |
67,773 |
67,042 |
9,470 |
|||
Deferred income tax assets |
99,789 |
152,701 |
21,569 |
|||
Other non-current assets |
121,517 |
115,934 |
16,376 |
|||
Total assets |
2,512,020 |
2,219,486 |
313,509 |
|||
LIABILITIES AND EQUITY |
||||||
Current liabilities: |
||||||
Short-term bank loans |
89,162 |
99,872 |
14,107 |
|||
Accounts payable |
16,563 |
9,768 |
1,380 |
|||
Amounts due to related parties |
239 |
111 |
16 |
|||
Operating lease liabilities-current |
241,710 |
195,317 |
27,589 |
|||
Income taxes payable |
69,671 |
70,104 |
9,902 |
|||
Deferred revenue-current |
1,554,431 |
1,951,331 |
275,631 |
|||
Accrued expenses and other current liabilities |
397,558 |
295,045 |
41,676 |
|||
Total current liabilities |
2,369,334 |
2,621,548 |
370,301 |
|||
Deferred revenue-non current |
31,539 |
36,636 |
5,175 |
|||
Operating lease liabilities-non current |
508,810 |
551,699 |
77,929 |
|||
Other non-current liabilities |
5,401 |
5,243 |
741 |
|||
Total liabilities |
2,915,084 |
3,215,126 |
454,146 |
|||
Commitments and contingencies |
- |
- |
- |
|||
Shareholders' equity: |
||||||
Class A ordinary shares |
337 |
339 |
48 |
|||
Class B ordinary shares |
74 |
75 |
10 |
|||
|
(457,169) |
(459,815) |
(64,950) |
|||
Additional paid-in capital |
1,284,573 |
1,307,047 |
184,624 |
|||
Accumulated other comprehensive income |
51,386 |
51,585 |
7,287 |
|||
Accumulated deficit |
(1,279,248) |
(1,888,706) |
(266,785) |
|||
Total deficit attributable to the shareholders |
(400,047) |
(989,475) |
(139,766) |
|||
Non-controlling interest |
(3,017) |
(6,165) |
(871) |
|||
Total liabilities and equity |
2,512,020 |
2,219,486 |
313,509 |
|
||||||
For the Six Months Ended |
||||||
2019 |
2020 |
2020 |
||||
RMB |
RMB |
USD |
||||
Net revenues |
882,613 |
626,826 |
89,205 |
|||
Cost of revenues(a) |
(569,851) |
(504,526) |
(71,800) |
|||
Gross profit |
312,762 |
122,300 |
17,405 |
|||
Selling and marketing expenses(a) |
(576,038) |
(443,784) |
(63,156) |
|||
General and administrative expenses(a) |
(294,670) |
(292,224) |
(41,587) |
|||
Research and development expenses(a) |
(88,952) |
(50,963) |
(7,253) |
|||
Operating loss |
(646,898) |
(664,671) |
(94,591) |
|||
Interest income (loss) |
9,427 |
(2,063) |
(294) |
|||
Other income (loss) |
(483) |
307 |
44 |
|||
Foreign currency exchange gains |
1,106 |
1,649 |
235 |
|||
Loss before income taxes |
(636,848) |
(664,778) |
(94,606) |
|||
Income tax benefit |
11,737 |
52,172 |
7,425 |
|||
Net loss |
(625,111) |
(612,606) |
(87,181) |
|||
Less: Net loss attributable to non-controlling |
(1,056) |
(3,148) |
(448) |
|||
Net loss attributable to Class A and Class B |
(624,055) |
(609,458) |
(86,733) |
|||
Net loss per Class A and Class B ordinary share: |
||||||
Basic and diluted |
(11.36) |
(11.29) |
(1.61) |
|||
Weighted average number of Class A and Class |
||||||
Basic and diluted |
54,929,910 |
54,004,236 |
54,004,236 |
|||
Net loss |
(625,111) |
(612,606) |
(87,181) |
|||
Other comprehensive income |
||||||
Foreign currency translation adjustment, net of nil income taxes |
8,273 |
199 |
28 |
|||
Comprehensive loss |
(616,838) |
(612,407) |
(87,153) |
|||
Notes: (a) Includes share-based compensation expenses as follows: |
||||||
For the Six Months Ended |
||||||
2019 |
2020 |
2020 |
||||
RMB |
RMB |
USD |
||||
Cost of revenues |
454 |
242 |
34 |
|||
Selling and marketing expenses |
1,980 |
1,038 |
148 |
|||
General and administrative expenses |
16,616 |
13,718 |
1,952 |
|||
Research and development expenses |
5,692 |
6,298 |
896 |
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (in thousands, except share data and per share data) |
|||||||
For the Six Months Ended |
|||||||
2019 (Unaudited) |
2020 (Unaudited) |
2020 (Unaudited) |
|||||
RMB |
RMB |
USD |
|||||
GAAP Cost of revenues |
569,851 |
504,526 |
71,800 |
||||
Share-based compensation expense in cost of |
454 |
242 |
34 |
||||
Non-GAAP Cost of revenues |
569,397 |
504,284 |
71,766 |
||||
GAAP Selling and marketing expenses |
576,038 |
443,784 |
63,156 |
||||
Share-based compensation expense in selling and |
1,980 |
1,038 |
148 |
||||
Non-GAAP Selling and marketing expenses |
574,058 |
442,746 |
63,008 |
||||
GAAP General and administrative expenses |
294,670 |
292,224 |
41,587 |
||||
Share-based compensation expense in general and |
16,616 |
13,718 |
1,952 |
||||
Non-GAAP General and administrative |
278,054 |
278,506 |
39,635 |
||||
|
88,952 |
50,963 |
7,253 |
||||
Share-based compensation expense in research and |
5,692 |
6,298 |
896 |
||||
|
83,260 |
44,665 |
6,357 |
||||
Operating loss |
(646,898) |
(664,671) |
(94,591) |
||||
Share-based compensation expenses |
24,742 |
21,296 |
3,030 |
||||
Non-GAAP Operating loss |
(622,156) |
(643,375) |
(91,561) |
||||
Net loss |
(625,111) |
(612,606) |
(87,181) |
||||
Share-based compensation expenses |
24,742 |
21,296 |
3,030 |
||||
Non-GAAP Net loss |
(600,369) |
(591,310) |
(84,151) |
||||
Less: Net loss attributable to non-controlling |
(1,056) |
(3,148) |
(448) |
||||
Non-GAAP net loss attributable to Class A and |
(599,313) |
(588,162) |
(83,703) |
||||
Non-GAAP net loss per Class A and Class B |
|||||||
Basic and diluted |
(10.91) |
(10.89) |
(1.55) |
||||
Weighted average number of ordinary shares |
|||||||
Basic and diluted |
54,929,910 |
54,004,236 |
54,004,236 |
||||
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 and loss on foreign currency forward contract for the first half of |
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SOURCE
Amanda Wang, Investor Relations Contact, Tarena International, Inc., ir@tedu.cn, +86-10-5668-3450