ATA Creativity Global (“ACG” or the “Company”, Nasdaq:
AACG), an international education services provider
focused on quality experiences that cultivate and enrich students’
creativity, today announced preliminary unaudited financial results
for the quarter and year ended December 31, 2019 (“Fourth Quarter
2019” and “Fiscal Year 2019,” respectively).
2019 Fourth Quarter and Annual Highlights, Significant
Changes in Operations Due to Huanqiuyimeng Acquisition
- ACG completed the acquisition (“Huanqiuyimeng Acquisition”) of
Beijing Huanqiuyimeng Education Consultation Corp.
(“Huanqiuyimeng”), a leading provider of educational services for
students in China interested in applying for overseas art study and
now a wholly owned subsidiary of ACG. Control of Huanqiuyimeng
transitioned to ACG on August 6, 2019 (the “Acquisition Date”).
Details of the Huanqiuyimeng Acquisition can be found in the
Forms 6-K filed by ACG on August 6, 2019, and October 17,
2019.
- During the Fourth Quarter 2019, student enrollment was 1,042,
of which 585 were enrolled in the Portfolio Training Program (as
defined below). Approximately 52,202 credit hours (i.e., the
standard unit measuring educational credit for the Portfolio
Training Program; each credit hour roughly equals to one hour of
time committed) were delivered during the Fourth Quarter 2019.
- Effective September 12, 2019, the Company changed its name to
ATA Creativity Global. Its stock ticker symbol also changed to
“AACG” with the Company’s American Depositary Shares commencing
trading under the new symbol as of market open on October 17,
2019.
- ACG completed a private placement with CL-TCC, a company
focused on investments in the culture and education industry, under
which it shall receive gross proceeds of approximately $10.0
million from the sale of 5,662,634 common shares of the Company
(the “Transaction”). ACG expects to use proceeds from the
Transaction to fund its day-to-day operations and M&A
activities. Details of the Transaction can be found in the
Form 6-K filed by ACG on December 18, 2019.
- Fourth Quarter 2019 net revenues of RMB54.1 million (US$7.8
million), driven by revenue from Huanqiuyimeng’s portfolio training
and other education services businesses.
- Fourth Quarter 2019 net loss from continuing operations
attributable to ACG of RMB70.8 million (US$10.2 million), compared
to RMB23.8 million in the prior-year period.
- Fiscal Year 2019 net revenues of RMB97.8 million (US$14.0
million), driven by revenue from Huanqiuyimeng’s portfolio training
and other education services businesses during the period beginning
from the Acquisition Date to December 31, 2019 (the “2019 Partial
Year”).
- Fiscal Year 2019 net loss from continuing operations
attributable to ACG of RMB127.0 million (US$18.2 million), compared
to RMB63.7 million in the prior year, mainly due to increased
operating expenses incurred related to the organizational
restructuring and day-to-day operations of the recently acquired
Huanqiuyimeng business.
- RMB154.2 million (US$22.1 million) in cash and cash equivalents
as of December 31, 2019
Management CommentaryMr. Kevin Ma,
Chairman and CEO of ACG, stated, “2019 was a monumental year for
our Company as we closed the Huanqiuyimeng Acquisition in the
second half of the year, marking the beginning of ACG’s new
strategic direction. The Company’s new name, ATA Creativity Global,
and ticker symbol ‘AACG’ represent this next phase of our
evolution. In reviewing our results for Fourth Quarter 2019, it is
important to note that these numbers incorporate the full quarter’s
results from Huanqiuyimeng while third quarter 2019 results
incorporated only about two months of results from Huanqiuyimeng.
However, summer tends to be the season during which Huanqiuyimeng
sees the strongest demand for educational travel services.
“We were pleased to have garnered the support of CL-TCC in a
private placement, from which the proceeds will be used to help
grow our business and fund potential future M&A prospects. We
expect to continue exploring M&A opportunities where we can
leverage our education service capabilities and industry
relationships and advance our long-term goal of becoming a leading
provider of international education services. We look forward to
updating the investment community on these developments.”
OutlookMr. Jun Zhang, President of ACG, stated,
“Having completed the organizational restructuring and integration
following the Huanqiuyimeng Acquisition, we are excited by the
student enrollment initiatives we have in place. In addition to
helping students pursue their goals of studying at the top art and
creative studies institutions around the globe, we are exploring
the possibility of partnerships with institutions primarily in
Europe and the United States to serve as a bridge for students who
require additional flexibility, time and support before moving
forward with an education at a recognized university or
institute.
“We’d like to provide an update on the impact the outbreak of
the coronavirus disease (‘COVID-19’) has had on ACG and our
operations. We are taking every precaution to ensure the health and
safety of our students, faculty, staff and employees during this
time. As such, students with any on-campus coursework, including
basic skills and one-on-one classes, are being given the option to
do so in an online format. We are seeing an impact on our sales
contract pipeline as our traditional sales/marketing channels are
typically driven by personnel who cannot come into the office due
to the COVID-19 outbreak. Our educational travel segment has also
been affected by delays and cancellations due to COVID-19. We will
continue to monitor the situation here closely but are prioritizing
the well-being of our students, staff and employees at all
times.”
Operating Review
Enrollment Update
Huanqiuyimeng student enrollment for Fourth Quarter 2019 was
1,042, of which 585 were enrolled in portfolio training programs,
Huanqiuyimeng’s main line of business that primarily consists of
training for students focused on arts and creative studies (the
“Portfolio Training Program”). The Portfolio Training Program
consists of time-based programs and project-based programs.
Students who elect the time-based programs enroll in a certain
number of consulting/training hours, whereas students who elect the
project-based programs have no consulting/training hour constraint
but will be guided through a certain number of projects needed to
complete a portfolio. Under project-based programs, the number of
credit hours required to complete a project may vary depending on
the background and requirements of the students. Revenue is
recognized proportionately per credit hour delivered regardless of
whether a student is enrolled in the time-based program or
project-based program. However, as the total credit hours of
project-based programs are not predetermined, the progress of a
project-based program, which is measured by credit hours delivered
compared against the total credit hours expected to be delivered,
is re-evaluated at each quarterly and annual financial reporting
date.
During Fourth Quarter 2019, 457 students were enrolled in
Huanqiuyimeng’s other programs, which mainly consist of educational
travel services, overseas study counseling services and language
training services.
A total of 52,202 credit hours were delivered during Fourth
Quarter 2019, of which 34,434 credit hours were delivered for
time-based programs and 17,768 credit hours were delivered for
project-based programs.
The following is a summary of the credit hours delivered for the
Portfolio Training Program, for the period beginning October 1,
2019, to December 31, 2019, compared to those for the prior-year
period:
|
Oct. 1 – Dec. 31, 2019 |
|
Oct. 1 – Dec. 31, 2018 |
|
% Growth |
|
No. of Credit Hours |
|
No. of Credit Hours |
|
|
|
|
|
|
|
|
Time-based Program |
34,434 |
|
35,490 |
|
(3.0 |
%) |
Project-based Program |
17,768 |
|
8,263 |
|
115.0 |
% |
Total |
52,202 |
|
43,753 |
|
19.3 |
% |
GAAP Results
Note: Impact of Huanqiuyimeng Acquisition on and Certain
Adjustments to the Company’s Financial Statements
Following the completion of the Huanqiuyimeng Acquisition
whereby Huanqiuyimeng became a wholly owned subsidiary of the
Company, the financial results presented in this press release
incorporate financial contributions from Huanqiuyimeng for Fourth
Quarter 2019 and the 2019 Partial Year. In addition, the Company
has applied acquisition accounting and made purchase
price allocation (“PPA”) adjustments to various assets acquired and
liabilities assumed from the Huanqiuyimeng Acquisition. Due to
reassessment for the fair value of Huanqiuyimeng’s identifiable
assets acquired and liabilities assumed at the Acquisition Date,
which shall be conducted within one year of the Acquisition Date,
certain line items in the consolidated balance sheets and
consolidated statements of comprehensive income (loss) presented in
this press release have been adjusted.
Certain line items in the condensed consolidated statements of
comprehensive income (loss) for the three months and year ended
December 31, 2018, in this press release have been revised as a
result of adjustments made in the Company’s annual report for the
fiscal year ended December 31, 2018. These revisions were
mainly made pursuant to the accounting treatment of discontinued
operations, under which the Company accounted for the sale of
business of ATA Online (Beijing) Education Technology Co., Ltd, or
ATA Online, a former subsidiary of the Company. The income from
discontinued operations, net of income taxes, recorded in the three
months ended December 31, 2019, was to account for the
contingencies that arose pursuant to the terms in the sale of the
business of ATA Online.
Fourth Quarter 2019 Financial
Review
ACG’s total net revenues for Fourth Quarter 2019 were RMB54.1
million (US$7.8 million), compared to RMB0.2 million in the
prior-year period, driven primarily by revenue from the recently
acquired Huanqiuyimeng. Net revenues for this quarter include a
negative adjustment of RMB9.2 million resulting from amortization
of the difference between the carrying value of deferred
revenues in Huanqiuyimeng’s book and the fair value of deferred
revenues assessed from the PPA process applied to the Huanqiuyimeng
Acquisition (“PPA Adjustment to Net Revenues”). Revenues from
portfolio training programs were RMB36.6 million, or 67.6% of total
net revenues, during the period. Revenues from other education
services and the K-12 business were RMB17.5 million, or 32.4% of
total net revenues during the period.
Gross profit for Fourth Quarter 2019 was RMB20.9 million (US$3.0
million), compared to gross loss of RMB0.02 million in the
prior-year period. Gross margin was 38.6% during the period,
compared to negative gross margin of 10.5% in the prior-year
period, prior to the Huanqiuyimeng Acquisition. Excluding the PPA
Adjustment to Net Revenues stated above, gross margin for Fourth
Quarter 2019 would have been 47.5%.
Total operating expenses for Fourth Quarter 2019 were RMB50.6
million (US$7.3 million), which includes RMB5.0 million in expenses
amortized from intangible assets recognized from the Huanqiuyimeng
Acquisition, compared to RMB21.8 million in the prior-year period,
primarily due to increased selling, general and administrative
(SG&A) expenses of RMB40.1 million related to the recently
acquired Huanqiuyimeng operations.
Loss from continuing operations for Fourth Quarter 2019 was
RMB29.7 million (US$4.3 million), compared to RMB20.8 million in
the prior-year period as a result of the increased operating
expenses mentioned above.
Net loss from continuing operations attributable to ACG for
Fourth Quarter 2019 was RMB70.8 million (US$10.2 million), compared
to RMB23.8 million in the prior-year period.
For Fourth Quarter 2019, basic and diluted losses from
continuing operations per common share attributable to ACG were
both RMB1.27 (US$0.18), compared to RMB0.56 for the prior-year
period. Basic and diluted losses from continuing operations per ADS
attributable to ACG were both RMB2.54 (US$0.36), compared to
RMB1.12 in the prior-year period.
Year-end 2019 Financial Review
ACG’s total net revenues for Fiscal Year 2019 were RMB97.8
million (US$14.0 million), compared to RMB1.3 million in the prior
year, driven primarily by revenue from the recently acquired
Huanqiuyimeng. Total net revenues for the year include the PPA
Adjustment to Net Revenues, which represents a decrease of RMB15.3
million. Revenues from portfolio training programs were RMB63.8
million, or 65.3% of total net revenues, during the period.
Revenues from other education services and the K-12 business were
RMB34.0 million, or 34.7% of total net revenues during the
period.
Gross profit for Fiscal Year 2019 was RMB35.9 million (US$5.2
million), compared to gross loss of RMB2.9 million in the prior
year. Gross margin was 36.7% during the period, compared to
negative gross margin of 217.6% in the prior year, prior to the
Huanqiuyimeng Acquisition. Excluding the PPA Adjustment to Net
Revenues stated above, gross margin for Fiscal Year 2019 would have
been 45.2%.
Total operating expenses for Fiscal Year 2019 were RMB127.9
million (US$18.4 million), which includes RMB8.4 million in
expenses amortized from intangible assets recognized from the
Huanqiuyimeng Acquisition, compared to RMB68.7 million in the prior
year, primarily due to increased selling, general and
administrative (SG&A) expenses of RMB66.7 million related to
the recently acquired Huanqiuyimeng operations.
Loss from continuing operations for Fiscal Year 2019 was RMB91.4
million (US$13.1 million), compared to RMB67.8 million in the prior
year as a result of the increased operating expenses mentioned
above.
Net loss from continuing operations attributable to ACG for
Fiscal Year 2019 was RMB127.0 million (US$18.2 million), compared
to RMB63.7 million in the prior year.
For Fiscal Year 2019, basic and diluted losses from continuing
operations per common share attributable to ACG were both RMB2.62
(US$0.37), compared to RMB1.81 for the prior year. Basic and
diluted losses from continuing operations per ADS attributable to
ACG were both RMB5.24 (US$0.74), compared to RMB3.62 in the prior
year.
Non-GAAP Measures
Adjusted net loss attributable to ACG for Fiscal Year 2019,
which excludes share-based compensation expense and foreign
currency exchange gain (non-GAAP), was RMB117.4 million (US$16.9
million), compared to adjusted net income of RMB869.3 million in
the prior year.
Basic and diluted losses per common share attributable to ACG
excluding share-based compensation expense and foreign currency
exchange gain (non-GAAP) for Fiscal Year 2019, were both RMB2.42
(US$0.35). Basic and diluted losses per ADS attributable to ACG
excluding share-based compensation expense and foreign currency
exchange gain (non-GAAP) for Fiscal Year 2019 were both RMB4.84
(US$0.70).
Please see the note about non-GAAP measures and the
reconciliation table at the end of this press release.
Other Data
The number of weighted average ADSs used to calculate both basic
and diluted earnings per ADS for Fourth Quarter 2019 and Fiscal
Year 2019 were 28.5 million and 25.5 million, respectively. Each
ADS represents two common shares.
Balance Sheet Highlights
As of December 31, 2019, ACG’s cash and cash equivalents were
RMB154.2 million (US$22.1 million), working capital deficit was
RMB81.2 million (US$11.7 million), and total shareholders’ equity
was RMB305.7 million (US$43.9 million); compared to cash and cash
equivalents of RMB190.6 million, working capital of RMB193.6
million, and total shareholders’ equity of RMB276.2 million,
respectively, as of December 31, 2018.
Conference Call and Webcast Information (With
Accompanying Presentation)
ACG will host a conference call at 9 p.m. Eastern Time
on Monday, March 30, 2020, during which management will discuss the
results of the quarter and year ended December 31, 2019. Investors
are welcome to send any questions in advance of the conference call
either through the webcast portal or via email to the Company’s
contacts listed below.
To participate in the conference call, please use the following
dial-in numbers about 10 minutes prior to the scheduled conference
call time:
U.S. & Canada (Toll-Free): |
+1
(800) 230-3019 |
International (Toll): |
+1 (617) 597-5413 |
|
Toll-Free |
Local Access |
China: |
(800) 990 1345 |
(400) 881 1630 |
Hong Kong: |
(800) 962844 |
3071 5030 |
|
|
|
Participant Passcode: |
68553913# |
|
A live webcast of the conference call can be accessed at the
investor relations section of ACG’s website
at www.atai.net.cn or by clicking the following link:
https://www.webcaster4.com/Webcast/Page/274/33840.
An accompanying slide presentation in PDF format will also be
made available 30 minutes prior to the conference call on the same
investor relations section of ACG’s website. To listen to the
webcast, please visit ACG’s website a few minutes prior to the
start of the call to register, download, and install any necessary
audio software.
A replay will be available shortly after the call on the
investor relations section of ACG’s website and will remain
available for 90 days.
About ATA Creativity Global
ATA Creativity Global is an international
education services provider focused on quality experiences that
cultivate and enrich students’ creativity. ATA Creativity Global
offers a wide range of education services consisting primarily of
portfolio training, educational travel, overseas study counseling
and other education services through its campus network in China
and abroad. For more information, please visit ACG’s website
at www.atai.net.cn.
Cautionary Note Regarding Forward-looking
Statements
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, and as defined in the Private Securities
Litigation Reform Act of 1995.
These forward-looking statements can be identified by terms such
as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“forecast,” “future,” “intend,” “look forward to,” “outlook,”
“plan,” “should,” “will,” and similar terms and include, among
other things, statements regarding ACG’s future growth and
results of operations; ACG’s strategy of becoming a leading
international education service provider; ACG’s plans for mergers
and acquisitions generally; ACG’s plan and anticipated benefits to
develop international education services and carry out new
business; intended benefits of the Huanqiuyimeng Acquisition; the
market potential of international art and creativity education;
ACG’s plan for geographic expansion, new product offerings and new
partnerships; the ability of ACG and Huanqiuyimeng to cooperate and
integrate effectively; ACG’s growth strategy and subsequent
business activities, market demand for ACG’s educational travel
services and other education services and the impact of the
COVID-19 outbreak on ACG and its operations.
The factors that could cause the Company’s actual financial and
operating results to differ from what the Company currently
anticipates may include its capability to develop and create
content that could accommodate needs of potential students, its
ability to provide effective creation related international
education services and control sales and marketing expenses, its
recognition in marketplace for services it delivered and branding
it established, its ability to integrate the acquired business, its
ability to maintain market share in the increasing competition, its
ability to identify and execute on M&A opportunities within the
education sector, the economy of China, uncertainties with respect
to China’s legal and regulatory environments, the outbreak of
COVID-19 and other factors stated in the Company’s filings with the
U.S. Securities and Exchange Commission (“SEC”).
The financial information contained in this release should be
read in conjunction with the consolidated financial statements and
related notes included in the Company’s annual report on
Form 20-F for its fiscal year ended December 31, 2018,
and other filings that ACG has made with the SEC. The filings are
available on the SEC’s website at www.sec.gov and at
ACG’s website at www.atai.net.cn. For additional information
on the risk factors that could adversely affect the Company’s
business, financial conditions, results of operations, and
prospects, please see the “Risk Factors” section of the Company’s
Form 20-F for the fiscal year ended December 31,
2018.
The forward-looking statements in this release involve known and
unknown risks and uncertainties and are based on current
expectations, assumptions, estimates, and projections about ACG and
the markets in which it operates. The Company undertakes no
obligation to update forward-looking statements, which speak only
as of the date of this release, to reflect subsequent events or
circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that its
expectations and assumptions expressed in these forward-looking
statements are reasonable, the Company cannot assure you that its
expectations and assumptions will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results.
Currency Convenience Translation
The Company’s financial information is stated in Renminbi
(“RMB”), the currency of the People’s Republic of China. The
translations of RMB amounts for the quarter ended December 31,
2019, into U.S. dollars are included solely for the convenience of
readers and have been made at the rate of RMB6.9618 to US$1.00, the
noon buying rate as of December 31, 2019, in New York for cable
transfers in RMB per U.S. dollar as set forth in the H.10 weekly
statistical release of the Federal Reserve Board. Such translations
should not be construed as representations that RMB amounts could
be converted into U.S. dollars at that rate or any other rate, or
to be the amounts that would have been reported under U.S.
generally accepted accounting principles (“GAAP”).
About Non-GAAP Financial Measures
To supplement ACG’s consolidated financial information presented
in accordance with U.S. GAAP, ACG uses the following non-GAAP
financial measures: net income (loss) excluding share-based
compensation expense and foreign currency exchange gain or loss,
and basic and diluted earnings (losses) per common share and ADS
excluding share-based compensation expense and foreign currency
exchange gain or loss.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. ACG believes these non-GAAP financial measures provide
meaningful supplemental information about its performance by
excluding share- based compensation expense and foreign currency
exchange gain or loss, which may not be indicative of its operating
performance.
ACG believes that both management and investors benefit from
these non-GAAP financial measures in assessing its performance and
when planning and forecasting future periods. These non-GAAP
financial measures also facilitate management’s internal
comparisons to ACG’s historical performance. ACG computes its
non-GAAP financial measures using a consistent method
from period to period. ACG believes these non-GAAP financial
measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using non-GAAP net income (loss) excluding
share-based compensation expense and foreign currency exchange gain
or loss and basic and diluted earnings (losses) per common share
and per ADS excluding share-based compensation expense and foreign
currency exchange gain or loss is that share-based compensation
charges and foreign currency exchange gain or loss have been, and
are expected to continue to be for the foreseeable future, a
significant recurring expense in ACG’s business.
Management compensates for these limitations by providing
specific information regarding the GAAP amounts excluded from each
non-GAAP measure. The table captioned “Reconciliations of Non-GAAP
Measures to the Most Comparable GAAP Measures” shown at the end of
this news release has more details on the reconciliations between
GAAP financial measures that are most directly comparable to the
non-GAAP financial measures used by ACG.
For more information on our company, please contact the
following individuals:
At
the Company |
Investor Relations |
ATA Creativity Global |
The Equity Group Inc. |
Amy Tung, CFO |
Carolyne Y. Sohn, Vice
President |
+86 10 6518 1133 x 5518 |
415-568-2255 |
amytung@atai.net.cn |
csohn@equityny.com |
|
|
|
Adam Prior, Senior Vice
President |
|
212-836-9606 |
|
aprior@equityny.com |
|
|
ATA CREATIVITY GLOBAL AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
RMB |
|
|
RMB |
|
|
USD |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
190,586,342 |
|
|
154,197,758 |
|
|
22,149,122 |
|
Accounts receivable, net |
439,783 |
|
|
214,591 |
|
|
30,824 |
|
Subscription receivable |
— |
|
|
8,530,931 |
|
|
1,225,392 |
|
Prepaid expenses and other current assets |
7,836,092 |
|
|
16,490,369 |
|
|
2,368,693 |
|
Loan receivable, net |
14,532,685 |
|
|
4,126,502 |
|
|
592,735 |
|
Total current assets |
213,394,902 |
|
|
183,560,151 |
|
|
26,366,766 |
|
|
|
|
|
|
|
Long-term investments |
66,390,898 |
|
|
45,726,391 |
|
|
6,568,185 |
|
Goodwill |
— |
|
|
200,478,795 |
|
|
28,796,977 |
|
Property and equipment, net |
37,430,741 |
|
|
42,070,794 |
|
|
6,043,091 |
|
Intangible assets, net |
17,122,578 |
|
|
135,599,770 |
|
|
19,477,688 |
|
Right-of-use assets |
— |
|
|
40,786,291 |
|
|
5,858,584 |
|
Deferred income tax assets |
— |
|
|
3,029,221 |
|
|
435,120 |
|
Other non-current assets |
799,652 |
|
|
16,402,750 |
|
|
2,356,108 |
|
Total assets |
335,138,771 |
|
|
667,654,163 |
|
|
95,902,519 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accrued expenses and other payables |
18,111,939 |
|
|
47,705,214 |
|
|
6,852,425 |
|
Short-term loan |
— |
|
|
4,991,000 |
|
|
716,912 |
|
Payable for business acquisition |
— |
|
|
19,642,082 |
|
|
2,821,409 |
|
Lease liabilities-current |
— |
|
|
20,556,017 |
|
|
2,952,687 |
|
Deferred revenues |
1,633,976 |
|
|
171,880,131 |
|
|
24,689,036 |
|
Total current liabilities |
19,745,915 |
|
|
264,774,444 |
|
|
38,032,469 |
|
|
|
|
|
|
|
Other non-current liabilities |
— |
|
|
12,500,120 |
|
|
1,795,530 |
|
Deferred income tax liabilities |
— |
|
|
39,748,664 |
|
|
5,709,538 |
|
Total liabilities |
19,745,915 |
|
|
317,023,228 |
|
|
45,537,537 |
|
|
|
|
|
|
|
Mezzanine equity-redeemable non-controlling
interests |
39,208,619 |
|
|
44,896,428 |
|
|
6,448,968 |
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
Common shares |
3,534,871 |
|
|
4,692,312 |
|
|
674,008 |
|
Treasury shares |
(27,737,073 |
) |
|
(27,737,073 |
) |
|
(3,984,181 |
) |
Additional paid-in capital |
410,195,990 |
|
|
560,814,066 |
|
|
80,555,900 |
|
Accumulated other comprehensive loss |
(38,288,364 |
) |
|
(37,478,167 |
) |
|
(5,383,402 |
) |
Retained earnings (accumulated deficit) |
(71,888,585 |
) |
|
(200,051,474 |
) |
|
(28,735,596 |
) |
Total shareholders’ equity attributable to
ACG |
275,816,839 |
|
|
300,239,664 |
|
|
43,126,729 |
|
Non-redeemable non-controlling interests |
367,398 |
|
|
5,494,843 |
|
|
789,285 |
|
Total shareholders’ equity |
276,184,237 |
|
|
305,734,507 |
|
|
43,916,014 |
|
Commitments and contingencies |
|
|
|
|
|
Total liabilities, mezzanine equity and shareholders’
equity |
335,138,771 |
|
|
667,654,163 |
|
|
95,902,519 |
|
ATA CREATIVITY GLOBAL AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
Three-month Period Ended |
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
RMB |
|
|
RMB |
|
|
USD |
|
Net
revenues |
189,151 |
|
|
54,138,667 |
|
|
7,776,533 |
|
Cost of
revenues |
208,996 |
|
|
33,239,851 |
|
|
4,774,606 |
|
Gross profit (loss) |
(19,845 |
) |
|
20,898,816 |
|
|
3,001,927 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Research and development |
7,121,243 |
|
|
2,462,282 |
|
|
353,685 |
|
Sales and marketing |
1,898,992 |
|
|
17,067,130 |
|
|
2,451,540 |
|
General and administrative |
12,763,383 |
|
|
31,066,678 |
|
|
4,462,449 |
|
Total operating expenses |
21,783,618 |
|
|
50,596,090 |
|
|
7,267,674 |
|
Other
operating income, net |
978,874 |
|
|
26,062 |
|
|
3,744 |
|
Loss from continuing operations |
(20,824,589 |
) |
|
(29,671,212 |
) |
|
(4,262,003 |
) |
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Impairment loss from investment |
(6,380,802 |
) |
|
(20,895,309 |
) |
|
(3,001,423 |
) |
Provision for loan and other receivables |
— |
|
|
(17,430,825 |
) |
|
(2,503,781 |
) |
Impairment loss of intangible asset and other non-current
assets |
— |
|
|
(8,932,439 |
) |
|
(1,283,065 |
) |
Interest income, net of interest expenses |
1,322,307 |
|
|
677,395 |
|
|
97,302 |
|
Foreign currency exchange gain (loss), net |
(30,271 |
) |
|
72,650 |
|
|
10,436 |
|
Loss from continuing operations before income
taxes |
(25,913,355 |
) |
|
(76,179,740 |
) |
|
(10,942,534 |
) |
Income tax benefit |
— |
|
|
(3,853,209 |
) |
|
(553,479 |
) |
Loss from continuing operations, net of income
taxes |
(25,913,355 |
) |
|
(72,326,531 |
) |
|
(10,389,055 |
) |
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
Income from discontinued operations, net of income
taxes |
— |
|
|
— |
|
|
— |
|
Net loss |
(25,913,355 |
) |
|
(72,326,531 |
) |
|
(10,389,055 |
) |
Net loss attributable to redeemable non-controlling interests
from continuing operations |
(943,835 |
) |
|
(891,820 |
) |
|
(128,102 |
) |
Net loss attributable to non-redeemable non-controlling
interests from continuing operations |
(1,132,602 |
) |
|
(681,022 |
) |
|
(97,823 |
) |
Net loss attributable to ACG |
(23,836,918 |
) |
|
(70,753,689 |
) |
|
(10,163,130 |
) |
Net loss from continuing operations attributable to
ACG |
(23,836,918 |
) |
|
(70,753,689 |
) |
|
(10,163,130 |
) |
Net income from discontinued operations attributable to
ACG |
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
Foreign
currency translation adjustment, net of nil income taxes |
(154,437 |
) |
|
(37,478,167 |
) |
|
(5,383,402 |
) |
Comprehensive loss attributable to
ACG |
(23,991,355 |
) |
|
(108,231,856 |
) |
|
(15,546,532 |
) |
|
|
|
|
|
|
Basic and
diluted losses per common share attributable to ACG |
(0.56 |
) |
|
(1.27 |
) |
|
(0.18 |
) |
Basic and diluted losses per ADS attributable to ACG |
(1.12 |
) |
|
(2.54 |
) |
|
(0.36 |
) |
Basic and
diluted losses from continuing operations per common share
attributable to ACG |
(0.56 |
) |
|
(1.27 |
) |
|
(0.18 |
) |
Basic and
diluted earnings from discontinued operations per common share
attributable to ACG |
— |
|
|
— |
|
|
— |
|
Basic and
diluted losses from continuing operations per ADS attributable to
ACG |
(1.12 |
) |
|
(2.54 |
) |
|
(0.36 |
) |
Basic and
diluted earnings from discontinued operations per ADS attributable
to ACG |
— |
|
|
— |
|
|
— |
|
|
ATA CREATIVITY GLOBAL AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
Twelve-month Period Ended |
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
RMB |
|
|
RMB |
|
|
USD |
|
Net
revenues |
1,338,592 |
|
|
97,770,167 |
|
|
14,043,806 |
|
Cost of
revenues |
4,251,451 |
|
|
61,914,502 |
|
|
8,893,462 |
|
Gross profit (loss) |
(2,912,859 |
) |
|
35,855,665 |
|
|
5,150,344 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Research and development |
19,594,484 |
|
|
11,817,255 |
|
|
1,697,442 |
|
Sales and marketing |
5,570,169 |
|
|
34,112,212 |
|
|
4,899,913 |
|
General and administrative |
43,507,856 |
|
|
81,923,516 |
|
|
11,767,577 |
|
Total operating expenses |
68,672,509 |
|
|
127,852,983 |
|
|
18,364,932 |
|
Other
operating income, net |
3,793,418 |
|
|
588,147 |
|
|
84,482 |
|
Loss from continuing operations |
(67,791,950 |
) |
|
(91,409,171 |
) |
|
(13,130,106 |
) |
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Investments loss |
— |
|
|
(7,850 |
) |
|
(1,128 |
) |
Impairment loss of investments |
(6,380,802 |
) |
|
(26,814,507 |
) |
|
(3,851,663 |
) |
Provision for loan and other receivables |
— |
|
|
(17,430,825 |
) |
|
(2,503,781 |
) |
Impairment losses of intangible asset and other non-current
assets |
— |
|
|
(8,932,439 |
) |
|
(1,283,065 |
) |
Change in fair value of long-term investment |
2,750,000 |
|
|
— |
|
|
— |
|
Interest income, net of interest expenses |
2,409,090 |
|
|
3,281,701 |
|
|
471,387 |
|
Foreign currency exchange gain, net |
960,188 |
|
|
51,476 |
|
|
7,394 |
|
Loss from continuing operations before income
taxes |
(68,053,474 |
) |
|
(141,261,615 |
) |
|
(20,290,962 |
) |
Income tax benefit |
— |
|
|
(7,248,434 |
) |
|
(1,041,172 |
) |
Net loss from continuing operations, net of income
taxes |
(68,053,474 |
) |
|
(134,013,181 |
) |
|
(19,249,790 |
) |
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
Income from discontinued operations, net of income
taxes |
918,654,979 |
|
|
4,894,197 |
|
|
703,008 |
|
Net income (loss) |
850,601,505 |
|
|
(129,118,984 |
) |
|
(18,546,782 |
) |
Net loss attributable to redeemable non-controlling interests
from continuing operations |
(3,181,199 |
) |
|
(2,820,682 |
) |
|
(405,166 |
) |
Net loss attributable to non-redeemable non-controlling
interests from continuing operations |
(1,132,602 |
) |
|
(4,143,904 |
) |
|
(595,235 |
) |
Net loss attributable to non-redeemable non-controlling
interests from discontinued operations |
(10,608 |
) |
|
— |
|
|
— |
|
Net income (loss) attributable to ACG |
854,925,914 |
|
|
(122,154,398 |
) |
|
(17,546,381 |
) |
Net loss from continuing operations attributable to
ACG |
(63,739,673 |
) |
|
(127,048,595 |
) |
|
(18,249,389 |
) |
Net income from discontinued operations attributable to
ACG |
918,665,587 |
|
|
4,894,197 |
|
|
703,008 |
|
Other comprehensive income (loss): |
|
|
|
|
|
Foreign
currency translation adjustment, net of nil income taxes |
(11,437,409 |
) |
|
810,197 |
|
|
116,378 |
|
Comprehensive income (loss) attributable
to ACG |
843,488,505 |
|
|
(121,344,201 |
) |
|
(17,430,003 |
) |
|
|
|
|
|
|
Basic and
diluted earnings (losses) per common share attributable to ACG |
18.25 |
|
|
(2.52 |
) |
|
(0.36 |
) |
Basic and diluted earnings (losses) per ADS attributable to
ACG |
36.5 |
|
|
(5.04 |
) |
|
(0.72 |
) |
Basic and
diluted losses from continuing operations per common share
attributable to ACG |
(1.81 |
) |
|
(2.62 |
) |
|
(0.37 |
) |
Basic and
diluted earnings from discontinued operations per common share
attributable to ACG |
20.06 |
|
|
0.10 |
|
|
0.01 |
|
Basic and
diluted losses from continuing operations per ADS attributable
to ACG |
(3.62 |
) |
|
(5.24 |
) |
|
(0.74 |
) |
Basic and
diluted earnings from discontinued operations per ADS attributable
to ACG |
40.12 |
|
|
0.20 |
|
|
0.02 |
|
|
RECONCILIATIONS OF NON-GAAP
MEASURES TO THE MOST COMPARABLE GAAP
MEASURES
|
Three-month Period Ended |
|
Twelve-month Period Ended |
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
RMB |
|
|
RMB |
|
|
RMB |
|
|
RMB |
|
GAAP net loss attributable to
ACG |
(23,836,918 |
) |
|
(70,753,689 |
) |
|
854,925,914 |
|
|
(122,154,398 |
) |
Share-based compensation
expenses |
6,986,644 |
|
|
27,118 |
|
|
20,591,898 |
|
|
4,809,453 |
|
Foreign currency exchange loss
(gain), net |
30,271 |
|
|
(72,650 |
) |
|
(6,220,268 |
) |
|
(51,476 |
) |
Non-GAAP net income (loss)
attributable to ACG |
(16,820,003 |
) |
|
(70,799,221 |
) |
|
869,297,544 |
|
|
(117,396,421 |
) |
|
|
|
|
|
|
|
|
GAAP earnings (losses) per common
share attributable to ACG Basic and diluted |
(0.56 |
) |
|
(1.27 |
) |
|
18.25 |
|
|
(2.52 |
) |
|
|
|
|
|
|
|
|
Non-GAAP earnings (losses) per
common share attributable to ACG Basic and diluted |
(0.40 |
) |
|
(1.27 |
) |
|
18.56 |
|
|
(2.42 |
) |
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