ATA Creativity Global (“ACG” or the “Company”, Nasdaq:
AACG), an international educational services company
focused on providing quality learning experiences that cultivate
and enhance students’ creativity, today announced preliminary
unaudited financial results for the quarter and six months ended
June 30, 2020 (“Second Quarter 2020” and “First Half 2020”,
respectively).
Second Quarter 2020 Highlights
- During Second Quarter 2020, student enrollment was 772, of
which 444 were enrolled in the Portfolio Training Program (as
defined below). Approximately 27,933 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 Second Quarter 2020.
- Second Quarter 2020 net revenues of RMB26.4 million (US$3.7
million), primarily driven by revenues from portfolio training
services
- Student enrollments and net revenues continued to be impacted
by the coronavirus disease (“COVID-19”) during Second Quarter
2020.
- Second Quarter 2020 net loss from continuing operations
attributable to ACG of RMB32.1 million (US$4.5 million), compared
to net loss from continuing operations attributable to ACG of
RMB18.2 million in the prior-year period
- First Half 2020 net revenues of RMB59.1 million (US$8.4
million)
- First Half 2020 net loss from continuing operations
attributable to ACG of RMB52.5 million (US$7.4 million), compared
to net loss from continuing operations attributable to ACG of
RMB31.1 million in the prior-year period
- RMB119.7 million (US$16.9 million) in cash and cash equivalents
as of June 30, 2020
Management Commentary
Mr. Kevin Ma, Chairman and CEO of ACG, stated, “ATA
Creativity Global continues to see stable enrollment rates and
favorable trends in student engagement as we manage the challenges
created by the COVID-19 pandemic. We have prioritized the health
and well-being of our students and employees by providing students
with the option of continuing their studies online and implementing
remote working protocols for our employees. We are pleased that the
public health situation in China has improved to where almost all
of our employees are able to report to work in the office, and as a
result of our sales team being able to operate at capacity, our
sales pipeline is seeing a resurgence. Having navigated these first
few months of the pandemic, we certainly realize the need for and
benefits of the flexibility that the online delivery method
provides from both a teaching and learning perspective, as well as
a business perspective. We continue to support our students via
online platform and are encouraging students to continue pursuing
their studies remotely while in-person teaching remains unavailable
in certain areas. With the increased flexibility that these
technologies present us, we are exploring additional academic
offerings and marketing initiatives to drive future enrollment
growth.”
Outlook/Impact of COVID-19
Mr. Jun Zhang, President of ACG, stated, “We were pleased that
many students in our portfolio training programs chose to continue
their studies during Second Quarter 2020. Learning any subject,
especially in areas like art and creativity, requires a level of
personal interaction, between student and teacher and between
student and peers. While some students have decided to put their
studies on hold, many are finding the online delivery method
effective and perhaps even preferable for certain coursework. ACG
has been fortunate in its ability to leverage its operating
flexibility in this environment, and we are adapting our business
model accordingly. We continue to closely monitor the global
situation, particularly as it relates to our educational travel
programs. As many of our partner institutions cancelled their
regular summer programs, this business was significantly impacted
during the second and third quarters of 2020. As an alternative to
the traditional educational travel programs, we are pleased to be
partnering with some renowned overseas art schools and institutions
in offering shorter online summer school programs where students
who complete these courses can obtain completion certificates, as
well as other short-term online bootcamps led by recognized
teachers invited from these overseas institutions to cooperate with
ACG’s own teachers. These summer programs generated approximately
RMB1.3 million in revenues in Second Quarter 2020. With the
majority of online summer programs and domestic educational tours
having occurred in July/August, we expect more contributions from
these businesses in the current quarter.”
Operating Review
Enrollment Update
ACG’s main line of business primarily consists of training for
students focused on arts and creative studies (the “Portfolio
Training Program”). Teachers guide students in preparing a
collection of artwork that demonstrates how a student’s skills and
ideas have developed over time and helps universities and colleges
evaluate the student’s potential. These courses are delivered
either in person through ACG’s nationwide training center network
or via online platform. The Portfolio Training Program consists of
time-based programs and project-based programs.
ACG student enrollment for Second Quarter 2020 was 772, of which
444 were enrolled in the Portfolio Training Program.
A total of 27,933 credit hours were delivered during Second
Quarter 2020, of which 16,191 credit hours were delivered for
time-based programs and 11,742 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 April 1, 2020,
to June 30, 2020, compared to those for the prior-year period:
|
|
Apr. 1 – June 30, 2020 |
|
Apr. 1 – June 30, 2019 |
|
% Change |
|
|
No. of Credit Hours |
|
No. of Credit Hours |
|
|
|
|
|
|
|
|
|
Time-based Program |
|
16,191 |
|
20,925 |
|
(22.6%) |
Project-based Program |
|
11,742 |
|
9,240 |
|
27.1% |
Total |
|
27,933 |
|
30,165 |
|
(7.4%) |
During Second Quarter 2020, 328 students were enrolled in ACG’s
other programs, which consists of overseas study counseling and
foreign language training services enrollments as well as
enrollments for other educational services such as short-term
online summer school and bootcamp programs currently being held
online.
GAAP Results
Note: Impact of Huanqiuyimeng Acquisition on and Certain
Adjustments to the Company’s Financial Statements
Following the completion of the Beijing Huanqiuyimeng Education
Consultation Corp. (“Huanqiuyimeng”) business acquisition whereby
Huanqiuyimeng became a wholly owned subsidiary of the Company in
2019, the financial results presented in this press release
incorporate financial contributions from Huanqiuyimeng for Second
Quarter 2020 and First Half 2020. 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 business
acquisition.
Second Quarter 2020 Financial Review
ACG’s total net revenues for Second Quarter 2020 were RMB26.4
million (US$3.7 million), compared to RMB1.4 million in the
prior-year period, driven primarily by revenue from the
Huanqiuyimeng business. Net revenues for this quarter include a
negative adjustment of RMB6.0 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
business acquisition (“PPA Adjustment to Net Revenues”). Revenues
from portfolio training programs were RMB19.4 million, or 73.7% of
total net revenues, during the period. Revenues from overseas study
counselling services, other educational services and the K-12
business were RMB7.0 million, or 26.3% of total net revenues during
the period.
Gross profit for Second Quarter 2020 was RMB6.6 million (US$0.9
million), compared to gross loss of RMB24,731 in the prior-year
period. Gross margin was 25.1% during the period, compared to
negative gross margin of 1.8% in the prior-year period, prior to
the Huanqiuyimeng business acquisition. Excluding the PPA
Adjustment to Net Revenues stated above, gross margin for Second
Quarter 2020 would have been 39.0%.
Total operating expenses for Second Quarter 2020 were RMB45.2
million (US$6.4 million), compared to RMB19.9 million in the
prior-year period, primarily due to increased selling, general and
administrative (SG&A) expenses of RMB24.7 million related to
the acquired Huanqiuyimeng operations.
Loss from continuing operations for Second Quarter 2020 was
RMB38.5 million (US$5.4 million), compared to RMB20.2 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
Second Quarter 2020 was RMB32.1 million (US$4.5 million), compared
to RMB18.2 million in the prior-year period.
For Second Quarter 2020, basic and diluted losses from
continuing operations per common share attributable to ACG were
both RMB0.54 (US$0.08), compared to RMB0.41 for the prior-year
period. Basic and diluted losses from continuing operations per ADS
attributable to ACG were both RMB1.08 (US$0.16), compared to
RMB0.82 in the prior-year period.
First Half 2020 Financial Review
ACG’s total net revenues for First Half 2020 were RMB59.1
million (US$8.4 million), compared to RMB3.0 million in the
prior-year period, driven primarily by revenue from the
Huanqiuyimeng business. Net revenues for the period include a
negative adjustment of RMB12.0 million resulting from the PPA
Adjustment to Net Revenues, as noted above. Revenues from portfolio
training programs were RMB38.1 million, or 64.6% of total net
revenues, during the period. Revenues from other education services
and the K-12 business were RMB21.0 million, or 35.4% of total net
revenues during the period.
Gross profit for First Half 2020 was RMB18.4 million (US$2.6
million), compared to RMB0.4 million in the prior-year period.
Gross margin was 31.1% during the period, compared to 12.9% in the
prior-year period, prior to the Huanqiuyimeng Acquisition.
Excluding the PPA Adjustment to Net Revenues stated above, gross
margin for First Half 2020 would have been 42.7%.
Total operating expenses for First Half 2020 were RMB83.7
million (US$11.8 million), compared to RMB36.4 million in the
prior-year period, primarily due to increased SG&A expenses of
RMB52.2 million related to Huanqiuyimeng operations, partially
offset by an RMB1.9 million decrease in share-based compensation
expense and an RMB5.0 million decrease in labor costs as a result
of streamlining operations.
Loss from continuing operations for First Half 2020 was RMB65.0
million (US$9.2 million), compared to RMB35.6 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
First Half 2020 was RMB52.5 million (US$7.4 million), compared to
RMB31.1 million in the prior-year period.
For First Half 2020, basic and diluted losses from continuing
operations per common share attributable to ACG were both RMB0.89
(US$0.13), compared to RMB0.72 for the prior-year period. Basic and
diluted losses from continuing operations per ADS attributable to
ACG were both RMB1.78 (US$0.26), compared to RMB1.44 in the
prior-year period.
Non-GAAP Measures
Adjusted net loss attributable to ACG for Second Quarter 2020,
which excludes share-based compensation expense and foreign
currency exchange loss (non-GAAP), was RMB31.7 million (US$4.5
million), compared to adjusted net loss of RMB12.4 million in the
prior-year period.
Basic and diluted losses per common share attributable to ACG
excluding share-based compensation expense and foreign currency
exchange loss (non-GAAP) for Second Quarter 2020, were RMB0.53
(US$0.08). Basic and diluted losses per ADS attributable to ACG
excluding share-based compensation expense and foreign currency
exchange loss (non-GAAP) for Second Quarter 2020 were RMB1.06
(US$0.16).
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 Second Quarter 2020 was 31.3
million. Each ADS represents two common shares.
Balance Sheet Highlights
As of June 30, 2020, ACG’s cash and cash equivalents were
RMB119.7 million (US$16.9 million), working capital deficit was
RMB119.4 million (US$16.9 million), and total shareholders’ equity
was RMB247.3 million (US$35.0 million); compared to cash and cash
equivalents of RMB154.2 million, working capital deficit of RMB81.3
million, and total shareholders’ equity of RMB305.6 million,
respectively, as of December 31, 2019.
Update on Share Repurchase Program
In May 2020, ACG’s Board of Directors approved a share
repurchase plan authorizing the Company to repurchase up to US$1.0
million of its issued and outstanding ADSs on the open market and
through privately negotiated transactions. By August 1, 2020, the
Company had repurchased 450,337 ADSs at an average stock price of
US$1.2631. This share repurchase plan continues through December
31, 2020. The Board may suspend or discontinue the repurchase
program at any time. This repurchase program does not obligate ACG
to make additional repurchases at any specific time or in any
specific situation.
Conference Call and Webcast Information (With
Accompanying Presentation)
ACG will host a conference call at 9 p.m. Eastern Time
on Wednesday, August 12, 2020 (9 a.m. Beijing time on Thursday,
August 13, 2020), during which management will discuss the results
of the quarter and six months ended June 30, 2020. 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: |
|
96121353# |
|
|
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/274/36019.
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
educational services company focused on providing quality learning
experiences that cultivate and enhance students’ creativity. ATA
Creativity Global offers a wide range of education services
consisting primarily of portfolio training, educational travel,
overseas study counseling and other educational services through
its training center network. 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; the benefits of the Huanqiuyimeng
Acquisition; ACG’s ability to operate efficiently and maintain
continued financial strength under unusual circumstances; ACG’s
growth strategy and subsequent business activities; market demand
for ACG’s portfolio training programs and other education services;
the impact of the COVID-19 outbreak on ACG and its operations;
ACG’s plan and anticipated benefits of the measures implemented in
response to the COVID-19 outbreak; and the implementation,
suspension or termination of the share repurchase program.
The factors that could cause the Company’s actual financial and
operating results to differ from what the Company currently
anticipates may include its ability to develop and create content
that could accommodate needs of potential students, its ability to
provide effective creative related international education services
and control sales and marketing expenses, its recognition in the
marketplace for services it delivered and branding it established,
its ability to integrate the acquired business, its ability to
maintain market share amid 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, 2019,
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,
2019.
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 and six months
ended June 30, 2020, into U.S. dollars are included solely for the
convenience of readers and have been made at the rate of RMB7.0651
to US$1.00, the noon buying rate as of June 30, 2020, 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, |
|
June 30, |
|
June 30, |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
|
RMB |
|
RMB |
|
USD |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
154,197,758 |
|
|
119,721,055 |
|
|
16,945,415 |
|
Accounts receivable, net |
|
214,591 |
|
|
804,138 |
|
|
113,818 |
|
Subscription receivable |
|
8,530,931 |
|
|
— |
|
|
— |
|
Prepaid expenses and other current assets |
|
16,490,369 |
|
|
16,939,848 |
|
|
2,397,681 |
|
Loan receivable, net |
|
4,126,502 |
|
|
4,187,605 |
|
|
592,717 |
|
Total current assets |
|
183,560,151 |
|
|
141,652,646 |
|
|
20,049,631 |
|
|
|
|
|
|
|
|
Long-term investments |
|
45,726,391 |
|
|
45,726,391 |
|
|
6,472,151 |
|
Goodwill |
|
200,478,795 |
|
|
196,454,927 |
|
|
27,806,390 |
|
Property and equipment, net |
|
42,070,794 |
|
|
39,807,466 |
|
|
5,634,381 |
|
Intangible assets, net |
|
135,599,770 |
|
|
124,629,343 |
|
|
17,640,139 |
|
Right-of-use assets |
|
40,786,291 |
|
|
24,485,273 |
|
|
3,465,665 |
|
Deferred income tax assets |
|
11,464,891 |
|
|
11,238,150 |
|
|
1,590,657 |
|
Other non-current assets |
|
16,402,750 |
|
|
18,887,228 |
|
|
2,673,314 |
|
Total assets |
|
676,089,833 |
|
|
602,881,424 |
|
|
85,332,328 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accrued expenses and other payables |
|
47,747,054 |
|
|
45,966,325 |
|
|
6,506,111 |
|
Short-term loan |
|
4,991,000 |
|
|
5,000,000 |
|
|
707,704 |
|
Payable for business acquisition |
|
19,642,082 |
|
|
4,642,082 |
|
|
657,044 |
|
Lease liabilities-current |
|
20,556,017 |
|
|
15,168,450 |
|
|
2,146,955 |
|
Deferred revenues |
|
171,880,131 |
|
|
190,302,136 |
|
|
26,935,519 |
|
Total current liabilities |
|
264,816,284 |
|
|
261,078,993 |
|
|
36,953,333 |
|
|
|
|
|
|
|
|
Other non-current liabilities |
|
12,500,120 |
|
|
8,088,917 |
|
|
1,144,912 |
|
Deferred income tax liabilities |
|
48,241,809 |
|
|
39,749,966 |
|
|
5,626,243 |
|
Total liabilities |
|
325,558,213 |
|
|
308,917,876 |
|
|
43,724,488 |
|
|
|
|
|
|
|
|
Mezzanine equity-redeemable non-controlling
interests |
|
44,896,428 |
|
|
46,652,818 |
|
|
6,603,278 |
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
Common shares |
|
4,692,312 |
|
|
4,716,675 |
|
|
667,602 |
|
Treasury shares |
|
(27,737,073 |
) |
|
(29,538,999 |
) |
|
(4,180,974 |
) |
Additional paid-in capital |
|
560,814,066 |
|
|
560,629,110 |
|
|
79,351,900 |
|
Accumulated other comprehensive loss |
|
(37,478,167 |
) |
|
(35,904,707 |
) |
|
(5,081,981 |
) |
Retained earnings (accumulated deficit) |
|
(200,151,065 |
) |
|
(255,592,375 |
) |
|
(36,176,753 |
) |
Total shareholders’ equity attributable to
ACG |
|
300,140,073 |
|
|
244,309,704 |
|
|
34,579,794 |
|
Non-redeemable non-controlling interests |
|
5,495,119 |
|
|
3,001,026 |
|
|
424,768 |
|
Total shareholders’ equity |
|
305,635,192 |
|
|
247,310,730 |
|
|
35,004,562 |
|
Commitments and contingencies |
|
|
|
|
|
|
Total liabilities, mezzanine equity and shareholders’
equity |
|
676,089,833 |
|
|
602,881,424 |
|
|
85,332,328 |
|
|
|
|
|
|
|
|
|
|
|
ATA CREATIVITY GLOBAL AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
|
Three-month Period Ended |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
|
RMB |
|
RMB |
|
USD |
Net revenues |
|
|
1,366,185 |
|
|
|
26,396,218 |
|
|
|
3,736,142 |
|
Cost of revenues |
|
|
1,390,916 |
|
|
|
19,764,559 |
|
|
|
2,797,492 |
|
Gross profit (loss) |
|
|
(24,731 |
) |
|
|
6,631,659 |
|
|
|
938,650 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,352,837 |
|
|
|
2,025,581 |
|
|
|
286,702 |
|
Sales and marketing |
|
|
1,343,997 |
|
|
|
9,943,378 |
|
|
|
1,407,394 |
|
General and administrative |
|
|
15,186,597 |
|
|
|
33,277,466 |
|
|
|
4,710,120 |
|
Total operating expenses |
|
|
19,883,431 |
|
|
|
45,246,425 |
|
|
|
6,404,216 |
|
Other operating income, net |
|
|
(247,958 |
) |
|
|
111,483 |
|
|
|
15,779 |
|
Loss from continuing operations |
|
|
(20,156,120 |
) |
|
|
(38,503,283 |
) |
|
|
(5,449,787 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
Investments loss |
|
|
— |
|
|
|
(1,092,035 |
) |
|
|
(154,568 |
) |
Interest income, net of interest expenses |
|
|
922,952 |
|
|
|
263,513 |
|
|
|
37,298 |
|
Foreign currency exchange gain, net |
|
|
18,564 |
|
|
|
8,104 |
|
|
|
1,147 |
|
Loss from continuing operations before income
taxes |
|
|
(19,214,604 |
) |
|
|
(39,323,701 |
) |
|
|
(5,565,910 |
) |
Income tax benefit |
|
|
— |
|
|
|
(5,386,716 |
) |
|
|
(762,440 |
) |
Loss from continuing operations, net of income
taxes |
|
|
(19,214,604 |
) |
|
|
(33,936,985 |
) |
|
|
(4,803,470 |
) |
Discontinued
operations: |
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of income
taxes |
|
|
4,894,198 |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
(14,320,406 |
) |
|
|
(33,936,985 |
) |
|
|
(4,803,470 |
) |
Net loss attributable to redeemable non-controlling interests from
continuing operations |
|
|
(478,112 |
) |
|
|
(575,117 |
) |
|
|
(81,403 |
) |
Net loss attributable to non-redeemable non-controlling interests
from continuing operations |
|
|
(573,735 |
) |
|
|
(1,281,273 |
) |
|
|
(181,352 |
) |
Net loss attributable to ACG |
|
|
(13,268,559 |
) |
|
|
(32,080,595 |
) |
|
|
(4,540,715 |
) |
Net loss from continuing operations attributable to
ACG |
|
|
(18,162,757 |
) |
|
|
(32,080,595 |
) |
|
|
(4,540,715 |
) |
Net income from discontinued operations attributable to
ACG |
|
|
4,894,198 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment, net of nil income
taxes |
|
|
1,236,400 |
|
|
|
(1,222,042 |
) |
|
|
(172,969 |
) |
Comprehensive loss attributable to ACG |
|
|
(12,032,159 |
) |
|
|
(33,302,637 |
) |
|
|
(4,713,684 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted losses per
common share attributable to ACG |
|
|
(0.31 |
) |
|
|
(0.54 |
) |
|
|
(0.08 |
) |
Basic and diluted losses per ADS
attributable to ACG |
|
|
(0.62 |
) |
|
|
(1.08 |
) |
|
|
(0.16 |
) |
Basic and diluted losses from
continuing operations per common share attributable to ACG |
|
|
(0.41 |
) |
|
|
(0.54 |
) |
|
|
(0.08 |
) |
Basic and diluted earnings
(losses) from discontinued operations per common share attributable
to ACG |
|
|
0.10 |
|
|
|
— |
|
|
|
— |
|
Basic and diluted losses from
continuing operations per ADS attributable to ACG |
|
|
(0.82 |
) |
|
|
(1.08 |
) |
|
|
(0.16 |
) |
Basic and diluted earnings
(losses) from discontinued operations per ADS attributable to
ACG |
|
|
0.20 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATA CREATIVITY GLOBAL AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
|
Six-month Period Ended |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
|
RMB |
|
RMB |
|
USD |
Net revenues |
|
|
2,982,593 |
|
|
|
59,099,623 |
|
|
|
8,365,009 |
|
Cost of revenues |
|
|
2,599,014 |
|
|
|
40,744,111 |
|
|
|
5,766,955 |
|
Gross profit |
|
|
383,579 |
|
|
|
18,355,512 |
|
|
|
2,598,054 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
6,361,789 |
|
|
|
4,406,670 |
|
|
|
623,724 |
|
Sales and marketing |
|
|
3,179,011 |
|
|
|
21,446,003 |
|
|
|
3,035,485 |
|
General and administrative |
|
|
26,889,212 |
|
|
|
57,819,609 |
|
|
|
8,183,834 |
|
Total operating expenses |
|
|
36,430,012 |
|
|
|
83,672,282 |
|
|
|
11,843,043 |
|
Other operating income, net |
|
|
456,901 |
|
|
|
346,935 |
|
|
|
49,105 |
|
Loss from continuing operations |
|
|
(35,589,532 |
) |
|
|
(64,969,835 |
) |
|
|
(9,195,884 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
Investments loss |
|
|
— |
|
|
|
(1,124,462 |
) |
|
|
(159,157 |
) |
Interest income, net of interest expenses |
|
|
2,100,131 |
|
|
|
651,092 |
|
|
|
92,156 |
|
Foreign currency exchange gain (loss), net |
|
|
14,752 |
|
|
|
(61,024 |
) |
|
|
(8,637 |
) |
Loss from continuing operations before income
taxes |
|
|
(33,474,649 |
) |
|
|
(65,504,229 |
) |
|
|
(9,271,522 |
) |
Income tax benefit |
|
|
— |
|
|
|
(8,173,252 |
) |
|
|
(1,156,849 |
) |
Loss from continuing operations, net of income
taxes |
|
|
(33,474,649 |
) |
|
|
(57,330,977 |
) |
|
|
(8,114,673 |
) |
Discontinued
operations: |
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of income
taxes |
|
|
4,894,198 |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
(28,580,451 |
) |
|
|
(57,330,977 |
) |
|
|
(8,114,673 |
) |
Net loss attributable to redeemable non-controlling interests from
continuing operations |
|
|
(1,096,839 |
) |
|
|
(1,147,865 |
) |
|
|
(162,470 |
) |
Net loss attributable to non-redeemable non-controlling interests
from continuing operations |
|
|
(1,316,208 |
) |
|
|
(3,646,060 |
) |
|
|
(516,066 |
) |
Net loss attributable to ACG |
|
|
(26,167,404 |
) |
|
|
(52,537,052 |
) |
|
|
(7,436,137 |
) |
Net loss from continuing operations attributable to
ACG |
|
|
(31,061,602 |
) |
|
|
(52,537,052 |
) |
|
|
(7,436,137 |
) |
Net income from discontinued operations attributable to
ACG |
|
|
4,894,198 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment, net of nil income
taxes |
|
|
130,146 |
|
|
|
1,573,460 |
|
|
|
222,709 |
|
Comprehensive loss attributable to ACG |
|
|
(26,037,258 |
) |
|
|
(50,963,592 |
) |
|
|
(7,213,428 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted losses per
common share attributable to ACG |
|
|
(0.62 |
) |
|
|
(0.89 |
) |
|
|
(0.13 |
) |
Basic and diluted losses per ADS
attributable to ACG |
|
|
(1.24 |
) |
|
|
(1.78 |
) |
|
|
(0.26 |
) |
Basic and diluted losses from
continuing operations per common share attributable to ACG |
|
|
(0.72 |
) |
|
|
(0.89 |
) |
|
|
(0.13 |
) |
Basic and diluted earnings
(losses) from discontinued operations per common share attributable
to ACG |
|
|
0.10 |
|
|
|
— |
|
|
|
— |
|
Basic and diluted losses from
continuing operations per ADS attributable to ACG |
|
|
(1.44 |
) |
|
|
(1.78 |
) |
|
|
(0.26 |
) |
Basic and diluted earnings
(losses) from discontinued operations per ADS attributable to
ACG |
|
|
0.20 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF NON-GAAP
MEASURESTO THE MOST COMPARABLE GAAP
MEASURES
|
|
Three-month Period Ended |
|
Six-month Period Ended |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
|
RMB |
|
RMB |
|
RMB |
|
RMB |
GAAP net loss attributable to
ACG |
|
(13,268,559 |
) |
|
(32,080,595 |
) |
|
(26,167,404 |
) |
|
(52,537,052 |
) |
Share-based compensation
expenses |
|
911,672 |
|
|
411,293 |
|
|
2,902,107 |
|
|
996,092 |
|
Foreign currency exchange loss
(gain), net |
|
(18,564 |
) |
|
(8,104 |
) |
|
(14,752 |
) |
|
61,024 |
|
Non-GAAP net loss attributable to
ACG |
|
(12,375,451 |
) |
|
(31,677,406 |
) |
|
(23,280,049 |
) |
|
(51,479,936 |
) |
|
|
|
|
|
|
|
|
|
GAAP losses per common share
attributable to ACG |
|
|
|
|
|
|
|
|
Basic and diluted |
|
(0.31 |
) |
|
(0.54 |
) |
|
(0.62 |
) |
|
(0.89 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP losses per common share
attributable to ACG |
|
|
|
|
|
|
|
|
Basic and diluted |
|
(0.29 |
) |
|
(0.53 |
) |
|
(0.55 |
) |
|
(0.87 |
) |
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