BEIJING, Nov. 23, 2021 /PRNewswire/ -- Tarena
International, Inc. (NASDAQ: TEDU) ("Tarena" or the "Company"), a
leading provider of adult professional education and childhood
& adolescent quality education services in China, today announced its unaudited financial
results for the third quarter ended September 30, 2021.
Highlights for the Third Quarter of
2021
- Net revenues decreased by 0.9% year-over-year to
RMB615.2 million (US$95.5 million), from RMB620.8 million in the same period of 2020.
- Net revenue from adult professional education business, which
represented 45.9% of the total net revenues, decreased by 14.7%
year-over-year to RMB282.6 million
(US$43.9 million), from RMB331.2 million in the same period of 2020.
- Net revenue from childhood & adolescent quality education
business, which represented 54.1% of the total net revenues,
increased by 14.8% year-over-year to RMB332.6 million (US$51.6
million), from RMB289.6
million in the same period of 2020.
- Gross profit decreased by 10.5% year-over-year to
RMB313.2 million (US$48.6 million), from RMB350.0 million in the same period of 2020.
- Gross profit margin decreased by 5.5% points year-over-year to
50.9%, from 56.4% in the same period of 2020.
- Operating loss increased by 56.5% to a loss of
RMB88.5 million (US$13.7 million), from a loss
of RMB56.6 million in the same period of 2020.
- Non-GAAP operating loss, which excluded share-based
compensation expenses, was RMB84.4
million (US$13.1 million),
compared to non-GAAP operating loss of RMB49.2 million in the same period of 2020.
- Net loss was RMB94.7 million (US$14.7 million), compared to net loss
of RMB63.9 million in the same period of 2020.
- Non-GAAP net loss, which excluded share-based compensation
expenses, was RMB90.5 million
(US$14.0 million), compared to
non-GAAP net loss of RMB56.5 million
in the same period of 2020.
- Basic and diluted loss per American Depositary Share ("ADS")
was RMB1.64 (US$0.25), compared to loss per ADS of
RMB1.16 in the third quarter of
2020.
- Cash, cash equivalents and time deposits, including current and
non-current, and restricted cash totaled RMB304.8 million (US$47.3
million) as of September 30,
2021, compared to RMB364.8
million as of December 31,
2020.
- Net cash outflow from operating activities in the third quarter
of 2021 was RMB35.4 million
(US$5.5 million). Net cash inflow
from investing activities in the third quarter of 2021 was
RMB28.6 million (US$4.4 million).
- Deferred revenue totaled RMB2,063.0 million (US$320.2 million) as of September 30, 2021, compared to RMB1,998.2 million as of December 31, 2020, representing an increase of
3.2%.
- Total student enrollments in adult professional education
business, defined as the total number of courses enrolled by
students during that period, including multiple courses enrolled by
the same student, in the third quarter of 2021 decreased by
13.0% year-over-year to 33,400.
- Total number of learning centers in adult professional
education decreased to 100 as of September
30, 2021, from 106 as of September
30, 2020.
- Total student enrollments in childhood &
adolescent quality 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 2021 reached 146,900,
increased by 19.6%, compared to the student enrollments of
122,800 in the same period of 2020.
- Total number of learning centers in childhood &
adolescent quality education increased to 238 as of
September 30, 2021, from 236 as of
September 30, 2020.
Highlights for the Nine Months Ended September 30, 2021
- Net revenues increased by 38.8% year-over-year to RMB1,731.2 million (US$268.7 million), from RMB1,247.6 million in the same period in
2020.
- Net revenue from adult professional education business, which
represented 48.0% of the total net revenues, increased by 6.0%
year-over-year to RMB830.9 million
(US$129.0 million), from RMB783.7 million in the same period of 2020.
- Net revenue from childhood & adolescent quality education
business, which represented 52.0% of the total net revenues,
increased by 94.1% year-over-year to RMB900.3 million (US$139.7
million), from RMB463.9
million in the same period of 2020.
- Gross profit increased by 81.6% year-over-year to RMB857.5 million (US$133.1
million), from RMB472.3
million in the same period in 2020.
- Gross profit margin increased by 11.6% points year-over-year to
49.5%, from 37.9% in the same period of 2020.
- Operating loss was RMB308.7
million (US$47.9 million),
compared to operating loss of RMB721.3 million in
the same period in 2020.
- Non-GAAP operating loss, which excluded share-based
compensation expenses, was RMB293.6
million (US$45.6 million),
compared to non-GAAP operating loss of RMB692.6 million in the same period in 2020.
- Net loss was RMB293.2 million (US$45.5 million), compared to net loss
of RMB676.5 million in the same period in 2020.
- Non-GAAP net loss, which excluded share-based compensation
expenses, was RMB278.0 million
(US$43.2 million), compared to
non-GAAP net loss of RMB647.8 million
in the same period in 2020.
- Basic and diluted loss per American Depositary Share ("ADS")
was RMB5.20 (US$0.81).
- Total student enrollments in adult professional education
business, defined as the total number of courses enrolled by
students during that period, including multiple courses enrolled by
the same student, in the first nine of 2021 decreased by 8.9%
year-over-year to 55,400.
- Total student enrollments in childhood &
adolescent quality 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 first nine of 2021 reached 163,300,
increased by 32.5%, compared to the student enrollments of 123,200
in the same period of 2020.
Key Financial Results
|
|
For the Three Months Ended
September 30,
|
Variance
|
% of
change
|
For the Nine Months Ended
September 30,
|
Variance
|
% of
change
|
|
|
2020
|
|
2021
|
|
|
|
2020
|
|
2021
|
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
|
(in thousands,
except for percentages)
|
Net
revenues
|
|
620,802
|
|
615,175
|
|
(5,627)
|
-0.9
|
1,247,628
|
|
1,731,219
|
|
483,591
|
38.8
|
Cost of
revenues(a)
|
|
(270,842)
|
|
(302,008)
|
|
(31,166)
|
11.5
|
(775,369)
|
|
(873,730)
|
|
(98,361)
|
12.7
|
Gross
profit
|
|
349,960
|
|
313,167
|
|
(36,793)
|
-10.5
|
472,259
|
|
857,489
|
|
385,230
|
81.6
|
Gross
margin
|
|
56.4%
|
|
50.9%
|
|
-5.5%
|
|
37.9%
|
|
49.5%
|
|
11.6%
|
|
Selling and
marketing
expenses(a)
|
|
(239,211)
|
|
(223,651)
|
|
15,560
|
-6.5
|
(682,995)
|
|
(656,284)
|
|
26,711
|
-3.9
|
General and
administrative
expenses(a)
|
|
(143,072)
|
|
(151,509)
|
|
(8,437)
|
5.9
|
(435,296)
|
|
(437,520)
|
|
(2,224)
|
0.5
|
Research and
development
expenses(a)
|
|
(24,256)
|
|
(26,552)
|
|
(2,296)
|
9.5
|
(75,219)
|
|
(72,434)
|
|
2,785
|
-3.7
|
Total operating
expenses
|
|
(406,539)
|
|
(401,712)
|
|
4,827
|
-1.2
|
(1,193,510)
|
|
(1,166,238)
|
|
27,272
|
-2.3
|
Operating
loss
|
|
(56,579)
|
|
(88,545)
|
|
(31,966)
|
56.5
|
(721,251)
|
|
(308,749)
|
|
412,502
|
-57.2
|
Notes:
(a) Includes share-based compensation expenses.
"In the third quarter of 2021, there were adverse climate and
weather conditions affecting our business, such as flooding and
typhoon incidents, as well as COVID-19 cases sporadically occurred
in some areas of China. In
response to these issues, we have implemented and executed
appropriate measures, including but not limited to transferring
offline, on-site students to online lessons, to deal with these
types of difficulties. Our total net revenues decreased by
0.9% to RMB615.2 million in the third
quarter of 2021, from RMB620.8
million in the same period of last year. Net revenues
from our childhood & adolescent quality education business,
which represent about 54.1% of our total net revenues, increased by
14.8% to RMB332.6 million in the
third quarter of 2021, from RMB289.6
million in the same period of 2020. Student
enrollments of childhood and adolescent quality education increased
by about 19.6% to 146,900 in the third quarter of 2021, from
122,800 in the same period of last year. Net revenues from
the adult professional education business, which represent about
45.9% of our total net revenue decreased by 14.7% to RMB282.6 million in the third quarter of 2021,
from RMB331.2 million in the same
period last year. Due to the decrease in net revenue from
adult profession education, our gross profit margin decreased by
5.5 percentage points to 50.9% in the third quarter of 2021 from
56.4% in the same period of 2020." remarked Ms. Ying Sun, the Chief Executive Officer of
Tarena.
"With the implementation of the national policy to ease the
burden of excessive homework and off-campus tutoring for students
in compulsory education, we understood that, instead of
subject-based curricula, only quality education, which emphasizes
and provokes the growth of children and adolescent, may receive
long-term supports from the government. We shall definitely follow
and comply with all the statutory required policies and be a
staunch force in providing quality-oriented education in science
and information technology. We are so delighted to note that,
according to those policies recently announced and published by the
Chinese government, adult professional education is highly
encouraged and promoted. We will continue to upgrade the quality of
our comprehensive products and services and uplift our operational
efficiencies." concluded Ms. Ying
Sun.
Financial Results for the Third Quarter of 2021
Net Revenues
Total net revenues decreased by 0.9% to RMB615.2 million (US$95.5 million) in the third quarter of
2021, from RMB620.8 million in the
same period of 2020.
Net revenue from adult professional education business decreased
by 14.7% to RMB282.6 million
(US$43.9 million) in the third
quarter of 2021, from RMB331.2
million in same period of 2020. The decrease was primarily
due to decrease in student enrollments from 38,400 in the third
quarter of 2020 to 33,400 in the same period of this year.
Net revenue from childhood & adolescent quality
education business increased by 14.8% to RMB332.6 million (US$51.6
million) in the third quarter of 2021, from RMB289.6 million in same period of 2020. The
increase was primarily due to increase in student enrollments from
122,800 in the third quarter of 2020 to 146,900 in the same period
of 2021.
Cost of Revenues
Cost of revenues increased by 11.5% to RMB302.0 million (US$46.9 million) in the third quarter of 2021,
from RMB270.8 million in the same
period of 2020. The increase was primarily due to increase in
personnel-related costs resulting from growing number of teaching
staff at our childhood & adolescent quality education learning
centers and, increase in social security fees which were exempted
according to the preferential policies enacted by the government
during COVID-19 pandemic in the third quarter of 2020 but were not
exempted in the third quarter of 2021.
Gross Profit and Gross Margin
Gross profit decreased by 10.5% to RMB313.2 million (US$48.6
million) in the third quarter of 2021, from RMB350.0 million in the same period of 2020.
Gross margin, which is equal to gross profit divided by net
revenues, was 50.9% in the third quarter of 2021, compared
to 56.4% in the same period of 2020. The decrease was mainly
attributable to the decrease in net revenue from adult professional
education, which results in decrease in its gross profit and gross
margin in the third quarter of 2021.
Operating Expenses
Total operating expenses decreased by 1.2% to RMB401.7 million (US$62.3 million) in the third quarter of 2021,
from RMB406.5 million in the
same period of 2020. Total non-GAAP operating expenses, which
excluded share-based compensation expenses, decreased by
0.4% to RMB397.7 million
(US$61.7 million) in the third
quarter of 2021, from RMB399.3
million in the same period of 2020. Total share-based
compensation expenses allocated to the related operating expenses
decreased by 45.4% to RMB4.0
million (US$0.6 million)
in the third quarter of 2021, from RMB7.3
million in the same period of 2020.
Selling and marketing expenses decreased by 6.5% to
RMB223.7 million (US$34.7 million) in the third quarter of 2021,
from RMB239.2 million in the same period of 2020. The
decrease was mainly due to decrease in advertising expenses in the
third quarter of 2021 as compared to the advertising expenses
incurred in the same period of 2020.
General and administrative expenses increased by 5.9% to
RMB151.5 million (US$23.5 million) in the third quarter of 2021,
from RMB143.1 million in the same
period of 2020. The increase was mainly due to a one-time charge of
the loss arising from the disposal of property, and partially
offset by decrease in office and other miscellaneous expenses.
Research and development expenses increased by 9.5% to
RMB26.6 million (US$4.1 million) in the third quarter of 2021,
from RMB24.3 million in the same
period of 2020. The increase was mainly due to increase in social
security fees which were exempted according to the preferential
policies enacted by the government during COVID-19 pandemic in the
third quarter of 2020 but were not exempted in the third quarter of
2021.
Operating Loss
Operating loss was RMB88.5 million
(US$13.7 million) in the third
quarter of 2021, compared to operating loss of RMB56.6 million in the same period of 2020.
Non-GAAP operating loss, which excluded share-based compensation
expenses, was RMB84.4 million
(US$13.1 million) in the third
quarter of 2021, compared to non-GAAP operating loss of
RMB49.2 million in the same period of
2020.
Interest Income
Net interest income was RMB0.4
million (US$0.1 million) in
the third quarter of 2021, compared to net interest income of
RMB3.3 million in the same period of
2020.
Other Income
Other income was RMB1.7 million
(US$0.3 million) in the third quarter
of 2021, compared to other income of RMB2.9
million in the same period of 2020. The income was mostly
from government grant offered to our learning centers.
Foreign Exchange Loss
Foreign exchange loss was RMB0.2 million (US$0.0 million) in the third quarter of 2021,
compared to foreign exchange loss of RMB3.4
million in the same period of 2020.
Income Tax Expense
The Company recorded an income tax expense of RMB8.0 million (US$1.2 million) in the third quarter of 2021,
compared to income tax expense of RMB10.1
million in the same period of 2020.
Net Loss
As a result of the foregoing, net loss was RMB94.7 million (US$14.7
million) in the third quarter of 2021, compared to net loss
of RMB63.9 million in the same
period of 2020. Non-GAAP net loss, which excluded share-based
compensation expenses, was RMB90.5 million (US$14.0 million) in the third quarter of 2021,
compared to non-GAAP net loss of RMB56.5
million in the same period of 2020.
Basic and Diluted Loss per ADS
Loss per ADS was RMB1.64 (US$0.25) in the third quarter of
2021, compared to loss per ADS of RMB1.16 in the third quarter of 2020.
Non-GAAP loss per ADS, which excluded share-based compensation
expenses, was RMB1.57 (US$0.24) in the third quarter of 2021, compared
to non-GAAP loss per ADS of RMB1.02
in the third quarter of 2020.
Cash Flow
Net cash outflow used in operating activities in the third
quarter of 2021 was RMB35.4 million (US$5.5 million). Net cash inflow from investing
activities in the third quarter of 2021 was RMB28.6 million (US$4.4
million). The net proceeds from the disposal of property and
office equipment in the third quarter of 2021 were RMB46.0 million (US$7.1
million) and RMB0.7 million
(US$0.1 million), respectively.
Capital expenditure incurred on leasehold improvement and office
equipment in the third quarter of 2021 was RMB17.9 million
(US$2.8 million).
Financial Results for the Nine Months Ended September 30, 2021
Net Revenues
Total net revenues increased by 38.8% to RMB1,731.2 million (US$268.7 million) in the first nine months of
2021, from RMB1,247.6 million in the
same period of 2020. The increase was mainly due to increase
in student enrollments of childhood & adolescent quality
education from 123,200 in the first nine months of 2020 to 163,300
in the same period of this year. Net revenue from childhood &
adolescent quality education increased by 94.1% from RMB463.9 million in the first nine months of 2020
to RMB900.3 million (US$139.7 million) in the same period of this
year.
Cost of Revenues
Cost of revenues increased by 12.7% to RMB873.7 million (US$135.6
million) in the first nine months of 2021, from RMB775.4 million in the same period of 2020. The
increase was primarily due to increase in personnel-related costs
resulting from growing number of teaching staff at our childhood
& adolescent quality education learning centers and increase in
social security fees which were exempted according to the
preferential policies enacted by the government during COVID-19
pandemic in the first nine months of 2020 but were not exempted in
the first nine months of 2021.
Gross Profit and Gross Margin
Gross profit increased by 81.6% to RMB857.5 million (US$133.1
million) in the first nine months of 2021, from RMB472.3 million in the same period of 2020.
Gross margin, which is equal to gross profit divided by net
revenues, was 49.5% in the first nine months of 2021, compared with
37.9% in the same period of 2020. The significant increase in gross
margin was primarily because the increase in total net revenue
largely outweighed the increase in cost of revenue in the first
nine months of 2021.
Operating Expenses
Total operating expenses decreased by 2.3% to RMB1,166.2 million (US$181.0 million) in the first nine months of
2021, from RMB1,193.5 million in the
same period of 2020. Total non-GAAP operating expenses, which
excluded share-based compensation expenses, decreased by 1.2% to
RMB1,151.6 million (US$178.7 million) in the first nine months of
2021, from RMB1,165.2 million in the
same period of 2020. Total share-based compensation expenses
allocated to the related operating expenses decreased by 48.3% to
RMB14.6 million (US$2.3 million) in the first nine months of 2021,
from RMB28.3 million in the same
period of 2020.
Selling and marketing expenses decreased by 3.9% to RMB656.3 million (US$101.9
million) in the first nine months of 2021, from RMB683.0 million in the same period of 2020. The
decline was mainly due to decrease in advertising expenses incurred
in the first nine months of this year.
General and administrative expenses increased by 0.5% to
RMB437.5 million (US$67.9 million) in the first nine months of
2021, from RMB435.3 million in the
same period of 2020. The increase was mainly due to the loss on
disposal of property and the increase of the employees' social
security fees which were exempted according to the preferential
policies enacted by the government during COVID-19 pandemic in the
first nine months of 2020 but were not exempted in the same period
of 2021, partially offset by one-time professional expenses related
to financial restatement and internal control improvement advisory
incurred in the same period of last year.
Research and development expenses decreased by 3.7% to
RMB72.4 million (US$11.2 million) in the first nine months of
2021, from RMB75.2 million in the
same period of 2020. The decline was mainly due to the decrease in
personnel-related costs and welfare expenses as the number of
staff decreased.
Operating Loss
Operating loss was RMB308.7
million (US$47.9 million) in
the first nine months of 2021, compared to operating loss of
RMB721.3 million in the same period
of 2020. Non-GAAP operating loss, which excluded share-based
compensation expenses, was RMB293.6
million (US$45.6 million) in
the first nine months of 2021, compared to non-GAAP operating loss
of RMB692.6 million in the same
period of 2020.
Interest Income
Net interest income was RMB1.6
million (US$0.2 million) in
the first nine months of 2021, compared to interest income of
RMB1.3 million in the same period in
2020.
Other Income
Other income was RMB2.8 million
(US$0.4 million) in the first nine
months of 2021, compared to RMB3.2
million in other income in the same period of 2020. The
income was mostly from government grants offered to learning
centers.
Foreign Exchange Loss
Foreign exchange loss was RMB0.5
million (US$0.1 million) in
the first nine months of 2021, compared to RMB1.7 million foreign exchange loss in the same
period of 2020.
Income Tax Benefit
The Company recorded an income tax benefit of RMB11.6 million (US$1.8
million) in the first nine months of 2021, compared to
RMB42.1 million in income tax
benefit in the same period of 2020.
Net Loss
As a result of the foregoing, net loss was RMB293.2 million (US$45.5
million) in the first nine months of 2021, compared to net
loss of RMB676.5 million in the same
period of 2020. Non-GAAP net loss, which excluded share-based
compensation expenses, was RMB278.0
million (US$43.1 million) in
the first nine months of 2021, compared to non-GAAP net loss of
RMB647.8 million in the same period
of 2020.
Basic and Diluted Loss per ADS
Loss per ADS was RMB5.20
(US$0.81) in the first nine months of
2021. Non-GAAP loss per ADS, which excluded share-based
compensation expenses, was RMB4.93
(US$0.77) in the first nine months of
2021.
Cash Flow
Net cash outflow from operating activities in the first nine
months of 2021 was RMB120.9 million
(US$18.8 million). Net cash inflow
from investing activities in the first nine months of 2021 was
RMB53.3 million (US$8.3 million). The net proceeds from the
disposal of property and office equipment in the first nine months
of 2021 were RMB92 million
(US$14.3 million) and RMB1.7 million (US$0.3
million), respectively. Capital expenditure on leasehold
improvement and office equipment was RMB46.8
million (US$7.3 million) in
the first nine months of 2021.
Recent Developments Regarding Going Private
Transaction
On April 30, 2021, the Company
announced that it entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Kidedu Holdings Limited ("Parent") and
Kidarena Merger Sub, a wholly owned subsidiary of Parent ("Merger
Sub"). Pursuant to the Merger Agreement, Merger Sub will merge with
and into the Company, with the Company continuing as the surviving
company and becoming a wholly owned subsidiary of Parent (the
"Merger"), in a transaction at US$4
per share. On November 15, 2021, the
Company and the buyer group (the "Buyer Group Parties") consisting
of Mr. Han Shaoyun, Ascendent Capital Partners III, L.P., Parent,
Merger Sub and Kidtech Limited, a wholly owned subsidiary of Mr.
Han Shaoyun, entered into a termination and settlement agreement
(the "Termination Agreement") to mutually terminate the Merger
Agreement. Pursuant to the Termination Agreement, the Buyer
Group Parties will pay a settlement payment of US$3.53 million to the Company by November 26, 2021. The Merger Agreement will be
terminated upon receipt by the Company of such payment in full
within the aforementioned time period.
Business Outlook
Based on the Company's current estimates, total net revenues for
the fourth quarter of 2021 are expected to be in the range of
RMB610 million and RMB640 million, after taking into
consideration the seasonal fluctuation factor and the likely
continued impact of the COVID-19.
This guidance is based on the current market conditions and
reflects the Company's current and preliminary estimates of market
and operating conditions, which are subject to change, particularly
as to the potential impact of COVID-19 on the economy in
China and elsewhere in the
world.
Exchange Rate Information
All translations made in the financial statements or elsewhere
in this press release made from RMB into United States dollars ("US$") are solely for
convenience and calculated at the rate of US$1.00=RMB6.4434,
representing the exchange rate as of September 30, 2021, set forth in the H.10
statistical release of the U.S. Federal Reserve Board. No
representation is made that the RMB amounts could have been, or
could be, converted, realized or settled into US$ at that rate, or
at any other rate, on September 30,
2021.
Conference Call
Company management will hold an earnings conference call and
live webcast to discuss the Company's results at 7:00 AM on November 23,
2021, U.S. Eastern Time (8:00
PM on November 23, 2021,
Beijing Time).
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/9058508. It will
automatically direct you to the registration page of "Tarena's
Third Quarter 2021 Earnings Conference Call " where you may fill in
your details for RSVP. If it requires you to enter a participant
conference ID, please enter "9058508 ".
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 30, 2021, 07:59 ET:
United
States:
|
+1 855 452
5696
|
INTERNATIONAL:
|
+61 2 8199
0299
|
Conference
ID:
|
9058508
|
Additionally, a live and archived webcast of this call will be
available on the Investor Relations section of Tarena's website at
http://ir.tedu.cn.
About Tarena International, Inc.
Tarena is a leading provider of adult professional education and
childhood and adolescent quality education services in
China. Through its innovative
education platform combining live distance instruction,
classroom-based tutoring and online learning modules, Tarena offers
adult professional education courses in IT and non-IT subjects. Its
adult professional education courses provide students with
practical skills to prepare them for jobs in industries with
significant growth potential and strong hiring demand. Tarena also
offers childhood and adolescent quality education programs,
including computer coding and robotics programming courses, etc.,
targeting students aged between three and eighteen.
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 U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates," "confident" and similar statements. Among other
things, quotations from management in this announcement, as well as
the Company's strategic and operational plans (in particular, the
impact of COVID-19 on our businesses; the solutions we adopt to
address such impact of COVID-19; balancing growth and
profitability; as well as the growth prospects of adult
professional education and childhood and adolescent quality
education services in China)
contain forward-looking statements. Tarena may also make written or
oral forward-looking statements in its reports filed with or
furnished to the U.S. Securities and Exchange Commission, in its
annual report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Any statements that are not historical
facts, including any business outlook and statements about Tarena's
beliefs and expectations, are forward-looking statements. Many
factors, risks and uncertainties could cause actual results to
differ materially from those in the forward-looking statements.
Such factors and risks include, but not limited to the following:
the impact of the COVID-19 outbreak; Tarena's goals and strategies;
its future business development, financial condition and results of
operations; its ability to continue to attract students to enroll
in its courses; its ability to continue to recruit, train and
retain qualified instructors and teaching assistants; its ability
to continually tailor its curriculum to market demand and enhance
its courses to adequately and promptly respond to developments in
the professional job market; its ability to maintain or enhance its
brand recognition, its ability to maintain high job placement rate
for its students, and its ability to maintain cooperative
relationships with financing service providers for student
loans.
Further information regarding these and other risks,
uncertainties or factors is included in Tarena's filings with the
U.S. Securities and Exchange Commission. All information provided
in this press release is current as of the date of the press
release, and Tarena does not undertake any obligation to update
such information, except as required under applicable law.
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 Tarena's consolidated financial results presented
in accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Tarena's management uses non-GAAP measures of
cost of revenues, operating expenses, operating income, net income,
and basic and diluted net income per ADS, which are adjusted from
results based on GAAP to exclude the share-based compensation
expenses, gain or loss on derivative instruments, goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact. These non-GAAP financial
measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. In addition, calculation of the
non-GAAP financial measures may be different from the calculation
used by other companies, and therefore comparability may be
limited.
Tarena's management believes that excluding the share-based
compensation expenses, gain or loss on derivative instruments,
goodwill impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact provides meaningful
supplemental information regarding our performance and liquidity by
excluding certain items identified as non-recurring and infrequent
in nature, and non-cash charges. The amount of share-based
compensation expenses, gain or loss on derivative instruments,
goodwill impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact are not built into the
Company's annual budgets and quarterly forecasts, which generally
will be the basis for information Tarena provides to analysts and
investors as guidance for future operating performance.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Tarena's current financial
performance and prospects for the future. A limitation of using
non-GAAP cost of revenues, operating expenses, operating income
(loss) and net income (loss), excluding the share-based
compensation expenses, gain or loss on derivative instruments,
goodwill impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact is that the share-based
compensation charge has been and will continue to be a recurring
expense in the Company's business for the foreseeable future, and
gain or loss on derivative instruments, goodwill impairment,
impairment of intangibles via acquisitions of businesses and the
related tax impact may recur in the future. In order to mitigate
these limitations, the Company has provided specific information
regarding the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables include details on the reconciliation between
GAAP financial measures that are most directly comparable to the
non-GAAP financial measures the Company has presented.
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except share data and per share data)
|
|
|
|
As
of
|
|
|
December 31,
|
|
September
30,
|
|
September
30,
|
|
|
2020
|
|
2021
|
|
2021
|
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
|
RMB
|
|
RMB
|
|
USD
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
320,179
|
|
216,095
|
|
33,537
|
Time
deposits
|
|
6,257
|
|
6,217
|
|
965
|
Restricted
cash
|
|
38,369
|
|
82,344
|
|
12,780
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
32,790
|
|
48,457
|
|
7,520
|
Amounts due from
related parties
|
|
305
|
|
1,439
|
|
223
|
Asset held for
sale
|
|
-
|
|
83,065
|
|
12,891
|
Prepaid expenses and
other current assets
|
|
138,353
|
|
152,015
|
|
23,592
|
Total current
assets
|
|
536,253
|
|
589,632
|
|
91,508
|
Time deposits-non
current
|
|
-
|
|
122
|
|
19
|
Accounts receivable,
net of allowance for doubtful accounts-non current
|
|
192
|
|
87
|
|
14
|
Property and
equipment, net
|
|
464,490
|
|
305,471
|
|
47,408
|
Intangible assets,
net
|
|
13,444
|
|
10,681
|
|
1,658
|
Goodwill
|
|
52,782
|
|
52,782
|
|
8,192
|
Right-of-use
assets
|
|
586,451
|
|
558,735
|
|
86,714
|
Long-term investments,
net
|
|
67,592
|
|
67,689
|
|
10,505
|
Deferred income tax
assets
|
|
142,220
|
|
161,891
|
|
25,125
|
Other non-current
assets, net
|
|
95,825
|
|
89,460
|
|
13,885
|
Total
assets
|
|
1,959,249
|
|
1,836,550
|
|
285,028
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term bank
loans
|
|
10,710
|
|
15,500
|
|
2,406
|
Accounts
payable
|
|
10,293
|
|
9,547
|
|
1,482
|
Amounts due to related
parties
|
|
180
|
|
295
|
|
46
|
Operating lease
liabilities-current
|
|
199,083
|
|
242,215
|
|
37,591
|
Income taxes
payable
|
|
76,817
|
|
84,216
|
|
13,070
|
Deferred
revenue-current
|
|
1,980,138
|
|
2,045,322
|
|
317,429
|
Advance received for
disposal of property
|
|
-
|
|
92,000
|
|
14,278
|
Accrued expenses and
other current liabilities
|
|
391,904
|
|
421,771
|
|
65,458
|
Total current
liabilities
|
|
2,669,125
|
|
2,910,866
|
|
451,760
|
Deferred revenue-non
current
|
|
18,060
|
|
17,655
|
|
2,740
|
Operating lease
liabilities-non current
|
|
406,251
|
|
318,020
|
|
49,356
|
Other non-current
liabilities
|
|
5,082
|
|
4,846
|
|
752
|
Total
liabilities
|
|
3,098,518
|
|
3,251,387
|
|
504,608
|
Commitments and
contingencies
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Class A ordinary
shares
|
|
349
|
|
355
|
|
55
|
Class B ordinary
shares
|
|
74
|
|
74
|
|
11
|
Treasury
stock
|
|
(459,815)
|
|
(459,815)
|
|
(71,362)
|
Additional paid-in
capital
|
|
1,324,161
|
|
1,343,298
|
|
208,477
|
Accumulated other
comprehensive income
|
|
49,120
|
|
48,984
|
|
7,602
|
Accumulated
deficit
|
|
(2,045,891)
|
|
(2,339,125)
|
|
(363,027)
|
Total deficit
attributable to the shareholders of Tarena
International, Inc.
|
|
(1,132,002)
|
|
(1,406,229)
|
|
(218,244)
|
Non-controlling
interest
|
|
(7,267)
|
|
(8,608)
|
|
(1,336)
|
Total liabilities
and equity
|
|
1,959,249
|
|
1,836,550
|
|
285,028
|
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
|
(in thousands,
except share data and per share data)
|
|
|
|
For the Three Months Ended
September 30
|
|
For the Nine Months Ended
September 30
|
|
|
2020 (Unaudited)
|
|
2021
(Unaudited)
|
|
2021
(Unaudited)
|
|
2020
(Unaudited)
|
|
2021
(Unaudited)
|
|
2021
(Unaudited)
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
620,802
|
|
615,175
|
|
95,474
|
|
1,247,628
|
|
1,731,219
|
|
268,681
|
Cost of
revenues(a)
|
|
(270,842)
|
|
(302,008)
|
|
(46,871)
|
|
(775,369)
|
|
(873,730)
|
|
(135,601)
|
Gross
profit
|
|
349,960
|
|
313,167
|
|
48,603
|
|
472,259
|
|
857,489
|
|
133,080
|
Selling and marketing
expenses(a)
|
|
(239,211)
|
|
(223,651)
|
|
(34,710)
|
|
(682,995)
|
|
(656,284)
|
|
(101,854)
|
General and
administrative
expenses(a)
|
|
(143,072)
|
|
(151,509)
|
|
(23,514)
|
|
(435,296)
|
|
(437,520)
|
|
(67,902)
|
Research and
development
expenses(a)
|
|
(24,256)
|
|
(26,552)
|
|
(4,121)
|
|
(75,219)
|
|
(72,434)
|
|
(11,242)
|
Operating
loss
|
|
(56,579)
|
|
(88,545)
|
|
(13,742)
|
|
(721,251)
|
|
(308,749)
|
|
(47,918)
|
Interest
income
|
|
3,337
|
|
372
|
|
58
|
|
1,273
|
|
1,561
|
|
242
|
Other
income
|
|
2,864
|
|
1,713
|
|
266
|
|
3,171
|
|
2,824
|
|
438
|
Foreign exchange
loss
|
|
(3,393)
|
|
(226)
|
|
(35)
|
|
(1,744)
|
|
(505)
|
|
(78)
|
Loss before income
taxes
|
|
(53,771)
|
|
(86,686)
|
|
(13,453)
|
|
(718,551)
|
|
(304,869)
|
|
(47,316)
|
Income tax (expense)/
benefit
|
|
(10,113)
|
|
(7,996)
|
|
(1,241)
|
|
42,061
|
|
11,638
|
|
1,806
|
Net
loss
|
|
(63,884)
|
|
(94,682)
|
|
(14,694)
|
|
(676,490)
|
|
(293,231)
|
|
(45,510)
|
Less: Net loss
attributable to non-
controlling interests
|
|
(931)
|
|
(1,894)
|
|
(294)
|
|
(4,079)
|
|
(1,157)
|
|
(180)
|
Net loss
attributable to Class A
and Class B ordinary
shareholders
|
|
(62,953)
|
|
(92,788)
|
|
(14,400)
|
|
(672,411)
|
|
(292,074)
|
|
(45,330)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per Class
A and Class B
ordinary share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
(1.16)
|
|
(1.64)
|
|
(0.25)
|
|
(12.42)
|
|
(5.20)
|
|
(0.81)
|
Weighted average
number of
Class A and Class B ordinary
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
54,443,291
|
|
56,515,425
|
|
56,515,425
|
|
54,151,656
|
|
56,150,962
|
|
56,150,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(63,884)
|
|
(94,682)
|
|
(14,694)
|
|
(676,490)
|
|
(293,231)
|
|
(45,510)
|
Other
comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
adjustment, net of nil income
taxes
|
|
(1,856)
|
|
(1,161)
|
|
(180)
|
|
(1,657)
|
|
(136)
|
|
(21)
|
Comprehensive
loss
|
|
(65,740)
|
|
(95,843)
|
|
(14,874)
|
|
(678,147)
|
|
(293,367)
|
|
(45,531)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
(a) Includes share-based
compensation expenses as follows:
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
|
2020
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
80
|
|
185
|
|
29
|
|
322
|
|
555
|
|
86
|
Selling and marketing
expenses
|
|
343
|
|
996
|
|
155
|
|
1,381
|
|
2,974
|
|
462
|
General and
administrative expenses
|
|
6,143
|
|
2,644
|
|
410
|
|
19,861
|
|
10,595
|
|
1,644
|
Research and
development expenses
|
|
794
|
|
332
|
|
52
|
|
7,092
|
|
1,068
|
|
166
|
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
|
(in thousands,
except share data and per share data)
|
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
|
2020 (Unaudited)
|
|
2021
(Unaudited)
|
|
2021
(Unaudited)
|
|
2020
(Unaudited)
|
|
2021 (Unaudited)
|
|
2021
(Unaudited)
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Cost of
revenues
|
|
270,842
|
|
302,008
|
|
46,871
|
|
775,369
|
|
873,730
|
|
135,601
|
Share-based
compensation expense in
cost of revenues
|
|
80
|
|
185
|
|
29
|
|
322
|
|
555
|
|
86
|
Non-GAAP Cost of
revenues
|
|
270,762
|
|
301,823
|
|
46,842
|
|
775,047
|
|
873,175
|
|
135,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Selling and
marketing expenses
|
|
239,211
|
|
223,651
|
|
34,710
|
|
682,995
|
|
656,284
|
|
101,854
|
Share-based
compensation expense in
selling and marketing expenses
|
|
343
|
|
996
|
|
155
|
|
1,381
|
|
2,974
|
|
462
|
Non-GAAP Selling
and marketing
expenses
|
|
238,868
|
|
222,655
|
|
34,555
|
|
681,614
|
|
653,310
|
|
101,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and
administrative
expenses
|
|
143,072
|
|
151,509
|
|
23,514
|
|
435,296
|
|
437,520
|
|
67,902
|
Share-based
compensation expense in
general and administrative expenses
|
|
6,143
|
|
2,644
|
|
410
|
|
19,861
|
|
10,595
|
|
1,644
|
Non-GAAP General
and
administrative expenses
|
|
136,929
|
|
148,865
|
|
23,104
|
|
415,435
|
|
426,925
|
|
66,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development
expenses
|
|
24,256
|
|
26,552
|
|
4,121
|
|
75,219
|
|
72,434
|
|
11,242
|
Share-based
compensation expense in
research and development expenses
|
|
794
|
|
332
|
|
52
|
|
7,092
|
|
1,068
|
|
166
|
Non-GAAP Research
and
development expenses
|
|
23,462
|
|
26,220
|
|
4,069
|
|
68,127
|
|
71,366
|
|
11,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(56,579)
|
|
(88,545)
|
|
(13,742)
|
|
(721,251)
|
|
(308,749)
|
|
(47,918)
|
Share-based
compensation expenses
|
|
7,360
|
|
4,157
|
|
646
|
|
28,656
|
|
15,192
|
|
2,358
|
Non-GAAP Operating
loss
|
|
(49,219)
|
|
(84,388)
|
|
(13,096)
|
|
(692,595)
|
|
(293,557)
|
|
(45,560)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(63,884)
|
|
(94,682)
|
|
(14,694)
|
|
(676,490)
|
|
(293,231)
|
|
(45,510)
|
Share-based
compensation expenses
|
|
7,360
|
|
4,157
|
|
645
|
|
28,656
|
|
15,192
|
|
2,358
|
Non-GAAP Net
loss
|
|
(56,524)
|
|
(90,525)
|
|
(14,049)
|
|
(647,834)
|
|
(278,039)
|
|
(43,152)
|
Less: Net loss
attributable to non-
controlling interests
|
|
(931)
|
|
(1,894)
|
|
(294)
|
|
(4,079)
|
|
(1,157)
|
|
(180)
|
Non-GAAP net loss
attributable to
Class A and Class B ordinary
shareholders
|
|
(55,593)
|
|
(88,631)
|
|
(13,755)
|
|
(643,755)
|
|
(276,882)
|
|
(42,972)
|
Non-GAAP net loss
per Class A and
Class B ordinary share(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
(1.02)
|
|
(1.57)
|
|
(0.24)
|
|
(11.89)
|
|
(4.93)
|
|
(0.77)
|
Weighted average
number of ordinary
shares outstanding used in calculating
Non-GAAP net loss per Class A and
Class B ordinary share(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
54,443,291
|
|
56,515,425
|
|
56,515,425
|
|
54,151,656
|
|
56,150,962
|
|
56,150,962
|
Notes:
(a) The Non-GAAP net loss per share is computed using Non-GAAP
net loss attributable to ordinary shareholders and the same number
of ordinary shares used in GAAP basic and diluted net loss per
share calculation.
(b) There was no tax impact of share-based compensation expenses
for the third quarter of 2021.
View original
content:https://www.prnewswire.com/news-releases/tarena-international-inc-announces-the-results-for-the-third-quarter-of-2021-301430706.html
SOURCE Tarena International, Inc.