BEIJING, Nov. 7, 2022
/PRNewswire/ -- China Liberal Education Holdings Limited (Nasdaq:
CLEU) ("China Liberal", the "Company", "we", "our", or "us"),
a China-based company that provides smart campus solutions and
other educational services, today announced its unaudited financial
results for the first six months of fiscal year 2022 ended
June 30, 2022.
Ms. Ngai Ngai Lam, Chairwoman and CEO of China Liberal,
commented, "We are delighted to mark a positive financial
turnaround in the first half of fiscal year 2022, despite several
headwinds including COVID-19 lockdowns in the People's Republic of China (the "PRC" or
"China"). We achieved significant
improvements across almost all financial metrics. During this
period, our revenue increased by 47.9% year-over-year to
$2.74 million, our gross profit
increased by 66.3% year-over-year to $2.28
million, and our net income increased by 564.9%
year-over-year to $1.50 million. The
solid results demonstrate the resilience of our business and the
successful execution of our growth strategy. We are pleased with
the success of the acquisition of Wanwang Investment Limited,
representing a transformational milestone for us to directly
operate colleges. Our strategic initiatives are driving results as
we continue diversifying service offerings, improving service
quality, and scaling our business. Looking forward, we will still
focus on retaining high-quality educational services of our
Sino-foreign Jointly Managed Academic Programs, attracting new
students and strengthening our market position. The encouraging
performance of the first half of fiscal year 2022 manifests our
business strategy to drive business growth across education
industries as a path toward a positive direction. We expect to
optimize our services within our ecosystem and further unlock
commercial value that catalyzes the Company's sustainable
development and drives shareholder value in the long run."
First Six Months of Fiscal Year 2022 Financial
Highlights
|
|
For the Six Months
Ended June 30,
|
($ millions, except
for percentages or per share data)
|
|
2022
|
|
2021
|
|
%Change
|
Revenue
|
|
2.74
|
|
1.85
|
|
47.9 %
|
Gross profit
|
|
2.28
|
|
1.37
|
|
66.3 %
|
Gross margin
|
|
83.5 %
|
|
74.2 %
|
|
9.2 pp
|
Income from
operations
|
|
1.49
|
|
0.30
|
|
392.1 %
|
Operating profit
margin
|
|
54.3 %
|
|
16.3 %
|
|
38.0 pp
|
Net income
|
|
1.50
|
|
0.23
|
|
564.9 %
|
Basic and diluted
earnings (loss) per share
|
|
0.09
|
|
0.03
|
|
200.0 %
|
|
Note: pp represents percentage
points.
|
- Revenue increased by 47.9% year-over-year to $2.74 million for the six months ended
June 30, 2022, from $1.85 million for the same period last year.
- Gross profit increased by 66.3% to $2.28
million for the six months ended June
30, 2022, from $1.37 million
for the same period last year.
- Gross margins were 83.5% and 74.2% for the six months ended
June 30, 2022 and 2021,
respectively.
- Income from operations increased by 392.1% to $1.49 million for the six months ended
June 30, 2022, from $0.30 million for the same period last year.
- Operating profit margin was 54.3% for the six months ended
June 30, 2022, compared to 16.3% for
the same period last year.
- Net income was $1.50 million for
the six months ended June 30, 2022,
compared to $0.23 million for the
same period last year.
- Basic and diluted earnings per share were $0.09 for the six months ended June 30, 2022, compared to $0.03 for the same period last year.
First Six Months of Fiscal Year 2022 Financial
Results
Revenue
Revenue increased by 47.9% year-over-year to $2.74 million for the six months ended
June 30, 2022 from $1.85 million for the same period last year. The
increase in revenue was mainly driven by increased revenue from the
Company's Sino-foreign Jointly Managed Academic Programs, as the
Company earned higher sharing of revenue from two colleges.
|
|
For the Six Months
Ended June 30,
|
($ millions, except
for percentages)
|
|
2022
|
|
2021
|
Revenue
|
|
Revenue
|
Cost of
Revenue
|
Gross
Margin
|
|
Revenue
|
Cost of
Revenue
|
Gross
Margin
|
Sino-foreign Jointly
Managed Academic Programs
|
|
2.15
|
0.14
|
93.4 %
|
|
1.42
|
0.23
|
84.0 %
|
Overseas Study
Consulting Services
|
|
0.33
|
0.09
|
73.7 %
|
|
0.03
|
0.02
|
29.3 %
|
Technological
Consulting Services for Smart Campus
Solutions
|
|
0.17
|
0.18
|
-6.7 %
|
|
0.34
|
0.19
|
43.9 %
|
Tailored Job Readiness
Training Services
|
|
0.09
|
0.05
|
50.5 %
|
|
0.07
|
0.04
|
37.9 %
|
Total
|
|
2.74
|
0.45
|
83.5 %
|
|
1.85
|
0.48
|
74.2 %
|
Revenue from Sino-foreign Jointly Managed Academic Programs
increased by $0.73 million, or 51.2%,
to $2.15 million for the six months
ended June 30, 2022, from
$1.42 million for the same period
last year. This increase was primarily attributable to an increase
in the average tuition fees by 72.6%, which was mainly caused by a
change in the student mix enrolled in different academic programs
with the universities/colleges. The increase was partially offset
by a decrease in the number of students by 352, or 12.4%, from
2,841 students for the six months June 30,
2021 to 2,489 students for the six months that ended
June 30, 2022.
Revenue from Overseas Study Consulting Services increased by
$0.30 million, or 1,166.4%, to
$0.33 million for the six months
ended June 30, 2022, from
$0.03 million for the same period
last year. The increase was mainly because our performance
obligations for our service contract with Beijing Foreign Studies
University were satisfied for the six months ended June 30, 2022. Following administration
guidelines issued by General Office of the Ministry of Education in
December 2021, universities and
colleges shall cease projects and cooperation with external parties
and, as a result, all existing contracts with Beijing Foreign
Studies University came to completion and all existing performance
obligations were completely satisfied.
Revenue from technological consulting service decreased by
$0.17 million, or 50.7%, to
$0.17 million for the six months
ended June 30, 2022, from
$0.34 million for the same period
last year. The decrease was primarily because we did not obtain
smart campus projects of large size during the six months ended
June 30, 2022. For the six months
ended June 30, 2022, three projects
were completed as compared with 14 completed projects for the six
months ended June 30, 2021. Many
Chinese universities/colleges put on hold their "smart campus"
project plans due to continued uncertainties associated with the
COVID-19 pandemic.
Revenue from tailored job readiness training services increased
by $0.03 million, or 41.4%, to
$0.09 million for the six months
ended June 30, 2022, from
$0.07 million for the same period
last year. The increase was mainly attributed to an increase in the
number of students receiving tailored job readiness training
services, from 130 students for the six months ended June 30, 2021 to 443 for the six months ended
June 30, 2022.
Cost of Revenue
Cost of revenue decreased by $24,064, or 5.0%, to 452,663 for the six months
ended June 30, 2022, from
$476,727 for the same period last
year, primarily due to decreased costs associated with Sino-foreign
Jointly Managed Academic Programs by $85,647, or 37.6%, which was mainly attributable
to the decrease in salary, welfare and insurance costs of foreigner
teachers in Sino-foreign Jointly Managed Academic Programs. Due to
travel bans and/or restrictions caused by the COVID-19 pandemic,
certain foreign teachers were unable to enter China and we engaged more Chinese teachers to
provide teaching services to students for the six months ended
June 30, 2022, as compared to the six
months ended June 30, 2021. The
decrease was partially offset by an increase in costs associated
with overseas study consulting services by $68,189, or 370.3%, and the increase was mainly
attributed to commissions incurred in recruiting students for
overseas study.
Gross Profit
Gross profit increased by $0.91 million, or 66.3%,
to $2.28 million for the six months ended June 30,
2022, from $1.37 million for the same period last year,
while gross profit margin increased by 9.2%, to 83.5% for the six
months ended June 30, 2022, from 74.2% for the same
period last year. The increase in gross profit and gross margin was
primarily due to higher gross profit and gross margin associated
with our technological consulting service projects, as the projects
during the six months ended June 30,
2022 had higher gross margin.
Operating Expenses
Selling expenses increased by $34,019, or 244.4%,
to $110,612 for the six months ended June 30, 2022,
from $76,593 for the same period last year. The increase
in selling expenses was primarily attributable to an increase in
salaries and welfare expenses of marketing employees.
General and administrative expenses decreased by $306,451,
or 30.8%, to $689,000 for the six months ended June
30, 2022, from $995,451 for the same period last year,
primarily due to a decrease in professional services fees of
$0.2 million, a decrease in
share-based compensation to independent directors of $53,250, and a decrease in independent director
compensation of $25,601.
Interest Income
Interest income decreased by $51,300, or 85.5%, to $8,673 for the six months ended June 30, 2022, from $59,973 for the same period last year. The
decrease was mainly attributed to the completion of our smart
campus projects. In connection with the Company's technological
consulting services for smart campus projects, we recognized
financing component resulted from a timing difference between when
control was transferred and when we collected cash consideration
from the customer. For the six months ended June 30, 2022 and 2021, we recognized nil and
$56,511 interest income in connection
with the aforementioned financing component, respectively.
Other Income (Expense)
Other income was $9,110 and
$7,249 for the six months ended
June 30, 2022 and 2021, respectively.
The increase in other income was primarily due to provision of
other training services for the six months ended June 30, 2022.
Income Tax Provision
Income tax provision was $42 for
the six months ended June 30, 2022,
decreased from $128,482 for the same
period last year. Effective income tax rate was 0.0% and 36.3% for
the six months ended June 30, 2022
and 2021, respectively. The significant change in effective income
tax rate comparing the two periods is mainly due to the fact that
China Liberal (Beijing) Education
Technology Co., Ltd., a wholly-owned PRC subsidiary of the Company,
is entitled to a reduced income tax rate of 15% and can claim
additional tax deductions for certain expenses.
Net Income
Net income was $1.50 million for the six months
ended June 30, 2022, compared to a net income of $0.23
million for the same period last year. Basic and diluted
earnings per share were $0.09 for the six months ended June 30,
2022, compared to basic and diluted loss per share of $0.03 for the same period last year.
Financial Condition
As of June 30, 2022, the Company had cash of $12.25
million, compared to $32.68
million as of December 31, 2021.
Net cash provided by operating activities was $6.70
million for the six months ended June 30, 2022, compared
to net cash used in operating activities of $1.89
million for the same period last year.
Net cash used in investing activities was $39.14
million for the six months ended June 30, 2022, compared
to net cash provided by investing activities of $1.46
million for the same period last year.
Net cash provided by financing activities was $12.30
million for the six months ended June 30, 2022, compared
to $29.05 million for the same period last year.
COVID-19
The Company's operations may be further affected by the ongoing
COVID-19 pandemic. For the six months ended June 30, 2022, the Company's revenue from
Sino-foreign Jointly Managed Academic Programs was not
significantly impacted because Chinese universities / colleges have
resumed on-site schooling since May
2020. The Company has been providing teaching services to
students at normal level and no significant dropout has been
reported to the Company during the six months ended June 30, 2022. However, due to the impact of
COVID-19, the internal payment processes of the Company's
partnering schools were temporarily delayed. As a result, the
Company and these partnering schools mutually agreed to extend the
tuition payment term by three to six months. The Company does not
believe such delay will result in any collectability risk and the
entire tuition receivable balance is expected to be fully received
but only slightly later than a typical operating year. Furthermore,
this temporary delay in tuition payment does not represent a change
in the Company's cooperation model with these partnering schools
and the Company does not expect to incur further tuition payment
delays in the future.
The continued uncertainties associated with the COVID-19
pandemic has caused many Chinese universities / colleges to
temporarily hold their "smart campus" project construction plans
and accordingly the Company did not obtain large "smart campus"
project contract during the six months ended June 30, 2022, which led to a decrease in the
Company's revenue from technological consulting and supporting
services during that period. Additionally, the COVID-19 pandemic
continues to have a negative impact over the Company's study abroad
consulting services. A portion of the Company's revenue from
overseas study consulting services was recognized when students
received offers and obtained appropriate visas. However, due to the
COVID-19 pandemic, certain countries closed their borders and
imposed travel restrictions. Due to the uncertainties around
international travels, it is expected that the COVID-19 pandemic
may continue to result in students being restricted from pursuing
their overseas education in the near terms and may have further
negative impact over the oversea study consulting service revenue
stream.
About China Liberal Education Holdings Limited
China Liberal, headquartered in Beijing, is an educational
services provider in China. It provides a wide range of
services, including those under sino-foreign jointly managed
academic programs; overseas study consulting services;
technological consulting services for Chinese universities to
improve their campus information and data management system and to
optimize their teaching, operating and management environment,
creating a "smart campus"; and tailored job readiness training to
graduating students. For more information, please visit the
company's website at ir.chinaliberal.com/.
Forward-Looking Statements
This document contains forward-looking statements.
These forward-looking statements involve known and unknown
risks and uncertainties and are based on the Company's expectations
and projections about future events, which the Company derives from
the information currently available to the Company. Such
forward-looking statements relate to future events or our future
performance, including: our financial performance and projections;
our growth in revenue and earnings; and our business prospects and
opportunities. You can identify forward-looking statements by those
that are not historical in nature, particularly those that use
terminology such as "may," "should," "expects," "anticipates,"
"contemplates," "estimates," "believes," "plans," "projected,"
"predicts," "potential," or "hopes" or the negative of these or
similar terms. In evaluating these forward-looking statements, you
should consider various factors, including: our ability to change
the direction of the Company; our ability to keep pace with new
technology and changing market needs; and the competitive
environment of our business. These and other factors may cause our
actual results to differ materially from any forward-looking
statement. Forward-looking statements are only predictions. The
forward-looking events discussed in this press release and other
statements made from time to time by us or our representatives, may
not occur, and actual events and results may differ materially and
are subject to risks, uncertainties and assumptions about us. The
Company undertakes no obligation to update forward-looking
statements to reflect subsequent occurring events or circumstances,
or changes in its expectations, except as may be required by law.
Although the Company believes that the expectations expressed in
these forward-looking statements are reasonable, it cannot assure
you that such expectations will turn out to be correct, and the
Company cautions investors that actual results may differ
materially from the anticipated results and encourages investors to
review risk factors that may affect its future results in the
Company's registration statement and in its other filings with
the U.S. Securities and Exchange Commission.
Investor Relations Contact
China Liberal Education Holdings Limited
Email:ir@chinaliberal.com
Ascent Investor Relations LLC
Ms. Tina Xiao
Email:tina.xiao@ascent-ir.com
Tel: +1 917 609 0333
China Liberal
Education Holdings Limited
|
Condensed
Consolidated Balance Sheets
|
|
|
June
30,
|
|
December
31,
|
|
2022
|
|
2021
|
|
(Unaudited)
|
|
|
ASSETS
|
$
|
|
$
|
CURRENT
ASSETS
|
|
|
|
Cash
|
$12,249,579
|
|
$32,678,421
|
Account
receivables
|
3,172,192
|
|
2,462,550
|
Contract
assets
|
-
|
|
2,014,146
|
Advance to
suppliers
|
-
|
|
4,525,794
|
Prepayment to
acquire subsidiaries
|
60,000,000
|
|
1,492,772
|
Inventories
|
215,701
|
|
201,091
|
Prepaid expenses
and other current assets
|
145,985
|
|
175,956
|
TOTAL CURRENT
ASSETS
|
$75,783,457
|
|
$43,550,730
|
NON-CURRENT
ASSETS
|
|
|
|
Property and equipment,
net
|
26,439
|
|
35,384
|
Right-of-use
assets
|
-
|
|
47,617
|
TOTAL NON-CURRENT
ASSETS
|
$26,439
|
|
$83,001
|
|
|
|
|
TOTAL
ASSETS
|
$75,809,896
|
|
$43,633,731
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Account
payables
|
$85,323
|
|
$169,137
|
Contract
liabilities
|
-
|
|
291,833
|
Contingent
consideration
|
19,400,299
|
|
-
|
Taxes
payable
|
714,848
|
|
740,966
|
Due to related
parties
|
22,852
|
|
23,557
|
Lease
liability
|
-
|
|
47,617
|
Loan from a
third party
|
304,568
|
|
-
|
Accrued expenses
and other current liabilities
|
382,684
|
|
402,233
|
TOTAL CURRENT
LIABILITIES AND TOTAL LIABILITIES
|
$20,910,574
|
|
$1,675,343
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Ordinary shares, $0.001
par value, 50,000,000 shares authorized, 21,848,333 and
13,848,333 shares issued and outstanding at June 30, 2022 and
December 31, 2021,
respectively
|
$21,848
|
|
$13,848
|
Additional
paid-in capital
|
52,668,260
|
|
40,686,311
|
Statutory
reserve
|
898,405
|
|
719,804
|
Retained
earnings
|
1,471,552
|
|
147,278
|
Accumulated
other comprehensive (loss) income
|
(160,743)
|
|
391,147
|
Total
shareholders' equity
|
$54,899,322
|
|
$41,958,388
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$75,809,896
|
|
$43,633,731
|
China Liberal
Education Holdings Limited
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
(Unaudited)
|
|
|
|
For the six
months ended June 30,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
REVENUE
|
|
$2,737,410
|
|
$1,850,551
|
COST OF
REVENUE
|
|
(452,663)
|
|
(476,727)
|
GROSS
PROFIT
|
|
2,284,747
|
|
1,373,824
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
Selling
expenses
|
|
(110,612)
|
|
(76,593)
|
General and
administrative expenses
|
|
(689,000)
|
|
(995,451)
|
Total operating
expenses
|
|
(799,612)
|
|
(1,072,044)
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
1,485,135
|
|
301,780
|
|
|
|
|
|
OTHER
INCOME
|
|
|
|
|
Interest
income
|
|
8,673
|
|
59,973
|
Other income
(expenses), net
|
|
9,110
|
|
(7,249)
|
Total other
income, net
|
|
17,783
|
|
52,724
|
|
|
|
|
|
INCOME BEFORE
INCOME TAXES
|
|
1,502,918
|
|
354,504
|
INCOME TAX
EXPENSE
|
|
(42)
|
|
(128,482)
|
NET
INCOME
|
|
$1,502,876
|
|
$226,022
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
|
|
|
|
Total foreign
currency translation adjustment
|
|
(551,890)
|
|
143,416
|
TOTAL COMPREHENSIVE
INCOME
|
|
$950,985
|
|
$369,438
|
|
|
|
|
|
Weighted average number
of shares, basic and diluted
|
|
17,627,339
|
|
8,756,372
|
Basic and diluted
earnings per ordinary share
|
|
$0.09
|
|
$0.03
|
China Liberal
Education Holdings Limited
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
For the six
months ended June 30,
|
|
2022
|
|
2021
|
Cash flows from
operating activities
|
|
|
|
Net
income
|
$1,502,876
|
|
$226,022
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
7,402
|
|
10,810
|
Non-cash lease
expenses
|
-
|
|
45,148
|
Loss from
disposal of property and equipment
|
-
|
|
606
|
Share-based
compensation
|
-
|
|
53,250
|
Changes in
operating assets and liabilities:
|
|
|
|
Account
receivables, net
|
(858,161)
|
|
(621,655)
|
Contract asset,
net
|
1,972,732
|
|
2,239,613
|
Advance to
suppliers
|
4,415,107
|
|
(3,937,025)
|
Inventory,
net
|
(25,401)
|
|
-
|
Prepaid expenses
and other current assets
|
40,899
|
|
64,982
|
Account
payables
|
(77,703)
|
|
(43,011)
|
Contract
liabilities
|
(285,832)
|
|
(38,853)
|
Taxes
payable
|
11,175
|
|
126,429
|
Accrued expenses
and other current liabilities
|
99
|
|
(18,412)
|
Net cash provided by
(used in) operating activities
|
6,703,193
|
|
(1,892,096)
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchase of
property and equipment
|
-
|
|
(3,500)
|
Prepayment for
acquisitions
|
(39,137,623)
|
|
-
|
Repayment of
advance to a related party
|
-
|
|
1,466,239
|
Net cash (used in)
provided by investing activities
|
(39,137,623)
|
|
1,462,739
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
advance from a third party
|
313,966
|
|
-
|
Net proceeds from
issuance of ordinary shares
|
11,989,949
|
|
29,047,088
|
Net cash provided by
financing activities
|
12,303,915
|
|
29,047,088
|
|
|
|
|
Effect of changes of
foreign exchange rates on cash
|
(298,326)
|
|
73,491
|
Net (decrease)
increase in cash
|
(20,428,842)
|
|
28,691,222
|
Cash, beginning of
year
|
32,678,421
|
|
5,007,449
|
Cash, end of
year
|
$12,249,579
|
|
$33,698,671
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
Cash paid for
interest expense
|
-
|
|
$40,463
|
Cash paid for
income tax
|
$2,493
|
|
-
|
View original
content:https://www.prnewswire.com/news-releases/china-liberal-education-holdings-limited-reports-financial-results-for-the-first-six-months-of-fiscal-year-2022-301669804.html
SOURCE China Liberal Education Holdings Limited