MIDDLETOWN, Ohio, July 13, 2021 /PRNewswire/ -- Elite Education
Group International Limited (Nasdaq: EEIQ) ("EEG"), a provider
of comprehensive, one-stop education solutions for Chinese
university students interested in study abroad programs in the US
and other countries, today announced its first half financial
results for the six months ended March 31,
2021 and an operational update.
"Our revenue decreased for the first half of fiscal 2021
primarily due to the global Covid-19 pandemic that negatively
impacted businesses around the world in 2020. It also reflects the
timing of our ability to recognize revenue as per GAAP accounting
rules where revenue is recognized when realized and earned, not
when cash is received. However, as of June
30, 2021, the number of students who paid full tuition fees
after being admitted to the English language programs at the
regional campuses of Miami University of
Ohio increased significantly compared to the same date in
2020. This is an indicator of a return to normalized economic
conditions which positively affected our recent enrollment
metrics. Further, our financial condition remains strong with
an increase in cash for the first half of the 2021 fiscal year due
to our IPO in March," commented Jianbo
Zhang, Chairman and Chief Executive Officer.
"We plan upon extending our turnkey overseas study solution to
offer our students even more options for academic enrichment as
they pursue their educational pursuits. We plan to expand into
other regions utilizing our distinctive educational model that
has proven to be highly successful. We believe that we are uniquely
positioned in the educational space to capitalize both upon the
stability of the education sector and its potential to develop
creative solutions as a means to develop career opportunities while
fulfilling students' major aspirational goals."
"We are also expanding our market in China with strategies that further penetrate
preparatory programs through agreements with domestic universities
in China. We deployed a strategy
to work with these universities during the global Covid-19 pandemic
to strengthen our global connections for when travel conditions
fully normalize. In the meantime, the Company has begun its
expansion into other countries such as Canada and the United Kingdom. While the pandemic had
curtailed the viability for international study abroad programs in
the short-term, we are enthusiastic about the long-term prospects
of our sector as study abroad programs continue to have strong
appeal for Chinese students and their families who seek premier
educational opportunities," Mr. Jianbo
Zhang concluded.
First Half 2021 Financial Results Ended March 31, 2021
Revenues were $3.1
million for the first half of fiscal 2021 compared to
$6.1 million for the same period of
2020, representing a decrease of $3.0
million, or 49.4%. The decrease was due to the decline in
student registration in the Fall 2020 and Spring 2021 semesters
compared to the Fall 2019 and Spring 2020 semesters due to impact
of the global Covid-19 pandemic.
Gross profit was $1.8
million for the first half of fiscal 2021 compared to
$4.6 million for the same period of
2020, representing a decrease of $2.8
million, or 60.2%. The decrease was primarily due to the
drop in revenue in the first half of 2021 compared to the same
period of 2020. Our gross margin decreased to 58.7% for the first
half ended March 31, 2021 from 74.6%
for the same period of 2020 primarily because our students could
not physically attend our English Program courses in the US due to
Covid-19 travel restrictions. Therefore, we had to engage a local
university in China and use their
facility to continue providing our English Program courses locally
and online. The use of the facility of the local university
represented an additional cost for us and therefore reduced our
gross margin.
Operating Expenses were $2.2 million for the first
half of fiscal 2021 compared to $2.9
million for the same period of 2020, representing a decrease
of $0.7 million, or 23.5%. The
decrease was primarily due to a decrease in selling expenses of
$0.5 million to $0.6 million for the first half of 2021 compared
to $1.1 million for the same period
of 2020 due to the decrease in revenue in the first half of 2021
compared to the same period of 2020.
Operating loss was $0.4
million for the first half of fiscal 2021 compared to
operating income of $1.7 million for
the same period of 2020, which was due to lower revenue and gross
margin in the first half of fiscal 2021.
Income tax recovery was $0.06
million for the first half of fiscal 2021 compared to income
tax expense of $0.4 million for the
same period of 2020. The decrease was caused by the operating loss
for the first half of 2021 compared to the generation of operating
income for the same period of 2020.
Net loss was $0.3 million
for the first half of fiscal 2021 compared to net income of
$1.3 million for the same period of
2020, which was due to various factors as discussed above.
Net Loss Per Basic and Diluted Share for the first
half of fiscal 2021 was $0.04
compared to net income of $0.17 per
basic and diluted share for the same period of 2020. The average
number of shares used in the computation of basic and diluted
earnings per share for the first half of 2021 was 7,946,678 shares
compared to 7,938,000 shares for basic and diluted earnings per
share in the prior year period.
Financial Condition
As of March 31, 2021, the Company
had $9.3 million in cash and cash
equivalents, an increase of $1.9
million or 26.2% as compared to $7.4
million as of September 30,
2020. As of March 31, 2021,
working capital was $7.8 million
(current assets minus current liabilities) and the current ratio
(current assets divided by current liabilities) was 2.9, as
compared to working capital of $3.9
million and a current ratio of 1.6 as of September 30, 2020. Stockholders' equity as of
March 31, 2021 was $11.3 million, an increase of $3.9 million or 51.5% as compared to $7.5 million as of September 30, 2020.
Liquidity and Capital Resources
Net cash used in operating activities for the six months
ended March 31, 2021 was $2.9 million as
compared to $2.5 million for the six months
ended March 31, 2020. This increase was primarily due to the
changes in net income and other working capital balances. We define
working capital as the assets and liabilities, other than cash,
generated through the Company's primary operating
activities. Changes in these balances are included in the
changes in assets and liabilities presented in the consolidated
statement of cash flows.
Net cash used in investing activities was $0.1 million
and $0.03 million for the six months ended March 31,
2021 and 2020, respectively. The net cash used in investing
activities in the six months ended March 31, 2021 was due
to $0.2 million used for purchases of
property and equipment, which was offset by the collection of a
$0.1 million note receivable.
Net cash provided by financing activities
was $4.9 million for the six months ended March
31, 2021 as compared to net cash used in financing activities of
$0.2 million for the six months
ended March 31, 2020. For the six months ended March 31, 2021, we generated cash inflow from the
issuance of 893,718 common shares as a result of the completion of
our initial public offering. The $0.2
million cash outflow for the six months ended March 31, 2020 was related to the costs
associated with our initial public offering.
Business Outlook and Operational Update
The Covid-19 outbreak occurred in China in late 2019, and in March 2020, the World Health
Organization declared the novel coronavirus outbreak a global
pandemic. This resulted in extensive travel restrictions as
well as a global economic downturn, and disrupted the normal
operations of many businesses, including ours, and the normal
operations of Miami University of Ohio,
which is the principal university that we work with to place our
students.
While our recruiting for the Spring 2020 semester for our
English language program at the regional campuses of Miami University of Ohio (the "MU Regional
Campuses"), where we primarily operate, was not significantly
affected, we undertook a comprehensive number of protocols and
extensive quarantine measures for students who stayed at MU
Regional Campuses to ensure our students' safety. However, our
recruiting for the Fall 2020 semester was affected by the Covid-19
pandemic although we believe many Chinese high school students who
did not take Chinese university entrance examinations still saw
study abroad as a highly viable option. Due to various
restrictions, we had to transition our recruitment marketing
activities into a virtual or online format in China, including online guidance classes and
training sessions, to maintain potential student interest and
student enrollment rates. Due to the pandemic, most of the programs
at MU Regional Campuses were postponed for the Fall 2020 semester
which resulted in a 28% drop in our 2020 enrollment as compared to
the prior academic year.
To bolster our pool of applicants from China in the 2021-2022 fiscal year, we
initiated online courses that work in sync with foundational
programs in China to improve our
recruitment efforts for when conditions associated with the
Covid-19 pandemic fully normalize. This is based on the
anticipation that on campus learning will resume at MU Regional
Campuses for both the Summer and Fall 2021 semesters. As of
June 30, 2021, indicators of
recruitment and enrollment for the MU Regional Campuses are better
than those at the end of June 2020.
As of June 30, 2021, 58 students who
had been admitted to the MU Regional Campuses paid full tuition
fees as compared to only three students for the same period in the
previous year, and the conversion rate from admission to deposition
payment was 42.9% as compared to 32.7% during the same period in
2020. We anticipate a normalization of our business in the periods
ahead as travel restrictions have been eased on Chinese and other
students travelling to the US for the Fall 2021 semester.
We are intent upon diversifying our business to operate in
Canada and the UK in order to
enlarge our footprint as we replicate our successful MU Regional
Campuses model. We plan to extend our programs of educational
services to targeted elite universities and colleges that we
believe will attract a growing number of international students. A
wholly-owned subsidiary of the Company, Highrim Holding
International Limited has been registered in Canada, effective July
9, 2021. This entity will mainly be used to expand our
educational service business in Canada and the UK.
Finally, as of June 30, 2021, Mr.
Tong Wang, Vice President and Chief Development Officer has
departed to pursue other business interests. We thank Mr. Wang for
his significant contributions to the Company. Starting July 1, 2021, in addition to her role as Chief
Operating Officer, Ms. Yunxia Xu
will also serve as the Chief Marketing Officer of the Company. Ms.
Jing Li has been appointed the
position of Chief Development Officer. Other executive officers'
roles remain unchanged.
About Elite Education Group International
Limited
Elite Education Group International Limited, through its
subsidiary Quest Holding International LLC, provides comprehensive,
one-stop education solutions for Chinese students who are
interested in study abroad programs in the US and other countries.
We develop specific education goals for each student enrolled in
our program and provide a safe and structured environment to enable
students to pursue their academic goals. Our primary study abroad
agreement is with Miami University of Ohio (Regional Campuses), and we maintain
residential facilities, a full-service cafeteria, recreational
facilities, shuttle buses and an office for the Middletown and Hamilton campuses that provides a wide range
of study abroad and post-study services for our students. For more
information, please visit www.eei-global.net.
Safe Harbor Statement
Certain of the statements made in this press release are
"forward-looking statements" within the meaning and protections of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, anticipations,
assumptions, estimates, intentions, and future performance, and
involve known and unknown risks, uncertainties and other factors,
which may be beyond our control, and which may cause the actual
results, performance, capital, ownership or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such forward-looking
statements. Forward-looking statements in this press release
include, without limitation, whether the conditions associated with
the Covid-19 fully normalize in the near-term, whether campus
learning will resume at MU Regional Campuses for both the Summer
2021 and the Fall 2021 semesters, the ability of Chinese and other
students to travel to the US for the Fall 2021 semester, the
continued stable macroeconomic environment in which we operate, the
overseas study abroad sector continuing to exhibit sound long-term
fundamentals, our ability to sustain our current business and
expand our services into Canada
and the United Kingdom. All
statements other than statements of historical fact are statements
that could be forward-looking statements. You can identify these
forward-looking statements through our use of words such as "may,"
"will," "anticipate," "assume," "should," "indicate," "would,"
"believe," "contemplate," "expect," "estimate," "continue," "plan,"
"point to," "project," "could," "intend," "target" and other
similar words and expressions of the future.
All written or oral forward-looking statements attributable to
us are expressly qualified in their entirety by this cautionary
notice, including, without limitation, those risks and
uncertainties described in our prospectus filed pursuant to
Rule 424(b)(4) and otherwise in our SEC reports and filings. Such
reports are available upon request from the Company, or from the
Securities and Exchange Commission, including through the SEC's
Internet website at http://www.sec.gov. We have no obligation and
do not undertake to update, revise or correct any of the
forward-looking statements after the date hereof, or after the
respective dates on which any such statements otherwise are
made.
Contacts:
Elite Education Group International Limited
+1
513-649-8350
ir@eei-global.net
Investor Relations:
Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
david.rudnick@preceptir.com
FINANCIAL
TABLES
|
|
ELITE EDUCATION
GROUP INTERNATIONAL LIMITED CONSOLIDATED BALANCE
SHEETS AS OF MARCH 31, 2021 and SEPTEMBER 30,
2020 (US$, except share data and per share data, or
otherwise noted)
|
|
|
|
March 31,
2021
|
|
|
September 30,
2020
|
|
|
|
US$
|
|
|
US$
|
|
Assets
|
|
|
|
|
|
|
Current
Assets
|
|
(Unaudited)
|
|
|
|
|
Cash and cash
equivalents
|
|
|
9,345,691
|
|
|
|
7,407,990
|
|
Accounts
receivables
|
|
|
131,319
|
|
|
|
149,361
|
|
Prepaid expenses
|
|
|
1,357,244
|
|
|
|
1,632,647
|
|
Deferred IPO
costs
|
|
|
-
|
|
|
|
783,889
|
|
Income tax
receivable
|
|
|
947,622
|
|
|
|
668,639
|
|
Total current
assets
|
|
|
11,781,876
|
|
|
|
10,642,526
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
3,294,768
|
|
|
|
3,120,564
|
|
Long term prepaid
expenses
|
|
|
34,147
|
|
|
|
159,382
|
|
Deferred income tax
assets
|
|
|
63,025
|
|
|
|
-
|
|
Notes receivable
|
|
|
180,000
|
|
|
|
280,000
|
|
Total
assets
|
|
|
15,353,816
|
|
|
|
14,202,472
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and other
liabilities
|
|
|
1,571,609
|
|
|
|
1,976,668
|
|
Student deposits
|
|
|
781,485
|
|
|
|
994,940
|
|
Due to related
party
|
|
|
140,000
|
|
|
|
140,000
|
|
Deferred revenue
|
|
|
1,524,793
|
|
|
|
3,608,237
|
|
Total current
liabilities
|
|
|
4,017,887
|
|
|
|
6,719,845
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
4,017,887
|
|
|
|
6,719,845
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
Common shares,
US$0.0015873 par value, 31,500,000 shares authorized, 8,831,718 and
7,938,000 shares issued and outstanding as of March 31, 2021 and
September 30, 2020, respectively
|
|
|
14,019
|
|
|
|
12,600
|
|
Additional paid-in
capital
|
|
|
7,636,919
|
|
|
|
2,731,273
|
|
Subscription
receivable
|
|
|
(761,875)
|
|
|
|
-
|
|
Retained earnings
|
|
|
4,446,866
|
|
|
|
4,738,754
|
|
Total
shareholders' equity
|
|
|
11,335,929
|
|
|
|
7,482,627
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
|
15,353,816
|
|
|
|
14,202,472
|
|
ELITE
EDUCATION GROUP INTERNATIONAL LIMITED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE
SIX MONTHS ENDED MARCH 31, 2021 AND 2020 (US$, except
share data and per share data, or otherwise noted)
|
|
|
|
For The Six
Months
Ended
|
|
|
For The Six
Months
Ended
|
|
|
|
March 31,
2021
|
|
|
March 31,
2020
|
|
|
|
US$
|
|
|
US$
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Revenues
|
|
|
3,101,646
|
|
|
|
6,128,360
|
|
Costs of
services
|
|
|
1,280,083
|
|
|
|
1,555,819
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
1,821,563
|
|
|
|
4,572,541
|
|
|
|
|
|
|
|
|
|
|
Operating costs
and expenses:
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
626,017
|
|
|
|
1,142,150
|
|
General and
administrative
|
|
|
1,588,611
|
|
|
|
1,751,402
|
|
Total operating
costs and expenses
|
|
|
2,214,628
|
|
|
|
2,893,552
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
(393,065)
|
|
|
|
1,678,989
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expenses:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
(38,152)
|
|
|
|
(19,900)
|
|
Foreign exchange
gain
|
|
|
-
|
|
|
|
12,682
|
|
Total other
(income) expenses
|
|
|
(38,152)
|
|
|
|
(7,218)
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
|
(354,913)
|
|
|
|
1,686,207
|
|
|
|
|
|
|
|
|
|
|
Current income tax
expense (recovery)
|
|
|
-
|
|
|
|
374,642
|
|
Deferred income tax
expense (recovery)
|
|
|
(63,025)
|
|
|
|
-
|
|
Income taxes
expense
|
|
|
(63,025)
|
|
|
|
374,642
|
|
|
|
|
-
|
|
|
|
-
|
|
Net
income
|
|
|
(291,888)
|
|
|
|
1,311,565
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
|
(291,888)
|
|
|
|
1,311,565
|
|
|
|
|
|
|
|
|
|
|
Basic &
diluted net income per share
|
|
$
|
(0.04)
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares-basic and diluted
|
|
|
7,946,678
|
|
|
|
7,938,000
|
|
ELITE
EDUCATION GROUP INTERNATIONAL
LIMITED CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 2021 AND
2020 (US$, except share data and per share data, or
otherwise noted)
|
|
|
|
For The Six
Months
Ended
March 31,
|
|
|
For The Six
Months
Ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
US$
|
|
|
US$
|
|
Cash Flows from
Operating Activities:
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Net income
|
|
|
(291,888)
|
|
|
|
1,311,565
|
|
Adjustments for items
not affecting cash:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
43,797
|
|
|
|
45,592
|
|
Deferred income tax
expense
|
|
|
(63,025)
|
|
|
|
-
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
18,042
|
|
|
|
(112,655)
|
|
Prepaid
expenses
|
|
|
275,403
|
|
|
|
537,082
|
|
Long-term prepaid
expenses
|
|
|
125,235
|
|
|
|
391,914
|
|
Accounts payable
& accrued liabilities
|
|
|
(405,060)
|
|
|
|
(401,112)
|
|
Deferred
revenue
|
|
|
(2,083,445)
|
|
|
|
(4,385,907)
|
|
Income tax
receivable
|
|
|
(278,982)
|
|
|
|
65,064
|
|
Student
deposits
|
|
|
(213,455)
|
|
|
|
-
|
|
Net cash provided
from (used in) operating activities
|
|
|
(2,873,378)
|
|
|
|
(2,548,457)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(218,000)
|
|
|
|
(25,864)
|
|
Notes
receivable
|
|
|
100,000
|
|
|
|
-
|
|
Net cash used in
investing activities
|
|
|
(118,000)
|
|
|
|
(25,864)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Deferred costs
related to initial public offering
|
|
|
-
|
|
|
|
(179,919)
|
|
Proceeds from initial
public offering, net of issuance costs
|
|
|
4,929,079
|
|
|
|
-
|
|
Net cash provided
from (used in) financing activities
|
|
|
4,929,079
|
|
|
|
(179,919)
|
|
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash, cash equivalents and restricted
cash
|
|
|
1,937,701
|
|
|
|
(2,754,239)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
7,407,990
|
|
|
|
8,272,623
|
|
Cash and cash
equivalents, end of period
|
|
|
9,345,691
|
|
|
|
5,518,384
|
|
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SOURCE Elite Education Group International Limited