ATA Creativity Global (“ACG”
or the “Company”, Nasdaq:
AACG), a company focused
on providing students with quality educational experiences and
services in China and abroad, today announced preliminary unaudited
financial results for the three months ended September 30, 2019.
2019 Third Quarter and Subsequent Operating Highlights
and Certain Events
- On August 6, 2019, the Company announced that it had closed the
acquisition of 87.46% equity interest in Beijing Huanqiuyimeng
Education Consultation Corp. (“Huanqiuyimeng”), a leading provider
of educational services for students in China interested in
applying for overseas art study. On the same day, control of
Huanqiuyimeng transitioned to ACG. On October 17, 2019, the Company
announced that it had closed the acquisition of the remaining
12.54% equity interest in Huanqiuyimeng. As a result, Huanqiuyimeng
is now a wholly owned subsidiary of ACG. Details of the
Huanqiuyimeng acquisition can be found in the Forms 6-K filed
by ACG on August 6, 2019, and October 17, 2019.
- At the Annual General Meeting of Shareholders held on September
12, 2019, shareholders approved the change of the Company’s name to
ATA Creativity Global. The Company’s stock ticker symbol also
changed to “AACG” with its American Depositary Shares commencing
trading under the new symbol as of market open on October 17, 2019.
These changes mark a new beginning for the Company with its recent
acquisition of Huanqiuyimeng.
- For the period beginning August 6, 2019, when control of
Huanqiuyimeng transitioned to ACG, to September 30, 2019 (the
“Partial Third Quarter Period”), student enrollment was 838, of
which 550 were enrolled in the Portfolio Training Program (as
defined below). Approximately 35,000 credit hours (i.e., the
standard unit measuring educational credit for the Portfolio
Training Program; each credit hour roughly equals to one hour of
time committed) were delivered during the Partial Third Quarter
Period.
- Net revenues of RMB42.4 million (US$5.9 million), driven by
revenue contributions from Huanqiuyimeng’s portfolio training and
other education services businesses
- Net loss from continuing operations attributable to ACG of
RMB24.4 million (US$3.4 million), compared to RMB8.9 million in the
prior-year period, due to increased operating expenses
- RMB105.1 million (US$14.7 million) in cash and cash equivalents
as of September 30, 2019
Management CommentaryMr. Kevin Ma,
Chairman and CEO, stated, “We are pleased that Huanqiuyimeng is now
a wholly owned subsidiary of ATA Creativity Global, our Company’s
new name that reflects the direction in which we are heading. Our
third quarter 2019 results incorporate about two months of
operating and financial results from Huanqiuyimeng. The acquisition
of Huanqiuyimeng marks the first major step forward in our
long-term strategy of becoming a leading international education
service provider with a special focus on the rapidly expanding art
and creativity education market. Huanqiuyimeng has earned its
reputation for excellence in this particular area, and we look
forward to serving more students all over China who are passionate
about pursuing a future in art and other creative fields.”
OutlookMr. Jun Zhang, President of ACG, stated,
“In the fourth quarter of 2019, we are focused on integrating
Huanqiuyimeng operations and personnel into the listed company
(i.e., ACG) with a goal of accelerating enrollment in 2020. We
continue working closely with Huanqiuyimeng management on
prioritizing growth initiatives and look forward to using our
resources to help Huanqiuyimeng efficiently scale its operations
through geographic expansion, new product offerings, and new
partnerships. We are well positioned to take advantage of the
growing demand from Chinese students and young professionals
focused on art and creative fields, as well as overseas educational
experiences.”
Operating Review
Enrollment Update
Please note that the following information reflects enrollment
information for the Partial Third Quarter Period beginning from
August 6, 2019, to September 30, 2019, as control of Huanqiuyimeng
transitioned to ACG on August 6, 2019.
Huanqiuyimeng student enrollment for the Partial Third Quarter
Period was 838, of which 550 were enrolled in the portfolio
training program, Huanqiuyimeng’s main line of business that
primarily consists of one-on-one training for students focused in
arts and creative studies (the “Portfolio Training Program”). The
Portfolio Training Program consists of time-based programs, for
which revenue is recognized per credit hour delivered, and
project-based programs, for which projects are carried out through
the delivery of credit hours but revenue is recognized per project
milestone completed within the contract term. Students who elect
the time-based program enroll in a certain number of
consulting/training hours over the contract term, whereas students
who elect the project-based program have no consulting/training
hour constraint over the contract term but will be guided through a
certain number of projects needed to complete a portfolio, which
will be predetermined and agreed upon the signing of a contract.
Under project-based programs, the number of credit hours required
to complete a project may vary depending on the background and
requirements of the students.
During the Partial Third Quarter, 288 students were enrolled in
Huanqiuyimeng’s other programs, which mainly consist of educational
travel and language preparation programs.
A total of 34,988 credit hours were delivered during the Partial
Third Quarter Period, of which 22,708 credit hours were delivered
for time-based programs and 12,280 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 August 6,
2019, to September 30, 2019, compared to those for the prior-year
period:
|
|
|
|
Aug. 6, 2019 – Sept. 30, 2019 |
|
|
Aug. 6, 2018 – Sept. 30, 2018 |
|
|
% Growth |
|
|
|
No. of Credit Hours |
|
|
No. of Credit Hours |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-based Program |
|
22,708 |
|
|
25,336 |
|
|
(10.4%) |
|
Project-based Program |
|
12,280 |
|
|
4,798 |
|
|
155.9% |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
34,988 |
|
|
30,134 |
|
|
16.1% |
|
2019 Third Quarter Financial Review
Note: Impact of Huanqiuyimeng Acquisition on and Certain
Adjustments to the Company’s Financial StatementsFollowing the
completion of the acquisition whereby Huanqiuyimeng became a wholly
owned subsidiary of the Company, the financial results presented in
this press release incorporate financial contributions from
Huanqiuyimeng for the Partial Third Quarter Period.
Certain line items in the condensed consolidated statements of
comprehensive income (loss) for the three months and nine months
ended September 30, 2018, in this press release have been revised
as a result of adjustments made in the Company’s annual report for
the fiscal year ended December 31, 2018. These revisions were
mainly made pursuant to the accounting treatment of discontinued
operations, under which the Company accounted for the sale of
business of ATA Online (Beijing) Education Technology Co., Ltd, or
ATA Online, a former subsidiary of the Company. The income from
discontinued operations, net of income taxes, recorded in the three
months ended September 30, 2019, was to account for the
contingencies that arose pursuant to terms in the sale of business
of ATA Online.
GAAP
Results
ACG’s total net revenues for the third quarter of 2019 were RMB42.4
million (US$5.9 million), compared to RMB1.0 million in the
prior-year period, driven primarily by revenue contributions from
the recently completed acquisition of Huanqiuyimeng. Revenues from
the portfolio training segment were RMB29.3 million, or 69.0% of
total net revenues, during the period. Revenues from the other
education services segment and K-12 business were RMB13.1 million,
or 31.0% of total net revenues.
Gross profit for the third quarter of 2019 was RMB16.6 million
(US$2.3 million), compared to gross loss of RMB0.5 million in the
prior-year period. Gross margin was 39.1% during the period,
compared to negative gross margin of 46.0% in the prior-year
period, prior to the acquisition of Huanqiuyimeng.
Total operating expenses for the third quarter of 2019 were
RMB41.0 million (US$5.7 million), compared to RMB11.4 million in
the prior-year period, primarily due to increased selling, general
and administrative (SG&A) expenses of RMB26.8 million related
to the newly acquired Huanqiuyimeng operations. The Company also
incurred increased operating expense, which primarily consisted of
professional and consulting fees of RMB1.5 million related to the
acquisition of Huanqiuyimeng as well as higher share-based
compensation expense of RMB1.8 million related to new options
granted during the period.
Loss from continuing operations for the third quarter of 2019
was RMB24.3 million (US$3.4 million), compared to RMB10.9 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 the
third quarter of 2019 was RMB24.4 million (US$3.4 million),
compared to RMB8.9 million in the prior-year period.
For the three months ended September 30, 2019, basic and diluted
losses from continuing operations per common share attributable to
ACG were both RMB0.49 (US$0.07), compared to RMB0.52 for the
prior-year period. Basic and diluted losses from continuing
operations per ADS attributable to ACG were both RMB0.98 (US$0.14),
compared to RMB1.04 in the prior-year period.
Non-GAAP Measures
Adjusted net loss attributable to ACG for the third quarter of
2019, which excludes share-based compensation expense and foreign
currency exchange gain (non-GAAP), was RMB22.5 million (US$3.1
million), compared to adjusted net income of RMB1.0 billion in the
prior-year period.
Basic and diluted losses per common share attributable to ACG
excluding share-based compensation expense and foreign currency
exchange gain (non-GAAP) for the third quarter of 2019, were both
RMB0.46 (US$0.06). Basic and diluted losses per ADS attributable to
ACG excluding share-based compensation expense and foreign currency
exchange gain (non-GAAP) for the third quarter of 2019 were both
RMB0.92 (US$0.12), compared to basic and diluted earnings per ADS
attributable to ACG (non-GAAP) of RMB44.00 in the prior-year
period.
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 the third quarter ended September
30, 2019, was 26.4 million. Each ADS represents two common
shares.
Balance Sheet Highlights
As of September 30, 2019, ACG’s cash and cash equivalents were
RMB105.1 million (US$14.7 million), working capital deficit was
RMB141.0 million (US$19.7 million), and total shareholders’ equity
was RMB309.9 million (US$43.4 million); compared to RMB190.6
million, working capital of RMB193.6 million, and RMB276.2 million,
respectively, as of December 31, 2018.
Conference Call and Webcast Information (With
Accompanying Presentation)
ACG will host a conference call at 8 p.m. Eastern Time
on Thursday, November 14, 2019, during which management will
discuss the results of the quarter ended September 30, 2019.
Investors are welcome to send any questions in advance of the
conference call either through the webcast portal or via email to
the Company’s contacts listed below.
To participate in the conference call, please use the following
dial-in numbers about 10 minutes prior to the scheduled conference
call time:
U.S. & Canada (Toll-Free): |
|
+1
(888) 339-2688 |
International (Toll): |
|
+1 (617) 847-3007 |
|
|
Toll-Free |
|
Local Access |
China: |
|
(800) 990 1344 |
|
(400) 881 1630 |
Hong Kong: |
|
|
|
3002 1672 |
|
|
|
|
|
Participant Passcode: |
|
76809102 |
|
|
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/274/32208.
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 focused on providing quality
educational experiences and services for students throughout China
and abroad. ACG aims to offer online, on-campus, and other
education programs through a network of global education partners.
For more information, please visit ACG’s website
at www.atai.net.cn.
Cautionary Note Regarding Forward-looking
Statements
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, and as defined in the Private Securities
Litigation Reform Act of 1995.
These forward-looking statements can be identified by terms such
as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“forecast,” “future,” “intend,” “look forward to,” “outlook,”
“plan,” “should,” “will,” and similar terms and include, among
other things, statements regarding ACG’s future growth and
results of operations; ACG’s strategy of becoming a leading
international education service provider; ACG’s plans for mergers
and acquisitions generally; ACG’s plan and anticipated benefits to
develop international education services and carry out new
business; intended benefits of ACG’s acquisition of Huanqiuyimeng;
the market potential of international art and creativity education;
ACG’s plan for geographic expansion, new product offerings and new
partnerships; the ability of ACG and Huanqiuyimeng to cooperate and
integrate effectively; and ACG’s growth strategy and subsequent
business activities.
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 leverage its existing
competency-focused assessment and education service capabilities,
its ability to integrate the acquired business, 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, and other factors stated in the
Company’s filings with the U.S. Securities and Exchange Commission
(“SEC”).
The financial information contained in this release should be
read in conjunction with the consolidated financial statements and
related notes included in the Company’s annual report on
Form 20-F for its fiscal year ended December 31, 2018,
and other filings that ACG has made with the SEC. The filings are
available on the SEC’s website at www.sec.gov and
at ACG’s website at www.atai.net.cn. For additional
information on the risk factors that could adversely affect the
Company’s business, financial conditions, results of operations,
and prospects, please see the “Risk Factors” section of the
Company’s Form 20-F for the fiscal year ended
December 31, 2018.
The forward-looking statements in this release involve known and
unknown risks and uncertainties and are based on current
expectations, assumptions, estimates, and projections about ACG and
the markets in which it operates. The Company undertakes no
obligation to update forward-looking statements, which speak only
as of the date of this release, to reflect subsequent events or
circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that its
expectations and assumptions expressed in these forward-looking
statements are reasonable, the Company cannot assure you that its
expectations and assumptions will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results.
Currency Convenience Translation
The Company’s financial information is stated in Renminbi
(“RMB”), the currency of the People’s Republic of China. The
translations of RMB amounts for the quarter ended September
30, 2019, into U.S. dollars are included solely for the convenience
of readers and have been made at the rate of RMB7.1477 to US$1.00,
the noon buying rate as of September 30, 2019, in New York for
cable transfers in RMB per U.S. dollar as set forth in the H.10
weekly statistical release of the Federal Reserve Board. Such
translations should not be construed as representations that RMB
amounts could be converted into U.S. dollars at that rate or any
other rate, or to be the amounts that would have been reported
under U.S. generally accepted accounting principles (“GAAP”).
About Non-GAAP Financial Measures
To supplement ACG’s consolidated financial information presented
in accordance with U.S. GAAP, ACG uses the following non-GAAP
financial measures: net income (loss) excluding share-based
compensation expense and foreign currency exchange gain or loss,
and basic and diluted earnings (losses) per common share and ADS
excluding share-based compensation expense and foreign currency
exchange gain or loss.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. ACG believes these non-GAAP financial measures provide
meaningful supplemental information about its performance by
excluding share- based compensation expense and foreign currency
exchange gain or loss, which may not be indicative of its operating
performance.
ACG believes that both management and investors benefit from
these non-GAAP financial measures in assessing its performance and
when planning and forecasting future periods. These non-GAAP
financial measures also facilitate management’s internal
comparisons to ACG’s historical performance. ACG computes its
non-GAAP financial measures using a consistent method
from period to period. ACG believes these non-GAAP financial
measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using non-GAAP net income (loss) excluding
share-based compensation expense and foreign currency exchange gain
or loss and basic and diluted earnings (losses) per common share
and per ADS excluding share-based compensation expense and foreign
currency exchange gain or loss is that share-based compensation
charges and foreign currency exchange gain or loss have been, and
are expected to continue to be for the foreseeable future, a
significant recurring expense in ACG’s business.
Management compensates for these limitations by providing
specific information regarding the GAAP amounts excluded from each
non-GAAP measure. The table captioned “Reconciliations of Non-GAAP
Measures to the Most Comparable GAAP Measures” shown at the end of
this news release has more details on the reconciliations between
GAAP financial measures that are most directly comparable to the
non-GAAP financial measures used by ACG.
For more information on our company, please contact the
following individuals:
At the Company |
|
Investor Relations |
ATA Creativity Global |
|
The Equity Group Inc. |
Amy Tung, CFO |
|
Carolyne Y. Sohn, Vice
President |
+86 10 6518 1133 x 5518 |
|
415-568-2255 |
amytung@atai.net.cn |
|
csohn@equityny.com |
|
|
|
|
|
Adam Prior, Senior Vice
President |
|
|
212-836-9606 |
|
|
aprior@equityny.com |
|
|
|
ATA CREATIVITY GLOBAL AND SUBSIDIARIESUNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
|
|
|
|
RMB |
|
|
RMB |
|
|
USD |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
190,586,342 |
|
|
105,100,214 |
|
|
14,704,061 |
|
|
Accounts receivable, net |
|
|
|
439,783 |
|
|
879,279 |
|
|
123,016 |
|
|
Prepaid expenses and other current assets |
|
|
|
7,836,092 |
|
|
33,927,390 |
|
|
4,746,616 |
|
|
Loan receivable |
|
|
|
14,532,685 |
|
|
15,751,832 |
|
|
2,203,762 |
|
|
Total current assets |
|
|
|
213,394,902 |
|
|
155,658,715 |
|
|
21,777,455 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term investments |
|
|
|
66,390,898 |
|
|
66,621,699 |
|
|
9,320,718 |
|
|
Goodwill |
|
|
|
— |
|
|
237,325,488 |
|
|
33,203,057 |
|
|
Property and equipment, net |
|
|
|
37,430,741 |
|
|
42,933,839 |
|
|
6,006,665 |
|
|
Intangible assets, net |
|
|
|
17,122,578 |
|
|
154,718,798 |
|
|
21,645,956 |
|
|
Right-of-use assets |
|
|
|
— |
|
|
36,543,284 |
|
|
5,112,593 |
|
|
Deferred income tax assets |
|
|
|
— |
|
|
1,030,738 |
|
|
144,206 |
|
|
Other non-current assets |
|
|
|
799,652 |
|
|
4,598,474 |
|
|
643,350 |
|
|
Total assets |
|
|
|
335,138,771 |
|
|
699,431,035 |
|
|
97,854,000 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accrued expenses and other payables |
|
|
|
18,111,939 |
|
|
37,888,563 |
|
|
5,300,804 |
|
|
Short-term loan |
|
|
|
— |
|
|
4,991,000 |
|
|
698,267 |
|
|
Purchase consideration payable |
|
|
|
— |
|
|
19,642,082 |
|
|
2,748,028 |
|
|
Lease liabilities-current |
|
|
|
— |
|
|
19,761,001 |
|
|
2,764,666 |
|
|
Deferred revenues |
|
|
|
1,633,976 |
|
|
214,418,771 |
|
|
29,998,289 |
|
|
Total current liabilities |
|
|
|
19,745,915 |
|
|
296,701,417 |
|
|
41,510,054 |
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current liabilities |
|
|
|
— |
|
|
11,053,791 |
|
|
1,546,482 |
|
|
Deferred income tax liabilities |
|
|
|
— |
|
|
37,738,982 |
|
|
5,279,878 |
|
|
Total liabilities |
|
|
|
19,745,915 |
|
|
345,494,190 |
|
|
48,336,414 |
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine equity-redeemable
non-controlling
interests |
|
|
|
39,208,619 |
|
|
44,031,794 |
|
|
6,160,274 |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
Common shares |
|
|
|
3,534,871 |
|
|
4,290,814 |
|
|
600,307 |
|
|
Treasury shares |
|
|
|
(27,737,073 |
) |
|
(27,737,073 |
) |
|
(3,880,559 |
) |
|
Additional paid-in capital |
|
|
|
410,195,990 |
|
|
491,028,196 |
|
|
68,697,371 |
|
|
Accumulated other comprehensive loss |
|
|
|
(38,288,364 |
) |
|
(36,391,218 |
) |
|
(5,091,319 |
) |
|
Retained earnings (accumulated deficit) |
|
|
|
(71,888,585 |
) |
|
(126,712,456 |
) |
|
(17,727,724 |
) |
|
Total shareholders’ equity attributable to
ACG |
|
|
|
275,816,839 |
|
|
304,478,263 |
|
|
42,598,076 |
|
|
Non-redeemable non-controlling interests |
|
|
|
367,398 |
|
|
5,426,788 |
|
|
759,236 |
|
|
Total shareholders’ equity |
|
|
|
276,184,237 |
|
|
309,905,051 |
|
|
43,357,312 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Total liabilities, mezzanine equity and shareholders’
equity |
|
|
|
335,138,771 |
|
|
699,431,035 |
|
|
97,854,000 |
|
|
ATA
CREATIVITY GLOBAL AND SUBSIDIARIESUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
|
|
|
Three-month Period Ended |
|
|
|
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
|
|
|
|
RMB |
|
|
RMB |
|
|
USD |
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues |
|
|
|
1,008,018 |
|
|
42,417,782 |
|
|
5,934,466 |
|
|
Cost of
revenues |
|
|
|
1,471,567 |
|
|
25,830,568 |
|
|
3,613,829 |
|
|
Gross profit
(loss) |
|
|
|
(463,549 |
) |
|
16,587,214 |
|
|
2,320,637 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
|
3,912,298 |
|
|
2,993,183 |
|
|
418,762 |
|
|
Sales and marketing |
|
|
|
1,396,596 |
|
|
14,024,707 |
|
|
1,962,129 |
|
|
General and administrative |
|
|
|
6,099,254 |
|
|
23,981,216 |
|
|
3,355,095 |
|
|
Total operating expenses |
|
|
|
11,408,148 |
|
|
40,999,106 |
|
|
5,735,986 |
|
|
Other operating income, net |
|
|
|
961,613 |
|
|
105,184 |
|
|
14,716 |
|
|
Loss from continuing
operations |
|
|
|
(10,910,084 |
) |
|
(24,306,708 |
) |
|
(3,400,633 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
Investment loss |
|
|
|
— |
|
|
(7,850 |
) |
|
(1,098 |
) |
|
Impairment loss from investment |
|
|
|
— |
|
|
(5,919,198 |
) |
|
(828,126 |
) |
|
Interest income, net of interest expenses |
|
|
|
634,102 |
|
|
504,420 |
|
|
70,571 |
|
|
Foreign currency exchange gain (loss), net |
|
|
|
572,019 |
|
|
(35,926 |
) |
|
(5,026 |
) |
|
Loss from continuing operations before
income taxes |
|
|
|
(9,703,963 |
) |
|
(29,765,262 |
) |
|
(4,164,312 |
) |
|
Income tax expense (benefit) |
|
|
|
— |
|
|
(2,317,889 |
) |
|
(324,285 |
) |
|
Loss from continuing
operations, net of income taxes |
|
|
|
(9,703,963 |
) |
|
(27,447,373 |
) |
|
(3,840,027 |
) |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
Income from discontinued
operations, net of income taxes |
|
|
|
1,024,563,840 |
|
|
— |
|
|
— |
|
|
Net income (loss) |
|
|
|
1,014,859,877 |
|
|
(27,447,373 |
) |
|
(3,840,027 |
) |
|
Net loss attributable to redeemable non-controlling
interests from continuing operations |
|
|
|
(760,628 |
) |
|
(832,022 |
) |
|
(116,404 |
) |
|
Net loss attributable to non-redeemable non-controlling
interests from continuing operations |
|
|
|
— |
|
|
(2,210,921 |
) |
|
(309,319 |
) |
|
Net income attributable to non-redeemable
non-controllinginterests from discontinued operations |
|
|
|
174,113 |
|
|
— |
|
|
— |
|
|
Net income (loss) attributable to
ACG |
|
|
|
1,015,446,392 |
|
|
(24,404,430 |
) |
|
(3,414,304 |
) |
|
Net loss from continuing operations
attributable to ACG |
|
|
|
(8,943,335 |
) |
|
(24,404,430 |
) |
|
(3,414,304 |
) |
|
Net income from discontinued operations
attributable to ACG |
|
|
|
1,024,389,727 |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss): |
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment, net of nil income taxes |
|
|
|
(11,041,461 |
) |
|
1,767,000 |
|
|
247,212 |
|
|
Comprehensive income (loss) attributable
to ACG |
|
|
|
1,004,404,931 |
|
|
(22,637,430 |
) |
|
(3,167,092 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings (losses) per common share attributable to ACG |
|
|
|
21.85 |
|
|
(0.49 |
) |
|
(0.07 |
) |
|
Basic and diluted earnings (losses) per ADS attributable to
ACG |
|
|
|
43.70 |
|
|
(0.98 |
) |
|
(0.14 |
) |
|
Basic and
diluted losses from continuing operations per common share
attributable to ACG |
|
|
|
(0.52 |
) |
|
(0.49 |
) |
|
(0.07 |
) |
|
Basic and
diluted earnings from discontinued operations per common
share attributable to ACG |
|
|
|
22.37 |
|
|
— |
|
|
— |
|
|
Basic and
diluted losses from continuing operations per ADS
attributable to ACG |
|
|
|
(1.04 |
) |
|
(0.98 |
) |
|
(0.14 |
) |
|
Basic and
diluted earnings from discontinued operations per ADS
attributable to ACG |
|
|
|
44.74 |
|
|
— |
|
|
— |
|
|
ATA
CREATIVITY GLOBAL AND SUBSIDIARIESUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
|
|
Nine-month Period Ended |
|
|
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
|
|
|
RMB |
|
|
RMB |
|
|
USD |
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
|
1,149,441 |
|
|
45,400,375 |
|
|
6,351,746 |
|
|
Cost of
revenues |
|
|
4,042,455 |
|
|
28,429,582 |
|
|
3,977,445 |
|
|
Gross profit
(loss) |
|
|
(2,893,014 |
) |
|
16,970,793 |
|
|
2,374,301 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
12,473,241 |
|
|
9,354,972 |
|
|
1,308,809 |
|
|
Sales and marketing |
|
|
3,671,177 |
|
|
17,203,718 |
|
|
2,406,889 |
|
|
General and administrative |
|
|
30,744,473 |
|
|
50,870,428 |
|
|
7,117,035 |
|
|
Total operating expenses |
|
|
46,888,891 |
|
|
77,429,118 |
|
|
10,832,733 |
|
|
Other operating income, net |
|
|
2,814,544 |
|
|
562,085 |
|
|
78,639 |
|
|
Loss from continuing
operations |
|
|
(46,967,361 |
) |
|
(59,896,240 |
) |
|
(8,379,793 |
) |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Investment income |
|
|
— |
|
|
(7,850 |
) |
|
(1,098 |
) |
|
Impairment loss from investment |
|
|
— |
|
|
(5,919,198 |
) |
|
(828,126 |
) |
|
Change in fair value of long-term investment |
|
|
2,750,000 |
|
|
— |
|
|
— |
|
|
Interest income, net of interest expenses |
|
|
1,086,783 |
|
|
2,604,551 |
|
|
364,390 |
|
|
Foreign currency exchange gain (loss), net |
|
|
990,459 |
|
|
(21,174 |
) |
|
(2,962 |
) |
|
Loss from continuing operations before
income taxes |
|
|
(42,140,119 |
) |
|
(63,239,911 |
) |
|
(8,847,589 |
) |
|
Income tax expense (benefit) |
|
|
— |
|
|
(2,317,889 |
) |
|
(324,285 |
) |
|
Loss from continuing
operations, net of income taxes |
|
|
(42,140,119 |
) |
|
(60,922,022 |
) |
|
(8,523,304 |
) |
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Income from discontinued
operations, net of income taxes |
|
|
918,654,979 |
|
|
4,894,198 |
|
|
684,723 |
|
|
Net income (loss) |
|
|
876,514,860 |
|
|
(56,027,824 |
) |
|
(7,838,581 |
) |
|
Net loss attributable to redeemable non-controlling
interests from continuing operations |
|
|
(2,237,364 |
) |
|
(1,928,861 |
) |
|
(269,858 |
) |
|
Net loss attributable to non-redeemable non-controlling
interests from continuing operations |
|
|
— |
|
|
(3,527,129 |
) |
|
(493,463 |
) |
|
Net loss attributable to non-redeemable non-controlling
interests from discontinued operations |
|
|
(10,608 |
) |
|
— |
|
|
— |
|
|
Net income (loss) attributable to
ACG |
|
|
878,762,832 |
|
|
(50,571,834 |
) |
|
(7,075,260 |
) |
|
Net loss from continuing operations
attributable to ACG |
|
|
(39,902,755 |
) |
|
(55,466,032 |
) |
|
(7,759,983 |
) |
|
Net income from discontinued operations
attributable to ACG |
|
|
918,665,587 |
|
|
4,894,198 |
|
|
684,723 |
|
|
Other comprehensive income
(loss): |
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment, net of nil income taxes |
|
|
(11,282,972 |
) |
|
1,897,146 |
|
|
265,420 |
|
|
Comprehensive income (loss) attributable
to ACG |
|
|
867,479,860 |
|
|
(48,674,688 |
) |
|
(6,809,840 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings (losses) per common share attributable to ACG |
|
|
18.80 |
|
|
(1.12 |
) |
|
(0.16 |
) |
|
Basic and diluted earnings (losses) per ADS attributable to
ACG |
|
|
37.60 |
|
|
(2.24 |
) |
|
(0.32 |
) |
|
Basic and
diluted losses from continuing operations per common share
attributable to ACG |
|
|
(1.26 |
) |
|
(1.22 |
) |
|
(0.17 |
) |
|
Basic and
diluted earnings from discontinued operations per common
share attributable to ACG |
|
|
20.06 |
|
|
0.10 |
|
|
0.01 |
|
|
Basic and
diluted losses from continuing operations per ADS
attributable to ACG |
|
|
(2.52 |
) |
|
(2.44 |
) |
|
(0.34 |
) |
|
Basic and
diluted earnings from discontinued operations per ADS
attributable to ACG |
|
|
40.12 |
|
|
0.20 |
|
|
0.02 |
|
|
|
|
Three-month Period Ended |
|
|
Nine-month Period Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
September 30, |
|
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
2019 |
|
|
|
RMB |
|
|
RMB |
|
|
RMB |
|
RMB |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to ACG |
|
|
1,015,446,392 |
|
|
|
(24,404,430) |
|
|
|
878,762,832 |
|
(50,571,834) |
|
Share-based compensation
expenses |
|
|
8,301,400 |
|
|
|
1,880,228 |
|
|
|
13,605,254 |
|
4,782,335 |
|
Foreign currency exchange gain
(loss), net |
|
|
(1,493,037) |
|
|
|
35,926 |
|
|
|
(6,250,539) |
|
21,174 |
|
Non-GAAP net income (loss)
attributable to ACG |
|
|
1,022,254,755 |
|
|
|
(22,488,276) |
|
|
|
886,117,547 |
|
(45,768,325) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings
(losses) per common share attributable to ACG |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
21.85 |
|
|
|
(0.49) |
|
|
|
18.80 |
|
(1.12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings (losses) per common share
attributable to ACG |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
22.00 |
|
|
|
(0.46) |
|
|
|
18.96 |
|
(1.02) |
|
ATA Creativity Global (NASDAQ:AACG)
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