ATA Creativity Global (“ACG” or the “Company”, Nasdaq:
AACG), an international educational services company
focused on providing quality learning experiences that cultivate
and enhance students’ creativity, today announced preliminary
unaudited financial results for the quarter and nine months ended
September 30, 2020 (“Third Quarter 2020” and “Nine Months 2020”,
respectively).
Third Quarter 2020
Highlights
- During Third Quarter 2020, student
enrollment was 1,225, of which 666 were enrolled in ACG’s portfolio
training programs. Approximately 44,203 credit hours (i.e., the
standard unit measuring educational credit for the portfolio
training program; each credit hour equates to roughly one hour of
time committed) were delivered during Third Quarter 2020.
- Third Quarter 2020 net revenues of
RMB42.2 million (US$6.2 million), primarily driven by revenues from
portfolio training services
- Student enrollments and net revenues,
particularly those related to the educational travel services
business, continued to be impacted by the coronavirus disease
(“COVID-19”) during Third Quarter 2020.
- Third Quarter 2020 net income
attributable to ACG of RMB19.3 million (US$2.8 million), compared
to net loss attributable to ACG of RMB25.2 million in the
prior-year period
- Nine Months 2020 net revenues of
RMB101.3 million (US$14.9 million)
- Nine Months 2020 net loss from
continuing operations attributable to ACG of RMB33.3 million
(US$4.9 million), compared to RMB56.3 million in the prior-year
period
- RMB111.9 million (US$16.5 million) in
cash and cash equivalents as of September 30, 2020
Management Commentary
Mr. Kevin Ma, Chairman and CEO of ACG,
stated, “During the third quarter of 2020, enrollment levels within
our portfolio training program increased by 50% with credit hours
delivered increasing by over 58% from the prior sequential quarter,
which we feel is an incredible achievement considering many
students continued to pursue their studies via online delivery when
most would likely prefer to do so in-person. The public health
situation in China continues to improve, and we are pleased that
nearly all of our training centers have been able to resume
traditional in-person delivery of coursework. ACG’s acquisition of
Beijing Huanqiuyimeng Education Consultation Corp.
(‘Huanqiuyimeng’) took place at an opportune time as the two
companies had substantially assimilated by early 2020 when the
pandemic hit, and it played a key role in our successful
transitioning of coursework to the online platform. We worked to
develop technology systems that would support Huanqiuyimeng’s daily
operations and leveraged our leadership in finance, management and
analysis, all of which were crucial elements contributing to our
successful navigation of challenges created by the pandemic. The
unique circumstances of the pandemic necessitated a transition to
an online education model, which has proven advantageous for
students who require the increased flexibility remote learning
provides and for institutions that can now serve a much wider
student population thanks to technology. We believe there remains a
great deal of runway for growth, and we are optimistic for our
future as we head into 2021.”
Outlook/Impact of COVID-19
Mr. Jun Zhang, President of ACG, stated, “We
were pleased to see continued strong enrollment in Third Quarter
2020 as traditional in-person delivery of coursework became
increasingly available and many students continued their educations
online during the period. The fourth quarter tends to be our
busiest time of the year as students are working in earnest to
complete their portfolios ahead of year-end application deadlines
for entry in the fall of 2021. Given the effects of the pandemic,
we anticipate fourth quarter enrollments in our Portfolio Training
Program will remain steady. While our educational travel business
will continue to be impacted through the remainder of the year, the
fall and winter tend to be lighter travel seasons, and we plan to
continue offering alternatives to our traditional travel programs,
mitigating the overall impact on our business. While the pandemic
has undoubtedly overturned the economy and countless lives have
been devastated by this disease, our students have shown a great
deal of resilience, and we are proud that ACG as an institution has
risen to the challenge of continuing to provide the educational
opportunities our students seek. We believe we will emerge from the
pandemic stronger than before and look forward to supporting our
students with additional offerings and improved infrastructure well
into the future.”
Operating Review
Enrollment Update
ACG student enrollment for Third Quarter 2020
was 1,225, of which 666 were enrolled in its portfolio training
programs, which consist of time-based programs and project-based
programs.
A total of 44,203 credit hours were delivered
for portfolio training programs during Third Quarter 2020, of which
26,117 credit hours were delivered for time-based programs and
18,086 credit hours were delivered for project-based programs.
These courses were delivered either in person through ACG’s
nationwide training center network or via online platform.
The following is a summary of the credit hours
delivered for ACG’s portfolio training programs, for the period
beginning July 1, 2020, to September 30, 2020, compared to those
for the prior-year period:
|
July 1 – Sept. 30, 2020 |
|
July 1 – Sept. 30, 2019 |
|
% Change |
|
No. of Credit Hours |
|
No. of Credit Hours |
|
|
|
|
|
|
|
|
Time-based Program |
26,117 |
|
36,363 |
|
(28.2%) |
Project-based Program |
18,086 |
|
18,868 |
|
(4.1%) |
Total |
44,203 |
|
55,231 |
|
(20.0%) |
During Third Quarter 2020, 559 students were
enrolled in ACG’s other programs, which consists of overseas study
counseling and foreign language training services enrollments as
well as enrollments for other educational services such as some
short-term online bootcamp programs and other recently launched
background enhancement programs, such as internships in fields like
fashion and architectural design.
GAAP Results
Note: Impact of Huanqiuyimeng Acquisition on and
Certain Adjustments to the Company’s Financial Statements
Following the completion of the Huanqiuyimeng
business acquisition whereby Huanqiuyimeng became a wholly owned
subsidiary of the Company in 2019, the financial results presented
in this press release incorporate financial contributions from
Huanqiuyimeng for Third Quarter 2020 and Nine Months 2020. Please
note that the prior-year period comparisons in the below financial
reviews include approximately two months of contributions from the
Huanqiuyimeng business as control of Huanqiuyimeng transitioned to
ACG on August 6, 2019. In addition, the Company has
applied acquisition accounting and made purchase price
allocation (“PPA”) adjustments to various assets acquired and
liabilities assumed from the Huanqiuyimeng business
acquisition.
Third Quarter 2020 Financial Review
ACG’s total net revenues for Third Quarter 2020
were RMB42.2 million (US$6.2 million), compared to RMB40.6 million
in the prior-year period. Net revenues for this quarter include a
negative adjustment of RMB6.0 million resulting from amortization
of the difference between the carrying value of deferred
revenues in Huanqiuyimeng’s book and the fair value of deferred
revenues assessed from the PPA process applied to the Huanqiuyimeng
business acquisition (“PPA Adjustment to Net Revenues”). Revenues
from portfolio training programs were RMB34.2 million, or 81.0% of
total net revenues, during the period. Revenues from overseas study
counselling services, other educational services and the K-12
business were RMB8.0 million, or 19.0% of total net revenues during
the period.
Gross profit for Third Quarter 2020 was RMB15.8
million (US$2.3 million), compared to RMB14.6 million in the
prior-year period. Gross margin was 37.4% during the period,
compared 35.9% in the prior-year period. Excluding the PPA
Adjustment to Net Revenues stated above, gross margin for Third
Quarter 2020 would have been 45.2%.
Total operating expenses for Third Quarter 2020
were RMB32.4 million (US$4.8 million), compared to RMB40.8 million
in the prior-year period. This decrease was primarily driven by a
value-added tax exemption stipulated by the State Authority of
Taxation in response to the impact of COVID-19 on the specific
industry in which Huanqiuyimeng operates in China in 2020, as well
as lower general and administrative costs as a result of reductions
in headcount and office space made as part of a general expense
savings plan launched in response to COVID-19.
Loss from operations for Third Quarter 2020 was
RMB16.5 million (US$2.4 million), compared to RMB26.1 million in
the prior-year period.
Net income attributable to ACG for Third Quarter
2020 was RMB19.3 million (US$2.8 million), compared to a net loss
of RMB25.2 million in the prior-year period.
For Third Quarter 2020, basic and diluted
earnings per common share attributable to ACG were both RMB0.28
(US$0.04), compared to basic and diluted losses per common share
attributable to ACG of RMB0.51 for the prior-year period. Basic and
diluted earnings per ADS attributable to ACG were both RMB0.56
(US$0.08), compared to basic and diluted losses per ADS
attributable to ACG of RMB1.02 in the prior-year period.
Nine Months 2020 Financial Review
ACG’s total net revenues for Nine Months 2020
were RMB101.3 million (US$14.9 million), compared to RMB43.6
million in the prior-year period. Net revenues for the period
include a negative adjustment of RMB18.0 million resulting from the
PPA Adjustment to Net Revenues, as noted above. Revenues from
portfolio training programs were RMB72.4 million, or 71.4% of total
net revenues, during the period. Revenues from other education
services and the K-12 business were RMB28.9 million, or 28.6% of
total net revenues during the period.
Gross profit for Nine Months 2020 was RMB34.1
million (US$5.0 million), compared to RMB15.0 million in the
prior-year period. Gross margin was 33.7% during the period,
compared to 34.3% in the prior-year period. Excluding the PPA
Adjustment to Net Revenues stated above, gross margin for Nine
Months 2020 would have been 43.7%.
Total operating expenses for Nine Months 2020
were RMB116.1 million (US$17.1 million), compared to RMB77.3
million in the prior-year period, which included only two months of
expenses related to Huanqiuyimeng operations as control
transitioned to ACG on August 6, 2019.
Loss from continuing operations for Nine Months
2020 was RMB81.5 million (US$12.0 million), compared to RMB61.7
million in the prior-year period as a result of the increased
operating expenses, which were partially offset by the increase in
gross profit mentioned above.
Net loss from continuing operations attributable
to ACG for Nine Months 2020 was RMB33.3 million (US$4.9 million),
compared to RMB56.3 million in the prior-year period.
For Nine Months 2020, basic and diluted losses
from continuing operations per common share attributable to ACG
were both RMB 0.60 (US$0.09), compared to RMB1.24 for the
prior-year period. Basic and diluted losses from continuing
operations per ADS attributable to ACG were both RMB 1.20
(US$0.18), compared to RMB2.48 in the prior-year period.
Non-GAAP Measures
Adjusted net income attributable to ACG for
Third Quarter 2020, which excludes share-based compensation expense
and foreign currency exchange loss (non-GAAP), was RMB19.7 million
(US$2.9 million), compared to adjusted net loss of RMB23.3 million
in the prior-year period.
Basic and diluted earnings per common share
attributable to ACG excluding share-based compensation expense and
foreign currency exchange loss (non-GAAP) for Third Quarter 2020,
were RMB0.29 (US$0.04). Basic and diluted earnings per ADS
attributable to ACG excluding share-based compensation expense and
foreign currency exchange loss (non-GAAP) for Third Quarter 2020
were RMB0.58 (US$0.08).
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 Third Quarter
2020 was 32.1 million. Each ADS represents two common shares.
Balance Sheet Highlights
As of September 30, 2020, ACG’s cash and cash
equivalents were RMB111.9 million (US$16.5 million), working
capital deficit was RMB134.9 million (US$19.9 million), and total
shareholders’ equity was RMB259.8 million (US$38.3 million);
compared to cash and cash equivalents of RMB154.2 million, working
capital deficit of RMB81.3 million, and total shareholders’ equity
of RMB305.6 million, respectively, as of December 31,
2019.
Update on Share Repurchase
Program
In May 2020, ACG’s Board of Directors approved a
share repurchase plan authorizing the Company to repurchase up to
US$1.0 million of its issued and outstanding ADSs on the open
market and through privately negotiated transactions. By November
1, 2020, the Company had repurchased 450,337 ADSs at an average
stock price of US$1.2631. This share repurchase plan continues
through December 31, 2020. The Board may suspend or discontinue the
repurchase program at any time. This repurchase program does not
obligate ACG to make additional repurchases at any specific time or
in any specific situation.
Conference Call and Webcast Information
(With Accompanying Presentation)
ACG will host a conference call at
8 p.m. Eastern Time on Thursday, November 12, 2020 (9
a.m. Beijing time on Friday, November 13, 2020), during which
management will discuss the results of the quarter and nine months
ended September 30, 2020. Investors are welcome to send any
questions in advance of the conference call either through the
webcast portal or via email to the Company’s contacts listed
below.
To participate in the conference call, please
use the following dial-in numbers about 10 minutes prior to the
scheduled conference call time:
U.S. & Canada
(Toll-Free): |
+1 (877) 737-7051 |
International (Toll): |
+1 (201) 689-8878 |
|
Local Access |
China: |
(400) 120 2840 |
Hong Kong: |
(800) 965561 |
|
|
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://78449.themediaframe.com/dataconf/productusers/atac/mediaframe/41783/indexl.html.
An accompanying slide presentation in PDF format
will also be made available 30 minutes prior to the conference call
on the same investor relations section of ACG’s website. To listen
to the webcast, please visit ACG’s website a few minutes prior to
the start of the call to register, download, and install any
necessary audio software.
A replay will be available shortly after the
call on the investor relations section of ACG’s website and will
remain available for 90 days.
About ATA Creativity Global
ATA Creativity Global is an international
educational services company focused on providing quality learning
experiences that cultivate and enhance students’ creativity. ATA
Creativity Global offers a wide range of education services
consisting primarily of portfolio training, educational travel,
overseas study counseling and other educational services through
its training center network. For more information, please visit
ACG’s website at www.atai.net.cn.
Cautionary Note Regarding
Forward-looking Statements
This announcement contains forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and as defined in the Private
Securities Litigation Reform Act of 1995.
These forward-looking statements can be
identified by terms such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “forecast,” “future,” “intend,” “look forward
to,” “outlook,” “plan,” “should,” “will,” and similar terms and
include, among other things, statements regarding ACG’s
future growth and results of operations; ACG’s strategy of
becoming a leading international education service provider; ACG’s
plans for mergers and acquisitions generally; the benefits of the
Huanqiuyimeng Acquisition; ACG’s ability to operate efficiently and
maintain continued financial strength under unusual circumstances;
ACG’s growth strategy, anticipated growth prospects and subsequent
business activities; market demand for ACG’s portfolio training
programs and other education services; the impact of the COVID-19
outbreak on ACG and its operations; ACG’s plan and anticipated
benefits of the measures implemented in response to the COVID-19
outbreak; and the implementation, suspension or termination of the
share repurchase program.
The factors that could cause the Company’s
actual financial and operating results to differ from what the
Company currently anticipates may include its ability to develop
and create content that could accommodate needs of potential
students, its ability to provide effective creative related
international education services and control sales and marketing
expenses, its recognition in the marketplace for services it
delivered and branding it established, its ability to integrate the
acquired business, its ability to maintain market share amid
increasing competition, its ability to identify and execute on
M&A opportunities within the education sector, the economy of
China, uncertainties with respect to China’s legal and regulatory
environments, the impact of the COVID-19 outbreak and other factors
stated in the Company’s filings with the U.S. Securities and
Exchange Commission (“SEC”).
The financial information contained in this
release should be read in conjunction with the consolidated
financial statements and related notes included in the Company’s
annual report on Form 20-F for its fiscal year ended
December 31, 2019, and other filings that ACG has made with
the SEC. The filings are available on the SEC’s website
at www.sec.gov and at ACG’s website
at www.atai.net.cn. For additional information on the risk
factors that could adversely affect the Company’s business,
financial conditions, results of operations, and prospects, please
see the “Risk Factors” section of the Company’s Form 20-F for
the fiscal year ended December 31, 2019.
The forward-looking statements in this release
involve known and unknown risks and uncertainties and are based on
current expectations, assumptions, estimates, and projections about
ACG and the markets in which it operates. The Company undertakes no
obligation to update forward-looking statements, which speak only
as of the date of this release, to reflect subsequent events or
circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that its
expectations and assumptions expressed in these forward-looking
statements are reasonable, the Company cannot assure you that its
expectations and assumptions will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results.
Currency Convenience
Translation
The Company’s financial information is stated in
Renminbi (“RMB”), the currency of the People’s Republic of China.
The translations of RMB amounts for the quarter and nine
months ended September 30, 2020, into U.S. dollars are included
solely for the convenience of readers and have been made at the
rate of RMB6.7896 to US$1.00, the noon buying rate as of September
30, 2020, in New York for cable transfers in RMB per U.S. dollar as
set forth in the H.10 weekly statistical release of the Federal
Reserve Board. Such translations should not be construed as
representations that RMB amounts could be converted into U.S.
dollars at that rate or any other rate, or to be the amounts that
would have been reported under U.S. generally accepted accounting
principles (“GAAP”).
About Non-GAAP Financial
Measures
To supplement ACG’s consolidated financial
information presented in accordance with U.S. GAAP, ACG uses the
following non-GAAP financial measures: net income (loss) excluding
share-based compensation expense and foreign currency exchange gain
or loss, and basic and diluted earnings (losses) per common share
and ADS excluding share-based compensation expense and foreign
currency exchange gain or loss.
The presentation of these non-GAAP financial
measures is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP. ACG believes these non-GAAP financial
measures provide meaningful supplemental information about its
performance by excluding share- based compensation expense and
foreign currency exchange gain or loss, which may not be indicative
of its operating performance.
ACG believes that both management and investors
benefit from these non-GAAP financial measures in assessing its
performance and when planning and forecasting future periods. These
non-GAAP financial measures also facilitate management’s internal
comparisons to ACG’s historical performance. ACG computes its
non-GAAP financial measures using a consistent method
from period to period. ACG believes these non-GAAP financial
measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using non-GAAP net income (loss) excluding
share-based compensation expense and foreign currency exchange gain
or loss and basic and diluted earnings (losses) per common share
and per ADS excluding share-based compensation expense and foreign
currency exchange gain or loss is that share-based compensation
charges and foreign currency exchange gain or loss have been, and
are expected to continue to be for the foreseeable future, a
significant recurring expense in ACG’s business.
Management compensates for these limitations by
providing specific information regarding the GAAP amounts excluded
from each non-GAAP measure. The table captioned “Reconciliations of
Non-GAAP Measures to the Most Comparable GAAP Measures” shown at
the end of this news release has more details on the
reconciliations between GAAP financial measures that are most
directly comparable to the non-GAAP financial measures used by
ACG.
For more information on our company,
please contact the following individuals:
At the Company |
|
Investor Relations |
ATA Creativity Global |
|
The Equity Group Inc. |
Amy Tung, CFO |
|
Carolyne Y. Sohn, Vice
President |
+86 10 6518 1133 x 5518 |
|
415-568-2255 |
amytung@atai.net.cn |
|
csohn@equityny.com |
|
|
|
|
|
Adam Prior, Senior Vice
President |
|
|
212-836-9606 |
|
|
aprior@equityny.com |
|
|
|
ATA CREATIVITY GLOBAL AND SUBSIDIARIES |
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
December 31, |
|
|
September 30, |
|
|
September 30, |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
RMB |
|
|
RMB |
|
|
USD |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
154,197,758 |
|
|
111,864,329 |
|
|
16,475,835 |
|
Accounts receivable, net |
214,591 |
|
|
752,314 |
|
|
110,804 |
|
Subscription receivable |
8,530,931 |
|
|
— |
|
|
— |
|
Prepaid expenses and other current assets |
16,490,369 |
|
|
15,839,853 |
|
|
2,332,958 |
|
Loan receivable, net |
4,126,502 |
|
|
4,028,251 |
|
|
593,297 |
|
Total current assets |
183,560,151 |
|
|
132,484,747 |
|
|
19,512,894 |
|
|
|
|
|
|
|
Long-term investments |
45,726,391 |
|
|
76,217,149 |
|
|
11,225,573 |
|
Goodwill |
200,478,795 |
|
|
194,754,963 |
|
|
28,684,306 |
|
Property and equipment, net |
42,070,794 |
|
|
39,320,610 |
|
|
5,791,300 |
|
Intangible assets, net |
135,599,770 |
|
|
119,144,330 |
|
|
17,548,063 |
|
Right-of-use assets |
40,786,291 |
|
|
34,878,923 |
|
|
5,137,110 |
|
Deferred income tax assets |
11,464,891 |
|
|
1,159,562 |
|
|
170,785 |
|
Other non-current assets |
16,402,750 |
|
|
21,718,104 |
|
|
3,198,731 |
|
Total assets |
676,089,833 |
|
|
619,678,388 |
|
|
91,268,762 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accrued expenses and other payables |
47,747,054 |
|
|
41,366,621 |
|
|
6,092,644 |
|
Short-term loan |
4,991,000 |
|
|
3,500,000 |
|
|
515,494 |
|
Payable for business acquisition |
19,642,082 |
|
|
4,642,082 |
|
|
683,705 |
|
Lease liabilities-current |
20,556,017 |
|
|
15,853,671 |
|
|
2,334,993 |
|
Deferred revenues |
171,880,131 |
|
|
201,988,560 |
|
|
29,749,700 |
|
Total current liabilities |
264,816,284 |
|
|
267,350,934 |
|
|
39,376,536 |
|
|
|
|
|
|
|
Other non-current liabilities |
12,500,120 |
|
|
17,892,422 |
|
|
2,635,269 |
|
Deferred income tax liabilities |
48,241,809 |
|
|
27,112,309 |
|
|
3,993,212 |
|
Total liabilities |
325,558,213 |
|
|
312,355,665 |
|
|
46,005,017 |
|
|
|
|
|
|
|
Mezzanine equity-redeemable non-controlling
interests |
44,896,428 |
|
|
47,566,642 |
|
|
7,005,809 |
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
Common shares |
4,692,312 |
|
|
4,716,675 |
|
|
694,691 |
|
Treasury shares |
(27,737,073 |
) |
|
(31,740,603 |
) |
|
(4,674,886 |
) |
Additional paid-in capital |
560,814,066 |
|
|
561,009,660 |
|
|
82,627,793 |
|
Accumulated other comprehensive loss |
(37,478,167 |
) |
|
(38,838,635 |
) |
|
(5,720,313 |
) |
Retained earnings (accumulated deficit) |
(200,151,065 |
) |
|
(237,694,169 |
) |
|
(35,008,567 |
) |
Total shareholders’ equity attributable to
ACG |
300,140,073 |
|
|
257,452,928 |
|
|
37,918,718 |
|
Non-redeemable non-controlling interests |
5,495,119 |
|
|
2,303,153 |
|
|
339,218 |
|
Total shareholders’ equity |
305,635,192 |
|
|
259,756,081 |
|
|
38,257,936 |
|
Commitments and contingencies |
|
|
|
|
|
Total liabilities, mezzanine equity and shareholders’
equity |
676,089,833 |
|
|
619,678,388 |
|
|
91,268,762 |
|
ATA CREATIVITY GLOBAL AND SUBSIDIARIES |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS) |
|
|
Three-month Period Ended |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
RMB |
|
RMB |
|
USD |
Net revenues |
40,648,907 |
|
|
42,220,208 |
|
|
6,218,365 |
|
Cost of revenues |
26,075,637 |
|
|
26,440,055 |
|
|
3,894,199 |
|
Gross profit |
14,573,270 |
|
|
15,780,153 |
|
|
2,324,166 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Research and development |
2,993,184 |
|
|
1,968,166 |
|
|
289,880 |
|
Sales and marketing |
13,866,071 |
|
|
14,426,538 |
|
|
2,124,799 |
|
General and administrative |
23,967,626 |
|
|
16,023,050 |
|
|
2,359,940 |
|
Total operating expenses |
40,826,881 |
|
|
32,417,754 |
|
|
4,774,619 |
|
Other operating income, net |
105,184 |
|
|
125,020 |
|
|
18,413 |
|
Loss from operations |
(26,148,427 |
) |
|
(16,512,581 |
) |
|
(2,432,040 |
) |
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
Investments loss |
(7,850 |
) |
|
(655,016 |
) |
|
(96,473 |
) |
Impairment loss from investment |
(5,919,198 |
) |
|
(1,576,391 |
) |
|
(232,177 |
) |
Change in fair value of long-term investment |
— |
|
|
34,131,246 |
|
|
5,026,989 |
|
Interest income, net of interest expenses |
504,175 |
|
|
233,578 |
|
|
34,402 |
|
Foreign currency exchange gain (loss), net |
(35,926 |
) |
|
(65,748 |
) |
|
(9,684 |
) |
Income (loss) before income taxes |
(31,607,226 |
) |
|
15,555,088 |
|
|
2,291,017 |
|
Income tax benefit |
(3,395,225 |
) |
|
(2,559,069 |
) |
|
(376,910 |
) |
Net income (loss) |
(28,212,001 |
) |
|
18,114,157 |
|
|
2,667,927 |
|
|
|
|
|
|
|
Net loss attributable to redeemable non-controlling interests |
(832,023 |
) |
|
(467,589 |
) |
|
(68,868 |
) |
Net loss attributable to non-redeemable non-controlling
interests |
(2,146,674 |
) |
|
(697,873 |
) |
|
(102,786 |
) |
Net income (loss) attributable to
ACG |
(25,233,304 |
) |
|
19,279,619 |
|
|
2,839,581 |
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
Foreign currency translation adjustment, net of nil income
taxes |
1,767,000 |
|
|
(2,933,928 |
) |
|
(432,121 |
) |
Comprehensive income
(loss)
attributable to ACG |
(23,466,304 |
) |
|
16,345,691 |
|
|
2,407,460 |
|
|
|
|
|
|
|
Basic and diluted earnings
(losses) per common share attributable to ACG |
(0.51 |
) |
|
0.28 |
|
|
0.04 |
|
Basic and diluted earnings
(losses) per ADS attributable to ACG |
(1.02 |
) |
|
0.56 |
|
|
0.08 |
|
ATA CREATIVITY GLOBAL AND SUBSIDIARIES
UNAUDITED |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS) |
|
|
Nine-month Period Ended |
|
September30, |
|
|
September 30, |
|
|
September30, |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
RMB |
|
RMB |
|
USD |
Net revenues |
43,631,500 |
|
|
101,319,831 |
|
|
14,922,798 |
|
Cost of revenues |
28,674,651 |
|
|
67,184,166 |
|
|
9,895,158 |
|
Gross profit |
14,956,849 |
|
|
34,135,665 |
|
|
5,027,640 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Research and development |
9,354,973 |
|
|
6,374,836 |
|
|
938,912 |
|
Sales and marketing |
17,045,082 |
|
|
35,872,541 |
|
|
5,283,454 |
|
General and administrative |
50,856,838 |
|
|
73,842,659 |
|
|
10,875,848 |
|
Total operating expenses |
77,256,893 |
|
|
116,090,036 |
|
|
17,098,214 |
|
Other operating income, net |
562,085 |
|
|
471,955 |
|
|
69,511 |
|
Loss from continuing operations |
(61,737,959 |
) |
|
(81,482,416 |
) |
|
(12,001,063 |
) |
Other income
(expense): |
|
|
|
|
|
Investments loss |
(7,850 |
) |
|
(1,779,478 |
) |
|
(262,089 |
) |
Impairment loss of long-term investments |
(5,919,198 |
) |
|
(1,576,391 |
) |
|
(232,177 |
) |
Change in fair value of long-term investment |
— |
|
|
34,131,246 |
|
|
5,026,989 |
|
Interest income, net of interest expenses |
2,604,306 |
|
|
884,670 |
|
|
130,298 |
|
Foreign currency exchange gain (loss), net |
(21,174 |
) |
|
(126,772 |
) |
|
(18,671 |
) |
Loss from continuing operations before income
taxes |
(65,081,875 |
) |
|
(49,949,141 |
) |
|
(7,356,713 |
) |
Income tax benefit |
(3,395,225 |
) |
|
(10,732,321 |
) |
|
(1,580,700 |
) |
Loss from continuing operations, net of income
taxes |
(61,686,650 |
) |
|
(39,216,820 |
) |
|
(5,776,013 |
) |
Discontinued
operations: |
|
|
|
|
|
Income from discontinued operations, net of income
taxes |
4,894,198 |
|
|
— |
|
|
— |
|
Net loss |
(56,792,452 |
) |
|
(39,216,820 |
) |
|
(5,776,013 |
) |
Net loss attributable to redeemable non-controlling interests from
continuing operations |
(1,928,862 |
) |
|
(1,615,454 |
) |
|
(237,931 |
) |
Net loss attributable to non-redeemable non-controlling interests
from continuing operations |
(3,462,882 |
) |
|
(4,343,933 |
) |
|
(639,792 |
) |
Net loss attributable to ACG |
(51,400,708 |
) |
|
(33,257,433 |
) |
|
(4,898,290 |
) |
Net loss from continuing operations attributable to
ACG |
(56,294,906 |
) |
|
(33,257,433 |
) |
|
(4,898,290 |
) |
Net income from discontinued operations attributable to
ACG |
4,894,198 |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
Foreign currency translation adjustment, net of nil income
taxes |
1,897,146 |
|
|
(1,360,468 |
) |
|
(200,375 |
) |
Comprehensive loss attributable to ACG |
(49,503,562 |
) |
|
(34,617,901 |
) |
|
(5,098,665 |
) |
|
|
|
|
|
|
Basic and diluted losses per
common share attributable to ACG |
(1.14 |
) |
|
(0.60 |
) |
|
(0.09 |
) |
Basic and diluted losses per ADS
attributable to ACG |
(2.28 |
) |
|
(1.20 |
) |
|
(0.18 |
) |
Basic and diluted losses from
continuing operations per common share attributable to ACG |
(1.24 |
) |
|
(0.60 |
) |
|
(0.09 |
) |
Basic and diluted earnings from
discontinued operations per common share attributable to ACG |
0.10 |
|
|
— |
|
|
— |
|
Basic and diluted losses from
continuing operations per ADS attributable to ACG |
(2.48 |
) |
|
(1.20 |
) |
|
(0.18 |
) |
Basic and diluted earnings from
discontinued operations per ADS attributable to ACG |
0.20 |
|
|
— |
|
|
— |
|
RECONCILIATIONS OF NON-GAAP MEASURES |
TO THE MOST COMPARABLE GAAP MEASURES |
|
|
Three-month Period Ended |
|
Nine-month Period Ended |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
|
September 30, |
|
|
2019 |
|
|
2020 |
|
2019 |
|
|
2020 |
|
|
RMB |
|
RMB |
|
RMB |
|
RMB |
GAAP net income (loss)
attributable to ACG |
(25,233,304 |
) |
|
19,279,619 |
|
(51,400,708 |
) |
|
(33,257,433 |
) |
Share-based compensation
expenses |
1,880,228 |
|
|
388,208 |
|
4,782,335 |
|
|
1,384,300 |
|
Foreign currency exchange loss,
net |
35,926 |
|
|
65,748 |
|
21,174 |
|
|
126,772 |
|
Non-GAAP net income (loss)
attributable to ACG |
(23,317,150 |
) |
|
19,733,575 |
|
(46,597,199 |
) |
|
(31,746,361 |
) |
|
|
|
|
|
|
|
|
GAAP earnings (losses) per common
share attributable to ACG |
|
|
|
|
|
|
|
Basic and diluted |
(0.51 |
) |
|
0.28 |
|
(1.14 |
) |
|
(0.60 |
) |
|
|
|
|
|
|
|
|
Non-GAAP earnings (losses) per
common share attributable to ACG |
|
|
|
|
|
|
|
Basic and diluted |
(0.47 |
) |
|
0.29 |
|
(1.04 |
) |
|
(0.58 |
) |
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