Questions? +1 (202) 335-3939 Login
Trusted News Since 1995
A service for global professionals · Saturday, July 4, 2020 · 520,990,082 Articles · 3+ Million Readers

China Liberal Education Holdings Limited Announces Fiscal Year 2019 Financial Results

/EIN News/ -- BEIJING, CHINA, June 30, 2020 (GLOBE NEWSWIRE) -- China Liberal Education Holdings Limited (Nasdaq: CLEU) (“China Liberal”, or the “Company”, or “we”), an educational services provider in China, today announced its financial results for the fiscal year ended December 31, 2019.

Mr. Jianxin Zhang, Chairman and CEO of China Liberal, commented, “We are excited to announce that we achieved record revenue for fiscal year 2019, which represented a year-over-year increase of 9.3%. The success of our Company continues to be driven by our core values of ‘integrity, professionalism, creativity and innovation’ and our aspiration to help more Chinese students to achieve their academic and professional goal. Our successful IPO in May this year marked an important milestone for both the Company and our shareholders. Going forward, we will continue focusing on investing in technology and leveraging our intellectual property, offering our smart campus solutions to a growing number of partnering schools. In addition, we will expand our focus to include computer science major, continue investing in sales and marketing activities to recruit art students for our one-on-one consulting services, and expanding classroom-based pre-session training services based on our current proven one-on-one consulting.”

Fiscal Year 2019 Financial Highlights

    For the Fiscal Years Ended December 31,
($ millions, except per share data)   2019     2018     %Change
Revenue   5.26     4.81     9.3 %
Gross profit   1.90     2.11     -10.0 %
Gross margin   36.1 %   43.9 %   -7.7 %
Income from operations   0.52     0.82     -37.0 %
Operating profit margin   9.9 %   17.1 %   -7.2 %
Net income   0.44     0.92     -52.6 %
Basic and diluted earnings per share   0.09     0.17     -47.1 %
  • Revenue increased by 9.3% year-over-year to $5.26 million for the fiscal year ended December 31, 2019 from $4.81 million for the prior fiscal year.
  • Gross profit decreased by 10.0% to $1.90 million for the fiscal year ended December 31, 2019 from $2.11 million for the prior fiscal year.
  • Gross margins were 36.1% and 43.8% for the fiscal year ended December 31, 2019 and 2018, respectively.
  • Income from operations was $0.52 million for the fiscal year ended December 31, 2019, compared to income from operations of $0.82 million for the same period of the prior fiscal year. Operating profit margin was 9.9% for the fiscal year ended December 31, 2019, compared to operating profit margin of 17.1% for the prior fiscal year.
  • Net income was $0.44 million for the fiscal year ended December 31, 2019, compared to $0.92 million for the prior fiscal year.
  • Basic and diluted earnings per share were $0.09 for the fiscal year ended December 31, 2019, compared to $0.17 for the prior fiscal year. 

Fiscal Year 2019 Financial Results

Revenue

Revenue increased by 9.3% year-over-year to $5.26 million for the fiscal year ended December 31, 2019 from $4.81 million for the prior fiscal year. The increase revenue was mainly attributable to increased revenue from our technological consulting services for smart campus solutions in 2019 as compared to 2018.

    For the Fiscal Years Ended December 31,
($ millions)   2019    2018 
Revenue   Revenue Cost of Revenue Gross Margin   Revenue Cost of Revenue Gross Margin
Sino-foreign joint managed academic programs   2.48 1.51 39.1 %   2.41 1.16 51.9 %
Textbook and course material sales   0.01 0.01 12.6 %   0.03 0.02 33.3 %
Overseas study consulting services   0.53 0.26 50.9 %   0.55 0.06 89.1 %
Technological consulting services for smart campus solutions   2.23 1.58 29.1 %   1.82 1.46 19.8 %
Total   5.26 3.36 36.1 %   4.81 2.70 43.9 %

For the fiscal year ended December 31, 2019, revenue from sino-foreign jointly managed academic Programs increased by $0.07 million, or 2.9%, to $2.48 million from $2.41 million for the prior fiscal year. The increase was primarily attributable to an increase in average tuition fee of 18.8%, or $158 per student, with FMP and increase in average tuition fee of 11.4% ,or $119 per student, with Strait College as a result of our good reputation, attractive learning environment and strengthened marketing efforts, offset by a decrease in the number of students by 153, or 6.4%, from 2,389 students in fiscal year 2018 to 2,236 students in fiscal year 2019 because we stopped recruiting and enrolling new students into the FUT ISEC Program after the Class of July 2018 graduated. We also suspended recruiting for the NZTC Program after students graduated in July 2019.

Revenue from sales of textbooks and course materials decreased by $0.02 million, or 55.7%, to $0.01 million for the fiscal year ended December 31, 2019 from $0.03 million for the prior fiscal year. The decrease in textbook and course material sales was primarily due to the adjustments made by our partnered schools FMP and Strait College in teaching course content and curriculum settings, as a result of which, FMP and Strait College purchased textbooks and course materials from other vendors in order to match the new curriculum settings. This led to the decrease in our textbook sales in 2019.

Revenue from overseas study consulting services decreased by $0.02 million, or 4.0%, to $0.53 million for the fiscal year ended December 31, 2019 from $0.55 million for the prior fiscal year. The decrease was mainly because a decrease in the number of students pursuing art majors in foreign countries.

Revenue from providing smart campus related technological consulting service increased by $0.41 million, or 22.6%, to $2.23 million for the fiscal year ended December 31, 2019 from $1.82 million for the prior fiscal year. The increase was mainly due to the fact that the number of smart campus projects we undertook increased during 2019.

Cost of revenue

Cost of revenue increased by $0.66 million, or 24.4%, to $3.36 million for the fiscal year ended December 31, 2019, from $2.70 million for the prior fiscal year, primarily due to the increased hardware and software costs of $0.32 million associated with the smart campus projects, and increased salary, welfare and insurance costs for teachers and faculty by $0.18 million because we hired more qualified teachers to provide one-on-one tutoring to the students for our overseas studying consulting services.

Gross profit

Gross profit decreased by $0.21 million, or 10.0%, to $1.90 million for the fiscal year ended December 31, 2019, from $2.11 million for the prior fiscal year, while gross profit margin decreased by 7.8%, from 43.9% in fiscal year 2018 to 36.1% in fiscal year 2019. The decrease in gross profit was primarily due to our decreased revenue from study abroad consulting services when average service fee decreased by 16.0% because of a decrease in the number of students pursuing art majors in foreign countries. In addition, our smart campus related technological consulting services require both hardware and software application and our costs associated with undertaking these projects were relatively high. As more smart campus projects were executed by us in 2019, our gross profit and gross margin decreased.

Operating expenses

Selling expenses decreased by $0.11 million, or 15.7%, to $0.59 million for the fiscal year ended December 31, 2019, from $0.70 million for the prior fiscal year. This decrease in selling expenses was attributable primarily to a decrease in our brand advertising expenses by $15,713, a decrease in salary and employee welfare benefit expenses by $123,670, resulting from cutting down our sales and marketing personnel, offset by an increase in rent expenses by $101,687.

General and administrative expenses increased by $0.20 million, or 35.2%, to $0.78 million for the fiscal year ended December 31, 2019, from $0.58 million for the prior fiscal year, primarily due to an increase in audit fees of $360,000 in connection with the audits and reviews of our financial statements for our initial public offering (“IPO”), offset by a decrease in rent and property management expense by $70,603 and a decrease in office expense by $57,355.

Interest Income

Interest income decreased by $82,806 or 93.1%, to $6,120 for the fiscal year ended December 31, 2019, from $88,926 for the prior fiscal year. In 2018, we advanced a $1,997,726 (RMB13 million) interest bearing short-term loan to a third party Jinjiang Hengfeng Trading Co., Ltd. (“Hengfeng”) as working capital, with interest rate of 5% per annum. As a result, we reported higher interest income on the third-party loan in 2018. In 2019, our interest income primarily related to interest income generated from our bank deposits.

Other Income

We recorded other income of $0.07 million for the fiscal year ended December 31, 2019, compared to $0.18 million for the prior fiscal year. This decrease was primarily due to the decrease in the immediate refund of the levied VAT tax in 2019.

Provision for Income Taxes

Provision for income taxes was $0.16 million for the fiscal year ended December 31, 2019, a decrease of $0.01 million from $0.17 million for the prior fiscal year due to our decreased taxable income.

Net income

Net income was $0.44 million for the fiscal year ended December 31, 2019, compared to net income of $0.92 million for the prior fiscal year. Basic and diluted earnings per share were $0.09 for the fiscal year ended December 31, 2019, compared to $0.17 for the prior fiscal year.

Financial Condition

As of December 31, 2019, the Company had cash of $1.70 million, compared to $2.08 million as of December 31, 2018.

Net cash used in operating activities was $0.34 million for the fiscal year ended December 31, 2019, compared to net cash provided by operating activities of $0.26 million for the prior fiscal year.

Net cash used in investing activities was $0.47 million for the fiscal year ended December 31, 2019, compared to net cash provided by investing activities of $1.88 million for the prior fiscal year.

Net cash provided by financing activities was $439,193 for the fiscal year ended December 31, 2019, compared to $8,094 for the prior fiscal year.

Recent Developments

On May 13, 2020, the Company announced the closing of its IPO of 1,333,333 ordinary shares at a public offering price of $6.00 per share, for total gross proceeds of approximately $8.0 million before deducting underwriting discounts, commissions and other related expenses. The shares commenced trading on the Nasdaq Capital Market on May 8, 2020 under the ticker symbol “CLEU.”

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, visit the company’s website at ir.chinaliberal.com.

Forward-Looking Statements

This document contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. 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. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this press release and other statements made from time to time by us or our representatives might not occur.

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

CONSOLIDATED BALANCE SHEETS

    As of December 31,  
    2019     2018  
ASSETS
CURRENT ASSETS            
Cash   $ 1,702,279     $ 2,077,166  
Accounts receivable, net     518,191       833,174  
Contract receivable, net     1,639,213       960,237  
Advance to suppliers     836,766       19,885  
Deferred initial public offering costs     649,451       -  
Due from a related party     -       72,700  
Prepaid expenses and other current assets     339,260       286,052  
TOTAL CURRENT ASSETS     5,685,160       4,249,214  
                 
Property and equipment, net     77,782       101,205  
Right-of-use lease assets, net     18,372       -  
Contract receivable, net     1,071,826       1,617,186  
TOTAL NON-CURRENT ASSETS     1,167,980       1,718,391  
                 
TOTAL ASSETS   $ 6,853,140     $ 5,967,605  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES                
Accounts payable   $ 51,071     $ 121,558  
Deferred revenue     562,056       149,560  
Taxes payable     404,453       244,142  
Due to related parties     461,633       22,591  
Operating lease liabilities     10,326       -  
Accrued expenses and other current liabilities     178,276       178,175  
TOTAL CURRENT LIABILITIES     1,667,815       716,026  
                 
 Operating lease liabilities, non-current     5,350       -  
TOTAL LIABILITIES     1,673,165       716,026  
                 
COMMITMENTS AND CONTINGENCIES                
                 
SHAREHOLDERS’ EQUITY                
Ordinary shares, $0.001 par value, 50,000,000 shares authorized; 5,000,000 shares issued and outstanding     5,000       5,000  
Additional paid in capital     4,579,116       4,579,116  
Statutory reserve     379,952       294,158  
Retained earnings     528,315       88,967  
Accumulated other comprehensive loss     (312,408 )     (234,237 )
Total China Liberal Education Holdings Limited shareholders’ equity     5,179,975       4,733,004  
Non-controlling interest     -       518,575  
Total shareholders’ equity     5,179,975       5,251,579  
                 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 6,853,140     $ 5,967,605  

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

     For the years ended
December 31,
 
    2019     2018     2017  
                   
REVENUE, NET   $ 5,255,810     $ 4,808,993     $ 3,885,886  
COST OF REVENUE     3,360,694       2,702,297       2,161,322  
GROSS PROFIT     1,895,116       2,106,696       1,724,564  
                         
OPERATING EXPENSES                        
Selling expenses     593,215       704,060       541,424  
General and administrative expenses     783,241       579,500       408,762  
Total operating expenses     1,376,456       1,283,560       950,186  
                         
INCOME FROM OPERATIONS     518,660       823,136       774,378  
                         
OTHER INCOME                        
Interest income     6,120       88,926       70,743  
Other income, net     69,162       180,191       187,794  
Total other income, net     75,282       269,117       258,537  
                         
INCOME BEFORE INCOME TAXES     593,942       1,092,253       1,032,915  
                         
INCOME TAX PROVISION     156,038       167,813       158,109  
                         
NET INCOME     437,904       924,440       874,806  
Less: net income attributable to non-controlling interest     -       81,779       5,800  
NET INCOME ATTRIBUTABLE TO CHINA LIBERAL EDUCATION HOLDINGS LIMITED   $ 437,904     $ 842,661     $ 869,006  
                         
OTHER COMPREHENSIVE INCOME (LOSS)                        
Total foreign currency translation adjustment     (78,171 )     (260,983 )     238,632  
TOTAL COMPREHENSIVE INCOME     359,733       663,457       1,113,438  
Less: comprehensive income (loss) attributable to non-controlling interest     -       (22,871 )     198  
COMPREHENSIVE INCOME ATTRIBUTABLE TO CHINA LIBERAL EDUCATION HOLDINGS LIMITED   $ 359,733     $ 686,328     $ 1,113,240  
                         
EARNINGS PER SHARE                        
Basic and diluted   $ 0.09     $ 0.17     $ 0.17  
                         
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                        
Basic and diluted     5,000,000       5,000,000       5,000,000  

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS

    For the years ended
December 31,
 
    2019     2018     2017  
                   
Cash flows from operating activities                  
Net income   $ 437,904     $ 924,440     $ 874,806  
Adjusted to reconcile net income to cash provided by (used in) operating activities                        
Depreciation and amortization     40,038       45,347       46,649  
Amortization of right-of-use lease assets     2,533       -       -  
Loss from disposal of fixed assets     -       -       22,223  
Changes in operating assets and liabilities:                        
Accounts receivable, net     306,781       (243,769 )     (552,457 )
Contract receivable, net     (176,968 )     (1,848,073 )     (813,737 )
Advance to suppliers     (824,141 )     1,484,014       (1,471,166 )
Deferred initial public offering costs     (650,092 )     -       -  
Due from a related party     72,371       (75,571 )     -  
Prepaid expenses and other current assets     (57,406 )     (130,282 )     (20,178 )
Right-of-use lease asset     (21,062 )     -       -  
Accounts payable     (69,500 )     (42,786 )     121,143  
Deferred revenue     417,987       53,000       (1,847,265 )
Taxes payable     164,879       78,988       (48,262 )
Operating lease liabilities     15,810       -       -  
Accrued expenses and other current liabilities     2,434       16,507       (26,949 )
Net cash provided by (used in) operating activities     (338,432 )     261,816       (3,715,193 )
                         
Cash flows from investing activities                        
Purchase of property and equipment     (17,738 )     (83,515 )     (9,353 )
Acquisition of 8.8228% non-controlling interest in China Liberal Beijing     (453,669 )     -       -  
Repayment of loan receivable     -       1,964,844       443,931  
Loan to a third party     -       -       (1,923,703 )
Collection of an investment deposit     -       -       1,659,491  
Collection of a short-term investment     -       -       2,663,589  
Net cash (used in) provided by investing activities     (471,407 )     1,881,329       2,833,955  
                         
Cash flows from financing activities                        
Capital contribution from non-controlling interest     -       -       453,669  
Proceeds from related party borrowings     439,193       8,094       1,580  
Net cash provided by financing activities     439,193       8,094       455,249  
                         
Effect of changes of foreign exchange rates on cash     (4,241 )     (82,043 )     (4,738 )
Net (decrease) increase in cash     (374,887 )     2,069,196       (430,727 )
Cash, beginning of year     2,077,166       7,970       438,697  
Cash, end of year   $ 1,702,279     $ 2,077,166     $ 7,970  
                         
Supplemental disclosure of cash flow information                        
Cash paid for interest expense   $ -     $ -     $ -  
Cash paid for income tax   $ 18,657     $ 79,830     $ 208,936  
                         
Supplemental disclosure of non-cash investing and financing activities                        
 Transfer of non-controlling interest   $ 87,238     $ -     $ -  
 Right-of-use assets obtained in exchange for operating lease obligations   $ 21,062     $ -     $ -  
Capital restructuring   $ -     $ 2,935,589     $ -  

Primary Logo

Powered by EIN News
Distribution channels: Business & Economy


EIN Presswire does not exercise editorial control over third-party content provided, uploaded, published, or distributed by users of EIN Presswire. We are a distributor, not a publisher, of 3rd party content. Such content may contain the views, opinions, statements, offers, and other material of the respective users, suppliers, participants, or authors.

Submit your press release