China Liberal Education Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2021 – PRNewswire

BEIJING, Dec. 3, 2021 /PRNewswire/ -- China Liberal Education Holdings Limited (Nasdaq: CLEU) ("China Liberal", or the "Company", or "we"), aChina-based company that provides smart campus solutions and other educational services, today announced its financial results for the first six months of fiscal year 2021.

Ms.Ngai Ngai Lam, Chairwoman and CEO of China Liberal, commented, "We still delivered respectable results in the first half of the fiscal year 2021, although the ongoing uncertainties associated with the COVID-19 pandemic caused many Chinese universities and colleges to hold off on their 'smart campus' project plans. Through our efforts and dedication, we achieved highly resilient financial results while prioritizing our customers during the pandemic. For the first half of fiscal year 2021, our revenue decreased by 18.5% year-over-year to $1.85 million from $2.27 million for the same period last year. However, our gross profit reached $1.37 million, an increase of 74.3% from $0.79 million for the same period of last year, and our gross margin was 74.2%, a year-over-year increase of 39.5% from 34.7% for the same period of last year. We are also excited about our business progress of integration of enterprises and vocational education business(tailored job readiness training services). To address the actual needs of regional economic development and industrial upgrading and transformation, we provided colleges and universities with school-enterprise integrated education solutions. We strived to establish a talent training system and a comprehensive platform, providing talent trainings and co-op opportunities for students. In addition, our self-developed and patented all-in-one teaching machine, AI-Space machine, has been recognized by the market and the industry and installed in several colleges and universities across China, including Beijing Foreign Studies University, Beijing Language and Culture University, and Straits Institute of Minjiang University, laying a solid foundation for our future potential revenue growth. We believe that we are well-positioned for the future with our brand awareness, innovative technologies, and loyal customer base."

First Six Months of Fiscal Year 2021 Financial Highlights

For the Six Months Ended June 30,

($ millions, except per share data)

2021

2020

%Change

Revenue

1.85

2.27

-18.5%

Gross profit

1.37

0.79

74.3%

Gross margin

74.2%

34.7%

39.5%

Income (Loss) from operations

0.30

(0.11)

NM

Operating profit(loss) margin

16.3%

-5.0%

NM

Net income (loss)

0.23

(0.08)

NM

Basic and diluted earnings (loss) per share

0.03

(0.02)

NM

First Six Months of Fiscal Year 2021 Financial Results

Revenue

Revenue decreased by 18.5% year-over-year to $1.85 million for the six months ended June 30, 2021 from $2.27 million for the same period last year. The decrease in revenue was mainly driven by decreased revenue from technological consulting services for smart campus solutions as the Company did not enter into new large "smart campus" project contract with Chinese universities/ colleges during the six months ended June 30, 2021 since continued uncertainties associated with the COVID-19 pandemic caused many Chinese universities/colleges to hold off on their "smart campus" project plans.

For the Six Months Ended June 30,

($ millions)

2021

2020

Revenue

Revenue

Cost of Revenue

Gross Margin

Revenue

Cost of Revenue

Gross Margin

Sino-foreign Jointly Managed Academic Programs

1.42

0.23

84.0%

1.26

0.26

79.2%

Technological Consulting Services for Smart Campus Solutions

0.34

0.19

43.9%

0.93

1.21

-29.3%

Overseas Study Consulting Services

0.03

0.02

29.3%

0.07

0.01

82.9%

Tailored Job Readiness Training Services

0.07

0.04

37.9%

-

-

-

Total

1.85

0.48

74.2%

2.27

1.48

34.7%

For the six months ended June 30, 2021, revenue from sino-foreign jointly managed academic programs increased by $0.16 million, or 12.3%, to $1.42 million, from $1.26 million for the same period last year. This increase was primarily attributed to an increase in the number of students by 173 or 6.5%, to 2,841 students in six months ended June 30, 2021, from 2,668 students in six months ended June 30, 2020. Furthermore, the increase is also attributable to an approximately 9.03% positive impact from foreign currency fluctuation when the average exchange rate used in converting RMB into USD increased from $1 to RMB 7.0416 in the six months ended June 30, 2020 to $1 to RMB 6.4587 in the six months ended June 30, 2021. The increase is partially offset by a 3.3% decrease in average tuition fees. The decrease in average tuition fee was mainly caused by change in student mix enrolled in different academic programs with the universities/ colleges.

Revenue from technological consulting services for smart campus solutions decreased by $0.59 million, or 63.8%, to $0.34 million for the six months ended June 30, 2021, from $0.93 million for the same period last year. The decrease was primarily because the Company did not obtain smart campus projects of large size during the six months ended June 30, 2021. In addition, the continued uncertainties associated with COVID-19 caused many Chinese universities/colleges to hold their "smart campus" project plans.

Revenue from overseas study consulting services decreased by $0.04 million, or 64.2%, to $0.03 million for the six months ended June 30, 2021, from $0.07 million for the same period last year. The decrease was mainly due to the impact of the COVID-19 pandemic which caused certain countries closed its borders and imposed travel restrictions. As a result, the number of students interested in seeking overseas education reduced significantly. A portion of our revenue from overseas study consulting services was recognized when the students received offers and obtained appropriate visas. For the six months ended June 30, 2021, none of the students who participated in overseas consulting services received offers or visas as they have not yet completed their trainings and studies compared to 11 students who received school offers and obtained visas in the same period in 2020.

Revenue from tailored job readiness training services was $0.07 million for the six months ended June 30, 2021, compared with nil for the same period last year. The Company provided tailored job readiness training services to more than 130 students for the six months ended June 30, 2021.

Cost of Revenue

Cost of revenue decreased by $1.00 million, or 67.8%, to $0.48 million for the six months ended June 30, 2021, from $1.48 million for the same period last year, primarily due to the decreased hardware costs of $1.02 million associated with the smart campus projects.

Gross Profit

Gross profit increased by$0.58 million, or 74.3%, to$1.37 millionfor the six months endedJune 30, 2021, from$0.79 millionfor the same period last year, while gross profit margin increased by 39.5%, to 74.2% for the six months endedJune 30, 2020,from 34.7% for the same period last year. The increase in gross profit and gross margin was primarily due to decreased hardware costs associated with the Company's technological consulting service projects.

Operating Expenses

Selling expenses decreased by$53,872, or 41.3%, to$76,593for the six months endedJune 30, 2021, from$130,465for the same period last year. The decrease in selling expenses was primarily attributable to the decrease in the rental and office expenses and depreciation expenses by $54,679 when the Company relocated to a smaller office space.

General and administrative expenses increased by$224,833, or 29.2%, to$995,451for the six months endedJune 30, 2021, from$770,618for the same period last year, primarily due to an increase in salaries and welfares expenses of $74,630 resulting from increased number of administrative employees, an increase in professional services fees of $57,300, an increase in share-based compensation to independent directors of $53,250 and an increase in independent director compensation of $28,419.

Interest Income

Interest income decreased by $22,797 or 27.5%, to $59,973 for the six months ended June 30, 2021, from $82,770 for the same period last year. In connection with the Company's technological consulting services for smart campus projects, the Company recognized financing component resulted from a timing difference between when control is transferred and when the Company collected cash consideration from the customer. For the six months ended June 30, 2021 and 2020, the Company recognized $56,511 and $79,907 interest income in connection with the aforementioned financing component, respectively.

Other Expense

Other expense was $7,249 and $907 for the six months ended June 30, 2021 and 2020, respectively, the increase was due to increased bank charges.

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China Liberal Education Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2021 - PRNewswire