Puxin Limited (NEW) Reports Q1 EPS of $0.04 on Revenues of $106.1M

Puxin Limited (NYSE: NEW) reported Q1 EPS of $0.04. Revenue for the quarter came in at $106.1 million.

First Quarter 2020 Financial and Operational Highlights

• Net revenues were RMB751.3 million (US$106.1 million), an increase of 22.0% from RMB615.7 million in the first quarter of 2019.
• Operating income was RMB3.7 million (US$0.5 million), compared to operating loss of RMB136.5 million in the first quarter of 2019.
• Adjusted operating income[1] was RMB12.1 million (US$1.7 million), compared to adjusted operating loss of RMB41.8 million in the first quarter of 2019.
• Net loss attributable to Puxin Limited was RMB43.5 million (US$6.1 million), a decrease of 82.5% from RMB248.8 million in the first quarter of 2019.
• Adjusted net income attributable to Puxin Limited[2] was RMB25.4 million (US$3.6 million), compared to adjusted net loss attributable to Puxin Limited of RMB73.8 million in the first quarter of 2019.
• Adjusted EBITDA[3] was RMB65.0 million (US$9.2 million), compared to RMB(16.9) million in the first quarter of 2019.
• Student enrollments increased by 133.4% to 938,275 from 402,061 in the first quarter of 2019.

Mr. Yunlong Sha, Chairman and Chief Executive Officer of Puxin, commented, "It has been an unusual quarter for both Puxin and China's education industry. We are deeply grateful to the tens of thousands of medical professionals and volunteers on the frontline who have worked tirelessly to contain the coronavirus, and to all the citizens that have cooperated with the government and made tremendous sacrifices during the quarantine period, especially those in Wuhan. We are glad to see a gradual return to normalcy here in China, especially appreciative of the individuals who have kept essential services up and running during this challenging period. Puxin has also reacted quickly to the outbreak through collaboration with the Institute of Psychology, Chinese Academy of Sciences and iGet College (Dedao Daxue) to provide much-needed counseling services during this stressful time. We are proud to be able to give back at a time of challenging circumstances and are determined to get through this crisis together with our students and their families."

Mr. Yunlong Sha continued, "In the first quarter of 2020, we successfully transitioned the offline courses to an online format. We have not only ensured that our students can complete the coursework with high satisfaction, but we have also provided an opportunity for our teachers to master the skills required for teaching small group classes online. This has further enhanced the professional development of our teaching staff for our Online-Merge-Offline (OMO) strategy. We are confident in our abilities to remain one of the leading service providers for China's K-12 tutoring market."

Mr. Peng Wang, Chief Financial Officer of Puxin, commented, "During the first quarter of 2020, Puxin swiftly adjusted class scheduling and enhanced online teaching capabilities. Within this quarter, our total net revenue achieved a solid growth of 22.0% year-over-year to RMB751.3 million and the gross profit increased by 25.3% year-over-year to RMB351.1 million. We appreciate the recognition from our students as we are pleased to report total enrollments of 938,275, which was a 133.4% year-over-year increase, and the retention rate reached 80.5% this quarter. The outlook for the second quarter is optimistic as the full-time schools are resuming classes and we expect our K-12 tutoring services to be reinvigorated. In the long-term, Puxin will continue to explore the full potential of Puxin Business System, to elevate our teaching quality, to drive revenue success with organic growth, M&As, and our OMO strategy. We firmly believe that Puxin will convert challenges into opportunities."

"In the next 1-2 years, Puxin will continue to develop its core capabilities and establish a profitable and sustainable growth model. We aim to achieve flexible deployment of assets and talent of our K-12 tutoring business which has a business model with proven track record and transferable approach to enhancing profitability. This strategy is fundamental to the success of our company and the realization of shareholder values," Mr. Peng Wang added.

Business Outlook

The beginning of 2020 was challenging for after-school education industry due to the outbreak of the novel coronavirus. As a result of the impact of the coronavirus outbreak, we have lowered our expectations for growth in the second quarter of 2020. Based on the information available as of the date of this press release, the Company expects net revenues for the second quarter of 2020 to be between RMB620.3 million and RMB651.9 million, which represents a decrease of 2% to an increase of 3% year-over-year. These forecasts reflect the Company's current and preliminary views on the market and operational conditions, which are subject to change.

For earnings history and earnings-related data on Puxin Limited (NEW) click here.

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