UPDATE: Tarena Int'l (TEDU) Reports 1H20 Loss of $1.60/sh

Tarena Int'l (NASDAQ: TEDU) reported 1H20 EPS of ($1.60). Revenue for the first half fiscal year came in at $89.2 million versus the consensus estimate of $58.85 million.

First Half Fiscal Year 2020 Highlights

• Net revenues decreased by 29.0% year-over-year to RMB626.8 million (US$89.2 million), from RMB882.6 million in the same period in 2019.
• Gross profit decreased by 60.9% year-over-year to RMB122.3 million (US$17.4 million), from RMB312.8 million in the same period in 2019.
• Operating loss was RMB664.7 million (US$94.6 million), compared to an operating loss of RMB646.9 million in the same period in 2019.
• Non-GAAP operating loss, which excluded share-based compensation expenses, was RMB643.4 million (US$91.6 million), compared to non-GAAP operating loss of RMB622.2 million in the same period in 2019.
• Net loss was RMB612.6 million (US$87.2 million), compared to a net loss of RMB625.1 million in the same period in 2019.
• Non-GAAP net loss, which excluded share-based compensation expenses, was RMB591.3 million (US$84.2 million), compared to a non-GAAP net loss of RMB600.4 million in the same period in 2019.
• Basic and diluted loss per American Depositary Share ("ADS") was RMB11.29 (US$1.6).
• Cash, cash equivalents and time deposits, including current and non-current, and restricted cash totaled RMB414.9 million (US$58.6 million) as of June 30, 2020, compared to RMB621.2 million as of December 31, 2019.
• Deferred revenue totaled RMB1,988.0 million (US$280.8 million) as of June 30, 2020, compared to RMB1,586.0 million as of December 31, 2019, representing an increase of 25.3%.
• Total student enrollments in adult education business, defined as the total number of courses enrolled in by students during that period, including multiple courses enrolled in by the same student, in the first half of 2020 decreased by 18.0% year-over-year to 51,600.
• Total number of learning centers in adult education decreased to 108 as of June 30, 2020, from 130 as of December 31, 2019.
• Total student enrollments in K-12 education programs, defined as the total number of students who attended at least one paid lesson during that period or have deposit balances in their accounts at the end of that period, in the first half of 2020 reached 105,500, increased by 80.7% compared to the first half of 2019, when the K-12 student enrollment was at 58,400.
• Total number of learning centers in K-12 education increased to 232 as of June 30, 2020, from 217 as of December 31, 2019.

"Due to the COVID-19 pandemic, total net revenue decreased by 29.0% from RMB882.6 million for the first half of 2019 to RMB626.8 million (US$89.2 million) for the first half of 2020. To cope with the challenges arising from the pandemic, we have adopted more stringent cost control policies and procedures. Since the second half of last year, we have focused on improving the operational efficiency of our adult education learning centers. We have gradually closed down or combined under-performing learning centers. As a result of the adjustments, although student enrollment of adult education dropped by 18.0% from 62,900 for the first half of 2019 to 51,600 for the first half of 2020, student enrollment per learning center increased by 7.9% from 443 for the first half of 2019 to 478 for the first half of 2020. Since February 2020, we have successfully transferred more than 90% of our adult education students to online lessons, where we use the "study at home plus dual teachers real-time broadcasting" teaching mode. During the period from February to May this year, all of our K-12 education learning centers were temporarily closed. We have worked to transfer K-12 students from offline classes to online lessons, and successfully transferred more than 60% of them. In the first half of 2020, our K-12 education student enrollment number reached 105,500 while in the first half of 2019, we reached a total K-12 student number of 58,400." remarked Mr. Yongji Sun, the CEO of Tarena.

"For the rest of 2020, we will continue to focus on improving our learning centers' operational efficiency, increasing per capita productivity and implementing effective cost and expenses controls. We do not plan to open new learning center in the second half of this year. Returning to profitability is our goal. We believe COVID-19 can be properly controlled and contained in China. Since June 2020, approximately 90% of our learning centers have been re-opened and resumed normal business. With that, we expect that our business performance will gradually improve." concluded Mr. Sun.

"Our cash and cash equivalents and time deposits, including current and non-current, decreased by 33.2%, from RMB621.2 million as of December 31, 2019 to RMB414.9 million (US$58.6 million) as of June 30, 2020. The decrease in cash and cash equivalents and time deposits, including current and non-current, was mainly due to net cash used in operating activities which mainly composed of net loss of RMB612.6 million incurred in the first half of 2020, and was partially offset by the increase in total deferred revenue of RMB402.0 million." said Kelvin Lau, the CFO of Tarena.

For earnings history and earnings-related data on Tarena Int'l (TEDU) click here.

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