Q1 2020 Earnings Call
Good day and welcome to the Piceance Limited first quarter 2020 earnings Conference call.
All participants will be in listen only mode.
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After todays presentation there'll be opportunities last question.
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I would now like to turn the conference over to Chesapeake Gen Investor Relations.
<unk> capital Advisory. Please go ahead.
Thank you operator, Hello, everyone. Thanks for joining pushes first quarter Twentyth once your earnings conference call.
Well if introduction I'm just thinking he left or were they show, especially from institutional kept those flights right.
The IR cobalt people pushing them with it.
We appreciate your time and ongoing interesting fishing.
Okay squeeze out well, where these already today and are available on the company's fourth but as I always thought he XJ white dot com.
Well the call today are we still do long shot.
A copy its founder Chairman and Chief <unk>, Chief Executive Officer I.
I missed.
The Companys Chief Financial Officer.
No well give a brief overview of the company its business operations and highlights.
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Well go through the financials and guidance.
They will both be available to answer your question during the Q when they stationed at fault.
Oh, what we might do that they've called me contain forward looking statements made under the safe Harbor provisions of the probably Securities Litigation Reform Act 1995.
Such statements are based on management's current expectations and current market and operating conditions.
Relate to events that involve known or unknown.
I started these and other factors.
Oh, well each are difficult to predict and they all menil, which are beyond the company's control.
Which may called the company, if actual results performance or achievements to differ materially from both in the forward looking statement.
Well there inflammation regarding these and other risks uncertainties and sector is included in the company's fighting with the U.S. Securities and Exchange Commission.
The company does not undertake any obligation to update any forward looking statement, it's always out of new information.
Sure event or otherwise, except as required and all.
With that I will now turn the call over to Mr. Shao Mr Show will give his remarks in Chinese.
I will translate <unk> English.
Mr Shop. Please go ahead.
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Ladies and gentlemen, good evening and good morning to all thank you for joining pushing limited first quarter Twentytwenty earnings Conference call.
It has a annual called her for both person and try not to education industry.
We are deeply grateful to the tens of thousands of medical professionals and volunteers on the one who have worked tirelessly to come paying the Corona wired.
And so all the students that have cooperated with a goldman and made tremendous sacrifices to read the corn crop cartoons here with.
Especially those in hot.
We are glad to see a gradual return to normalcy here in China.
Especially appreciate is helping individuals who have kept essential services up and running during this challenging feel it.
Was there has also reacted quickly to the Alfredo through collaboration with these disputable psychology, I guess Academy of Sciences, and I I guess publish the adult that's true.
To provide much needed come for you first is doing this stressful time.
In the first quarter off 2020, we successfully transitioned the offline courses during the winter holidays to I don't want all online format.
We have not only in short our students can successfully complete the course work with high satisfaction.
We have also provided an opportunity for teachers must sort of through required to multi someone classes.
This has filtering host the professional development of our kitchen, so for all I'm old stretching.
We have appointed Mr.
So who is also a co founder.
Sure well quick to offer yourself pushing limited.
It certainly has made great contribution to multiple across offline and online businesses.
If there won't be responsible for implementing our on most gradually and for him to where our internal resources.
Oh, I'm afraid you won't see doing this year it.
We have which during this period, we have achieved 80.5, we take your weight.
She said about the same as last year.
Net revenue in the first holder of Twentytwenty increase fytwenty.
2% year over year to R&D RMB 751 million.
Specifically student enrollment continues to be our primary growth engine.
Total student enrollments grew to 938000, an increase of 433.4 year over year.
Parents to 406 out in the same cure rate of 20 Nike.
Gross profit increased by 25.3% year over year and gross profit margin in the first also raised 46.7%.
You achieved positive operating profit of RMB 3.6 flags, meaning in the first quarter.
Parents to the operating loss of RMB 137 million into first quarter all 29.
This is a very impressive result.
Adjusted net income attributable to Cushing limited was RMB 25.4 million.
Compared to adjusted net loss attributable to see some limited wolf foreign be 73.8 medium in the fourth cultural once nicely.
Well the first quarter of Twentytwenty net revenues self pay 12 to 20 business.
Wished foreign B U 546 million.
The increase of 43.6%.
And the student enrollments for Mark Andrew and 24000.
And that's wherever you Oh study abroad services for RMB 200, and Fyfe meeting.
Decreased 12.8 year over year.
This is mainly due to the outbreak of coli nights in western countries, which has led to a more cautious approach some students and parents Wade comes to going abroad.
In addition, the cancellation or overseas examination. This spring has also affected students than two study abroad.
As to Corona Margaret situation continues to disrupt Lyski Europe and the U.S.
We expect that the revenue and profit of Saudi I brought with it will also be equate to be affected your second quarter.
And that's why when he was also she online school in the fourth quarter, all Twentytwenty reached RMB 23.
An increase of.
I would and 127% to 7.8% year over year.
This was partly due to the transitional foreign forces to the only format.
Looking ahead to the second quarter appointed places.
Hey, 12 business will fully recover that's food prices in China, we feel normal operations.
In the next one to two years.
So she will continue to develop well capabilities and establish a profitable and sustainable growth model.
We aim to achieve flexible deployment assets and how does how for people to come business, which has a business model with Cleveland track record and transferable approach to eat healthy profitability.
This strategy is fundamental to success, a whole company and we like they should all shareholder value.
The cold it might say upgrade brought up challenges and opportunities.
I don't fishing industry will evolve and we are confident that pushing well continue to adapt and emerge from this crisis stronger than ever.
Now I will hand, the call over to Mr. won't always CFO, who will walk you through our financial details.
Thank you Jesse Thank you Mr. shop, Hello, Ladies gentlemen, please be reminded at an all now hopefully well be RMB, an old percentage increases won't be it on a year over year basis.
Unless otherwise stated.
It's also referred to earnings release, well detailed information not public inherited financial performance on a year over year basis.
Sorry about the financial results or Twentytwenty.
Net revenues were 751.3 minutes.
An increase of 22%.
Okay. Thank you 19.
The increase was primarily driven by increases each student enrollment.
Student enrollments increased by 100.
33.4%.
She will not be 38000.
402000, either same period between 19.
Net revenue up types, which helps your 20 services increased by 43.6% to 546.3 none.
The first quarter of attention 19th.
In the fish caught up since you're trying to eat a total student enrollment.
Okay to talk to me services reached 952.
Which included.
58 student enrollment, which an online school.
Golf courses are generated.
Revenue rose.
8.4 million.
I wish you all high school, considering that maybe new all 23 minutes.
Personally likes to transport chicken courses country. This net revenue of 168 million.
And 79.9 million, especially corporate Twentytwenty, respectively.
Although we have closed on after learning centers in China.
Separate Twentytwenty response to get married [laughter].
Canada novel chronic virus.
A copy 19, we have focused on offering.
And then you horses online strip and student recruitment.
All right horses offer in the spring semester.
As a result.
Oh student enrollments insights quite a country PRINERGY continues to increase compared to.
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872000.
I think 50 in the fourth quarter after the 19th and a 400 and true.
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60 watt skewed any woman in a safe Harbor 19.
However, the school closures.
How is the diversity.
It could have a student recruitment and of course is gonna be helping to spring semester.
We will incur anniversary.
[laughter] centers condition resolvable operation.
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No revenue.
Excuse me services decreased by 12.8% to two Hopkins 5.0 million.
The first part of 2019.
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First quarter opportunity trenching compared to 17 fallen into first quarter Nike.
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Steering parents.
Nice postponed or even gearbox study abroad plan you to the world wide operate on survivor.
Which makes and continue to mature they are diverse me [laughter] student enrollment and results of operations.
Got you turn business for the remainder of countries.
Cost of revenues.
400.
4.3 million and increased 19.3% from the second part of a turnkey 19.
Hi, how are you to increase you ran its course in aligned with increasing learning centers.
Awesome revenues.
Excluding share based compensation expenses.
But 300.
Not in 99.6 minutes and increased 19.6 person.
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Gross profit was 351 important 61.1 million.
And increased 25.3% from the same care tend to 19.
Well not from glares, 46.7%.
Parents, you, 45.5% oxide <unk> 90.
Total operating expenses were 347.4 million.
Decreased 16.6% from the first quarter 219.
Selling expenses were 230.5 minutes.
I think increased 3.5 person from the first quarter to 19.
Sorry, not cutting expenses, excluding share based compensation expenses.
226.5 million an increase of 5.1%.
Today's call have to do 90.
I mean look Heinrich due to increased marketing expenses.
General and administrative expenses were 116.9 million.
Increased 39.7% from the same pure to 19.
General and administrative expenses, excluding share based compensation expenses.
Well 131 million.
Increased 5% some customers caught up to 90.
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Total share based compensation expenses allocated interrelated.
Revenues and operating expenses.
Increased by 19, 91.1% to 8.4 million from 94.7 million interface offerings like 19.
The decrease was primarily due to last auction faster than the first part of a 20 punchy compare <unk> clock 19.
Operating income was 3.7 million compared to the operating loss Oh Wow.
36.5 million besides caught up in 2019.
Operating margin was zero, 5% comparison that.
92.2% in the same period, you print Tonight.
Operating income how are you from top to between services with 35.0 million compared to operating loss off.
40.17 in the first quarter after the 19th.
Operating margin improved to 6.4% not to 10.5%.
Adjusted operating income was 12.1 non.
Compared to adjusted operating loss.
41.8 minutes in the second part of 290.
Adjusted operating margin was 1.6 <unk> percent compared.
Comcast American.
1.8% and the site Pareto prior year.
Net loss attributable to of course 11 decreased by 882.5% to 43.5 minute.
Basic and diluted net loss per adss attributable to but she limited.
Do you feel quite quite beautiful compared to 3.0 to during the same period to 90.
Adjusted net income attributable to push my luck. It was 25.4 million compared to adjusted net loss attributable machine learning all 73.8 million during the same humorous turnkey 19.
A job basic and diluted net income for 80, I actually just to put kind of.
What do you want to nine.
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He'd be dollars Natchez, Reight point 9 million I'm actually not to 191 cost was 91.9 million affects caught up to 19.
He'd be Dol, how you for child tutoring services was 30.5 million compared to an active.
74.9, my liking the headquarters 19.
EBITDA margin was not going to 0.5% either first quarter twentytwenty compared to knock at 31.2% you assign Pierre <unk> 1990.
Adjusted EBITDA was 65.0 million compared to negative 16.9 million into first quarter 2019.
Adjusted EBITDA margin was 8.6% comparison that 2.7% and the same pure rate even pension 90.
Well move onto the balance sheet.
As of March 31, Twentytwenty accompany have kupol cash cash equivalents.
Current portion that restrict cash our.
And 63.9 million compared to 606 points, but and then as of December 31 tend to 19.
A carton cost enough restrict cash [laughter] I'd rather be talk.
The Chinese commercial banks as collateral for all of a bank borrowings within one year term.
Finally for guidance.
Beginning of a 20 times he was challenging for office, where do you actually candidates.
Due to the op break often mobile around the virus.
As a result.
Currently virus outbreak.
We haven't lowered our expectation called growth in the second quarter of Twentytwenty.
So he's going to need from nice number level.
Right.
Hi release.
I'm going to expect net revenue for the second quarter, often get turnkey to be between.
600, I'm trying to keep Brennan.
661.9 11.
Which represents do crazy trying to keep for a 2% today increase of three person you over here.
They will reflect the company's current and preliminary views on the market and personal condition, which are subject for trends.
This concludes our prepared remarks, I'll turn the call over to the operator and open the call culinary.
Operator, we're ready for taking questions.
Thank you.
We'll now begin the question answer session.
You asked a question you May Press Star then one on your Touchtone phone.
If you're using a speakerphone please pick up your handset before passing the keys.
Withdraw your question. Please press Star then too.
At this time, we will pause momentarily to assemble our roster.
My first question comes from.
All easily with Citigroup. Please go ahead.
Oh, the global economy, So Oh gosh digital the T., but Oh debenture don't you enjoy job going through a ticket DRG two <unk> corn I kind of what does show the you cheap actually somebody else.
Usually okay sure. She had shown how would you go do show you.
How did your before that's fine job choose your comment that guy to garner some younger okay. Let me translate my question.
Regarding the Q2 revenue guidance could imagine men's give more color on the girls although by segments.
Well, the K 12, Pucci online school as well as well as these study abroad tree in service.
In the meantime, or do how little color on the ASP trends by segments as well. Thank you.
Okay. Thank you for production [laughter] first question as to the color. The Guy that is Oh, the second quarter, we expect the taste metallic segment to be either.
A breakeven I mean, the growth rate or blithely increases compared with the second quarter of last year.
And we also expect they study abroad Testament to be a decreasing.
Compared to the same pure written blocks to your because of Oh I mention just now the outbreak up though the virus.
The dynamic is still there with the I'll say that.
English speaking countries so.
The general break down all the.
The guidance for the second quarter, but your second question as to the E.S.P. all the pricing.
We are not expecting.
In.
<unk> com to above current customers all the cost immersing Eva coming summer programs.
When things are experiencing yourself.
Programs offered during the first quarter.
Wind turbine Hasan programs and the brain.
The first half the up the spring up her back.
We are very confident that.
Students customers the up pretty satisfied with the poly to either teaching services saw pushing without the online small group classes. So.
We we don't need to eat docs Uh huh.
So.
Yeah, that's all thank you.
Okay. Thank you.
Oh, My God, if you'd like to ask a question. Please press Star then one.
There were no further questions I would like to turn the conference back over to just be Jim for any closing remarks.
Okay. Thank you operator in closing on behalf of the entire management team up who would like to thank you again for your participation in today's call. If you have any further inquiries in the future. Please feel free to contact us at pushing dot I see a show dotcom. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.