Skillful Craftsman Announces Financial Results for The First Six Months of Fiscal Year 2022
First Six Months of Fiscal Year 2022 Financial and Operational Highlights
All financial figures are in US Dollars unless otherwise noted.
- Revenue was
$11.9 million , compared with$15.3 million for the same period of last year, representing a 23% decrease, primarily due to a decrease in the number of total fee-paying members resulting from the decline in training needs of workers from rural area as the urbanization continued.
- Gross profit was
$3.6 million , compared with$8.5 million for the same period of last year, representing a 58% decrease. The decrease was mainly due to the combined effect of the decrease in revenue and an increase in cost of revenue as the Company incurred increased fees in courseware, software copyrights and virtual simulation in connection with its efforts to shift target customers to students at vocational schools.
- Gross profit margin was 30%, compared with 55% for the same period of last year. The main reason was the cost spent in platform upgrade and courses enrichment did not result in the expansion of customer base to the extent expected.
- Net loss was
$43.3 thousand , compared with net income of$4.4 million for the same period of last year. The decrease was due to the decrease in revenue, an increase in the cost of revenue and an increase in general and administrative expenses.
- Basic and diluted earnings per share were
$0.00 , compared with$0.44 for the same period of last year.
- Total fee-paying members(1) was 1.1 million, compared with 3.3 million during the same period of last year, representing a 68% decrease. The decrease was primarily due to the combined effect of (i) the shrinking training needs of workers from rural area as a result of the development of urbanization, and (ii) unsatisfactory acquisition of new customers among students at vocational schools, who nowadays tend to be more interested in mobile live streaming and short video training courses than the personal computer courses offered by the Company.
(1) Number of fee-paying members is defined as the total number of members that are paying fees for accessing our platforms as of the end of the applicable period. |
Mr.
First Six Months of Fiscal Year 2022 Financial Results
All figures refer to the first six months of fiscal year 2022 ended
Revenue
Revenue decreased by 23% to
Cost of Revenue
Cost of revenue increased by 21% to
Gross Profit and Gross Margin
Gross profit decreased by 58% to
Gross margin decreased by 25 percentage points to 30%, from 55% for the same period of last year. The main reason was the cost spent in platform upgrade and courses enrichment did not result in the expansion of customer base to the extent expected.
Operating Expenses
Operating expenses increased by 27% to
Sales and marketing expenses decreased by 18% to
General and administrative expenses increased by 53% to
Income Before Tax
Income before tax expense decreased by 90% to
Net (loss)/Income
Net loss was
Basic and diluted earnings per share were
Cash and Cash Equivalents
As of
Cash Flow
Net cash generated from operating activities was
Net cash provided by investing activities was
Net cash generated from financing activities was nil, compared with
About Skillful Craftsman
Skillful Craftsman is an education technology company that provides interactive online vocational training and virtual simulation experimental training courses. The Company began operations in
Safe Harbor Statement
This report contains "forward-looking statements" for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that represent our beliefs, projections and predictions about future events. All statements other than statements of historical fact are "forward-looking statements," including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management's beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as "may", "will", "should", "could", "would", "predicts", "potential", "continue", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar expressions, as well as statements in the future tense, identify forward-looking statements.
Forward-looking statements are based on information available at the time those statements are made and management's belief as of that time with respect to future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Such risks, uncertainties, and other factors include, but are not limited to, our ability to improve launch and leverage new technologies and cooperative relationships or anticipate market demand in a timely or cost-effective manner, and those factors discussed under the headings "Risk Factors", "Operating and Financial Review and Prospects," and elsewhere in our Annual Report on Form 20-
For investor and media enquiries, please contact:
Skillful Craftsman
Investor Relations Department
Email: iredtk@kingwayedu.cn
Ascent Investor Relations LLC
Tel: +1 917-609-0333
Email: tina.xiao@ascent-ir.com
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CONSOLIDATED BALANCE SHEETS |
|||||||
(Amounts in US$, except for number of shares) |
|||||||
As of |
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|
|
||||||
(Unaudited) |
(Audited) |
||||||
ASSETS |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
23,712,359 |
$ |
17,453,360 |
|||
Accounts receivable, net |
50,246 |
83,980 |
|||||
Prepayments |
2,903,533 |
1,784,537 |
|||||
Other receivables |
186,325 |
5,713,192 |
|||||
Total current assets |
26,852,463 |
25,035,069 |
|||||
Non-current assets |
|||||||
Long-term investment |
306,498 |
- |
|||||
Property and equipment, net |
12,462,098 |
13,725,957 |
|||||
Intangible assets, net |
17,144,418 |
20,416,461 |
|||||
|
4,581,112 |
- |
|||||
Long-term prepayments and other non-current assets |
- |
28,406 |
|||||
Total non-current assets |
34,494,126 |
34,170,824 |
|||||
TOTAL ASSETS |
$ |
61,346,589 |
$ |
59,205,893 |
|||
LIABILITIES |
|||||||
Current liabilities |
|||||||
Accounts payable |
$ |
122,119 |
$ |
113,707 |
|||
Taxes payable |
292,532 |
448,485 |
|||||
Amounts due to a related party |
5,764 |
257,037 |
|||||
Accrued expenses |
920,665 |
1,051,929 |
|||||
Deferred tax liabilities |
43,234 |
- |
|||||
Deferred revenue-current |
9,270,561 |
11,456,667 |
|||||
Total current liabilities |
10,654,875 |
13,327,825 |
|||||
Non-current liabilities |
|||||||
Deferred revenue-noncurrent |
- |
312,896 |
|||||
Total non-current liabilities |
- |
312,896 |
|||||
TOTAL LIABILITIES |
$ |
10,654,875 |
$ |
13,640,721 |
|||
COMMITMENTS AND CONTINGENCIES |
- |
- |
|||||
SHAREHOLDERS' EQUITY |
|||||||
Ordinary shares, par value |
2,980
|
2,400
|
|||||
shares authorized; 14,900,000 and 12,000,000 shares issued |
|||||||
and outstanding as of |
|||||||
2021, respectively |
|||||||
Additional paid-in capital |
18,055,407 |
13,415,987 |
|||||
Statutory reserve |
746,323 |
745,590 |
|||||
Accumulated profits |
30,375,080 |
30,419,177 |
|||||
Accumulated other comprehensive income |
1,511,924 |
982,018 |
|||||
TOTAL SHAREHOLDERS' EQUITY |
50,691,714 |
45,565,172 |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
61,346,589 |
$ |
59,205,893 |
|
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
|||||||
(Amounts in US$, except for number of shares) |
|||||||
For the six months ended |
|||||||
|
|||||||
2021 |
2020 |
||||||
(Unaudited) |
(Unaudited) |
||||||
Revenue |
$ |
11,851,792 |
$ |
15,313,780 |
|||
Cost of revenue |
(8,255,007) |
(6,826,879) |
|||||
Gross income |
3,596,785 |
8,486,901 |
|||||
Operating expenses: |
|||||||
Selling and marketing expenses |
(720,191) |
(879,812) |
|||||
General and administrative expenses |
(2,293,011) |
(1,499,774) |
|||||
Total operating expenses |
(3,013,202) |
(2,379,586) |
|||||
Income from operations |
583,583 |
6,107,315 |
|||||
Interest income |
31,237 |
30,292 |
|||||
Investment loss |
(1,897) |
- |
|||||
Government grant |
493 |
- |
|||||
Foreign currency exchange loss |
(48,819) |
- |
|||||
Loss on disposals of equipment |
(54,147) |
- |
|||||
Other expenses, net |
(2,147) |
(909) |
|||||
Income before income taxes |
508,303 |
6,136,698 |
|||||
Income tax expense |
(551,667) |
(1,744,005) |
|||||
Net (loss)/income |
$ |
(43,364) |
$ |
4,392,693 |
|||
Other comprehensive income/(loss): |
|||||||
Foreign currency translation adjustment |
529,906 |
1,246,805 |
|||||
Total comprehensive income |
486,542 |
5,639,498 |
|||||
Net earnings per ordinary share, basic and diluted |
$ |
0.00 |
$ |
0.44 |
|||
Weighted average number of ordinary shares, basic and |
12,475,410 |
10,000,000 |
|
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||
(Amounts in US$) |
|||||||
For the six months ended |
|||||||
2021 |
2020 |
||||||
Cash Flows from Operating Activities |
|||||||
Net (loss)/income |
$ |
(43,364) |
$ |
4,392,693 |
|||
Adjustments to reconcile net profit to net cash provided |
|||||||
by operating activities: |
|||||||
Depreciation of property and equipment |
2,051,081 |
1,657,961 |
|||||
Amortization of intangible assets |
3,948,391 |
3,157,605 |
|||||
Loss from equity-method investment |
1,897 |
- |
|||||
Loss on disposals of equipment |
54,147 |
- |
|||||
Changes in operating assets and liabilities: |
|||||||
Accounts receivables, net |
33,734 |
(24,284) |
|||||
Prepayments and other current assets |
(1,118,873) |
(602,972) |
|||||
Other receivables |
(19,296) |
- |
|||||
Long-term prepayments and other non-current assets |
28,406 |
28,509 |
|||||
Accounts payable |
8,412 |
(149,822) |
|||||
Amounts due to a related party |
(251,273) |
509,012 |
|||||
Deferred revenue |
(2,552,387) |
(2,939,360) |
|||||
Accrued expenses |
(220,164) |
768,911 |
|||||
Taxes payable |
(154,248) |
(213,411) |
|||||
Deferred tax liabilities |
(730) |
- |
|||||
Net cash generated from operating activities |
1,765,733 |
6,584,842 |
|||||
Cash flows from investing activities |
|||||||
Purchase of property and equipment |
(653,189) |
(3,988,249) |
|||||
Purchase of intangible assets |
(209,469) |
(2,254,100) |
|||||
Proceed from redemption of financial assets held for |
5,563,191 |
- |
|||||
trading |
|||||||
Investment in private held company |
(308,385) |
- |
|||||
Purchase of Jisen Information, net of cash acquired |
50,229 |
- |
|||||
Proceed from disposal of equipment |
4,650 |
- |
|||||
Purchases of other investments |
- |
(8,000,000) |
|||||
Net cash generated from/(used in) investing activities |
$ |
4,447,027 |
$ |
(14,242,349) |
|||
Cash flows from financing activities |
|||||||
Proceeds from IPO net off IPO expenses |
- |
13,243,554 |
|||||
Net cash generated from financing activities |
$ |
- |
$ |
13,243,554 |
|||
Effects of foreign currency translation |
46,239 |
(67,122) |
|||||
Net increase in cash and cash equivalents |
6,258,999 |
5,518,925 |
|||||
Cash and cash equivalents at beginning of period |
17,453,360 |
11,931,714 |
|||||
Cash and cash equivalents at end of period |
$ |
23,712,359 |
$ |
17,450,639 |
|||
Supplemental disclosures of cash flow information |
|||||||
Cash paid for income taxes |
$ |
687,877 |
$ |
1,974,038 |
|||
Non cash transactions |
|||||||
Ordinary shares issued for Jisen Information acquisition |
$ |
4,640,000 |
$ |
- |
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