CLPS Incorporation Reports Financial Results for the First Half of Fiscal Year 2020
First Half of Fiscal 2020 Highlights (all results compared to the six months ended
- Revenues increased by 38.2% to
$42.6 million from$30.8 million . - Gross profit increased by 37.7% to
$15.4 million from$11.2 million . Gross margin remained relatively flat at 36% compared to the prior year period. - Net income attributable to CLPS Incorporation's shareholders was
$2.4 million , or$0.17 basic and diluted earnings per share, compared to net loss attributable to CLPS Incorporation's shareholders of$1.4 million , or$0.10 basic and diluted losses per share. - Non-GAAP net income attributable to CLPS Incorporation's shareholders[1] increased by 33.1% to
$3.4 million , or$0.24 basic and diluted earnings per share, compared to$2.6 million , or$0.19 basic earnings per share and$0.18 diluted earnings per share (See Use of Non-GAAP Financial Measures below for a discussion of such measures as used in this press release).
Mr.
"For the remainder of the fiscal year,
Ms.
First Half of Fiscal Year 2020 Financial Results
Revenues
In the first half of fiscal 2020, revenues increased by
Revenues by Service
- Revenue from IT consulting services increased by
$11.8 million , or 39.8%, to$41.6 million and accounted for 97.7% of total revenue in the first half of fiscal 2020 from$29.8 million , or 96.6% of total revenue, in the same period of the previous year. The increase was primarily due to increased demand from existing and new clients. For the six months endedDecember 31, 2019 and 2018, 41.3% and 50.3% of IT consulting services revenue were from international banks, respectively. - Revenue from customized IT solution services decreased by
$0.2 million , or 25.9%, to$0.7 million in the first half of fiscal 2020 from$0.9 million . - Revenue from other services increased to
$0.3 million in the first half of fiscal year 2020 from$0.1 million in the same period of the previous year.
Revenues by Geography
- Revenue from overseas services increased by 179.5% to
$4.3 million in the first half of fiscal year 2020 from$1.5 million in the same period of the previous year. Overseas revenue accounted for 10.1% of total revenue compared to 5.0% in the prior year period. The increase in overseas revenue reflects the Company's successful and continuous global expansion strategy.
Gross Profit and Gross Margin
Gross profit increased by
Operating Expenses
Selling and marketing expenses increased by
Research and development expenses increased by
General and administrative expenses decreased by
Operating Income
Operating income increased by
Provision for Income Taxes
Provision for income taxes increased by
Net Income and EPS
Net income increased by
Cash Flow
As of
Net cash provided by operating activities was approximately
For the six months ended
Net cash used in financing activities was approximately
Financial Outlook
For fiscal year 2020, the Company expects, absent material acquisitions or non-recurring transactions, total sales growth in the range of approximately 30% to 35%, net income to turn profitable, and non-GAAP net income growth in the range of approximately 30% to 35% compared to fiscal year 2019 financial results. The foregoing guidance includes estimated 2020 financial results of the
This forecast reflects the Company's current and preliminary views, which are subject to change and are subject to risks and uncertainties, including, but not limited to, potential accounting adjustments attributable to
Exchange Rate
The balance sheet amounts with the exception of equity as of
About CLPS Incorporation
Headquartered in
Forward-Looking Statements
Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company's control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All such statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties related to the Company's financial and operational performance in the first half of 2020, its expectations of the Company's future performance, its preliminary outlook and guidance offered in this presentation, as well as the risks and uncertainties described in the Company's most recently filed
Use of Non-GAAP Financial Measures
The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with
Contact:
CLPS Incorporation
Email: ir@clpsglobal.com
[1] Non-GAAP net income attributable to CLPS Incorporation's shareholders is a non-GAAP financial measure, which is defined as net income attributable to the Company excluding share-based compensation expenses. Please refer to the section titled "Reconciliation of GAAP and Non-GAAP Results" for details. |
[2] Non-GAAP general and administrative expenses is a non-GAAP financial measure, which is defined as general and administrative expenses excluding share-based compensation expenses. Please refer to the section titled "Reconciliation of GAAP and Non-GAAP Results" for details. |
[3] Non-GAAP net income is a non-GAAP financial measure, which is defined as net income excluding share-based compensation expenses. Please refer to the section titled "Reconciliation of GAAP and Non-GAAP Results" for details. |
CLPS INCORPORATION |
||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(Amounts in |
||||||
As of December |
As of June |
|||||
ASSETS |
||||||
Current assets |
||||||
Cash and cash equivalents |
$ |
11,234,260 |
$ |
6,601,335 |
||
Short-term investments |
- |
1,791,697 |
||||
Accounts receivable, net |
20,857,441 |
19,263,584 |
||||
Escrow receivable |
200,000 |
200,000 |
||||
Prepayments, deposits and other assets, net |
1,998,499 |
1,028,154 |
||||
Prepaid income tax |
524,352 |
630,790 |
||||
Amount due from related parties |
252,706 |
230,540 |
||||
Total Current Assets |
35,067,258 |
29,746,100 |
||||
Property and equipment, net |
471,886 |
566,591 |
||||
Intangible assets, net |
1,240,490 |
427,769 |
||||
|
2,184,001 |
447,790 |
||||
Prepayments, deposits and other assets, net |
220,661 |
222,507 |
||||
Long-term investments |
1,102,691 |
914,006 |
||||
Deferred tax assets, net |
251,912 |
338,221 |
||||
Total Assets |
$ |
40,538,899 |
$ |
32,662,984 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
Current liabilities |
||||||
Short-term bank loans |
$ |
802,514 |
$ |
2,184,996 |
||
Accounts payable and other current liabilities |
845,032 |
196,832 |
||||
Tax payables |
1,178,472 |
915,629 |
||||
Deferred subsidies |
- |
109,250 |
||||
Contract liabilities |
1,241,706 |
- |
||||
Deferred revenue |
- |
124,192 |
||||
Salaries and benefits payable |
10,789,713 |
7,735,487 |
||||
Amounts due to related parties |
161,864 |
- |
||||
Deferred tax liabilities |
192,127 |
- |
||||
Total Current Liabilities |
15,211,428 |
11,266,386 |
||||
Commitments and Contingencies |
||||||
Shareholders' Equity |
||||||
Common share, |
1,425 |
1,391 |
||||
Additional paid-in capital |
25,648,785 |
24,276,622 |
||||
Statuary reserves |
2,331,138 |
1,833,802 |
||||
Accumulated deficit |
(2,776,767) |
(4,509,729) |
||||
Accumulated other comprehensive loss |
(960,744) |
(813,650) |
||||
Total CLPS Incorporation's Shareholders' Equity |
24,243,837 |
20,788,436 |
||||
Non-controlling Interests |
1,083,634 |
608,162 |
||||
Total Shareholders' Equity |
25,327,471 |
21,396,598 |
||||
Total Liabilities and Shareholders' Equity |
$ |
40,538,899 |
$ |
32,662,984 |
CLPS INCORPORATION |
||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS |
||||||
OF INCOME AND COMPREHENSIVE INCOME |
||||||
(Amounts in |
||||||
For the six months ended |
||||||
2019 |
2018 |
|||||
Revenues |
42,568,264 |
30,795,748 |
||||
Less: Cost of revenues (note 1) |
(27,191,640) |
(19,625,663) |
||||
Gross profit |
15,376,624 |
11,170,085 |
||||
Operating expenses |
||||||
Selling and marketing expenses (note 1) |
1,404,227 |
972,876 |
||||
Research and development expenses |
5,020,520 |
3,039,361 |
||||
General and administrative expenses (note 1) |
7,897,096 |
9,161,267 |
||||
Other operating income |
(187,496) |
- |
||||
Total operating expenses |
14,134,347 |
13,173,504 |
||||
Income (loss) from operations |
1,242,277 |
(2,003,419) |
||||
Subsidies and other income, net |
1,371,912 |
623,156 |
||||
Other expenses |
(30,093) |
(61,717) |
||||
Income (loss) before income tax and share of income in equity |
2,584,096 |
(1,441,980) |
||||
Provision for income taxes |
388,843 |
242,898 |
||||
Income (loss) before share of income in equity investees |
2,195,253 |
(1,684,878) |
||||
Share of income in equity investees, net of tax |
99,468 |
- |
||||
Net income (loss) |
2,294,721 |
(1,684,878) |
||||
Less: Net loss attributable to non-controlling interests |
(74,220) |
(252,247) |
||||
Net income (loss) attributable to CLPS Incorporation's |
$ |
2,368,941 |
$ |
(1,432,631) |
||
Other comprehensive (loss) income |
||||||
Foreign currency translation loss |
$ |
(139,745) |
$ |
(370,384) |
||
Less: foreign currency translation gain (loss) attributable to non- |
7,349 |
(19,427) |
||||
Other comprehensive loss attributable to |
$ |
(147,094) |
$ |
(350,957) |
||
Comprehensive income (loss) |
||||||
CLPS Incorporation shareholders |
$ |
2,221,847 |
$ |
(1,783,588) |
||
Non-controlling interests |
(66,351) |
(271,674) |
||||
$ |
2,155,496 |
$ |
(2,055,262) |
|||
Basic earnings (losses) per common share |
$ |
0.17 |
$ |
(0.10) |
||
Weighted average number of share outstanding – basic |
14,152,616 |
13,799,224 |
||||
Diluted earnings (losses) per common share |
$ |
0.17 |
$ |
(0.10) |
||
Weighted average number of share outstanding – diluted (note 2) |
14,205,188 |
13,799,224 |
||||
Note: |
||||||
(1) Includes share-based compensation expenses as follows: |
||||||
Cost of revenues |
$ |
5,068 |
$ |
- |
||
Selling and marketing expenses |
30,316 |
- |
||||
General and administrative expenses |
1,031,265 |
4,013,714 |
||||
$ |
1,066,649 |
$ |
4,013,714 |
|||
(2) All dilutive potential ordinary shares had anti-dilutive impact and were excluded in computation of diluted |
CLPS INCORPORATION |
||||||
RECONCILIATION OF NON-GAAP TO GAAP RESULTS |
||||||
(Amounts in |
||||||
For the six months ended |
||||||
2019 |
2018 |
|||||
Cost of revenues |
$ |
27,191,640 |
$ |
19,625,663 |
||
Less: share-based compensation expenses |
5,068 |
- |
||||
Non-GAAP cost of revenues |
$ |
27,186,572 |
$ |
19,625,663 |
||
Selling and marketing expenses |
$ |
1,404,227 |
$ |
972,876 |
||
Less: share-based compensation expenses |
30,316 |
- |
||||
Non-GAAP selling and marketing |
$ |
1,373,911 |
$ |
972,876 |
||
General and administrative expenses |
$ |
7,897,096 |
$ |
9,161,267 |
||
Less: share-based compensation expenses |
1,031,265 |
4,013,714 |
||||
Non-GAAP general and administrative |
$ |
6,865,831 |
$ |
5,147,553 |
||
Operating income (loss) |
$ |
1,242,277 |
$ |
(2,003,419) |
||
Add: share-based compensation expenses |
1,066,649 |
4,013,714 |
||||
Non-GAAP operating income |
$ |
2,308,926 |
$ |
2,010,295 |
||
Operating Margin |
2.9% |
(6.5)% |
||||
Add: share-based compensation expenses |
2.5% |
13.0% |
||||
Non-GAAP operating margin |
5.4% |
6.5% |
||||
Net income (loss) |
$ |
2,294,721 |
$ |
(1,684,878) |
||
Add: share-based compensation expenses |
1,066,649 |
4,013,714 |
||||
Non-GAAP net income |
$ |
3,361,370 |
$ |
2,328,836 |
||
Net income (loss) attributable to |
$ |
2,368,941 |
$ |
(1,432,631) |
||
Add: share-based compensation expenses |
1,066,649 |
4,013,714 |
||||
Non-GAAP net income attributable to |
$ |
3,435,590 |
$ |
2,581,083 |
||
Weighted average number of share |
14,152,616 |
13,799,224 |
||||
GAAP Basic earnings (losses) per common share |
$ |
0.17 |
$ |
(0.10) |
||
Add: share-based compensation expenses |
0.07 |
0.29 |
||||
Non-GAAP basic earnings per common |
$ |
0.24 |
$ |
0.19 |
||
Weighted average number of share |
14,205,188 |
13,799,224 |
||||
Add: effect of dilutive securities (note 1) |
- |
158,574 |
||||
Weighted average number of share |
14,205,188 |
13,957,798 |
||||
GAAP diluted earnings (losses) per common |
$ |
0.17 |
$ |
(0.10) |
||
Add: share-based compensation expenses |
0.07 |
0.28 |
||||
Non-GAAP diluted earnings per common |
$ |
0.24 |
$ |
0.18 |
||
Note: |
||||||
(1) All dilutive potential ordinary shares had anti-dilutive impact and were excluded in computation of GAAP |
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SOURCE
Rose Zu, +1-646-277-1287