CLPS Incorporation Reports Financial Results for the First Half of Fiscal Year 2021
First Half of Fiscal 2021 Highlights (all results compared to the six months ended
- Revenues increased by 37.0% to
$58.3 million from$42.6 million . - Operating income increased by 213.5% to
$3.9 million from$1.2 million . - Net income increased by 114.9% to
$4.9 million from$2.3 million . - Net income attributable to
CLPS Incorporation's shareholders increased by 105.2% to$4.9 million from$2.4 million . - Basic and diluted earnings per share was
$0.30 compared to$0.17 basic and diluted earnings per share. - Net cash provided by operating activities increased by 66.2% to
$9.4 million from$5.7 million . - Non-GAAP net income guidance for the fiscal year 2021 was adjusted upwards to 60%-65% from 32%-37%.
Mr.
"Our growth strategy continued to prove its value, enabling us to pivot with agility in this challenging moment. During the period, we have done well in gaining more overseas and domestic clients within our core industry scope. We maintained strong relationship with our existing clients, which resulted to a 98% client retention rate. In addition, we further advanced our mergers and acquisition efforts both domestically and overseas. Our acquisition of the remaining 20% ownership stake in Ridik enabled us to expand our footprint not only in
"I am pleased with the solid level of stability and momentum we achieved during the first half of fiscal 2021.I would like to extend my gratitude to our staff, clients, partners, and shareholders for your continued support particularly during this challenging time. We attribute our success to you for your trust and confidence in the Company."
Ms.
First Half of Fiscal Year 2021 Financial Results
Revenues
In the first half of fiscal 2021, revenues increased by
Revenues by Service
- Revenue from IT consulting services increased by
$15.5 million , or 37.2%, to$57.1 million and accounted for 97.8% of total revenue in the first half of fiscal 2021 from$41.6 million , or 97.7% 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, 2020 and 2019, 41.0% and 41.3% of IT consulting services revenue were from international banks, respectively. - Revenue from customized IT solution services increased by
$0.4 million , or 51.1%, to$1.1 million and accounted for 1.8% of total revenue in the first half of fiscal 2021 from$0.7 million , or 1.6% of total revenue. The increase was primarily due to increased demand from existing clients in the banking and wealth management areas. - Revenue from other services decreased by
$0.1 million , or 25.3%, to$0.2 million and accounted for 0.3% of total revenue in the first half of fiscal year 2021 from$0.3 million , or 0.6% of total revenue in the same period of the previous year. The decrease was primarily due to decreased demand for other services, including headhunting service.
Revenues by Operational Areas
- Revenue from banking area increased by
$7.1 million , or 33.1% to$28.7 million in the first half of fiscal 2021, from$21.6 million in the prior year period. Revenue from banking area accounted for 49.3% and 50.7% of total revenues in the first half of fiscal 2021 and 2020, respectively. - Revenue from wealth management area increased by
$2.0 million , or 21.8% to$11.4 million in the first half of fiscal 2021, from$9.4 million in the prior year period. Revenue from wealth management area accounted for 19.6% and 22.0% of total revenues in the first half of fiscal 2021 and 2020, respectively. - Revenue from e-Commerce area increased by
$2.3 million , or 42.0% to$7.7 million in the first half of fiscal 2021, from$5.4 million in the prior year period. Revenue from e-Commerce area accounted for 13.2% and 12.7% of total revenues in the first half of fiscal 2021 and 2020, respectively. - Revenue from automotive area increased by
$1.5 million , or 72.9% to$3.5 million in the first half of fiscal 2021, from$2.0 million in the prior year period. Revenue from automotive area accounted for 6.0% and 4.7% of total revenues in the first half of fiscal 2021 and 2020, respectively.
Revenues by Geography
- Revenue generated outside of Mainland China increased by 53.9% to
$6.6 million in the first half of fiscal year 2021 from$4.3 million in the same period of the previous year. Revenue generated outside of Mainland China accounted for 11.4% of total revenue compared to 10.1% in the prior year period. The increase in revenue generated outside of Mainland China reflects the Company's successful and continuous global expansion strategy.
Gross Profit
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
Other Income and Expenses
Total other income, net of other expenses decreased to
Provision for Income Taxes
Provision for income taxes decreased by
Net Income and EPS
Net income increased by
After excluding the impact of non-controlling interests, net income attributable to
Cash Flow
As of
Net cash provided by operating activities was approximately
Financial Outlook
For fiscal year 2021, the Company expects, absent material acquisitions or non-recurring transactions, total sales growth in the range of approximately 30% to 35% compared to fiscal year 2020 financial results. The non-GAAP net income growth was adjusted in the range of approximately 60% to 65% from 32% to 37% as previously forecasted in the Company's second half and full year of fiscal 2020 financial report.
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 various risks and uncertainties facing the Company's business and operations as identified in its public filings.
Exchange Rate
The balance sheet amounts with the exception of equity as of
Conference Call Information
The Company will hold a conference call at
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+1-866-575-6539 |
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+1-323-994-2028 |
Mainland |
400 120 8590 |
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800 961 384 |
To access the live webcast of the conference call, please visit this link. The live and archived webcast will also be available through the Company's investor relations website at https://ir.clpsglobal.com.
A replay of the call will be available through
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+1-844-512-2921 |
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+1-412-317-6671 |
Passcode: |
3139679 |
About
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 fiscal 2021, 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:
Investor Relations Office
Phone: +86-182-2192-5378
Email: ir@clpsglobal.com
[1] 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. |
[2] Non-GAAP net income attributable to |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||||
(Amounts in |
|||||||||
As of |
As of June 30, |
||||||||
2020 |
2020 |
||||||||
ASSETS |
|||||||||
Current assets |
|||||||||
Cash and cash equivalents |
$ |
25,981,167 |
$ |
12,652,120 |
|||||
Short-term investments |
- |
636,934 |
|||||||
Accounts receivable, net |
31,205,299 |
25,753,856 |
|||||||
Prepayments, deposits and other assets, net |
1,545,239 |
1,280,967 |
|||||||
Prepaid income tax |
884,720 |
15,780 |
|||||||
Amounts due from related parties |
- |
169,185 |
|||||||
Total Current Assets |
59,616,425 |
40,508,842 |
|||||||
Property and equipment, net |
585,079 |
452,472 |
|||||||
Intangible assets, net |
1,202,449 |
1,144,579 |
|||||||
|
2,234,615 |
2,118,700 |
|||||||
Long-term investments |
900,091 |
680,131 |
|||||||
Prepayments, deposits and other assets, net |
537,063 |
244,387 |
|||||||
Deferred tax assets, net |
448,154 |
203,247 |
|||||||
Total Assets |
$ |
65,523,876 |
$ |
45,352,358 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||
Current liabilities |
|||||||||
Short-term bank loans |
$ |
5,005,402 |
$ |
2,161,239 |
|||||
Accounts payable and other current liabilities |
773,511 |
489,043 |
|||||||
Tax payables |
1,626,017 |
1,426,614 |
|||||||
Contract liabilities |
868,222 |
755,178 |
|||||||
Salaries and benefits payable |
19,472,224 |
11,522,268 |
|||||||
Amount due to related parties |
67,918 |
- |
|||||||
Total Current Liabilities |
27,813,294 |
16,354,342 |
|||||||
Long-term bank loans |
16,925 |
22,554 |
|||||||
Deferred tax liabilities |
143,846 |
163,163 |
|||||||
Unrecognized tax benefits |
311,923 |
194,939 |
|||||||
TOTAL LIABILITIES |
28,285,988 |
16,734,998 |
|||||||
Commitments and Contingencies |
|||||||||
Shareholders' Equity |
|||||||||
Common stock, |
1,635 |
1,593 |
|||||||
Additional paid-in capital |
30,081,334 |
28,586,048 |
|||||||
Statutory reserves |
2,954,993 |
2,803,811 |
|||||||
Retained earnings (accumulated deficits) |
2,028,791 |
(2,680,143) |
|||||||
Accumulated other comprehensive income (loss) |
770,144 |
(1,362,665) |
|||||||
Total |
35,836,897 |
27,348,644 |
|||||||
Non-controlling Interests |
1,400,991 |
1,268,716 |
|||||||
Total Shareholders' Equity |
37,237,888 |
28,617,360 |
|||||||
Total Liabilities and Shareholders' Equity |
$ |
65,523,876 |
$ |
45,352,358 |
|||||
* The shares and per share data are presented on a retroactive basis to reflect the nominal share issuance. |
|
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS |
||||||
OF INCOME AND COMPREHENSIVE INCOME |
||||||
(Amounts in |
||||||
For the six months ended |
||||||
2020 |
2019 |
|||||
Revenues |
58,318,208 |
42,568,264 |
||||
Less: Cost of revenues (note 1) |
(39,840,283) |
(27,191,640) |
||||
Gross profit |
18,477,925 |
15,376,624 |
||||
Operating expenses |
||||||
Selling and marketing expenses (note 1) |
1,793,807 |
1,404,227 |
||||
Research and development expenses |
6,161,188 |
5,020,520 |
||||
General and administrative expenses (note 1) |
6,629,000 |
7,897,096 |
||||
Other operating (loss), net |
- |
(187,496) |
||||
Total operating expenses |
14,583,995 |
14,134,347 |
||||
Income from operations |
3,893,930 |
1,242,277 |
||||
Subsidies and other income, net |
1,185,916 |
1,371,912 |
||||
Other expenses |
(49,224) |
(30,093) |
||||
Income before income tax and share of income in equity investees |
5,030,622 |
2,584,096 |
||||
Provision for income taxes |
92,214 |
388,843 |
||||
Income before share of income in equity investees Share of (loss) income in equity investees, net of tax Net income |
4,938,408 (6,127) 4,932,281 |
2,195,253 99,468 2,294,721 |
||||
Less: Net income (loss) attributable to non-controlling interests |
72,165 |
(74,220) |
||||
Net income attributable to |
$ |
4,860,116 |
$ |
2,368,941 |
||
Other comprehensive income (loss) |
||||||
Foreign currency translation gain (loss) |
$ |
2,226,431 |
$ |
(139,745) |
||
Less: foreign currency translation gain attributable to non-controlling |
93,622 |
7,349 |
||||
Other comprehensive income (loss) attributable to |
$ |
2,132,809 |
$ |
(147,094) |
||
Comprehensive income attributable to |
||||||
|
$ |
6,992,925 |
$ |
2,221,847 |
||
Non-controlling interests |
165,787 |
(66,351) |
||||
$ |
7,158,712 |
$ |
2,155,496 |
|||
Basic earnings per common share* |
$ |
0.30 |
$ |
0.17 |
||
Weighted average number of share outstanding – basic |
16,147,508 |
14,152,616 |
||||
Diluted earnings per common share* |
$ |
0.30 |
$ |
0.17 |
||
Weighted average number of share outstanding – diluted |
16,174,530 |
14,204,248 |
||||
Note: |
||||||
(1) Includes share-based compensation expenses as follows: |
||||||
Cost of revenues |
$ |
4,183 |
$ |
5,068 |
||
Selling and marketing expenses |
79,531 |
30,316 |
||||
General and administrative expenses |
1,411,613 |
1,031,265 |
||||
$ |
1,495,327 |
$ |
1,066,649 |
|||
* The shares and per share data are presented on a retroactive basis to reflect the nominal share issuance. |
|
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UNAUDITED RECONCILIATION OF NON-GAAP AND GAAP RESULTS |
|||||||||
(Amounts in |
|||||||||
For the six months ended |
|||||||||
2020 |
2019 |
||||||||
Cost of revenues |
$ |
39,840,283 |
$ |
27,191,640 |
|||||
Less: share-based compensation expenses |
4,183 |
5,068 |
|||||||
Non-GAAP cost of revenues |
$ |
39,836,100 |
$ |
27,186,572 |
|||||
Selling and marketing expenses |
$ |
1,793,807 |
$ |
1,404,227 |
|||||
Less: share-based compensation expenses |
79,531 |
30,316 |
|||||||
Non-GAAP selling and marketing |
$ |
1,714,276 |
$ |
1,373,911 |
|||||
General and administrative expenses |
$ |
6,629,000 |
$ |
7,897,096 |
|||||
Less: share-based compensation expenses |
1,411,613 |
1,031,265 |
|||||||
Non-GAAP general and administrative |
$ |
5,217,387 |
$ |
6,865,831 |
|||||
Operating income |
$ |
3,893,930 |
$ |
1,242,277 |
|||||
Add: share-based compensation expenses |
1,495,327 |
1,066,649 |
|||||||
Non-GAAP operating income |
$ |
5,389,257 |
$ |
2,308,926 |
|||||
Operating Margin |
6.7% |
2.9% |
|||||||
Add: share-based compensation expenses |
2.5% |
2.5% |
|||||||
Non-GAAP operating margin |
9.2% |
5.4% |
|||||||
Net income |
$ |
4,932,281 |
$ |
2,294,721 |
|||||
Add: share-based compensation expenses |
1,495,327 |
1,066,649 |
|||||||
Non-GAAP net income |
$ |
6,427,608 |
$ |
3,361,370 |
|||||
Net income attributable to |
$ |
4,860,116 |
$ |
2,368,941 |
|||||
Add: share-based compensation expenses |
1,495,327 |
1,066,649 |
|||||||
Non-GAAP net income attributable to |
$ |
6,355,443 |
$ |
3,435,590 |
|||||
Weighted average number of share |
16,147,508 |
14,152,616 |
|||||||
GAAP Basic earnings per common share |
$ |
0.30 |
$ |
0.17 |
|||||
Add: share-based compensation expenses |
0.09 |
0.07 |
|||||||
Non-GAAP basic earnings per common |
$ |
0.39 |
$ |
0.24 |
|||||
Weighted average number of share |
16,174,530 |
14,204,248 |
|||||||
Add: effect of dilutive securities |
- |
- |
|||||||
Weighted average number of share |
16,174,530 |
14,204,248 |
|||||||
GAAP diluted earnings per common share |
$ |
0.30 |
$ |
0.17 |
|||||
Add: share-based compensation expenses |
0.09 |
0.07 |
|||||||
Non-GAAP diluted earnings per common |
$ |
0.39 |
$ |
0.24 |
|||||
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