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LAIX Inc. Announces Second Quarter 2020 Unaudited Financial Results

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SHANGHAI, Aug. 27, 2020 — LAIX Inc. ("LAIX" or the "Company") (NYSE: LAIX), an artificial intelligence (AI) company in China that creates and delivers products and services to popularize English learning, today announced its unaudited financial results for the second quarter ended June 30, 2020.

Second Quarter 2020 Financial and Operating Highlights

  • Gross billings[1] for the second quarter of 2020 were RMB306.2 million (US$43.3 million), a 13.2% decrease from RMB352.7 million for the previous quarter and a 5.5% increase from RMB290.1 million for the same quarter last year.
  • Net revenues for the second quarter of 2020 were RMB269.4 million (US$38.1 million), an 18.0% increase from RMB228.3 million for the previous quarter and a 2.5% decrease from RMB276.4 million for the same quarter last year.
  • Gross margin for the second quarter of 2020 was 71.9%, compared with 65.5% for the previous quarter and 76.5% for the same quarter last year.
  • Sales and marketing expenses for the second quarter of 2020 were RMB200.7 million (US$28.4 million), a 24.2% decrease from RMB264.7 million for the previous quarter and an 8.7% decrease from RMB219.7 million for the same quarter last year.
  • Net loss for the second quarter of 2020 was RMB92.5 million (US$13.1 million), compared with RMB197.0 million for the previous quarter and RMB87.8 million for the same quarter last year.
  • Operating cash outflow for the second quarter of 2020 was RMB66.4 million (US$9.4 million), compared with RMB99.8 million for the previous quarter and RMB58.9 million for the same quarter last year.
  • Approximately 0.5 million paying users purchased the Company’s courses and services for the second quarter of 2020, compared with approximately 0.9 million paying users for the previous quarter and approximately 0.9 million paying users for the same quarter last year.
  • Total cumulative registered users were 185.6 million as of June 30, 2020, compared with 179.7 million total cumulative registered users as of March 31, 2020 and 138.8 million total cumulative registered users as of June 30, 2019.

[1] "Gross billings" for a certain period refer to the total amount of cash received from the sale of course packages in that period net of the total amount of cash refunds paid to users in the same period.

Management Comments

Dr. Yi Wang, Chairman and Chief Executive Officer of LAIX, commented, "We are pleased to see the net revenues for the second quarter of 2020 reach RMB269.4 million, an 18.0% increase from the previous quarter and exceeding the high end of our guidance range. Gross profit margin bounced back above 70%, and sales and marketing expenses as a percentage of net revenues declined to 74.5%, compared to 115.9% in the previous quarter. Consequently, net loss narrowed to RMB92.5 million, down 53.0% sequentially. Operating cash outflow also declined to RMB66.4 million in the second quarter of 2020, compared with RMB99.8 million in the first quarter of 2020. While the total number of unique paying users decreased sequentially as a result of both the fade-away of the unexpected increase in traffic due to the COVID-19 outburst in the first quarter as well as our stringent cost control in advertising and optimization of user acquisition costs, our gross billings per paying user improved by 50.6% quarter-over-quarter, demonstrating our success in migrating users into targeted courses with higher average selling prices. We believe there is room for further improvement in these metrics in the coming quarters.

"Our improving financial performance reflects our focus and priority on efficiently allocating resources, restructuring the product mix and streamlining our operations. Streamlining our operations involves optimizing the organizational structure, refining marketing channels and enhancing free learning content, in order to drive our company towards profitable growth in the long term. Looking ahead, we will continue to focus on product innovation and further refinement of our internal operations, together as our efforts to achieve a healthy and sustainable growth in the long term." concluded Dr. Wang.

Second Quarter 2020 Financial Results

Net Revenues

Net revenues for the second quarter of 2020 were RMB269.4 million (US$38.1 million), an 18.0% increase from RMB228.3 million for the previous quarter and a 2.5% decrease from RMB276.4 million for the same quarter last year. The quarter-over-quarter increase was primarily attributable to the upgrade of product mix, introducing additional courses and services with higher average selling prices.

Cost of Revenues

Cost of revenues for the second quarter of 2020 was RMB75.6 million (US$10.7 million), a 4.0% decrease from RMB78.8 million for the previous quarter and a 16.6% increase from RMB64.9 million for the same quarter last year. The quarter-over-quarter change was primarily due to decreases in salaries and benefit expenses.

Gross Profit and Gross Margin

Gross profit for the second quarter of 2020 was RMB193.8 million (US$27.4 million), a 29.6% increase from RMB149.5 million for the previous quarter and an 8.4% decrease from RMB211.6 million for the same quarter last year.

Gross margin for the second quarter of 2020 was 71.9%, compared with 65.5% for the previous quarter and 76.5% for the same quarter last year.

Operating Expenses

Total operating expenses for the second quarter of 2020 were RMB289.7 million (US$41.0 million), a 16.3% decrease from RMB346.1 million for the previous quarter and a 3.6% decrease from RMB300.5 million for the same quarter last year. The changes were primarily due to an improvement in operating efficiency and the optimization of the organizational structure.

Sales and marketing expenses for the second quarter of 2020 were RMB200.7 million (US$28.4 million), a 24.2% decrease from RMB264.7 million for the previous quarter and an 8.7% decrease from RMB219.7 million for the same quarter last year. The changes were primarily due to the Company’s stringent cost control in advertising and optimization of user acquisition costs. Sales and marketing expenses as a percentage of net revenues decreased to 74.5% for the second quarter of 2020, compared with 115.9% for the previous quarter and 79.5% for the same quarter last year.

Research and development expenses for the second quarter of 2020 were RMB48.5 million (US$6.9 million), an 18.1% decrease from RMB59.2 million for the previous quarter and an 8.3% decrease from RMB52.9 million for the same quarter last year. Research and development expenses as a percentage of net revenues decreased from the same quarter last year, representing 18.0% of net revenues for the second quarter of 2020, compared with 25.9% for the previous quarter and 19.1% for the same quarter last year. The changes were primarily due to the efficiency optimization in personnel management.

General and administrative expenses for the second quarter of 2020 were RMB40.5 million (US$5.7 million), an 82.8% increase from RMB22.1 million for the previous quarter and a 45.0% increase from RMB27.9 million for the same quarter last year, primarily due to a one-off impairment loss on leasehold improvement caused by early termination of lease in Wuhan due to changes in business strategy. Subsequently in August, the early termination of lease was confirmed with the lessor. General and administrative expenses were 15.0% of net revenues for the second quarter of 2020, compared with 9.7% for the previous quarter and 10.1% for the same quarter last year.

Loss from Operations

Loss from operations for the second quarter of 2020 was RMB95.9 million (US$13.6 million), compared with RMB196.5 million for the previous quarter and RMB88.9 million for the same quarter last year. The improvement in operating result was attributable to: (i) the upgrade of product mix, introducing additional courses and services with higher average selling prices; (ii) an improvement in operating efficiency; and (iii) stringent cost control in advertising and optimization of user acquisition costs.

Adjusted EBITDA[2]

Adjusted EBITDA for the second quarter of 2020 was a loss of RMB77.8 million (US$11.0 million), compared with an adjusted EBITDA loss of RMB182.5 million for the previous quarter and an adjusted EBITDA loss of RMB77.2 million for the same quarter last year.

[2] "Adjusted EBITDA" is a non-GAAP measure, which represents EBITDA before share-based compensation expenses. EBITDA represents net loss before interest, tax, depreciation and amortization. See "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release.

Foreign exchange related (losses) / gains, net

Foreign exchange gain was RMB0.1 million (US$20 thousand) in the second quarter of 2020, compared with a foreign exchange loss of RMB2.3 million for the previous quarter and a foreign exchange loss of RMB1.7 million for the same quarter last year. 

Net Loss

Net loss for the second quarter of 2020 was RMB92.5 million (US$13.1 million), compared with RMB197.0 million for the previous quarter and RMB87.8 million for the same quarter last year.

Adjusted net loss[3] for the second quarter of 2020 was RMB85.3 million (US$12.1 million), compared with RMB189.2 million for the previous quarter and RMB81.6 million for the same quarter last year.

Basic and diluted net loss per ordinary share attributable to ordinary shareholders for the second quarter of 2020 was RMB1.87 (US$0.27), compared with RMB3.99 for the previous quarter and RMB1.78 for the same quarter last year. 

[3] "Adjusted net loss" is a non-GAAP measure, which excludes share-based compensation expenses. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

Balance Sheet & Cashflows

As of June 30, 2020, the Company’s cash, cash equivalents, restricted cash and short-term investments totaled RMB390.3 million (US$55.3 million), compared with RMB459.4 million as of March 31, 2020 and RMB552.6 million as of December 31, 2019. 

Operating cash outflow for the second quarter of 2020 was RMB66.4 million (US$9.4 million), compared with RMB99.8 million for the previous quarter and RMB58.9 million for the same quarter last year.

The Company had deferred revenues of RMB828.8 million (US$117.3 million) as of June 30, 2020, compared with RMB820.7 million as of March 31, 2020 and RMB696.0 million as of December 31, 2019.

Impact of the Recently Adopted Major Accounting Pronouncement

In June 2016, the FASB issued ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326)," which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. The Company adopted the new standard effective January 1, 2020 on a modified retrospective basis and did not restate comparative periods. The impact of new standard was immaterial to the Company.

Outlook

For the third quarter of 2020, the Company currently expects:

–  Net revenues to be between RMB230.0 million to RMB250.0 million, which would represent a decrease of approximately 12.2% to 4.6% from RMB262.1 million for the same quarter last year;

This forecast reflects the Company’s current and preliminary view on the current business situation and market conditions, which is subject to change.

Conference Call

The Company’s management will host an earnings conference call at 9:00 PM U.S. Eastern Time on August 26, 2020 (9:00 AM Beijing/Hong Kong time on August 27, 2020).

Dial-in details for the earnings conference call are as follows:

United States (toll free):

+1-877-396-2308

International:

+1-647-689-5527

Mainland China:

400-048-6136 or 400-043-3098

Hong Kong:

+852-5803-0358

Conference ID:

2666857

Participants should dial-in at least 10 minutes before the scheduled start time to be connected to the call.

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.laix.com/investors.

About LAIX Inc.

LAIX Inc. ("LAIX" or the "Company") is an artificial intelligence (AI) company in China that creates and delivers products and services to popularize English learning. Its proprietary AI teacher utilizes cutting-edge deep learning and adaptive learning technologies, big data, well-established education pedagogies and the mobile internet. LAIX believes its innovative approach fundamentally transforms learning. LAIX provides its products and services on demand via its mobile apps, primarily its flagship "English Liulishuo" mobile app launched in 2013. On the Company’s platform, AI technologies are seamlessly integrated with diverse learning content incorporating well-established language learning pedagogies, gamified features and strong social elements to deliver an engaging, adaptive learning experience. LAIX provides a variety of courses inspired by a broad range of topics and culture themes to make English learning more interesting and is committed to offering a fun, interactive learning environment to motivate and engage its users.

For more information, please visit: http://ir.laix.com.

Use of Non-GAAP Financial Measures

We use adjusted EBITDA and adjusted net loss, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes.

We believe that adjusted EBITDA and adjusted net loss help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in loss from operations and net loss. We believe that adjusted EBITDA and adjusted net loss provide useful information about our results of operations, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Adjusted EBITDA and adjusted net loss should not be considered in isolation or construed as an alternative to loss from operations, net loss or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted EBITDA and adjusted net loss presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars are made at a rate of RMB7.0651 to US$1.00, the rate in effect as of June 30, 2020 published by the Federal Reserve Board.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue" or other similar expressions. Among other things, the Outlook and quotations from management in this announcement, as well as LAIX’s strategic and operational plans, contain forward-looking statements. LAIX may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about LAIX’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a variety of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: LAIX’s goals and strategies; LAIX’s future business development, results of operations and financial condition; the expected growth of the education market; LAIX’s ability to monetize the user base; fluctuations in general economic and business conditions in China; the potential impact of the COVID-19 to LAIX’s business operations and the economy in China and elsewhere generally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and the Company undertakes no duty to update such information, except as required under applicable law.

For investor and media inquiries, please contact:

LAIX Inc.
Harry He
Investor Relations
Email: ir@laix.com 

The Piacente Group Investor Relations
Brandi Piacente
Tel: +1-212-481-2050
Email: liulishuo@tpg-ir.com

Emilie Wu
Tel: +86-21-6039-8363
Email: liulishuo@tpg-ir.com  

 

 

 

LAIX INC.

 UNAUDITED CONSOLIDATED BALANCE SHEETS

 (Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))

 As of

As of

December 31, 2019

June 30, 2020

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

281,166

169,248

23,955

Restricted cash

1,816

2,147

304

Short-term investments

269,643

218,953

30,991

Accounts receivable, net

7,360

8,509

1,204

Prepayments and other current assets

86,787

81,449

11,528

Total current assets

646,772

480,306

67,982

Non-current assets:

Property and equipment, net

71,637

45,670

6,464

Investment in equity fund

5,919

6,196

877

Intangible assets, net

15,541

15,776

2,233

Operating lease right-of-use assets, net 

155,525

111,929

15,843

Other non-current assets

8,447

7,253

1,027

Deferred tax assets

15,336

15,336

2,171

Total non-current assets

272,405

202,160

28,615

Total assets

919,177

682,466

96,597

LIABILITIES 

Current liabilities:

Accounts payable 

137,684

102,208

14,467

Deferred revenue

695,971

828,763

117,304

Salary and welfare payable

153,969

130,490

18,470

Tax payable

74,340

75,080

10,627

Operating lease liability, current

37,009

34,973

4,950

Accrued liabilities and other current liabilities

15,444

16,448

2,327

Total current liabilities

1,114,417

1,187,962

168,145

Non-current liabilities:

Operating lease liability, non-current

117,124

77,868

11,022

Other non-current liabilities

12,441

12,839

1,817

Total non-current liabilities

129,565

90,707

12,839

Total liabilities

1,243,982

1,278,669

180,984

Shareholders’ equity/(deficit)

Class A Ordinary shares

208

210

30

Class B Ordinary shares

121

121

17

Subscriptions receivable from founding shareholders

(122)

(122)

(17)

Treasury Stock

(10,730)

(15,327)

(2,169)

Additional paid-in capital

1,167,884

1,184,200

167,613

Accumulated other comprehensive income

29,483

35,874

5,077

Accumulated (deficit)

(1,511,649)

(1,801,159)

(254,938)

Total shareholders’ equity/(deficit)

(324,805)

(596,203)

(84,387)

Total liabilities and shareholders’ equity/(deficit)

919,177

682,466

96,597

 

 

 

LAIX INC. 

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amount in thousands of Renminbi ("RMB") and US dollars ("US$")

except for number of shares and per share data)

Three months ended

Six months ended

June 30

March 31

June 30

June 30

June 30

2019

2020

2020

2019

2020

RMB

RMB

RMB

US$

RMB

RMB

US$

Net revenues

276,427

228,338

269,405

38,132

529,731

497,743

70,451

Cost of revenues

(64,865)

(78,799)

(75,646)

(10,707)

(124,555)

(154,445)

(21,860)

Gross profit

211,562

149,539

193,759

27,425

405,176

343,298

48,591

Operating expenses:

Sales and marketing expenses

(219,734)

(264,740)

(200,726)

(28,411)

(413,362)

(465,466)

(65,882)

Research and development expenses

(52,882)

(59,219)

(48,482)

(6,862)

(102,961)

(107,701)

(15,244)

General and administrative expenses

(27,895)

(22,139)

(40,461)

(5,727)

(47,942)

(62,600)

(8,860)

Total operating expenses

(300,511)

(346,098)

(289,669)

(41,000)

(564,265)

(635,767)

(89,986)

Other operating income

–

18

25

4

–

43

6

Loss from Operations

(88,949)

(196,541)

(95,885)

(13,571)

(159,089)

(292,426)

(41,389)

Other income/(expenses):

Interest income

761

683

366

52

1,062

1,049

148

Foreign exchange related (losses)/gains, net

(1,711)

(2,319)

140

20

(1,012)

(2,179)

(308)

Change in fair value of short-term investment

1,815

517

806

114

3,938

1,323

187

Other income, net

269

682

2,098

297

42

2,780

393

Loss before income taxes expenses

(87,815)

(196,978)

(92,475)

(13,088)

(155,059)

(289,453)

(40,969)

Income tax expenses

(28)

(29)

(28)

(4)

(56)

(57)

(8)

Net loss

(87,843)

(197,007)

(92,503)

(13,092)

(155,115)

(289,510)

(40,977)

Net loss attributable to LAIX Inc.’s ordinary
shareholders

(87,843)

(197,007)

(92,503)

(13,092)

(155,115)

(289,510)

(40,977)

 

 

 

LAIX INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amount in thousands of Renminbi ("RMB") and US dollars ("US$")

except for number of shares and per share data)

Three months ended

Six months ended

June 30

March 31

June 30

June 30

June 30

2019

2020

2020

2019

2020

RMB

RMB

RMB

US$

RMB

RMB

US$

Net loss

(87,843)

(197,007)

(92,503)

(13,092)

(155,115)

(289,510)

(40,977)

Other comprehensive income/(loss)

—Foreign currency translation adjustment, net of nil tax

14,605

6,776

(385)

(54)

835

6,391

905

Comprehensive loss

(73,238)

(190,231)

(92,888)

(13,146)

(154,280)

(283,119)

(40,072)

Net loss per Class A and Class B ordinary shares

—Basic and Diluted

(1.78)

(3.99)

(1.87)

(0.27)

(3.19)

(5.87)

(0.83)

Weighted average number of Class A and Class B
ordinary shares used in per share calculation

—Basic and Diluted

49,246,017

49,359,565

49,337,462

49,337,462

48,609,846

49,348,103

49,348,103

 

 

LAIX INC.

Reconciliation of GAAP and Non-GAAP Results

(Amount in thousands of Renminbi ("RMB") and US dollars("US$")

except for percentage data)

Three months ended

Six months ended

June 30,
2019

March 31,
2020

June 30,
2020

June 30,
2019

June 30,
2020

RMB

RMB

RMB

US$

RMB

RMB

US$

Net loss

(87,843)

(197,007)

(92,503)

(13,092)

(155,115)

(289,510)

(40,977)

Add:

Share-based compensation expenses

6,239

7,774

7,241

1,025

19,059

15,015

2,125

Depreciation of property, plant and equipment

5,001

7,347

7,781

1,101

7,439

15,128

2,141

Amortization of prepaid interest expense and service fees to loan companies

92

–

–

–

252

–

–

Income tax expenses

28

29

28

4

56

57

8

Subtract:

Interest income

(761)

(683)

(366)

(52)

(1,062)

(1,049)

(148)

Adjusted EBITDA

(77,244)

(182,540)

(77,819)

(11,014)

(129,371)

(260,359)

(36,851)

Net loss

(87,843)

(197,007)

(92,503)

(13,092)

(155,115)

(289,510)

(40,977)

Add back:

Share-based compensation expenses

6,239

7,774

7,241

1,025

19,059

15,015

2,125

Adjusted net loss

(81,604)

(189,233)

(85,262)

(12,067)

(136,056)

(274,495)

(38,852)

 

 

PR Newswire

China Distance Education Holdings Limited Reports Financial Results for Third Quarter Fiscal Year 2020

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– Third Quarter 2020 Net Revenue was $50.7 Million, within Guidance Range –

– Third Quarter 2020 Gross Profit was $24.1 Million, with Gross Margin of 47.5% –

– Third Quarter 2020 Operating Income was $2.5 Million, with Operating Margin of 4.9% –

– Third Quarter 2020 Net Income Attributable to CDEL was $3.0 Million, with Net Income Margin of 5.9% –

BEIJING, Aug. 27, 2020 — China Distance Education Holdings Limited (NYSE: DL) ("CDEL", or the "Company"), a leading provider of online education and value-added services for professionals and corporate clients in China, today announced unaudited financial results for the third quarter of fiscal year 2020 ended June 30, 2020.

Third Quarter Fiscal 2020 Financial and Operational Highlights

  • Net revenue decreased by 17.9% to $50.7 million from $61.7 million in the prior year period.
  • Total course enrollments were 738,300, an increase of 0.5% from the third quarter of fiscal 2019.
  • Cash receipts from online course registration were $34.6 million, a 31.3% decrease from the third quarter of fiscal 2019.
  • Gross profit decreased by 22.8% to $24.1 million from $31.2 million in the prior year period.
  • Non-GAAP[1] gross profit decreased by 22.7% to $24.1 million from $31.2 million in the prior year period.
  • Gross margin was 47.5%, compared with 50.5% in the prior year period. Non-GAAP[1] gross margin was 47.5%, compared with 50.5% in the prior year period.
  • Operating income decreased by 75.0% to $2.5 million from $9.9 million in the prior year period.
  • Non-GAAP[1] operating income decreased by 69.6% to $3.2 million from $10.4 million in the prior year period.
  • Net income attributable to CDEL was $3.0 million, compared with net income attributable to CDEL of $9.4 million in the prior year period.
  • Non-GAAP[1] net income attributable to CDEL was $3.7 million, compared with non- GAAP[1] net income attributable to CDEL of $10.0 million in the prior year period.
  • Basic and diluted net income per American Depositary Share ("ADS") attributable to CDEL were $0.089 and $0.088, respectively, compared with basic and diluted net income per ADS attributable to CDEL of $0.282 and $0.281, respectively, for the third quarter of fiscal 2019. Each ADS represents four ordinary shares.
  • Basic and diluted non-GAAP[1] net income per ADS attributable to CDEL were $0.111 and $0.109, respectively, compared with basic and diluted non-GAAP[1] net income per ADS attributable to CDEL of $0.299 and $0.296, respectively, for the third quarter of fiscal 2019.
  • Cash flow from operations decreased by 59.2% to $7.2 million from $17.6 million in the third quarter of fiscal 2019.

[1] For more information about the non-GAAP financial measures contained in this press release, please see "Use of Non-GAAP Financial Measures" below.

Mr. Zhengdong Zhu, Chairman and CEO of CDEL, said, "In the third quarter of fiscal 2020, we reported net revenue of $50.7 million, within our guidance range. During the onset of the COVID-19 pandemic, in order to support our students across China with high-quality online professional education at a time when offline classes were suspended, we provided free online courses to students in Hubei province and significant discounts for certain online exam preparation courses to students outside Hubei. Our socially responsive actions resulted in a surge in enrollment in our second fiscal quarter as previously disclosed, effectively pulling forward the demand for our courses and thus dampening enrollment and cash receipts growth in our third fiscal quarter."

"We believe in the long-term growth prospects of online professional education in China, and expect online education will continue to transform how knowledge is delivered and how students learn. We remain committed to serving students with our high-quality courseware and compelling online educational solutions during this challenging time. We are confident that our comprehensive lifelong learning ecosystem will enable us to reach a broad and growing student audience, and extend convenience, flexibility and engagement to their learning experience," Mr. Zhu concluded.

Mr. Mark Marostica, Co-Chief Financial Officer of CDEL, added, "As anticipated, the decrease in cash receipts for our courses due to our socially responsive actions, together with the postponement of certain professional certification examinations, negatively impacted our revenue growth for the third fiscal quarter. In addition, a delay in the publication of certain legal exam preparation books further weakened our third quarter revenue growth. Despite these headwinds, we maintained a disciplined cost structure and achieved a non-GAAP operating margin of 6.2% for the quarter. With our fourth fiscal quarter well underway, we are further impacted by the postponement of a number of core professional certification examinations held in Beijing and several other cities. We remain focused on balancing growth with a keen focus on profitability."

Third Quarter Fiscal 2020 Financial Results

Net Revenue. Total net revenue decreased by 17.9% to $50.7 million in the third quarter of fiscal 2020 from $61.7 million in the third quarter of fiscal 2019. Net revenue from online education services, books and reference materials, and other sources contributed 78.9%, 12.8% and 8.3%, respectively, of total net revenues for the third quarter of fiscal 2020.

Online education services. Net revenue from online education services decreased by 8.1% to $40.0 million in the third quarter of fiscal 2020 from $43.5 million in the third quarter of fiscal 2019, primarily attributable to the decrease in revenue from the Company’s healthcare and accounting verticals due to the impact of COVID-19, stemming from the postponement of certain professional certification examinations across China and the aforementioned socially responsive actions the Company adopted, which resulted in a significant decline in cash receipts from online course registration in both the second and third fiscal quarters of 2020.

Books and reference materials. Net revenue from books and reference materials decreased by 33.8% to $6.5 million in the third quarter of fiscal 2020 from $9.8 million in the third quarter of fiscal 2019, primarily attributable to the delay in the publication of certain Legal Professional Qualification Examination books, due to the promulgation of new laws.

Others. Net revenue from other sources decreased by 49.8% to $4.2 million in the third quarter of fiscal 2020 from $8.4 million in the third quarter of fiscal 2019, primarily due to a significant decrease in revenue from the sale of college-related learning simulation software, and a significant decrease in the provision of offline training courses, resulting from the impact of COVID-19.

Cost of Sales. Cost of sales decreased by 12.8% to $26.6 million in the third quarter of fiscal 2020, from $30.6 million in the third quarter of fiscal 2019. Non-GAAP[1] cost of sales decreased by 13.0% to $26.6 million in the third quarter of fiscal 2020, from $30.6 million in the third quarter of fiscal 2019. The decrease in cost of sales was primarily attributable to a decrease in cost of books and reference materials and lecture fees.

Gross Profit and Gross Margin. Gross profit was $24.1 million in the third quarter of fiscal 2020, down 22.8% from $31.2 million in the prior year period. Non-GAAP[1] gross profit was $24.1 million, decreasing by 22.7% from $31.2 million in the prior year period. Gross margin was 47.5% in the third quarter of fiscal 2020, compared with 50.5% in the third quarter of fiscal 2019. Non-GAAP[1] gross margin was 47.5% in the third quarter of fiscal 2020, compared with 50.5% in the third quarter of fiscal 2019.

Operating Expenses. Total operating expenses increased by 5.6% to $23.2 million in the third quarter of fiscal 2020, from $22.0 million in the prior year period. Non-GAAP[1] total operating expenses increased by 5.0% to $22.6 million in the third quarter of fiscal 2020, from $21.5 million in the prior year period.

Selling expenses. Selling expenses increased by 4.6% to $17.8 million in the third quarter of fiscal 2020 from $17.0 million in the prior year period. Non-GAAP[1] selling expenses increased by 4.5% to $17.8 million in the third quarter of fiscal 2020, from $17.0 million in the prior year period. The increase was primarily driven by higher advertising and promotional expenses, and the increase in commission to agents.

General and administrative expenses. General and administrative expenses increased by 8.8% to $5.4 million in the third quarter of fiscal 2020 from $4.9 million in the prior year period. Non-GAAP[1] general and administrative expenses increased by 7.0% to $4.8 million in the third quarter of fiscal 2020, from $4.4 million in the prior year period. The increase was mainly due to the increase in share-based compensation expenses.

Income Tax Expenses. Income tax expense decreased by 77.1% to $0.6 million in the third quarter of fiscal 2020 from $2.5 million in the prior year period, primarily due to the decrease in taxable income in the third quarter of fiscal 2020.

Net Income Attributable to CDEL. As a result of the foregoing, net income attributable to CDEL was $3.0 million in the third quarter of fiscal 2020, compared with net income attributable to CDEL of $9.4 million in the prior year period. Non-GAAP[1] net income attributable to CDEL was $3.7 million in the third quarter of fiscal 2020, compared with non-GAAP[1] net income attributable to CDEL of $10.0 million in the prior year period.

Operating Cash Flow. Net operating cash inflow decreased by 59.2% to $7.2 million in the third quarter of fiscal 2020 from $17.6 million in the prior year period. The operating cash inflow was mainly attributable to net income before non-cash items generated in the third quarter of fiscal 2020. The increase in accrued expenses and other liabilities also contributed to the operating cash inflow. The operating cash inflow was partially offset by the decrease in deferred revenue and the decrease/increase in amount due to/from related parties.

Cash and Cash Equivalents, Term Deposits, Restricted Cash and Short-term Investments. Cash and cash equivalents, term deposits, restricted cash and short-term investments as of June 30, 2020 increased by 2.7% to $133.7 million from $130.2 million as of March 31, 2020, mainly due to the operating cash inflow generated in the third quarter of fiscal 2020 and the drawdown of an offshore loan of $20.0 million. The increase was partially offset by (i) the dividend distribution of $19.6 million, (ii) the repayment of an onshore loan of $2.8 million, (iii) the payment of an investment of $0.7 million and (iv) the capital expenditure of $0.6 million.

First Nine Months of Fiscal 2020 Financial Results

Net Revenue. Total net revenue increased by 0.6% to $144.0 million in the first nine months of fiscal 2020 from $143.1 million in the first nine months of fiscal 2019. Net revenue from online education services, books and reference materials, and other sources contributed 75.0%, 10.9% and 14.1%, respectively, of total net revenues for the first nine months of fiscal 2020.

Online education services. Net revenue from online education services increased by 11.9% to $107.9 million in the first nine months of fiscal 2020 from $96.5 million in the first nine months of fiscal 2019.

Books and reference materials. Net revenue from books and reference materials decreased by 27.2% to $15.8 million in the first nine months of fiscal 2020 from $21.6 million in the first nine months of fiscal 2019.

Others. Net revenue from other sources decreased by 18.9% to $20.3 million in the first nine months of fiscal 2020 from $25.0 million in the first nine months of fiscal 2019.

Cost of Sales. Cost of sales decreased by 8.4% to $72.8 million in the first nine months of fiscal 2020 from $79.5 million in the first nine months of fiscal 2019. Non-GAAP[1] cost of sales decreased by 8.5% to $72.7 million in the first nine months of fiscal 2020, from $79.4 million in the first nine months of fiscal 2019.

Gross Profit and Gross Margin. Gross profit was $71.2 million in the first nine months of fiscal 2020, up 11.9% from $63.7 million in the prior year period. Non-GAAP[1] gross profit was $71.3 million, increasing by 12.0% from $63.7 million in the prior year period. Gross margin was 49.5% in the first nine months of fiscal 2020, compared with 44.5% in the first nine months of fiscal 2019. Non-GAAP[1] gross margin was 49.5% in the first nine months of fiscal 2020, compared with 44.5% in the first nine months of fiscal 2019.

Operating Expenses. Total operating expenses increased by 9.7% to $69.3 million in the first nine months of fiscal 2020, from $63.2 million in the prior year period. Non-GAAP[1] total operating expenses increased by 9.4% to $67.5 million in the first nine months of fiscal 2020, from $61.7 million in the prior year period.

Selling expenses. Selling expenses increased by 15.3% to $52.3 million in the first nine months of fiscal 2020 from $45.3 million in the prior year period. Non-GAAP[1] selling expenses increased by 15.3% to $52.2 million in the first nine months of fiscal 2020, from $45.3 million in the prior year period.

General and administrative expenses. General and administrative expenses decreased by 4.7% to $17.0 million in the first nine months of fiscal 2020 from $17.9 million in the prior year period. Non-GAAP[1] general and administrative expenses decreased by 7.0% to $15.2 million in the first nine months of fiscal 2020, from $16.4 million in the prior year period.

Income Tax Expenses. Income tax expense was $1.3 million in the first nine months of fiscal 2020, compared with income tax expense of $2.1 million in the prior year period.

Net Income Attributable to CDEL. As a result of the foregoing, net income attributable to CDEL was $5.6 million in the first nine months of fiscal 2020, compared with net income attributable to CDEL of $7.5 million in the prior year period. Non-GAAP[1] net income attributable to CDEL was $7.5 million in the first nine months of fiscal 2020, compared with non-GAAP[1] net income attributable to CDEL of $9.0 million in the prior year period.

Operating Cash Flow. Net operating cash inflow decreased by 33.8% to $41.0 million in the first nine months of fiscal 2020 from $61.9 million in the prior year period.

Recent Developments Regarding the Non-binding "Going Private" Proposal

On June 8, 2020, the board of directors of the Company (the "Board") received a preliminary non-binding proposal letter (the "Proposal Letter") from Mr. Zhengdong Zhu, co-founder, chairman of the Board and chief executive officer of the Company ("Mr. Zhu"), Ms. Baohong Yin, co-founder of the Company, deputy chairman of the Board and the spouse of Mr. Zhu and their affiliated entity (collectively, the "Buyer Group") to acquire all of the outstanding ordinary shares of the Company, including ordinary shares represented by American depositary shares (the "ADSs", each representing four ordinary shares), for $2.27 in cash per ordinary share, or $9.08 in cash per ADS (the "Proposal"). On June 22, 2020, the Company announced that the Board had formed a special committee of independent directors (the "Special Committee") consisting of Ms. Carol Yu and Ms. Annabelle Yu Long to review and evaluate the Proposal, and the Special Committee had retained Goulston & Storrs PC as its United States legal counsel in connection with its review and evaluation of the Proposal. On July 29, 2020, the Company announced that the Special Committee had retained Duff & Phelps, LLC as its financial advisor in connection with its review and evaluation of the Proposal.

The Company cautions its shareholders and others considering trading in its securities that neither the Board nor the Special Committee has made any decision with respect to the Company’s response to the Proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

Outlook

For the fourth quarter of fiscal 2020, the Company expects to generate total net revenue in the range of $58.4 million to $61.8 million, representing year-over-year decline of approximately 15% to 10%, respectively.

For fiscal year 2020, the Company expects to generate total net revenue in the range of $202.4 million to $205.8 million, representing year-over-year decline of approximately 4.4% to 2.8%, respectively.

The above guidance reflects the Company’s current and preliminary view, which is subject to change, particularly in consideration of uncertainties related to the impact of COVID-19, including the postponement of certain professional examinations, the schedule of reopening of schools, and the schedule of resumption of provision of offline training courses, among others.

Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, August 27, 2020 (8:00 p.m. Beijing Time on Thursday, August 27, 2020) to discuss financial results and answer questions from investors and analysts. Details for the conference call are as follows:

Event Title:

China Distance Education Holdings Limited Third Quarter of Fiscal Year 2020 Earnings Conference Call

Conference ID:

9952634

Registration Link:

http://apac.directeventreg.com/registration/event/9952634

All participants must use the link provided above to complete the online registration process at least 20 minutes in advance of the conference call. Upon registering, each participant will receive a participant dial-in number, Direct Event passcode, and a unique registrant ID, which will be used to join the conference call.

A telephone replay will be available two hours after the call until September 3, 2020 by dialing:

US Toll Free:

+1-855-452-5696

International:

+61-2-8199-0299

Mainland China:

400-632-2162

Hong Kong, China:

800-963-117

United Kingdom:

0808-234-0072

Replay Passcode:

9952634

Additionally, a live and archived webcast of the conference call will be available at http://ir.cdeledu.com.

About China Distance Education Holdings Limited

China Distance Education Holdings Limited is a leading provider of online education and value-added services for professionals and corporate clients in China. The courses offered by the Company through its websites are designed to help professionals seeking to obtain and maintain professional licenses and to enhance their job skills through our professional development courses in China in the areas of accounting, healthcare, engineering & construction, legal and other industries. The Company also offers online test preparation courses for self-taught learners pursuing higher education diplomas or degrees, and practical accounting training courses for college students and working professionals. In addition, the Company provides business services to corporate clients, including but not limited to tax advisory and accounting outsourcing services. For further information, please visit http://ir.cdeledu.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "may," "should," "potential," "continue," "expect," "predict," "anticipate," "future," "intend," "plan," "believe," "is/are likely to," "estimate" and similar statements. Among other things, the outlook for the fourth quarter and full fiscal year 2020 and quotations from management in this announcement, as well as the Company’s strategic and operational plans (in particular, the impact of COVID-19 on our businesses; the solutions we adopt to address such impact of COVID-19; balancing growth and profitability; the growth prospects of online professional education in China; as well as the anticipated benefits of our strategic growth initiatives, including the promotion of the Company’s life-long learning ecosystem) contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic and annual reports to the SEC, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the impact of the COVID-19 outbreak, the potential impact of the Proposal and any transaction in connection with the Proposal, our goals and growth strategies; future prospects and market acceptance of our courses and other products and services; our future business development and results of operations; projected revenues, profits, earnings and other estimated financial information; projected enrollment numbers; our plans to expand and enhance our courses and other products and services; anticipated benefits of acquisition or disposal of businesses, competition in the education and test preparation markets; and Chinese laws, regulations and policies, including those applicable to the Internet, Internet content providers, the education and telecommunications industries, mergers and acquisitions, taxation and foreign exchange. In addition, with respect to the "going private" Proposal, there can be no assurance that the Buyer Group will make any definitive offer to the Company, that any definitive agreement relating to the Proposal will be entered into between the Company and the Buyer Group or that a transaction based on the Proposal or any other similar transaction will be approved or consummated.

Further information regarding these and other risks is included in the Company’s annual report on Form 20-F and other documents filed or furnished with the SEC. All information provided in this press release is as of the date of this press release. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth in this press release is preliminary and subject to adjustments. Adjustments to the financial statements may be identified when audit work is performed for the year-end audit, which could result in significant differences from this preliminary unaudited financial information.

Use of Non-GAAP Financial Measures

To supplement the Company’s consolidated financial results presented in accordance with U.S. generally accepted accounting principles, or GAAP, the Company uses the following measures defined as non-GAAP financial measures: non-GAAP net income attributable to CDEL, operating income, gross profit, cost of sales, selling expenses, general and administrative expenses, net income margin attributable to CDEL, operating margin, gross profit margin, and basic and diluted earnings per ADS and per share attributable to CDEL. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to comparable GAAP measures" set forth at the end of this release.

The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding share-based compensation expenses. However, non-GAAP financial measures may not be indicative of the Company’s operating performance from a cash perspective. The Company believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance and liquidity. The Company computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of excluding share-based compensation expenses from the above-mentioned line items and presenting these non-GAAP measures is that such items may continue to be for the foreseeable future a significant recurring expense in our business. Management compensates for this limitation by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying table at the end of this release provides more detail on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

Contacts:

In China:

China Distance Education Holdings Limited
Jiao Jiao
Tel: +86-10-8231-9999 ext. 1826
Email: IR@cdeledu.com

The Piacente Group, Inc. 
Xi Zhang 
Tel: +86-10-6508-0677
E-mail: dl@tpg-ir.com

In the United States: 

The Piacente Group, Inc.    
Brandi Piacente
Tel: +1 212-481-2050
Email: dl@tpg-ir.com

 

 

(Financial Tables on Following Pages)

 

 

China Distance Education Holdings Limited

Unaudited Condensed Consolidated Balance Sheets

(in thousands of US Dollars, except number of shares and per share data)

September 30, 2019

June 30, 2020

Assets:

Current assets:

Cash and cash equivalents

67,977

83,927

Term deposits

–

4,954

Restricted cash

38,358

20,241

Short-term investments

22,118

24,550

Accounts receivable, net of allowance for doubtful accounts of US$1,648 and
US$1,282 as of June 30, 2020 and September 30, 2019, respectively

7,330

6,182

Inventories

4,232

5,713

Prepayment and other current assets

26,732

30,143

Amounts due from related parties

515

908

Deferred cost

1,427

2,104

   Total current assets

168,689

178,722

Non-current assets:

Property, plant and equipment, net

37,935

40,732

Operating lease right of use asset

–

30,074

Goodwill, net

74,829

75,704

Long term investments

25,379

25,572

Other intangible assets, net

30,113

24,318

Deposit for purchase of non-current assets

4,448

1,552

Deferred tax assets

3,865

3,713

Other non-current assets

10,092

7,579

   Total non-current assets

186,661

209,244

   Total assets

355,350

387,966

Liabilities and equity:

Current liabilities:

Bank borrowings

38,502

7,199

Accrued expenses and other liabilities (including accrued expenses and other
liabilities of the consolidated VIE without recourse to China Distance Education
Holdings Limited of US$47,280 and US$35,491 as of June 30, 2020 and September
30, 2019, respectively)

38,267

49,950

Amount due to related parties

600

687

Income tax payable (including income tax payable of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$6,942 and US$8,188
as of June 30, 2020 and September 30, 2019, respectively)

10,899

8,579

Deferred revenue, current portion (including deferred revenue of the consolidated
VIE without recourse to China Distance Education Holdings Limited of US$71,477
and US$93,364 as of June 30, 2020 and September 30, 2019, respectively)

94,202

72,253

Refundable fees – current portion (including refundable fees of the consolidated VIE
without recourse to China Distance Education Holdings Limited of US$24 and
US$435 as of June 30, 2020 and September 30, 2019, respectively)

435

24

Operating lease liability – current portion (including operating lease liability of the
consolidated VIE without recourse to China Distance Education Holdings Limited
of US$3,614 and nil as of June 30, 2020 and September 30, 2019, respectively)

–

3,967

   Total current liabilities

182,905

142,659

Non-current liabilities:

Deferred revenue, non-current portion (including deferred revenue of the
consolidated VIE without recourse to China Distance Education Holdings Limited
of US$80,430 and US$33,564 as of June 30, 2020 and September 30, 2019,
respectively)

33,564

80,430

Refundable fees – non-current portion (including refundable fees of the consolidated
VIE without recourse to China Distance Education Holdings Limited of US$3,944
and US$2,440 as of June 30, 2020 and September 30, 2019, respectively)

2,440

3,944

Long-term bank borrowing

–

16,000

Deferred tax liabilities

12,695

6,410

Operating lease liability – non-current portion (including operating lease liability of
the consolidated VIE without recourse to China Distance Education Holdings
Limited of US$24,536 and nil as of June 30, 2020 and September 30, 2019,
respectively)

–

24,927

Total non-current liabilities

48,699

131,711

   Total liabilities

231,604

274,370

 

Equity:

Ordinary shares (par value of US$0.0001 per share; 500,000,000 shares authorized; 
135,320,433 and 134,210,745 shares issued and outstanding at June 30, 2020 and
September 30, 2019, respectively)

13

14

Additional paid-in capital

24,507

26,629

Accumulated other comprehensive loss

(12,357)

(8,805)

Retained earnings

60,668

46,612

   Total China Distance Education Holdings Limited shareholder’s equity

72,831

64,450

Noncontrolling interests

50,915

49,146

   Total equity

123,746

113,596

   Total liabilities and equity

355,350

387,966

 

 

China Distance Education Holdings Limited

Unaudited Condensed Consolidated Statements Of Operations

(in thousands of US dollars, except number of shares, per share and per ADS data)

Three Months Ended June 30,

2019

2020

Sales, net of business tax, value-added tax and related surcharges:

Online education services

43,529

39,996

Books and reference materials

9,826

6,507

Others

8,392

4,211

–  Sale of learning simulation software

2,665

833

–  Business start-up training services

886

175

–  Others

4,841

3,203

   Total net revenues

61,747

50,714

Cost of sales

Cost of services and others

(20,836)

(19,767)

Cost of tangible goods sold

(9,735)

(6,882)

   Total cost of sales

(30,571)

(26,649)

Gross profit

31,176

24,065

Operating expenses

Selling expenses

(17,043)

(17,828)

General and administrative expenses

(4,947)

(5,383)

   Total operating expenses

(21,990)

(23,211)

Other operating income

665

1,607

Operating income 

9,851

2,461

Interest income

526

582

Interest expense

(703)

(216)

Gain from disposal of an investment

318

–

Exchange gain/(loss)

1,996

(243)

Income before income taxes

11,988

2,584

Income tax expense

(2,460)

(564)

Loss from equity method investments

(656)

(570)

Net income

8,872

1,450

Net loss attributable to noncontrolling interest

575

1,566

Net income attributable to China Distance Education Holdings Limited

9,447

3,016

 

Net income per share attributable to China Distance Education Holdings
Limited:

Net income attributable to China Distance Education Holdings Limited 
shareholders

Basic

0.070

0.022

Diluted

0.070

0.022

 

Net income per ADS attributable to China Distance Education Holdings
Limited:

Net income attributable to China Distance Education Holdings Limited 
shareholders

Basic

0.282

0.089

Diluted

0.281

0.088

Weighted average shares used in calculating net income per share
attributable to China Distance Education Holdings Limited:

Basic

133,037,866

134,005,063

Diluted

134,342,150

135,441,737

 

 

China Distance Education Holdings Limited

Unaudited Condensed Consolidated Statements Of Operations

 (in thousands of US dollars, except number of shares, per share and per ADS data)

Nine Months Ended June 30,

2019

2020

Sales, net of business tax, value-added tax and related surcharges:

Online education services

96,450

107,939

Books and reference materials

21,632

15,751

Others

25,049

20,322

–  Sale of learning simulation software

9,630

7,295

–  Business start-up training services

2,258

1,826

–  Others

13,161

11,201

   Total net revenues

143,131

144,012

Cost of sales

Cost of services and others

(62,461)

(57,938)

Cost of tangible goods sold

(16,997)

(14,840)

   Total cost of sales

(79,458)

(72,778)

Gross profit

63,673

71,234

Operating expenses

Selling expenses

(45,327)

(52,273)

General and administrative expenses

(17,855)

(17,016)

Total operating expenses

(63,182)

(69,289)

Change in fair value of contingent consideration payable

695

–

Other operating income

2,434

3,932

Operating income 

3,620

5,877

Interest income

1,714

1,952

Interest expense

(2,294)

(901)

Gain from disposal of an investment

318

–

Gain from deconsolidation of a subsidiary

6,869

–

Exchange loss

(104)

(1,154)

Income before income taxes

10,123

5,774

Income tax expense

(2,077)

(1,259)

Loss from equity method investments

(1,019)

(847)

Net income

7,027

3,668

Net loss attributable to noncontrolling interest

457

1,897

Net income attributable to China Distance Education Holdings Limited

7,484

5,565

 

Net income per share attributable to China Distance Education Holdings
Limited:

Net income attributable to China Distance Education Holdings Limited 
shareholders

Basic

0.056

0.041

Diluted

0.056

0.041

 

Net income per ADS attributable to China Distance Education Holdings
Limited:

Net income attributable to China Distance Education Holdings Limited 
shareholders

Basic

0.224

0.165

Diluted

0.223

0.165

Weighted average shares used in calculating net income per share
attributable to China Distance Education Holdings Limited:

Basic

132,946,829

133,808,589

Diluted

134,072,148

135,124,141

 

 

China Distance Education Holdings Limited

Reconciliations of non-GAAP measures to comparable GAAP measures

(In thousands of US Dollars, except number of shares, per share and per ADS data)

Three Months Ended June 30,

2019

2020

(Unaudited)

(Unaudited)

Cost of sales

30,571

26,649

Share-based compensation expense in cost of sales

–

45

Non-GAAP cost of sales

30,571

26,604

Selling expenses

17,043

17,828

Share-based compensation expense in selling expenses

–

19

Non-GAAP selling expenses

17,043

17,809

General and administrative expenses

4,947

5,383

Share-based compensation expense in general and administrative expenses

503

626

Non-GAAP general and administrative expenses

4,444

4,757

Gross profit

31,176

24,065

Share-based compensation expenses

–

45

Non-GAAP gross profit

31,176

24,110

Gross profit margin

50.5%

47.5%

Non-GAAP gross profit margin

50.5%

47.5%

Operating income

9,851

2,461

Share-based compensation expenses

503

690

Non-GAAP operating income

10,354

3,151

Operating margin

16.0%

4.9%

Non-GAAP operating margin

16.8%

6.2%

Net income attributable to CDEL

9,447

3,016

Share-based compensation expense

503

690

Non-GAAP net income attributable to CDEL

9,950

3,706

Net income margin attributable to CDEL

15.3%

5.9%

Non-GAAP net income margin attributable to CDEL

16.1%

7.3%

Net income per share attributable to CDEL—basic

0.070

0.022

Net income per share attributable to CDEL—diluted

0.070

0.022

Non-GAAP net income per share attributable to CDEL—basic

0.075

0.028

Non-GAAP net income per share attributable to CDEL—diluted

0.074

0.027

Net income per ADS attributable to China Distance Education Holdings Limited
      shareholders—basic (note 1)

0.282

0.089

Net income per ADS attributable to China Distance Education Holdings Limited
      shareholders—diluted (note 1)

0.281

0.088

Non-GAAP net income per ADS attributable to China Distance Education Holdings
      Limited shareholders—basic (note 1)

 

0.299

0.111

Non-GAAP net income per ADS attributable to China Distance Education Holdings
      Limited shareholders—diluted (note 1)

 

0.296

0.109

Weighted average shares used in calculating basic net income per share attributable
      to China Distance Education Holdings Limited

133,037,866

134,005,063

Weighted average shares used in calculating diluted net income per share
      attributable to China Distance Education Holdings Limited

134,342,150

135,441,737

Weighted average shares used in calculating basic non-GAAP net income per share
      attributable to China Distance Education Holdings Limited

133,037,866

134,005,063

Weighted average shares used in calculating diluted non-GAAP net income per share
      attributable to China Distance Education Holdings Limited

134,342,150

135,441,737

Note 1: Each ADS represents four ordinary shares

 

 

China Distance Education Holdings Limited

Reconciliations of non-GAAP measures to comparable GAAP measures

(In thousands of US Dollars, except number of shares, per share and per ADS data)

Nine Months Ended June 30,

2019

2020

(Unaudited)

(Unaudited)

Cost of sales

79,458

72,778

Share-based compensation expense in cost of sales

23

95

Non-GAAP cost of sales

79,435

72,683

Selling expenses

45,327

52,273

Share-based compensation expense in selling expenses

10

39

Non-GAAP selling expenses

45,317

52,234

General and administrative expenses

17,855

17,016

Share-based compensation expense in general and administrative expenses

1,482

1,795

Non-GAAP general and administrative expenses

16,373

15,221

Gross profit

63,673

71,234

Share-based compensation expenses

23

95

Non-GAAP gross profit

63,696

71,329

Gross profit margin

44.5%

49.5%

Non-GAAP gross profit margin

44.5%

49.5%

Operating income

3,620

5,877

Share-based compensation expenses

1,515

1,929

Non-GAAP operating income

5,135

7,806

Operating margin

2.5%

4.1%

Non-GAAP operating margin

3.6%

5.4%

Net income attributable to CDEL

7,484

5,565

Share-based compensation expense

1,515

1,929

Non-GAAP net income attributable to CDEL

8,999

7,494

Net income margin attributable to CDEL

5.2%

3.9%

Non-GAAP net income margin attributable to CDEL

6.3%

5.2%

Net income per share attributable to CDEL—basic

0.056

0.041

Net income per share attributable to CDEL—diluted

0.056

0.041

Non-GAAP net income per share attributable to CDEL—basic

0.068

0.056

Non-GAAP net income per share attributable to CDEL—diluted

0.067

0.055

Net income per ADS attributable to China Distance Education Holdings Limited
      shareholders—basic (note 1)

0.224

0.165

Net income per ADS attributable to China Distance Education Holdings Limited
      shareholders—diluted (note 1)

0.223

0.165

Non-GAAP net income per ADS attributable to China Distance Education Holdings
      Limited shareholders—basic (note 1)

 

0.271

0.224

Non-GAAP net income per ADS attributable to China Distance Education Holdings
      Limited shareholders—diluted (note 1)

 

0.269

0.222

Weighted average shares used in calculating basic net income per share attributable
      to China Distance Education Holdings Limited

132,946,829

133,808,589

Weighted average shares used in calculating diluted net income per share
      attributable to China Distance Education Holdings Limited

134,072,148

135,124,141

Weighted average shares used in calculating basic non-GAAP net income per share
      attributable to China Distance Education Holdings Limited

132,946,829

133,808,589

Weighted average shares used in calculating diluted non-GAAP net income per
      share attributable to China Distance Education Holdings Limited

134,072,148

135,124,141

 Note 1: Each ADS represents four ordinary shares

 

PR Newswire

Delta Controls, a Delta Group Company, Wins the 2020 Global Building Automation Systems Company of the Year Award by Frost & Sullivan

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FREMONT, Calif., Aug. 26, 2020 — Delta, a global leader in power and thermal management solutions, today announced Delta Controls, Inc., a Delta Group company and provider of cutting-edge building automation systems, has won Frost & Sullivan’s 2020 Global Building Automation Systems Company of the Year Award. The honor by the prestigious market research firm recognizes Delta Controls’ ability to provide superior value to worldwide customers with its industry-leading technologies that offer a full suite of smart features and functionality, as well as with its best-in-class technical support. Delta Controls’ signature O3 Sensor Hub 2.0, an innovative system integrating multiple sensors and IoT interfaces to enable next-generation smart and energy-efficient buildings, served as a key factor in receiving the Frost & Sullivan award.

"Delta Controls exemplifies superior best practices in best-of-breed technology offerings and innovative solutions because it incorporates a convergence of technologies with a dedicated customer service partnership experience," said Neha Tatikota, an industry analyst for energy and environment at Frost & Sullivan.

Mr. Bill Lo, general manager of Delta’s Building Automation Business Group, said, "We are extremely proud of Delta Controls’ passion in always pushing the envelope. They are a tremendously valued part of Delta – enabling us to collectively create a more energy-efficient built environment for a smarter and greener future."

Frost & Sullivan called the IoT-enabled O3 Sensor Hub 2.0  "revolutionary," before concluding "it is beneficial not just for building owners, managers, and occupants, but also accepted by architects, installers, and consultant community as a highly cost-effective installation." The hub utilizes sensor fusion technology for superior room control and to optimize occupant comfort. The ceiling-mounted device observes its environment and reports interior temperature, occupancy, humidity, lighting, heating and cooling – while serving as a connectivity platform for sensing air quality, ventilation, window contact and shade positions. It also supports multiple protocols that allow for integration with nearly any system, including native BACnet, MQTT and REST API for third-party integration and BLE API for custom app development.

"Winning this award is a testament to the hard work, spirit and dedication that shines across our organization every day," said John Nicholls, president of Delta Controls. "Our guiding philosophy is to ‘do it right,’ which fuels our ambition to develop only the most innovative solutions."

Surrey, Canada-based Delta Controls was acquired by Delta Electronics in 2016 to strengthen the company’s building automation capabilities and expand its portfolio of critical smart infrastructure solutions.

To learn about Delta Controls and the O3 Sensor Hub 2.0, visit www.deltacontrols.com

About Delta Controls

Delta Controls is at the forefront of building automation systems. Through our network of partners in over 80 countries, our solutions span the globe. Our focus on innovation and sustainability has made us industry leaders for over 30 years. Delta Controls offers dependable and user-friendly control solutions for buildings in the commercial, healthcare, hospitality, education and leisure markets. As part of Delta Electronics, we are committed to leading building automation into a sustainable future.

For more information, please visit: https://deltacontrols.com/

About Delta Electronics (Americas)

Delta Electronics (Americas) was established 38 years ago and has grown to over one thousand employees in the entire Americas region. Delta has offices, R&D centers, manufacturing, distribution and repair centers in multiple locations in the United States, Mexico and South America. In the U.S., operations are located in Fremont, Los Angeles, San Diego, Seattle, Austin, Dallas, Houston, Raleigh, Boston and Detroit to better serve its diverse customer base. Outside the U.S., Delta continues to expand its Americas operations in Mexico, Argentina, Brazil and Canada.

Delta Electronics (Americas) serves the IT, communications, industrial automation, renewable energy, lighting, power tool, automotive electric vehicle and other major industries. Products include power electronics, DC brushless fans, visual displays, industrial automation, networking products, electronic components, consumer products and energy efficient and renewable energy products. The company is always striving to define new ways to improve the energy efficiency of its products through advanced research and product development.

For more information, please visit: www.delta-americas.com

About Delta

Delta, founded in 1971, is a global leader in switching power supplies and thermal management products with a thriving portfolio of smart energy-saving systems and solutions in the fields of industrial automation, building automation, telecom power, data center infrastructure, EV charging, renewable energy, energy storage and display, to nurture the development of smart manufacturing and sustainable cities. As a world-class corporate citizen guided by its mission statement, "To provide innovative, clean and energy-efficient solutions for a better tomorrow," Delta leverages its core competence in high-efficiency power electronics and its CSR-embedded business model to address key environmental issues, such as climate change. Delta serves customers through its sales offices, R&D centers and manufacturing facilities spread over close to 200 locations across 5 continents.

Throughout its history, Delta has received various global awards and recognition for its business achievements, innovative technologies and dedication to CSR. Since 2011, Delta has been listed on the DJSI World Index of Dow Jones Sustainability™ Indices for 9 consecutive years. Delta also ranked a Climate Change Leadership Level by CDP for the 3rd year in 2019.

For detailed information about Delta, please visit: www.deltaww.com

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, helps clients accelerate growth and achieve best-in-class positions in growth, innovation, and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s growth team with disciplined research and best practices models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages nearly 60 years of experience in partnering with Global 1000 companies, emerging businesses, and the investment community from 45 offices on 6 continents. To join Frost & Sullivan’s Growth Partnership, visit http://www.frost.com.

Media Contacts:

Delta Electronics (Americas)
Public Relations and Communications
Richard Chang
+1 (510) 364-8432
richard.chang@deltaww.com 

PAN Communications for Delta Electronics (Americas)
Sean Welch
+1 (407) 734-7330
swelch@pancomm.com

PR Newswire

Capture Magnetic Moments With The New DJI OM 4 Smartphone Stabilizer

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OM 4 Makes The Most Of Your Smartphone Camera With A Sleek Folding Design, New Intelligent Features And A Novel Magnetic Phone Attachment

SHENZHEN, China, Aug. 26, 2020 — DJI, the world leader in civilian drones and creative camera technology, today unveiled the DJI OM 4, a premium smartphone stabilizer that helps capture important moments that pull you in. The rebranded sequel to DJI’s popular Osmo Mobile line, the DJI OM 4, features a highly functional quick-snap magnetic phone attachment system, intuitive operation, upgraded motors, new creative capture modes and a portable folding design. As mobile phone cameras become more advanced, the DJI OM 4 optimizes their technology by helping anyone easily create smoother, higher quality and more visually appealing images and videos. Using high-quality materials, robust motors and the absolute latest in 3-axis stabilizer technology, the DJI OM 4 offers everyone an effortless way to capture compelling content with just a few taps of your finger.

The Smartphone Stabilizer You Can Use Every Day

The DJI OM 4’s folding design makes it portable and convenient to take everywhere and the perfect companion for all of life’s adventures, whether on upcoming road trips, video conferencing with friends far away or memorable moments with family. On a full charge, the DJI OM 4 offers an impressive battery life of up to 15 hours and can also be used as a portable battery charger if need be. With durable, premium materials made to last and easy to use features, the DJI OM 4 will quickly integrate into daily life as the smartphone stabilizer you won’t leave home without. It is compatible with the vast majority of smartphones. Using upgraded motors, it can now support a heavier weight than its predecessors.

"As the DJI OM smartphone stabilizers have evolved over the years, every iteration has made it easier for anyone to add rock-solid stabilization to their photos and videos. With its new magnetic attachment and folding design, the DJI OM 4 again goes farther so anyone, no matter their experience with gimbals, can pick it up and make content that pulls in the viewer," said Paul Pan, Senior Product Line Manager at DJI. "As people around the globe now rely on their smartphones to navigate the new work-from-home world, stay connected with loved ones and showcase their lives, the DJI OM 4 is our phone’s companion we need to make capturing footage fun, smooth and magnetic."

Easier Than Ever Before

The DJI OM 4 transforms handheld stabilizer technology with a new and unique high-grade magnetic attachment design that makes it easier than ever to attach and balance your phone to the DJI OM 4. Two new options allow for quick and easy attachment and detachment of your phone. A sleek, secure and lightweight metal clamp connects to the back of your phone and can remain fixed to it during daily use, while ready to instantly attach to the DJI OM 4. A second option removes the balancing step by sticking an aesthetically designed magnetic mount with ring holder onto the back of your phone allowing snapping onto DJI OM4 even easier. The intuitive design allows DJI OM 4 users to access and control its core features and functions with just one hand. When not in immediate use, the DJI OM 4 can remain in Standby Mode to be easily reactivated at any time.

Capture Content You’ll Want to Share

The DJI OM 4 and the DJI Mimo app work together to help anyone generate top-quality content easily, with pre-programmed shooting modes and professional-grade features that make your photos and videos jump off the screen:

  • ActiveTrack 3.0: Select a subject for the DJI OM 4 to automatically track and let the gimbal do the work for you. Newly updated, the mode features improved distinction between subjects such as adults, children, and pets. Framing during ActiveTrack can now be adjusted by using the dedicated joystick for enhanced control.
  • Gesture Control: Easily start and stop video recording or take photos by using hand gestures to control the DJI OM 4, perfect for capturing an epic selfie or group footage without a finicky self-timer.
  • Pre-programmed Movements and Modes: Take advantage of unique gimbal movements and high-grade image modes that will make footage look like it was shot by a professional:
    – DynamicZoom: A visually appealing cinematic look, the DJI OM 4 automatically adjusts the zoom function to create the dramatic background shift made popular by Alfred Hitchcock.
    – Timelapse, Motionlapse, Hyperlapse: Show the passing of time in a sped-up form using TimeLapse; Motionlapse, which adds set movement points for the gimbal; or HyperLapse to physically move with the gimbal. All three modes use Electronic Image Stabilization (EIS) technology as well as the 3-axis gimbal for an added level of smoothness. Easily share these creative videos on social media for the world to enjoy.
    – Slow-motion: Slow down the world around you in stunning detail with the Slow-motion feature.
    – Sport Mode: The DJI OM 4 will respond and follow subjects and movements faster to add a level of action to the scene.
    – Panoramas: Choose from three creative panorama options to capture a wider perspective including 3X3 panorama, 240°panorama and a new "CloneMe" panorama which allows the user to add multiple versions of a person or subject into one shot for a unique and creative effect.
    – Spin Shot Gimbal Movement: Activated in the DJI Mimo app and using the joystick, the gimbal will rotate the phone to give a spinning effect.
    – Story Mode Templates: Choose from one of the preset templates to add a creative spin to your content. The DJI OM 4 uses preset movements, music and color palates for quick videos perfect for sharing on social media.

Useful Accessories, an Intuitive DJI Mimo App

Using a Bluetooth connection, users can easily navigate through the DJI Mimo app to control vital settings, adjustments and choose the various preset modes. Besides the Mimo App, the DJI OM 4 also controls the basic camera functions of your smartphone’s native camera app with the option of more advanced functions depending on the type of phone. Additionally, the DJI OM 4 is supported by useful accessories including a wrist strap, grip tripod and storage pouch.

DJI Care Refresh

DJI Care Refresh, the comprehensive protection plan for DJI product, will be available in select countries and regions for DJI OM 4. For a small additional charge, DJI Care Refresh provides 2 replacement units in 1 year, covering accidents like water and impact damage. The 2-Year plan provides 3 replacement units in 2 years and extends the original warranty period by one more year. Other exclusive services of DJI Care Refresh include International Warranty Service, VIP phone service and free shipping. For details, please visit: https://www.dji.com/service/djicare-refresh.

Pricing and Availability

The DJI OM 4 can be purchased from store.dji.com and authorized DJI resellers for the retail price of USD $149 which includes a magnetic ring holder, magnetic phone clamp, grip tripod, wrist strap, storage pouch and power cable. For more information, please visit https://www.dji.com/mobile/om-4. For local pricing, please visit store.dji.com or an authorized DJI reseller in your country or region.

Additional images and video can be found here: https://bit.ly/3g5sfZ1

For additional information, please contact:
pr@dji.com

Related Links :

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http://www.dji.com

PR Newswire

Agora Announces Steep Customer Growth in Q2

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Demand for Agora’s APIs mirrors societal shift towards real-time engagement

SANTA CLARA, California, Aug. 26, 2020 — Agora, Inc. (NASDAQ: API), a real-time engagement API provider, today announced steep growth across its customer base in Q2 driven by increased demand for real-time engagement (RTE) technology. Agora, with dual headquarters in Santa Clara, California and Shanghai, China, grew its customer base by 85.5 percent year-over-year as of June 2020, and it serves customers in more than 100 countries around the world through more than 10,000 active applications.

New Agora customers built features like audio and video live streaming into applications even as COVID-19-related social distancing requirements eased. Real-time engagement technology rapidly reached widespread adoption as companies shifted critical business functions to the virtual world. Sources like Gartner report 74% of CFOs plan to shift some employees to remote work permanently post-pandemic, making virtual experiences an integral common part of modern daily life.

"At Agora, it’s our goal to make real-time engagement ubiquitous so people can connect from anywhere, at any time in ways that capture meaningful human interactions," said Reggie Yativ, Chief Operations Officer and Chief Revenue Officer at Agora Lab, Inc. "We continue to see interest in RTE and real growth on a global scale from customers across sectors like education and gaming. This reflects a larger cultural shift towards richer virtual interactions in our personal and professional lives, both to create better online experiences, but also to innovate in the new business landscape."

In Q2, Agora inked new partnerships with industry leaders in IT, social gaming, online dating, and more. Partners turned to Agora to create unique use cases like:

  • Online Learning:
    • Applejax makes it easy for parents to find quality teachers for tutoring and pod-based learning. Quality education needs good teachers, that is why 100% of Applejax’s teachers are credentialed. Applejax partnered with Agora to develop virtual whiteboards and real-time engagement via video between teachers and students. Both features play an integral role in collaborative learning ensuring your child is learning at the highest level.
    • PandaTree, a remote language tutoring service, tapped Agora’s SDKs to improve business continuity and ensure streaming quality for its virtual tutoring sessions. With Agora’s SDK in place, PandaTree scaled to meet a 300% increase in user demand when shelter-in-place measures were first enacted. Agora’s network, which delivers extremely low latency, also enabled tutors to host innovative lessons with shared real-time visuals and engagement.
  • Streamed Fitness Experiences:
    • MixPose used Agora’s API to build live streaming into its platform for yoga instructors leading real-time classes, allowing instructors and viewers to capture the experience of a guided session. Agora’s video SDK pairs with MixPose’s AI functions to evaluate the yoga poses of participants, helping to offer guidance and track progress.
  • Socializing While Distanced:
    • VirtualTaproom pioneered the application of video chat to connect craft beer enthusiasts for networking and virtual brewery experiences. With Agora, VirtualTaproom took the craft beer tasting experience online with live-streaming virtual "taprooms," digital "tipping" and other interactive features. In connection with this year’s Craft Beer Professionals Virtual Conference, VirtualTaproom welcomed 5,000 attendees to a virtual afterparty and trade show.
    • Sesh used Agora’s RTE technology to build a unique video app for free-flowing group hangouts and personal safety. Sesh allows users to spontaneously start, join or watch video hangouts on their private groups in an organic and flexible manner. Additionally, the "Safety Sesh" feature allows users to easily broadcast their live video and location to their preselected safety contacts in times of perceived danger or insecurity.
  • Remote Collaboration:
    • VirBELA, an immersive platform that offers virtual campuses for offices and educational institutions, is redefining the future of business, events and education with Agora’s RTE capabilities. Using 3D technology, VirBELA creates dynamic virtual campuses that allow groups of people to engage in real-time through avatars.
  • Immersive Virtual Events:
    • InEvent used Agora’s SDKs to add real-time engagement features to its platform, which provides a no-code way to create immersive virtual event experiences complete with live-streamed speaking sessions. InEvent’s engaging, easy-to-use platform provides a virtual solution for summits and conferences derailed by social distancing restrictions.

Agora partners receive 10,000 free minutes of use each month hosted on Agora’s proprietary Software-Defined Real-Time Network (SD-RTN™), which delivers extremely low latency and high availability. This flexible pricing model allows Agora to scale with its customers, making Agora easy to seamlessly build into digital strategies.

For more information about Agora’s partners or its live interactive video and voice SDKs for mobile, web or desktop apps, visit www.agora.io.

About Agora

Agora’s mission is to make real-time engagement ubiquitous, allowing everyone to interact with anyone, in any application, anytime and anywhere. Agora’s platform provides developers simple, flexible and powerful application programming interfaces, or APIs, to embed real-time video and voice engagement experiences into their applications.

Contact: Alexandria Plew, agora@matternow.com

Logo – https://mma.prnasia.com/media2/240347/agora_inc_logo.jpg?p=medium600

Related Links :

http://www.agora.io

PR Newswire

MoneyGram Expands Digital Network and Mobile Wallet Capability by Integrating with Global Payment Network, Thunes

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JOHANNESBURG and SINGAPORE, Aug. 26, 2020 — MoneyGram International, Inc. (NASDAQ: MGI), a global leader in cross-border P2P payments and money transfers, today announced a partnership with leading fintech payment network, Thunes, which will enable MoneyGram’s customers to seamlessly send money directly to mobile wallets and bank accounts globally through the MoneyGram platform.

MoneyGram Expands Digital Network and Mobile Wallet Capability by Integrating with Global Payment Network, Thunes
MoneyGram Expands Digital Network and Mobile Wallet Capability by Integrating with Global Payment Network, Thunes

The global partnership will see additional payment services progressively rolled out in two phases. The first will be in Africa where countries such as Kenya, Tanzania and Uganda lead the continent in mobile wallet usage, while the second will focus on the Asia Pacific region and Latin America.

"This partnership marks an important milestone for us. Through this tie-up, Thunes can connect MoneyGram to over 30 markets in Africa, enabling us to significantly expand our reach into the region," said John Gely, Head of MoneyGram Africa. "We are continuously investing in key markets and accelerating digital growth through the integration of mobile wallets and banks, and we believe our partnership with Thunes will further support our strong expansion."

MoneyGram recently reported that account deposit and mobile wallet transactions increased 165% in July, which is an acceleration from the second quarter where the company reported 148% year-over-year transaction growth. This partnership is expected to further support this strong growth globally and further strengthen MoneyGram’s leading position in Africa.

"Thunes aspires to bridge the last mile in terms of access to financial services, particularly in emerging markets, and as such, this partnership is a strong fit," said Peter De Caluwe, CEO of Thunes. "Our robust technological capabilities will enable MoneyGram to achieve greater efficiencies which will bring about significant benefits for MoneyGram customers. In working together with MoneyGram, we strive to help them extend their reach worldwide. Beyond Africa, our next step is to facilitate MoneyGram’s expansion into Asia and Latin America."

According to the GSMA’s 2019 State of the Industry Report on Mobile Money, the mobile money industry is recording astonishing growth with roughly $730 billion global transactions in 2019. The organization reports Africa as one of the fastest growing mobile money transaction continents in the world with an estimated 190 million active wallets.

The COVID-19 outbreak had served to accelerate the trend towards digital payments as people shift away from cash and towards card and contactless payments for health and safety reasons.

"Like MoneyGram, it is important to us that we continue to make essential financial services more inclusive worldwide," said Serigne Dioum, Head of Mobile Money at MTN Group. "MoneyGram’s partnership with Thunes is already enabling our customers located across the African continent to receive payments quickly from MoneyGram straight to their mobile phones. This is significant, especially in times where the use of cash has been adversely impacted."

About MoneyGram International, Inc.

MoneyGram is a global leader in cross-border P2P payments and money transfers. Its consumer-centric capabilities enable family and friends to quickly and affordably send money in more than 200 countries and territories, with over 70 countries now digitally enabled.

MoneyGram leverages its modern, mobile, and API-driven platform and collaborates with the world’s leading brands to serve millions of people each year through both its walk-in business and its direct-to-consumer digital business.

With a strong culture of innovation and a relentless focus on utilizing technology to deliver the world’s best customer experience, MoneyGram is leading the evolution of digital P2P payments.

For more information, please visit MoneyGram.com and follow @MoneyGram

About Thunes

Thunes is a B2B cross-border payments network that enables corporates and financial institutions to move funds and provide financial services in emerging markets. Our global platform connects mobile wallet providers, banks, technology companies and money transfer operators in more than 100 countries and 60 currencies. Thunes is headquartered in Singapore with regional offices in London, Shanghai and New York.

For more information, visit www.thunes.com

About MTN Group

Launched in 1994, the MTN Group is a leading emerging markets operator with a clear vision to lead the delivery of a bold new digital world to our 240 million customers in 21 countries in Africa and the Middle East. We are inspired by our belief that everyone deserves the benefits of a modern connected life. The MTN Group is listed on the JSE Securities Exchange in South Africa under the share code "MTN". We are pursuing our BRIGHT strategy with a major focus on growth in data, fintech and digital businesses.

For more information, visit www.mtn.com or www.mtn.co.za

Photo – https://photos.prnasia.com/prnh/20200826/2899894-1?lang=0

Related Links :

http://www.thunes.com

PR Newswire

ASUS ZenFone 7 Series Flagship 5G Smartphone Delivers Stunning Visuals with Pixelworks Display Technology

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Leading color accuracy, DC dimming and HDR tone mapping enable a truly cinematic video experience in consumers’ hands

SAN JOSE, Calif., Aug. 26, 2020 — Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of innovative video and display processing solutions, today announced that the new flagship smartphone ASUS ZenFone 7 series utilizes the Company’s leading HDR Tone Mapping, patented high efficiency color calibration and DC Dimming technology to make on-screen entertainment come to life for ASUS mobile users. With HDR certification, ZenFone 7 users can enjoy the most immersive new content from popular streaming sites, such as Amazon, Netflix and YouTube.

Leveraging Pixelworks technology, the new ZenFone 7 delivers more vibrant colors and absolute color accuracy for true-to-life videos and photos, with greater contrast and detail, even when viewing in darker environments. The Company’s innovative DC dimming feature reduces flicker sometimes associated with screen dimming in dark environments, improving eye comfort while maintaining superior viewing clarity.

Built on a Samsung 6.67" OLED display with a 90 Hz refresh rate, the ZenFone 7 supports a resolution of 1080 x 2400 pixels. The phone’s premium visual display, powered by Pixelworks technology, makes photos and videos taken with the ZenFone 7’s new triple front and rear cameras mounted in the unique Flip Camera module to expose impeccable color reproduction across all viewing modes.

The flagship ZenFone 7 delivers superior display performance based on visual processing technologies by Pixelworks, including the following:

  • Absolute Color Accuracy – Every ZenFone 7 is factory tuned with the Company’s patented, high-efficiency calibration software and runs Pixelworks color management software to optimize power while delivering color accuracy for all apps and content spanning the sRGB and DCI-P3 color gamuts.
  • DC Dimming – Reduces eye strain and visual sensitivity that can occur at low brightness on Samsung OLED screens. To dim the screen, the Pixelworks solution dynamically adjusts the display’s current to reduce the screen flickering associated with conventional Pulse Width Modulation (PWM) dimming.
  • High-Efficiency Calibration – Each device is efficiently tuned during production using Pixelworks technology and a rapid, high-precision color checker to calibrate for standard sRGB and DCI-P3 color gamuts in a fraction of the time of other approaches.
  • Industry-leading HDR – The Company’s precision HDR tone mapping provides exceptional contrast and color depth with up to 1 billion hues and access to more HDR content with certification from top content providers, including Amazon, Netflix and YouTube.

"Our latest flagship ZenFone 7 series delivers true premium quality to consumers with a display that is performance-optimized using some of the industry’s most advanced visual processing technology from Pixelworks," said Bryan Chang, General Manager, Smartphone Business Unit at ASUS. "For effortless access to the richest high-bandwidth HDR content and applications, the ZenFone 7 series combines powerful performance with Pixelworks display technology to transform consumer entertainment into breathtaking cinematic experiences they can enjoy anywhere they go."

"ASUS offers a full lineup of new phones that continue to elevate the visual experience for consumers," said Todd DeBonis, President and CEO, Pixelworks. "We are excited to partner with ASUS on the ZenFone 7, as this product truly demonstrates the company’s ongoing commitment to deliver compelling flagship quality and value for consumers for all visual content. We look forward to continued expansion of our partnership with ASUS."

With over 20 years of visual processing experience, Pixelworks is committed to advancing the smartphone viewing experience across all product tiers around the globe, especially for video, gaming and user generated content.

Availability

ASUS announced and officially launched the ZenFone 7 series on August 26, 2020 to the global markets and is expected to be commercially available in Q3 2020.

About ASUS

ASUS is a multinational company known for the world’s best motherboards, PCs, monitors, graphics cards and routers. Along with an expanding range of superior gaming, content-creation and AIoT solutions, ASUS leads the industry through cutting-edge design and innovations made to create the most ubiquitous, intelligent, heartfelt and joyful smart life for everyone. With a global workforce that includes more than 5,000 R&D professionals, ASUS is driven to become the world’s most admired innovative leading technology enterprise. Inspired by the In Search of Incredible brand spirit, ASUS won more than 11 awards every day in 2019 and ranks as one of Forbes’ World’s Best Regarded Companies and Fortune’s World’s Most Admired Companies.

About Pixelworks

Pixelworks provides industry-leading content creation, video delivery and display processing solutions and technology that enable highly authentic viewing experiences with superior visual quality, across all screens – from cinema to smartphone and beyond. The Company has a 20-year history of delivering image processing innovation to leading providers of consumer electronics, professional displays and video streaming services. Pixelworks is headquartered in San Jose, CA. For more information, please visit the company’s web site at www.pixelworks.com.

Note: Pixelworks and the Pixelworks logo are registered trademarks of Pixelworks, Inc. All other trademarks are the property of their respective owners.


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PR Newswire

CNN’s ‘Tech for Good’ meets inspiring people who are using technology to overcome adversity

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HONG KONG, Aug. 26, 2020 — In the second episode of CNN’s new series ‘Tech For Good’, anchor and correspondent Kristie Lu Stout meets five inspiring people from across the globe who are using technology to beat the odds and excel in everything from sport, to cultural preservation, to gaming.

CNN’s ‘Tech for Good’ meets inspiring people who are using technology to overcome adversity
CNN’s ‘Tech for Good’ meets inspiring people who are using technology to overcome adversity

CNN first speaks with South African surfer and swimmer Caleb Swanepoel, who was back in the water just three weeks after losing his leg in a shark attack, with the help of a state-of-the-art prosthetic limb. Designed by German company Ottobock, the prosthetic is computerized and uses sensors to mimic a natural gait – allowing Swanepoel to continue doing what he loves most, and even compete in international championships.

Wearable technology is helping British ultramarathoner Simon Wheatcroft stay on track. Faced with the challenges of mobility that came with losing his eyesight as a teenager, Wheatcroft helped to develop technology that could enable him to run without a guide. Stout learns how he uses the Wayband, a watch-like haptic device by WearWorks which sends pulses to his wrists whenever he veers off-course. He hopes the technology will enable a new level of independence for the visually-impaired community. 

Archaeologist Solsiré Cusicanqui uses technology to conduct drone surveys and 3D modelling to unearth the secrets of a pre-Hispanic civilization that prospered in the Andes Mountains in Peru. She explains to CNN how such discoveries have helped instill a sense of identity and pride in the local communities of Peru’s northern highlands, and shares how technology has empowered her as a female archaeologist.

Stout then meets Adonian Chan, a graphic and type designer with an ambition to preserve an endangered calligraphy style native to his hometown of Hong Kong. Chan is using software called Glyphs to digitize the style – called Beiwei Kaishu – into a contemporary typeface which could eventually be installed on phones and computers. He says the technology allows him to adapt this ancient writing style to the needs of modern society, preventing its extinction.

Finally, ‘Tech for Good’ catches up with Ryan Hart – also known as ‘Robotnik’ – a professional video gamer from the UK. Hart reveals that he found a community in arcades after becoming homeless when he was 18, and that he turned to competitive gaming as a form of creative expression. He has since won hundreds of events around the world, and is now considered one of Europe’s best players.

Tech for Good Episode 2 trailer: https://bit.ly/2CW4bKR 
Tech for Good Episode 2 images: https://bit.ly/2E9Rr3N 
Tech for Good microsite: https://cnn.it/2ECCs23 

Airtimes for 30-minute special:
Saturday, August 29 at 1:00pm and 6:00pm HKT
Sunday, August 30 at 10:00am HKT
Monday, August 31 at 12:00am HKT

About CNN International 

CNN’s portfolio of news and information services is available in seven different languages across all major TV, digital and mobile platforms, reaching more than 475 million households around the globe. CNN International is the number one international TV news channel according to all major media surveys across Europe, the Middle East and Africa, the Asia Pacific region, and Latin America and has a US presence that includes CNNgo. CNN Digital is a leading network for online news, mobile news and social media. CNN is at the forefront of digital innovation and continues to invest heavily in expanding its digital global footprint, with a suite of award-winning digital properties and a range of strategic content partnerships, commercialised through a strong data-driven understanding of audience behaviours. CNN has won multiple prestigious awards around the world for its journalism. Around 1,000 hours of long-form series, documentaries and specials are produced every year by CNNI’s non-news programming division. CNN has 36 editorial offices and more than 1,100 affiliates worldwide through CNN Newsource. CNN International is a WarnerMedia company.

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PR Newswire

FICO Survey: 73% of Philippine Banks Believe AI Will Stop More Money Laundering

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36 percent currently experience significant struggles modifying their existing rules-based anti-money laundering (AML) compliance system

MANILA, Philippines, Aug. 26, 2020 —

Highlights:

  • 73 percent of Philippine banks believe AI will stop more money laundering.
  • 95 percent of Philippine banks still believe in older rules-based technology for AML compliance, despite 36 percent saying that they experience significant struggles modifying these systems.
  • In the Philippines, 100 percent of banks said they will invest in financial crime compliance in the year ahead and 41 percent plan to significantly increase this investment in 2021.      

More information: https://www.fico.com/en/latest-thinking/executive-brief/adopting-integrated-approach-aml-compliance

A recent survey by global analytics software firm FICO has revealed that while 73 percent of Philippine banks believe AI will strengthen anti-money laundering efforts, many remain unsure how to operationalize the advanced technology.

Conversely, when asked about the efficacy of much older rules-based technology, 95 percent of Philippine banks say they still believe in the ability of these AML systems, despite 36 percent saying they experience significant struggles modifying them.

"Rules-based compliance systems continue to the be the workhorse for banks in Asia Pacific when fighting financial crime," said Timothy Choon, FICO’s Financial Crimes Leader in Asia Pacific. "However, some early adopters are starting to embrace the new world of AI and realize that the decade-old rules-based systems can’t keep up with sophisticated threats on their own.

"The secret sauce is operationalizing advanced AI technology and making it work side-by-side with the rules-based systems. In fact, 20 percent of respondents picked this as their principal obstacle in meeting financial crime risk mitigation targets."

The survey showed that the key challenges for existing AML compliance solutions regionally were: the ability to meet new types of compliance risks in channels and products; the capacity to provide an end-to-end integrated compliance solution; and the facility to update quickly to changes in regulation.

Across Asia Pacific, larger multinational banks were more likely to use a vendor solution for AML, while the use of an in-house system was more common with domestic banks.

Key drivers of financial crime strategy

One of the leading indicators driving change in financial crime strategy is customer experience. Over two-in-five respondents ranked this in their top considerations with 17 percent of Asia Pacific banks citing it as the primary factor behind their current and future approach.

"We can see that addressing the competing needs of regulatory compliance and customer experience remains a balancing act for most institutions," said Choon. "Banks are challenged by the need for more information to deal with high rates of alerts from ineffective systems, while not vexing customers with incessant due diligence questions."

Additional considerations ranked second and third by banks included, reputation damage and direct financial losses. When it came to financial crime challenges almost half of respondents cited the speed of responding to new threats, while a third believe achieving accurate detection remains a significant test.

FICO’s comprehensive compliance solution incorporates advanced machine learning techniques designed to address these challenges by significantly improving detection accuracy through patented advanced analytics models such as Soft Clustering Misalignment and Threat Score which can help financial institutions operationalize AI within their existing compliance strategies.

Investment in compliance technology

A significant majority of banks (93%) across Asia Pacific are likely to continue their technology spend on either upgrading or enhancing their compliance systems. However, in the key regional financial centres of Singapore and Hong Kong only two-thirds of respondents indicated that their banks are likely to start new investments in compliance technology, likely due to their more significant spend in this area in recent years.

In the Philippines, 100 percent of banks said they will continue to invest in compliance in the year ahead and 41 percent plan to significantly increase this investment in 2021.

Overall levels of investment in compliance technology by banks in Asia Pacific are expected to rise in 2021. 49 percent of respondents said budgets will increase, with an additional 34 percent expecting a significant increase. Interestingly, foreign banks are more inclined towards new spend compared with domestic counterparts. Indonesia, Australia, Thailand and the Philippines were the markets that said they would invest the most in 2021.

"This survey, conducted in May, shows that even in the recent economic downturn triggered by the pandemic, banks remain committed to targeted spending that boosts their AML compliance defenses," said Choon. "There is an increased willingness to perceive compliance and fraud as a common financial crime risk – a fraudster is more likely to launder money, and vice versa.

"This convergence is a global trend. Banks in the US and UK are well on their way to fully integrating their compliance and fraud functions, bringing together teams, leaders and technologies.  We believe banks in Asia Pacific are looking to these markets to see what will work, with plans to follow quickly in the next 24-36 months."

FICO’s Integrated AML Compliance Survey was produced in May 2020 using an online, quantitative poll of 256 senior executives from banks across eleven countries carried out on behalf of FICO by an independent research company. The countries and regions surveyed were Australia, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 195 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, manufacturing, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.

Learn more at www.fico.com.

Join the conversation on Twitter at @FICOnews_APAC.

FICO is a registered trademark of Fair Isaac Corporation in the US and other countries

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PR Newswire

First Rapid Corona Antigen Test Approved for Clinical Study in Germany

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The health tech company Digital Diagnostics AG from Mainz, Germany, has received approval for clinical trials from a German ethics committee and the Federal Institute for Drugs and Medical Devices (BfArM). This is a crucial regulatory step in the ongoing approval process for the Digid Cantisense™ SARS-CoV-2 test in Germany. The aim of the clinical trials is to demonstrate the reliability of the new technology in comparison with conventional PCR tests. The new test is particularly suitable for access control at airports or at large-scale event

MAINZ, Germany, Aug. 26, 2020 — In June 2020, the health technology company Digital Diagnostics AG from Mainz, applied for approval of the Digid Cantisense™ SARS-CoV-2 test for Germany at the German Federal Institute for Drugs and Medical Devices (BfArM). BfArM has now permitted the conduct of clinical trials in accordance with Section 20 (1) of the German Medical Devices Act (MPG). Meanwhile, the ethics committee of the Rheinland-Pfalz Medical Association (Landesärztekammer) has also given a positive vote.

Completion of the clinical evaluation of the Digid biosensor and the accompanying reading device is expected in October 2020. If the results meet expectations, the rapid Cantisense™ test shall be approved in short succession. Digital Diagnostics AG will then be able to launch the tests on the market in millions. The company currently develops the necessary production capacities, ready for use in time right after the approval.

The leading center to carry out the clinical trials is PFÜTZNER Science & Health Institute in Mainz, which works closely with scientists and MDs from corona test centers and clinics throughout Germany. It is planned to perform the study locally as well as in known German corona hotspots.

In the study, patients are tested in parallel with a standard PCR method and with the Digid Cantisense™ SARS-CoV-2 test. Like with all common SARS-CoV-2 determinations, medical staff takes a throat swab from the patient. The sample is analyzed directly on site with the Digid rapid test system and afterwards compared with the result of a PCR test from a reference laboratory to demonstrate the accuracy of the Digid Cantisense™ SARS-CoV-2 test. The design of the study complies with FDA and EU Commission guidelines for in-vitro measurement procedures to detect SARS-CoV-2.

One key advantage of the Digid Cantisense™ SARS-CoV-2 test is that it directly detects the presence of the virus in the sample, while other available rapid tests mostly detect antibodies. Patients only develop these antibodies if they have had an infection for several days, a time during which they were contagious and might unknowingly have infected others. With the unique combination of immediate on-site detection of the virus in tested patients, the Digid Cantisense™ SARS-CoV-2 test is particularly useful to contain the spread of the pandemic and suitable for on-site access control and rapid testing, for example at airports, in hospitals or at large-scale events.

Press contact

Thomas Huber
semanticom GmbH
+49 30 275 80 81 11
digid-pr@semanticom.eu

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