HONG KONG, Oct. 22, 2020 /PRNewswire/ -- CLPS Incorporation
(the "Company" or "CLPS") (Nasdaq: CLPS), today announced its
financial results for the six months ended June 30, 2020 and full year of fiscal year
2020.
Second Half of Fiscal 2020 Highlights (all results compared
to the six months ended June 30,
2019)
- Revenues increased by 37.2% to $46.8
million from $34.1
million.
- Gross profit increased by 25.1% to $15.7
million from $12.6
million.
- Net income attributable to CLPS Incorporation's shareholders
was $0.6 million, or $0.04 basic and diluted earnings per share,
compared to net loss attributable to CLPS Incorporation's
shareholders of $1.8 million, or
$0.13 basic and diluted losses per
share.
- Non-GAAP net income attributable to CLPS Incorporation's
shareholders1 increased by 200.9% to $3.5 million, or $0.23 basic and diluted earnings per share,
compared to $1.2 million, or
$0.08 basic and diluted earnings per
share (See Use of Non-GAAP Financial Measures below for a
discussion of such measures as used in this press release).
Fiscal Year 2020 Highlights (all results compared to the
twelve months ended June 30,
2019)
- Revenues increased by 37.7% to $89.4
million from $64.9
million.
- Gross profit increased by 31.0% to $31.1
million from $23.8
million.
- Net income attributable to CLPS Incorporation's shareholders
was $2.9 million, or $0.20 basic and diluted earnings per share,
compared to net loss attributable to CLPS Incorporation's
shareholders of $3.3 million, or
$0.24 basic and diluted losses per
share.
- Non-GAAP net income attributable to CLPS Incorporation's
shareholders1 increased by 85.3% to $6.9 million, or $0.47 basic and diluted earnings per share,
compared to $3.7 million, or
$0.27 basic and diluted earnings per
share (See Use of Non-GAAP Financial Measures below for a
discussion of such measures as used in this press release).
Mr. Raymond Lin, Co-Founder and
Chief Executive Officer of CLPS, commented, "As the disruption from
the COVID-19 pandemic persists, the health and safety of our
employees and their families, as well as our customers and business
partners, have been and will continue to be our top priority.
Despite the current circumstances, we are pleased to see stable
growth in the second half and full year of fiscal 2020 in both our
international and local markets. This year, we acquired Ridik to
further expand our business in the Southeast Asia; in addition, we opened CLPS
California, which will support our U.S. market. Locally, we have
invested in Shenzhen Huaqin Robotics and Guangdong Zhichuang
Software Technology to further enrich our business services and to
provide better service to our clients."
"Cultivating young talent has always been important to us. We
are currently cooperating with Technological and Higher Education
Institute of Hong Kong and its
information technology program to maintain a robust applicant pool
and recruit young talent to join our company."
"Going forward, we will continue to expand our business and grow
our market share, both internationally and locally. We hope to
achieve sustainable, high-quality growth for CLPS as we create
long-term value for our shareholders."
Ms. Rui Yang, acting Chief
Financial Officer of CLPS, commented, "During the second half and
full year of fiscal 2020, we are pleased to announce that our
revenue increased by double digits year-over-year, by 37.2% and
37.7%, respectively. Net income attributable to CLPS
Incorporation's shareholders was $0.6
million in the second half and $2.9
million in the full year of fiscal 2020. Our basic and
diluted earnings per share in the second half of fiscal 2020 was
$0.04, and $0.20 for the full-year fiscal 2020. Our non-GAAP
basic and diluted earnings per share in the second half of fiscal
year 2020 was $0.23, and $0.47 for the full year of fiscal 2020. With our
strong balance sheet and outstanding services, we are fully
confident in our ability to deliver sustainable value for our
shareholders."
Second Half and Fiscal Year 2020 Financial Results
Revenues
In the second half of fiscal 2020, revenues increased by
$12.7 million, or 37.2%, to
$46.8 million from $34.1 million in the prior year period. For the
year ended June 30, 2020, revenues
increased by $24.5 million, or 37.7%,
to $89.4 million from $64.9 million in the prior year period. This
increase in revenue was mainly due to an increase in revenue from
IT consulting services.
The number of clients increased by 53, or 30.5%, to 227 for
the year ended June 30, 2020 from 174
in the prior year period. Revenues from top five clients
accounted for 47.3% and 50.7% of the Company's total revenues for
fiscal 2020 and 2019, respectively, which reflects decreased in
revenue dependence from major clients.
Revenues by Service
- Revenue from IT consulting services increased by $13.5 million, or 42.3%, to $45.5 million and accounted for 97.2% of total
revenue in the second half of fiscal 2020, up from $32.0 million, or 93.7% of total revenue, in the
prior year period. For the year ended June
30, 2020, revenue from IT consulting services increased by
$25.3 million, or 41.1%, to
$87.1 million and accounted for 97.5%
of total revenue, up from $61.8
million, or 95.1% of total revenue, in the prior year
period. The increase was due to increased demand for the Company's
IT consulting service from banks and other financial institutions,
primarily from existing clients. For the twelve months ended
June 30, 2020 and 2019, 40.0% and
47.5% of IT consulting services revenue were from international
banks, respectively.
- Revenue from customized IT solution services decreased by
$1.0 million, or 45.4%, to
$1.1 million in the second half of
fiscal 2020 from $2.1 million.
Revenue from customized IT solution services decreased by
$1.2 million, or 39.3%, to
$1.8 million for the year ended
June 30, 2020, from $3.0 million in the same period of the previous
year. The decrease was primarily due to decreasing demand from
existing clients.
- Revenue from other services increased to $0.2 million in the second half of fiscal year
2020 from $0.04 million in the prior
year period. Revenue from other services increased by $0.3 million, or 219.0%, to $0.4 million for the year ended June 30, 2020, from $0.1
million in the prior year period.
Revenues by Operational Areas
- Revenue from banking area increased by $11.4 million, or 34.3% to $44.5 million for the year ended June 30, 2020, from $33.1
million in the prior year period. Revenue from banking area
accounted for 49.8% and 51.2% of total revenues in fiscal 2020 and
fiscal 2019, respectively.
- Revenue from wealth management area increased by $4.7 million, or 32.6% to $19.2 million for the year ended June 30, 2020, from $14.5
million in the prior year period. Revenue from wealth
management area accounted for 21.5% and 22.4% of total revenues in
fiscal 2020 and fiscal 2019, respectively.
- Revenue from e-Commerce area increased by $2.4 million, or 27.8% to $11.1 million for the year ended June 30, 2020, from $8.7
million in the prior year period. Revenue from e-Commerce
area accounted for 12.4% and 13.4% of total revenues in fiscal 2020
and fiscal 2019, respectively.
- Revenue from automotive area increased by $1.6 million, or 77.3% to $3.6 million for the year ended June 30, 2020, from $2.0
million in the prior year period. Revenue from automotive
area accounted for 4.1% and 3.2% of total revenues in fiscal 2020
and fiscal 2019, respectively.
Revenues by Geography
Revenue generated outside of mainland China increased by 110.0% to $6.3 million in the second half of fiscal year
2020 from $3.0 million in the prior
year period. Revenue generated outside of mainland China increased by 133.2% to $10.6 million for the year ended June 30, 2020 from $4.5
million in the prior year period, accounted for 11.8% of
total revenue compared to 7.0% in the prior year period. The
increase in revenue generated outside mainland China reflects the Company's successful and
continuous global expansion strategy.
Gross Profit and Gross Margin
Gross profit increased by $3.2
million, or 25.1%, to $15.7
million in the second half of fiscal 2020 from $12.6 million in the prior year period. Gross
margin in the second half of fiscal 2020 decreased to 33.6%
compared to 36.9% in the prior year period. The decrease in gross
margin was primarily due to the increase in epidemic prevention
cost during the COVID-19 outbreak.
Gross profit increased by $7.3
million, or 31.0%, to $31.1
million for the year ended June 30,
2020, from $23.8 million in
the prior year period. Gross margin decreased to 34.8% for the year
ended June 30, 2020, compared to
36.6% in the prior year period. The decrease in gross margin was
primarily due to the increase in epidemic prevention cost during
the COVID-19 outbreak.
Operating Expenses
Selling and marketing expenses increased by $0.5 million, or 37.3%, to $1.7 million in the second half of fiscal 2020
from $1.2 million in the prior year
period. Selling and marketing expenses increased by $0.9 million, or 40.4%, to $3.1 million for the year ended June 30, 2020, from $2.2
million in the prior year. The increase was due to the
increase of salary expenses as new staffs
were hired, enabling the implementation of the Company's
global expansion strategy.
Research and development expenses increased by $0.5 million, or 9.7%, to $5.4 million in the second half of fiscal 2020
from $4.9 million in the prior year
period. Research and development expenses increased by $2.4 million, or 30.8%, to $10.4 million for the year ended June 30, 2020 from $8.0
million in the prior year period. The increase primarily
resulted from the establishment of four new research projects and
the Company's continued R&D efforts in big data, blockchain,
and artificial intelligence (AI).
General and administrative expenses increased by $0.2 million, or 2.7%, to $8.4 million in the second half of fiscal 2020
from $8.2 million in the prior year
period. After excluding the impact of non-cash share-based
compensation expenses, non-GAAP general and administrative
expenses2 increased by $0.4 million, or 8.0%, to $5.7 million in the second half of fiscal 2020
from $5.3 million in the same period
of the previous year. The increase in non-GAAP administrative
expenses was primarily due to an increase in administrative
personnel and M&A related expenses as a result of business
expansion.
General and administrative expenses decreased by $1.1 million, or 6.0%, to $16.3 million for the year ended June 30, 2020, from $17.4
million in the prior year period. The decrease was primarily
due to the decrease of $3.2 million
non-cash share-based compensation expenses. After the deduction of
non-cash share-based compensation expenses, non-GAAP general and
administrative expenses2 increased by $2.1 million, or 20.5%, to $12.6 million for the year ended June 30, 2020, from $10.4
million in the same period of the previous year. The
increase in non-GAAP administrative expenses was primarily due to
an increase in administrative personnel and M&A related
expenses as a result of business expansion.
Operating Income/Loss
Operating income increased by $1.82
million to $0.04 million in
the second half of fiscal 2020 from a loss of $1.78 million in the same period of the previous
year. Operating margin was 0.1% in the second half of fiscal 2020,
compared to -5.2% in the prior year period.
Operating income increased by $5.1
million to $1.3 million for
the year ended June 30, 2020 from a
loss of $3.8 million in the same
period of the previous year. Operating margin was 1.4% for the year
ended June 30, 2020, compared to
-5.8% in the prior year period.
Other Income and Expenses
Total other income, net of other expenses increased to
$1.1 million in the second half of
fiscal 2020 from $0.1 million in the
prior year period.
Total other income, net of other expenses increased to
$2.4 million for the year ended
June 30, 2020, from $0.7 million in the prior year period.
Provision (Benefits) for Income Taxes
Provision for income taxes increased by $0.5 million to $0.4
million in the second half of fiscal 2020 from $0.1 million income tax benefits in the same
period of the previous year, mainly due to the reduction in
recoverable losses for some of the Company's subsidiaries.
Provision for income taxes was $0.8
million for the year ended June 30,
2020, compared to $0.2 million
in fiscal 2019, mainly due to the reduction in recoverable losses
for some of the Company's subsidiaries.
Net Income/Loss and EPS
Net income for the second half of fiscal 2020 increased by
$2.5 million to $0.8 million from a net loss of $1.7 million in the prior year period. After
excluding the impact of non-cash share-based compensation expenses,
non-GAAP net income3 increased by $2.4 million, or 196.7%, to $3.7 million in the second half of fiscal 2020
from $1.3 million in the same period
of the previous year. After excluding the impact of non-controlling
interests, net income attributable to CLPS Incorporation's
shareholders in the second half of fiscal 2020 was $0.6 million, or $0.04 basic and diluted earnings per share. After
excluding the impact of non-cash share-based compensation expenses,
non-GAAP net income attributable to CLPS Incorporation's
shareholders1 in the second half of fiscal 2020 was
$3.5 million, or $0.23 basic and diluted earnings per share. This
is compared to non-GAAP net income attributable to CLPS
Incorporation's shareholders of $1.2
million, or $0.08 basic and
diluted earnings per share, in the second half of fiscal 2019.
Net income for the year ended June 30,
2020 increased by $6.5 million
to $3.1 million from a net loss of
$3.4 million in the prior year
period. The increase in net income was due to the decrease in
non-cash share-based compensation expenses. After the deduction of
non-cash share-based compensation expenses, non-GAAP net
income3 increased by $3.5 million, or 97.7%, to $7.1 million for the year ended June 30, 2020, from $3.6
million in the same period of the previous year. After the
deduction of non-controlling interests, net income attributable to
CLPS Incorporation's shareholders for the year ended June 30, 2020, was $2.9
million, or $0.20 basic and
diluted earnings per share. After excluding the impact of non-cash
share-based compensation expenses, non-GAAP net income attributable
to CLPS Incorporation's shareholders1 for the year
ended June 30, 2020, was $6.9 million, or $0.47 basic and diluted earnings per share. This
is compared to non-GAAP net income attributable to CLPS
Incorporation's shareholders of $3.7
million, or $0.27 basic and
diluted earnings per share, in the prior year period.
Cash Flow
As of June 30, 2020, the Company
had cash and cash equivalents of $12.7
million compared to $6.6
million as of June 30,
2019.
Net cash provided by operating activities was approximately
$5.9 million for the twelve months
ended June 30, 2020. Net cash
provided by investing activities was approximately $0.2 million. Net cash provided by financing
activities was approximately $0.1
million. The effect of exchange rate change on cash was
approximately negative $0.2. The
Company believes that its current cash position and cash flow from
operations are sufficient to meet its anticipated cash needs for at
least the next 12 months.
Financial Outlook
For fiscal year 2021, the Company expects, absent material
acquisitions or non-recurring transactions, total sales growth in
the range of approximately 30% to 35%, non-GAAP net income growth
in the range of approximately 32% to 37% compared to fiscal year
2020 financial results.
This forecast reflects the Company's current and preliminary
views, which are subject to change and are subject to risks and
uncertainties, including, but not limited to, potential accounting
adjustments attributable to Ridik Pte. Ltd. acquisition as well as
various risks and uncertainties facing the Company's business and
operations as identified in its public filings.
Exchange Rate
The balance sheet amounts with the exception of equity as of
June 30, 2020, were translated at
7.0651 RMB to 1.00 USD compared to 6.8650 RMB to
1.00 USD as of June 30, 2019. The equity accounts were stated at
their historical rate. The average translation rates applied to the
income statements accounts for the periods ended June 30, 2020 and 2019 were 7.0309 RMB to 1.00
USD and 6.8211 RMB to
1.00 USD, respectively. The change in
the value of the RMB relative to the U.S. dollar may affect our
financial results reported in the U.S, dollar terms without giving
effect to any underlying change in our business or results of
operation.
Conference Call Information
The Company will hold a conference call at 8:30 am ET on October 23,
2020 to discuss second half and full year of fiscal 2020
results. Listeners may access the call by dialing:
U.S.
Toll-Free:
|
+1-888-394-8218
|
U.S. Local
/International:
|
+1-323-794-2588
|
Mainland
China:
|
400 120
8590
|
Hong Kong:
|
800 961
384
|
To access the live webcast of the conference call, please visit
this link. The live and archived webcast will also be available
through the Company's investor relations website at
http://ir.clpsglobal.com.
A replay of the call will be available through November 6, 2020 by dialing:
U.S.
Toll-Free:
|
+1-844-512-2921
|
U.S.
Local/International:
|
+1-412-317-6671
|
Passcode:
|
1612001
|
About CLPS Incorporation
Headquartered in Hong Kong,
CLPS Incorporation (the "Company") (Nasdaq: CLPS) is a global
leading information technology ("IT"), consulting and solutions
service provider focusing on the banking, insurance and financial
sectors. The Company serves as an IT solutions provider to a
growing network of clients in the global financial industry,
including large financial institutions in the US, Europe, Australia, Southeast
Asia and Hong Kong, and
their PRC-based IT centers. The Company maintains 18 delivery
and/or research & development centers to serve different
customers in various geographic locations. Mainland China centers are located in Shanghai, Beijing, Dalian, Tianjin, Baoding, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Suzhou. The remaining eight
global centers are located in Hong Kong SAR, USA, UK, Japan, Singapore, Malaysia, Australia, and India. For further information regarding the
Company, please visit: http://ir.clpsglobal.com/, or follow CLPS on
Facebook, LinkedIn, and Twitter.
Forward-Looking Statements
Certain of the statements made in this press release are
"forward-looking statements" within the meaning and protections of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements with respect to the
Company's beliefs, plans, objectives, goals, expectations,
anticipations, assumptions, estimates, intentions, and future
performance, and involve known and unknown risks, uncertainties and
other factors, which may be beyond the Company's control, and which
may cause the actual results, performance, capital, ownership or
achievements of the Company to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. All such statements attributable to us
are expressly qualified in their entirety by this cautionary
notice, including, without limitation, those risks and
uncertainties related to the Company's financial and operational
performance in the second half and full year of fiscal 2020, its
expectations of the Company's future performance, its preliminary
outlook and guidance offered in this presentation, as well as the
risks and uncertainties described in the Company's most recently
filed SEC reports and filings. Such reports are available upon
request from the Company, or from the Securities and Exchange
Commission, including through the SEC's Internet website at
http://www.sec.gov. We have no obligation and do not undertake to
update, revise or correct any of the forward-looking statements
after the date hereof, or after the respective dates on which any
such statements otherwise are made.
Use of Non-GAAP Financial Measures
The unaudited condensed consolidated financial information is
prepared in conformity with accounting principles generally
accepted in the United States of
America ("U.S. GAAP"), except that the consolidated
statement of changes in shareholders' equity, consolidated
statements of cash flows, and the detailed notes have not been
presented. The Company uses non-GAAP operating income, non-GAAP
operating margin, non-GAAP net income attributable to CLPS
Incorporation's shareholders, and basic and diluted non-GAAP net
income per share, which are non-GAAP financial measures. Non-GAAP
operating income is operating income excluding share-based
compensation expenses. Non-GAAP operating margin is non-GAAP
operating income as a percentage of revenues. Non-GAAP net income
attributable to CLPS Incorporation's shareholders is net income
attributable to CLPS Incorporation's shareholders excluding
share-based compensation expenses. Basic and diluted non-GAAP net
income per share is non-GAAP net income attributable to common
shareholders divided by weighted average number of shares used in
the calculation of basic and diluted net income per share. The
Company believes that separate analysis and exclusion of the
non-cash impact of share-based compensation expenses clarity to the
constituent parts of its performance. The Company reviews these
non-GAAP financial measures together with GAAP financial measures
to obtain a better understanding of its operating performance. It
uses the non-GAAP financial measure for planning, forecasting and
measuring results against the forecast. The Company believes that
non-GAAP financial measure is useful supplemental information for
investors and analysts to assess its operating performance without
the effect of non-cash share-based compensation expenses, which
have been and will continue to be significant recurring expenses in
its business. However, the use of non-GAAP financial measures has
material limitations as an analytical tool. One of the limitations
of using non-GAAP financial measures is that they do not include
all items that impact the Company's net income for the period. In
addition, because non-GAAP financial measures are not measured in
the same manner by all companies, they may not be comparable to
other similar titled measures used by other companies. In light of
the foregoing limitations, you should not consider non-GAAP
financial measure in isolation from or as an alternative to the
financial measure prepared in accordance with U.S. GAAP.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation from, or as a substitute
for, the financial information prepared and presented in accordance
with U.S. GAAP. The Company encourages investors to carefully
consider its results under GAAP, as well as its supplemental
non-GAAP information and the reconciliation between these
presentations, to more fully understand its business. For more
information on these non-GAAP financial measures, please see the
table captioned "Reconciliations of Non-GAAP and GAAP Results" near
the end of this release.
Contact:
CLPS Incorporation
Rhon Galicha
Investor Relations Office
Phone: +86-182-2192-5378
Email: ir@clpsglobal.com
1 Non-GAAP
net income attributable to CLPS Incorporation's shareholders is a
non-GAAP financial measure, which is defined as net income
attributable to the Company excluding share-based compensation
expenses. Please refer to the section titled "Reconciliation of
GAAP and Non-GAAP Results" for details.
|
2 Non-GAAP general and administrative
expenses is a non-GAAP financial measure, which is defined as
general and administrative expenses excluding share-based
compensation expenses. Please refer to the section titled
"Reconciliation of GAAP and Non-GAAP Results" for
details.
|
3 Non-GAAP net income is a non-GAAP
financial measure, which is defined as net income excluding
share-based compensation expenses. Please refer to the section
titled "Reconciliation of GAAP and Non-GAAP Results" for
details.
|
CLPS
INCORPORATION
|
CONSOLIDATED
BALANCE SHEETS
|
(Amounts in U.S.
dollars ("$"), except for number of shares)
|
|
|
|
As of June
30,
|
As of
December 31,
|
|
|
|
2020
(Audited)
|
|
|
2019
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
12,652,120
|
|
|
$
|
11,234,260
|
|
Short-term
investments
|
|
|
636,934
|
|
|
|
-
|
|
Accounts receivable,
net
|
|
|
25,753,856
|
|
|
|
20,857,441
|
|
Escrow
receivable
|
|
|
-
|
|
|
|
200,000
|
|
Prepayments, deposits
and other assets, net
|
|
|
1,280,967
|
|
|
|
1,998,499
|
|
Prepaid income
tax
|
|
|
15,780
|
|
|
|
524,352
|
|
Amounts due from
related parties
|
|
|
169,185
|
|
|
|
252,706
|
|
Total Current
Assets
|
|
|
40,508,842
|
|
|
|
35,067,258
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
452,472
|
|
|
|
471,886
|
|
Intangible assets,
net
|
|
|
1,144,579
|
|
|
|
1,240,490
|
|
Goodwill
|
|
|
2,118,700
|
|
|
|
2,184,001
|
|
Long-term
investments
|
|
|
680,131
|
|
|
|
1,102,691
|
|
Prepayments, deposits
and other assets, net
|
|
|
244,387
|
|
|
|
220,661
|
|
Deferred tax assets,
net
|
|
|
203,247
|
|
|
|
251,912
|
|
Total
Assets
|
|
$
|
45,352,358
|
|
|
$
|
40,538,899
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
2,161,239
|
|
|
$
|
802,514
|
|
Accounts payable and
other current liabilities
|
|
|
489,043
|
|
|
|
1,006,896
|
|
Tax
payables
|
|
|
1,426,614
|
|
|
|
1,178,472
|
|
Contract
liabilities
|
|
|
755,178
|
|
|
|
1,241,706
|
|
Salaries and benefits
payable
|
|
|
11,522,268
|
|
|
|
10,789,713
|
|
Total Current
Liabilities
|
|
|
16,354,342
|
|
|
|
15,019,301
|
|
Long-term bank
loans
|
|
|
22,554
|
|
|
|
-
|
|
Deferred tax
liabilities
|
|
|
163,163
|
|
|
|
192,127
|
|
Unrecognized tax
benefits
|
|
|
194,939
|
|
|
|
-
|
|
TOTAL
LIABILITIES
|
|
|
16,734,998
|
|
|
|
15,211,428
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Common stock, $0.0001 par
value, 100,000,000 shares authorized; 15,930,330
shares issued and outstanding
as of June 30, 2020; 13,913,201 shares
issued and outstanding as of
June 30, 2019. *
|
|
|
1,593
|
|
|
|
1,425
|
|
Additional paid-in
capital
|
|
|
28,586,048
|
|
|
|
25,648,785
|
|
Statutory
reserves
|
|
|
2,803,811
|
|
|
|
2,331,138
|
|
Retained
earnings
|
|
|
(2,680,143)
|
|
|
|
(2,776,767)
|
|
Accumulated other
comprehensive loss
|
|
|
(1,362,665)
|
|
|
|
(960,744)
|
|
|
|
|
|
|
|
|
|
|
Total CLPS
Incorporation's Shareholders' Equity
|
|
|
27,348,644
|
|
|
|
24,243,837
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
Interests
|
|
|
1,268,716
|
|
|
|
1,083,634
|
|
|
|
|
|
|
|
|
|
|
Total
Shareholders' Equity
|
|
|
28,617,360
|
|
|
|
25,327,471
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
45,352,358
|
|
|
$
|
40,538,899
|
|
|
* The shares and per
share data are presented on a retroactive basis to reflect the
nominal share issuance.
|
CLPS
INCORPORATION
|
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
(Amounts in U.S.
dollars ("$"), except for number of shares)
|
|
|
|
For the six
months ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
46,847,534
|
|
|
$
|
34,137,189
|
|
Less: Cost of
revenues (note 1)
|
|
|
(31,104,457)
|
|
|
|
(21,552,693)
|
|
Gross
profit
|
|
|
15,743,077
|
|
|
|
12,584,496
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses (note 1)
|
|
|
1,655,650
|
|
|
|
1,206,153
|
|
Research and
development expenses
|
|
|
5,416,455
|
|
|
|
4,939,522
|
|
General and
administrative expenses (note 1)
|
|
|
8,446,840
|
|
|
|
8,223,126
|
|
Other operating
expense
|
|
|
187,496
|
|
|
|
-
|
|
Total operating
expenses
|
|
|
15,706,441
|
|
|
|
14,368,801
|
|
Income (loss) from
operations
|
|
|
36,636
|
|
|
|
(1,784,305)
|
|
Subsidies and other
income, net
|
|
|
1,163,956
|
|
|
|
156,352
|
|
Other
expenses
|
|
|
(77,229)
|
|
|
|
(30,712)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax and share of loss in equity
investees
|
|
|
1,123,363
|
|
|
|
(1,658,665)
|
|
Provision (benefits)
for income taxes
|
|
|
446,601
|
|
|
|
(56,283)
|
|
Income (loss) before
share of income in equity investees
|
|
|
676,762
|
|
|
|
(1,602,382)
|
|
Share of income in
equity investees, net of tax
|
|
|
107,895
|
|
|
|
(145,329)
|
|
Net income
(loss)
|
|
|
784,657
|
|
|
|
(1,747,711)
|
|
Less: Net income
attributable to non-controlling interests
|
|
|
215,359
|
|
|
|
89,434
|
|
Net income (loss)
attributable to CLPS Incorporation's
shareholders
|
|
$
|
569,298
|
|
|
$
|
(1,837,145)
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss (income)
|
|
|
|
|
|
|
|
|
Foreign currency
translation loss
|
|
$
|
(432,198)
|
|
|
$
|
(58,964)
|
|
Less: foreign
currency translation (loss) gain attributable to non-
controlling interest
|
|
|
(30,277)
|
|
|
|
2,052
|
|
Other comprehensive
loss attributable to CLPS
Incorporation's shareholders
|
|
$
|
(401,921)
|
|
|
$
|
(61,016)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to
|
|
|
|
|
|
|
|
|
CLPS Incorporation
shareholders
|
|
$
|
167,377
|
|
|
$
|
(1,898,161)
|
|
Non-controlling
interests
|
|
|
184,562
|
1
|
|
|
91,486
|
|
|
|
$
|
351,939
|
|
|
$
|
(1,806,675)
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per common share*
|
|
$
|
0.04
|
|
|
$
|
(0.13)
|
|
Weighted average
number of share outstanding – basic
|
|
|
15,169,655
|
|
|
|
13,889,460
|
|
Diluted
earnings (loss) per common share*
|
|
$
|
0.04
|
|
|
$
|
(0.13)
|
|
Weighted average
number of share outstanding – diluted (note 2)
|
|
|
15,212,010
|
|
|
|
13,889,460
|
|
Note:
|
|
|
|
|
|
|
|
|
(1)
Includes share-based compensation expenses as follows:
Cost of revenues
|
|
|
9,042
|
|
|
|
9,472
|
|
Selling and marketing
expenses
|
|
|
181,257
|
|
|
|
46,100
|
|
General and
administrative expenses
|
|
|
2,747,132
|
|
|
|
2,946,803
|
|
|
(2) All
dilutive potential common shares had anti-dilutive impact and were
excluded in computation of diluted
earnings per share in the period when loss was reported.
|
|
* The shares and per
share data are presented on a retroactive basis to reflect the
nominal share issuance.
|
CLPS
INCORPORATION
|
RECONCILIATION OF
NON-GAAP AND GAAP RESULTS
(Amounts in U.S.
dollars ("$"), except for number of shares)
|
|
|
|
|
|
For the six
months ended
|
June
30,
|
|
|
|
|
2020
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
$
|
(31,104,457)
|
|
|
$
|
(21,552,693)
|
Less: share-based
compensation expenses
|
|
|
|
9,042
|
|
|
|
9,472
|
Non-GAAP cost of
revenues
|
|
|
$
|
(31,095,415)
|
|
|
$
|
(21,543,221)
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
|
$
|
1,655,650
|
|
|
$
|
1,206,153
|
Less: share-based
compensation expenses
|
|
|
|
181,257
|
|
|
|
46,100
|
Non-GAAP selling
and marketing expenses
|
|
|
$
|
1,474,393
|
|
|
$
|
1,160,053
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
|
$
|
8,446,840
|
|
|
$
|
8,223,126
|
Less: share-based
compensation expenses
|
|
|
|
2,747,132
|
|
|
|
2,946,803
|
Non-GAAP general
and administrative expenses
|
|
|
$
|
5,699,708
|
|
|
$
|
5,276,323
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
$
|
36,636
|
|
|
$
|
(1,784,305)
|
Add: share-based
compensation expenses
|
|
|
|
2,937,431
|
|
|
|
3,002,375
|
Non-GAAP operating
income
|
|
|
$
|
2,974,067
|
|
|
$
|
1,218,070
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
0.1%
|
|
|
|
(5.2%)
|
Add: share-based
compensation expenses
|
|
|
|
6.2%
|
|
|
|
8.8%
|
Non-GAAP operating
margin
|
|
|
|
6.3%
|
|
|
|
3.6%
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
$
|
784,657
|
|
|
$
|
(1,747,711)
|
Add: share-based
compensation expenses
|
|
|
|
2,937,431
|
|
|
|
3,002,375
|
Non-GAAP net
income
|
|
|
$
|
3,722,088
|
|
|
$
|
1,254,664
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to CLPS Incorporation's
shareholders
|
|
|
$
|
569,298
|
|
|
$
|
(1,837,145)
|
Add: share-based
compensation expenses
|
|
|
|
2,937,431
|
|
|
|
3,002,375
|
Non-GAAP net
income attributable to CLPS
Incorporation's shareholders
|
|
|
|
3,506,729
|
|
|
|
1,165,230
|
$
|
$
|
|
|
|
|
|
|
|
|
|
Weighted average
number of share outstanding used
in computing GAAP and non-GAAP basic earnings
|
|
|
|
15,169,655
|
|
|
|
13,889,460
|
GAAP basic earnings
(loss) per common share
|
|
|
$
|
0.04
|
|
|
$
|
(0.13)
|
Add: share-based
compensation expenses
|
|
|
|
0.19
|
|
|
|
0.21
|
Non-GAAP basic
earnings per common share
|
|
|
$
|
0.23
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
Weighted average
number of share outstanding used
in computing GAAP diluted earnings
|
|
|
|
15,212,010
|
|
|
|
13,889,460
|
Add: effect of
dilutive securities (note 1)
|
|
|
|
-
|
|
|
|
184,316
|
Weighted average
number of share outstanding used
in computing non-GAAP diluted earnings
|
|
|
|
15,212,010
|
|
|
|
14,073,776
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
(loss) per common share
|
|
|
$
|
0.04
|
|
|
$
|
(0.13)
|
Add: share-based
compensation expenses
|
|
|
|
0.19
|
|
|
|
0.21
|
Non-GAAP diluted
earnings per common share
|
|
|
$
|
0.23
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
|
|
(1) All
dilutive potential common shares had anti-dilutive impact and were
excluded in computation of
|
GAAP diluted earnings
per share in the period when loss was reported.
|
CLPS
INCORPORATION
|
AUDITED
CONSOLIDATED BALANCE SHEETS
|
(Amounts in U.S.
dollars ("$"), except for number of shares)
|
|
|
|
As of June
30,
|
|
|
|
2020
|
|
|
2019
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
12,652,120
|
|
|
$
|
6,601,335
|
|
Short-term
investments
|
|
|
636,934
|
|
|
|
1,791,697
|
|
Accounts receivable,
net
|
|
|
25,753,856
|
|
|
|
19,263,584
|
|
Escrow
receivable
|
|
|
-
|
|
|
|
200,000
|
|
Prepayments, deposits
and other assets, net
|
|
|
1,280,967
|
|
|
|
1,028,154
|
|
Prepaid income
tax
|
|
|
15,780
|
|
|
|
630,790
|
|
Amounts due from
related parties
|
|
|
169,185
|
|
|
|
230,540
|
|
Total Current
Assets
|
|
|
40,508,842
|
|
|
|
29,746,100
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
452,472
|
|
|
|
566,591
|
|
Intangible assets,
net
|
|
|
1,144,579
|
|
|
|
427,769
|
|
Goodwill
|
|
|
2,118,700
|
|
|
|
447,790
|
|
Long-term
investments
|
|
|
680,131
|
|
|
|
914,006
|
|
Prepayments, deposits
and other assets, net
|
|
|
244,387
|
|
|
|
222,507
|
|
Deferred tax assets,
net
|
|
|
203,247
|
|
|
|
338,221
|
|
Total
Assets
|
|
$
|
45,352,358
|
|
|
$
|
32,662,984
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
2,161,239
|
|
|
$
|
2,184,996
|
|
Accounts payable and
other current liabilities
|
|
|
489,043
|
|
|
|
196,832
|
|
Tax
payables
|
|
|
1,426,614
|
|
|
|
915,629
|
|
Deferred
subsidies
|
|
|
-
|
|
|
|
109,250
|
|
Deferred
revenues
|
|
|
-
|
|
|
|
124,192
|
|
Contract
liabilities
|
|
|
755,178
|
|
|
|
-
|
|
Salaries and benefits
payable
|
|
|
11,522,268
|
|
|
|
7,735,487
|
|
Total Current
Liabilities
|
|
|
16,354,342
|
|
|
|
11,266,386
|
|
Long-term bank
loans
|
|
|
22,554
|
|
|
|
-
|
|
Deferred tax
liabilities
|
|
|
163,163
|
|
|
|
-
|
|
Unrecognized tax
benefits
|
|
|
194,939
|
|
|
|
-
|
|
TOTAL
LIABILITIES
|
|
|
16,734,998
|
|
|
|
11,266,386
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Common stock, $0.0001 par
value, 100,000,000 shares authorized;
15,930,330 shares issued and outstanding as of June 30, 2020;
13,913,201 shares issued and outstanding as of June 30, 2019.
*
|
|
|
1,593
|
|
|
|
1,391
|
|
Additional paid-in
capital
|
|
|
28,586,048
|
|
|
|
24,276,622
|
|
Statutory
reserves
|
|
|
2,803,811
|
|
|
|
1,833,802
|
|
Retained
earnings
|
|
|
(2,680,143)
|
|
|
|
(4,509,729)
|
|
Accumulated other
comprehensive loss
|
|
|
(1,362,665)
|
|
|
|
(813,650)
|
|
|
|
|
|
|
|
|
|
|
Total CLPS
Incorporation's Shareholders' Equity
|
|
|
27,348,644
|
|
|
|
20,788,436
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
Interests
|
|
|
1,268,716
|
|
|
|
608,162
|
|
|
|
|
|
|
|
|
|
|
Total
Shareholders' Equity
|
|
|
28,617,360
|
|
|
|
21,396,598
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
45,352,358
|
|
|
$
|
32,662,984
|
|
|
|
|
|
|
|
|
|
|
* The shares and per
share data are presented on a retroactive basis to reflect the
nominal share issuance.
|
CLPS
INCORPORATION
|
AUDITED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
(Amounts in U.S.
dollars ("$"), except for number of shares)
|
|
|
|
For the years
ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
89,415,798
|
|
|
$
|
64,932,937
|
|
Less: Cost of
revenues (note 1)
|
|
|
(58,296,097)
|
|
|
|
(41,178,356)
|
|
Gross
profit
|
|
|
31,119,701
|
|
|
|
23,754,581
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses (note 1)
|
|
|
3,059,877
|
|
|
|
2,179,029
|
|
Research and
development expenses
|
|
|
10,436,975
|
|
|
|
7,978,883
|
|
General and
administrative expenses (note 1)
|
|
|
16,343,936
|
|
|
|
17,384,393
|
|
Total operating
expenses
|
|
|
29,840,788
|
|
|
|
27,542,305
|
|
Income (loss) from
operations
|
|
|
1,278,913
|
|
|
|
(3,787,724)
|
|
Subsidies and other
income, net
|
|
|
2,535,868
|
|
|
|
779,508
|
|
Other
expenses
|
|
|
(107,322)
|
|
|
|
(92,429)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax and share of income (loss) in
equity investees
|
|
|
3,707,459
|
|
|
|
(3,100,645)
|
|
Provision for income
taxes
|
|
|
835,444
|
|
|
|
186,615
|
|
Income (loss) before
share of income (loss) in equity investees
|
|
|
2,872,015
|
|
|
|
(3,287,260)
|
|
Share of income
(loss) in equity investees, net of tax
|
|
|
207,363
|
|
|
|
(145,329)
|
|
Net income
(loss)
|
|
|
3,079,378
|
|
|
|
(3,432,589)
|
|
Less: Net income
(loss) attributable to non-controlling interests
|
|
|
141,139
|
|
|
|
(162,813)
|
|
Net income (loss)
attributable to CLPS Incorporation's
shareholders
|
|
$
|
2,938,239
|
|
|
$
|
(3,269,776)
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
Foreign currency
translation loss
|
|
$
|
(571,943)
|
|
|
$
|
(429,348)
|
|
Less: foreign
currency translation loss attributable to non-
controlling interests
|
|
|
(22,928)
|
|
|
|
(17,375)
|
|
Other comprehensive
loss attributable to CLPS
Incorporation's shareholders
|
|
$
|
(549,015)
|
|
|
$
|
(411,973)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to
|
|
|
|
|
|
|
|
|
CLPS Incorporation
shareholders
|
|
$
|
2,389,224
|
|
|
$
|
(3,681,749)
|
|
Non-controlling
interests
|
|
|
118,211
|
|
|
|
(180,188)
|
|
|
|
$
|
2,507,435
|
|
|
$
|
(3,861,937)
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share*
|
|
$
|
0.20
|
|
|
$
|
(0.24)
|
|
Weighted average
number of share outstanding – basic
|
|
|
14,689,224
|
|
|
|
13,843,764
|
|
Diluted earnings
(loss) per common share*
|
|
$
|
0.20
|
|
|
$
|
(0.24)
|
|
Weighted average
number of share outstanding – diluted (note 2)
|
|
|
14,692,299
|
|
|
|
13,843,764
|
|
Note:
|
|
|
|
|
|
|
|
|
(1)
Includes share-based compensation expenses as follows:
Cost of revenues
|
|
|
14,110
|
|
|
|
9,472
|
|
Selling and marketing
expenses
|
|
|
211,573
|
|
|
|
46,100
|
|
General and
administrative expenses
|
|
|
3,778,397
|
|
|
|
6,960,517
|
|
|
(2) All
dilutive potential common shares had anti-dilutive impact and were
excluded in computation of diluted
earnings per share in the period when loss was reported.
|
|
* The shares and per
share data are presented on a retroactive basis to reflect the
nominal share issuance.
|
CLPS
INCORPORATION
|
RECONCILIATION OF
NON-GAAP AND GAAP RESULTS
(Amounts in U.S.
dollars ("$"), except for number of shares)
|
|
|
|
|
|
For the years
ended
|
June
30,
|
|
|
|
|
2020
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
$
|
(58,296,097)
|
|
|
$
|
(41,178,356)
|
Less: share-based
compensation expenses
|
|
|
|
14,110
|
|
|
|
9,472
|
Non-GAAP cost of
revenues
|
|
|
$
|
(58,281,987)
|
|
|
$
|
(41,168,884)
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
|
$
|
3,059,877
|
|
|
$
|
2,179,029
|
Less: share-based
compensation expenses
|
|
|
|
211,573
|
|
|
|
46,100
|
Non-GAAP selling
and marketing expenses
|
|
|
$
|
2,848,304
|
|
|
$
|
2,132,929
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
|
$
|
16,343,936
|
|
|
$
|
17,384,393
|
Less: share-based
compensation expenses
|
|
|
|
3,778,397
|
|
|
|
6,960,517
|
Non-GAAP general
and administrative expenses
|
|
|
$
|
12,565,539
|
|
|
$
|
10,423,876
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
$
|
1,278,913
|
|
|
$
|
(3,787,724)
|
Add: share-based
compensation expenses
|
|
|
|
4,004,080
|
|
|
|
7,016,089
|
Non-GAAP operating
income
|
|
|
$
|
5,282,993
|
|
|
$
|
3,228,365
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
1.4%
|
|
|
|
(5.8%)
|
Add: share-based
compensation expenses
|
|
|
|
4.5%
|
|
|
|
10.8%
|
Non-GAAP operating
margin
|
|
|
|
5.9%
|
|
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
$
|
3,079,378
|
|
|
$
|
(3,432,589)
|
Add: share-based
compensation expenses
|
|
|
|
4,004,080
|
|
|
|
7,016,089
|
Non-GAAP net
income
|
|
|
$
|
7,083,458
|
|
|
$
|
3,583,500
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to CLPS Incorporation's
shareholders
|
|
|
$
|
2,938,239
|
|
|
$
|
(3,269,776)
|
Add: share-based
compensation expenses
|
|
|
|
4,004,080
|
|
|
|
7,016,089
|
Non-GAAP net
income attributable to CLPS
Incorporation's shareholders
|
|
|
$
|
6,942,319
|
|
|
$
|
3,746,313
|
|
|
|
|
|
|
|
|
|
Weighted average
number of share outstanding used in
computing GAAP and non-GAAP basic earnings
|
|
|
|
14,689,224
|
|
|
|
13,843,764
|
GAAP basic earnings
(loss) per common share
|
|
|
$
|
0.20
|
|
|
$
|
(0.24)
|
Add: share-based
compensation expenses
|
|
|
|
0.27
|
|
|
|
0.51
|
Non-GAAP basic
earnings per common share
|
|
|
$
|
0.47
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
Weighted average
number of share outstanding used in
computing GAAP diluted earnings
|
|
|
|
14,692,299
|
|
|
|
13,843,764
|
Add: effect of
dilutive securities (note 1)
|
|
|
|
-
|
|
|
|
194,824
|
Weighted average
number of share outstanding used in
computing non-GAAP diluted earnings
|
|
|
|
14,692,299
|
|
|
|
14,038,588
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
(loss) per common share
|
|
|
$
|
0.20
|
|
|
$
|
(0.24)
|
Add: share-based
compensation expenses
|
|
|
|
0.27
|
|
|
|
0.51
|
Non-GAAP diluted
earnings per common share
|
|
|
$
|
0.47
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
|
|
(1) All
dilutive potential common shares had anti-dilutive impact and were
excluded in computation of
|
GAAP diluted earnings
per share in the period when loss was reported.
|
View original
content:http://www.prnewswire.com/news-releases/clps-incorporation-reports-financial-results-for-the-second-half-and-full-year-of-fiscal-2020-301158427.html
SOURCE CLPS