Skillful Craftsman Announces Financial Results for The First Six Months of Fiscal Year 2021

14% year-over-year revenue growth
28% year-over-year total fee-paying members growthWUXI, China, Jan. 14, 2021 (GLOBE NEWSWIRE) — Skillful Craftsman Education Technology Ltd. (“the Company”) (NASDAQ: EDTK), an education technology company providing interactive online learning services, today announced its financial results for the first six months of fiscal year 2021 ended September 30, 2020.First Six Months of Fiscal Year 2021 Financial and Operational HighlightsAll financial figures are in US Dollars unless otherwise noted.Revenue was $15.3 million, compared with $13.4 million for the same period of last year, representing a 14% increase.Gross profit was $8.5 million, compared with $8.1 million for the same period of last year, representing a 5% increase.Gross profit margin was 55%, compared with 60% for the same period of last year.Net income was $4.39 million, compared with $5.13 million for the same period of last year. The decrease was due in part to one-time expense related to the Company’s initial public offering (“IPO”).Basic and diluted earnings per share were $0.44, compared with $0.57 for the same period of last year.Total fee-paying members¹ reached 3.28 million, compared with 2.57 million during the same period of last year, representing a 28% increase.¹Number of fee-paying members is defined as the total number of members that are paying fees for accessing our platforms as of the end of the applicable period.Mr. Xiaofeng Gao, Chairman and CEO of Skillful Craftsman Education Technology Ltd., commented, “We are excited to announce our strong results for the first six months of fiscal year 2021 ended September 30, 2020. Our revenue increased by 14% to $15.3 million, from $13.4 million for the same period of last year and our total fee-paying members increased by 28% to 3.28 million, compared with 2.57 million during the same period of last year. We believe the results demonstrate the resilience of our business, the experience of our senior management team, and our commitment to quality service. As an education technology company, we strive to optimize our service and diversify our offerings to meet the evolving needs of the market. We believe that the current business climate, which encourages remote learning, will enhance our business growth more than ever. We have been pursuing our business strategies to expand course offerings in tune with industry trends and national policies, integrate online and offline resources for virtual simulation experimental training, offer professional development-related services and develop mobile app and WeChat interfaces for our online learning platform. We believe we are well-positioned in the turbulent market environment to optimize our revenue structure and strategically explore opportunities to create more value for all of our shareholders.”First Six Months of Fiscal Year 2021 Financial ResultsAll figures refer to the first six months of fiscal year 2021 ended September 30, 2020 unless otherwise statedRevenueRevenue increased by 14% to $15.3 million, from $13.4 million for the same period of last year.Cost of RevenueCost of revenue increased by 28% to $6.83 million, from $5.35 million for the same period of last year. The increase was mainly caused by the increase of resource usage fee by $0.35 million and website maintenance fee by $0.48 million. In addition, the depreciation expenses of server hardware also increased by $0.6 million.Gross Profit and Gross MarginGross profit increased by 5% to $8.5 million, from $8.1 million for the same period of last year.Gross margin decreased by 5 percentage points to 55%, from 60% for the same period of last year.Operating ExpensesOperating expenses increased by 90% to $2.38 million, from $1.25 million for the same period of last year.Sales and marketing expenses increased by 13% to $0.88 million, from $0.78 million for the same period of last year. This increase was mainly due to Telecommunications service fees, which increased by $0.21 million as the Company expanded their network and service systems.General and administrative expenses increased by 217% to $1.50 million, from $0.47 million for the same period of last year. This increase was primarily caused by higher employee compensation and welfare expenses and particularly an increase of $0.54 million in salary and fee expenses of independent directors, senior executives and employees related to the IPO. The service fee also increased by $0.27 million due to the success of IPO. The Company also recorded research and development expenses in general and administrative expenses of $0.24 million, compared with $0.10 million for the same period of last year.Income Before TaxIncome before tax expense decreased by 11% to $6.14 million, from $6.86 million for the same period of last year.Net IncomeNet income decreased by 14% to $4.39 million, from $5.13 million for the same period of last year.Basic and diluted earnings per share were $0.44, compared with $0.57 for the same period of last year.Cash and Cash EquivalentsAs of September 30, 2020, the Company had cash and cash equivalents of $17.5 million, compared with $11.9 million as of March 31, 2020.Cash FlowNet cash generated from operating activities was $6.58 million, compared with $6.78 million for the same period of last year.Net cash used in investing activities was $14.24 million, compared with $5.73 million for the same period of last year.Net cash generated from financing activities was $13.24 million, compared with nil for the same period of last year.About Skillful CraftsmanSkillful Craftsman is an education technology company that provides interactive online vocational training and virtual simulation experimental training courses. The Company began operations in Wuxi, China in 2013 and is a key supporter for China education reform and development for labor employment. As of March 31, 2020, the Company had 68.5 million total registered members, of which 3.1 million are fee-paying members. For more information, please visit: ir.kingwayup.comSafe Harbor StatementThis report contains “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that represent our beliefs, projections and predictions about future events. All statements other than statements of historical fact are “forward-looking statements,” including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as “may”, “will”, “should”, “could”, “would”, “predicts”, “potential”, “continue”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates” and similar expressions, as well as statements in the future tense, identify forward-looking statements.Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Such risks, uncertainties, and other factors include, but are not limited to, our ability to improve launch and leverage new technologies and cooperative relationships or anticipate market demand in a timely or cost-effective manner, and those factors discussed under the headings “Risk Factors”, “Operating and Financial Review and Prospects,” and elsewhere in our Annual Report on Form 20-F. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, and the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based or the success of our business. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statement.For investor and media enquiries, please contact:Skillful Craftsman
Investor Relations Department
Email: iredtk@kingwayedu.cn Ascent Investor Relations LLC
Tina Xiao
Tel: +1 917-609-0333
Email: tina.xiao@ascent-ir.comSKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITED
CONSOLIDATED BALANCE SHEETSSKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITEDCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
SKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)