Tarena International, Inc. Announces Unaudited First Half Fiscal Year 2019 Results

BEIJING,May 1,2020 -- Tarena International,Inc. (NASDAQ: TEDU) ("Tarena" or the "Company"),a leading provider of professional education services in China,today announced its unaudited financial results for the six months ended June 30,2019.

First Half Fiscal Year 2019 Highlights

Net revenues increased by 3.3% year-over-year to RMB882. 6 million (US$128.6 million),from RMB854.2 million in the same period in 2018.

Gross profit decreased by 30.4% year-over-year to RMB312.8 million (US$45.6 million),from RMB449.2 million in the same period in 2018.

Operating loss was RMB646.9 million (US$94.2 million),compared to an operating loss of RMB345.9 million in the same period in 2018.

Net loss was RMB625.1 million (US$91.1 million),compared to a net loss ofRMB338.0 million in the same period in 2018.

Basic and diluted loss per American Depositary Share ("ADS") was RMB11.36 (US$1.65).

Cash,cash equivalents,time deposits,including current and non-current,and restricted cash totaled RMB728.7 million (US$106.1 million) as of June 30,2019,compared to a balance of RMB704.8 million as of December 31,2018.

Deferred revenue totaled RMB1,398.4 million (US$203.7 million) as of June 30,compared to a balance of RMB830.0 million as of December 31,2018,representing an increase of 68.5%.

Total student enrollments in adult education in the first half of 2019 decreased by 4.8% year-over-year to approximately 62,900.

Total number of learning centers in adult education decreased to 142 as of June 30,from 180 as of December 31,2018.

Total student enrollments in K-12 education in the first half of 2019 increased by 214.0% year-over-year to approximately 58,400.

Total number of learning centers in K-12 education increased to 177 as of June 30,from 148 as of December 31,2018.

The Company's Interim Financial Statements are prepared and presented in accordance with U.S. GAAP. However,the Interim Financial Statements have not been audited or reviewed by the Company's independent registered accounting firm.

About Tarena International,Inc.

Tarena is a leading provider of professional education services in China. Through its innovative education platform combining live distance instruction,classroom-based tutoring and online learning modules,Tarena offers professional education courses in IT and non-IT subjects. Tarena also offers K-12 education programs. Its professional education courses provide students with practical skills to prepare them for jobs in industries with significant growth potential and strong hiring demand.

TARENA INTERNATIONAL,INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands,except share data and per share data)

As of

June30,

December31,

2019

2018

Unaudited

RMB

RMB

ASSETS

Current assets:

Cash and cash equivalents

569,498

530,984

Time deposits

158,660

158,585

Restricted cash

-

14,700

Accounts receivable,net of allowance for doubtful accounts

36,217

39,901

Amounts due from a related party

16,448

9,938

Prepaid expenses and other current assets

201,992

171,466

Total current assets

982,815

925,574

Time deposits-non current

523

517

Accounts receivable,net of allowance for doubtful accounts-non current

19,357

12,157

Amounts due from a related party

6,500

6,500

Property and equipment,net

594,553

626,068

Intangible assets,net

21,157

19,046

Goodwill

52,782

52,782

Right-of-use assets

617,356

-

Long-term investments

69,651

59,651

Deferred income tax assets

66,811

53,752

Other non-current assets

114,350

122,000

Total assets

2,545,855

1,878,047

LIABILITIES AND EQUITY

Current liabilities:

Short-term bank loan

-

13,726

Accounts payable

48,741

18,529

Amounts due to related parties

-

872

Income taxes payable

66,644

71,847

Deferred revenue

1,398,388

830,019

Accrued expenses and other current liabilities

448,004

365,428

Operating lease liabilities - current

301,166

-

Total current liabilities

2,262,943

1,300,421

Operating lease liabilities – non-current

296,262

-

Other non-current liabilities

5,825

5,983

Total liabilities

2,565,030

1,306,404

Commitments and contingencies

—

—

Shareholders' equity:

Class A ordinary shares

331

331

Class B ordinary shares

74

74

Treasury stock

(457,169)

(457,169)

Additional paid-in capital

1,247,392

1,222,072

Accumulated other comprehensive income

58,745

50,472

Accumulated deficit

(867,217)

(243,162)

Total equity attributable to Tarena International,Inc.

(17,844)

572,618

Non-controlling interest

(1,331)

(975)

Total liabilities and equity

2,047

TARENA INTERNATIONAL,INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands,except share data and per share data)

FortheSix MonthsEnded

June 30,

2019

2018

Unaudited

Unaudited

RMB

RMB

Net revenues

882,613

854,182

Cost of revenues

(569,851)

(404,978)

Gross profit

312,762

449,204

Selling and marketing expenses

(576,038)

(467,489)

General and administrative expenses

(294,670)

(244,594)

Research and development expenses

(88,952)

(83,003)

Operating loss

(646,898)

(345,882)

Interest income

9,427

14,949

Other (loss) income

(483)

707

Foreign currency exchange income

1,106

1,032

Loss before income taxes

(636,848)

(329,194)

Income tax benefit (expense)

11,737

(8,835)

Net loss

(625,111)

(338,029)

Less: Net loss attributable to non-controlling interests

(1,056)

(782)

Net loss attributable to Class A and Class B ordinary shareholders

(624,055)

(337,247)

Net loss per Class A and Class B ordinary share:

Basic

(11.36)

(5.99)

Diluted

(11.36)

(5.99)

Weighted average number of Class A and Class B ordinary shares outstanding:

Basic

54,929,910

56,277,694

Diluted

54,694

Net loss

(625,029)

Other comprehensive income

Foreign currency translation adjustment,net of nil income taxes

8,273

14,415

Comprehensive loss

(616,838)

(323,614)

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