Mynd(US:MYND)2020-05-29 18:21Financial Data and Key Metrics Changes - The company's net revenues for Q1 2020 were $17.3 million, a 49.5% decrease from $34.3 million in the same quarter last year [25][32] - Operating cash outflow for the quarter was $14 million, primarily due to temporary facility closures [25] - Gross loss for Q1 2020 was $11.6 million compared to a gross profit of $1.28 million in Q1 2019 [36] - Operating loss for Q1 2020 was $26.1 million, compared to $4 million for the same quarter last year [40] - Net loss attributable to ordinary shareholders for Q1 2020 was $26.6 million, with adjusted net loss at $25.8 million [40][41] Business Line Data and Key Metrics Changes - Service revenues decreased by 47.3% to $16.8 million from $31.8 million in Q1 2019, attributed to decreased tuition fees due to facility closures [32] - Product revenues decreased by 78.2% to $500,000 from $2.4 million in the same quarter last year, due to a significant drop in merchandise sales through the franchise network [33] - The number of students enrolled at directly operated facilities increased by 27.2% year-over-year to 31,251 students [12] Market Data and Key Metrics Changes - The company attracted over 350,000 registered users through various service accounts and apps, with more than 660,000 views in early childhood education content on a third-party platform [11] - The majority of directly operated facilities in China began reopening as of May 28, 2020, with expectations for normal operations by the end of June [10][14] Company Strategy and Development Direction - The company remains committed to a brand portfolio approach, focusing on premium international branded facilities in China and integrating operations across multiple geographies [15] - The company plans to slow down investments in new initiatives while strengthening its core business and maintaining financial flexibility [21] - The digital strategy has been accelerated due to COVID-19, with a focus on online education and maintaining engagement with students and parents [47][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and the underlying demand for high-quality early childhood education services despite the challenges posed by the pandemic [22][30] - The company expects net revenues for Q2 2020 to be in the range of $11 million to $11.8 million, reflecting current market conditions [43] - Management highlighted the importance of maintaining health and safety protocols during the reopening of facilities [13] Other Important Information - The company recorded an impairment loss on goodwill of $8.5 million during Q1 2020 due to the impact of COVID-19 [39] - The company has implemented stringent cost control measures, including headcount reduction and deferred discretionary capital expenditures [27][28] Q&A Session Summary Question: Can you provide more details on your digital strategy and plans for opening new kindergartens? - Management noted that the COVID-19 outbreak has increased awareness of online education, leading to a surge in demand for online resources. They have developed a range of educational content accessible through various platforms, reaching over 80,000 users in China [47][49] - Regarding new kindergartens, the company opened seven premium international branded kindergartens last year and plans to continue this growth, albeit at a more measured pace due to the pandemic [55][56]