China Distance Education Holdings Limited Reports Second Quarter 2009 Results
Posted on: Friday, 15 May 2009, 15:30 CDT
Commenting on the results, Mr.
Mr. Zhu continued, "The sustained growth in enrollments in both accounting and non-accounting subjects demonstrates our ability to replicate our successful accounting model to other subject and course offerings. The strong acceptance of our premium classes has also proven our diversified pricing and marketing strategies, which have helped to maintain our average selling-price (ASP) level.
"The non-cyclical nature of the education industry has shielded us thus far from experiencing any significant adverse impact from the soft economic environment. While the half-price promotion launched in the previous quarters was expected to have pressure on ASPs of the affected courses, it has helped expand our student base and our market share.
"We are confident that our focused growth strategy and competitive advantages, including a well recognized brand name, diversified and high quality course offerings, superior services and a strong technology platform, will continue to position our business to maintain strong growth as we capitalize on the immense opportunities in the education market in China" Mr. Zhu concluded.
Ms.
"As part of our strategy to further bolster our market position and to
improve service quality, we continued to invest in strengthening our sales,
teaching services, tutoring and technical support, and general customer
services during the period by further expanding our headcount and office space.
While this impacted our margins in the quarter, we believe these efforts are
necessary to support our continued growth and will allow us to strengthen our
market position moving forward. In addition, the newly acquired Yucai
contributed an additional
Fiscal Second Quarter 2009 Unaudited Financial Results
Net Revenues. Total net revenues for the second quarter of fiscal 2009
were
Online education services net revenues for the second quarter of fiscal
2009 were
The Company's complementary businesses achieved exceptional growth in
revenue for the second quarter of fiscal 2009. Revenue from books and
reference materials sales increased by 181.9% to
Cost of Sales. Cost of sales for the second quarter of fiscal 2009 was
Gross Profit and Gross Margin. Gross profit for the second quarter of
fiscal 2009 was
Operating Expenses. Total operating expenses for the second quarter of
fiscal 2009 were
Selling expenses amounted to
General and administrative expenses were
Income Tax Expense. Income tax expense for the second quarter of fiscal
2009 was
Net Income. Net income was
Operating Cash Flow. Net operating cash flow for the second quarter of
fiscal 2009 was
Cash and Cash Equivalents. Cash and cash equivalents as of
Third Quarter Fiscal 2009 Guidance -- Due to the seasonality of our
business, we typically experience fluctuations in our results. As such, CDEL
expects to generate total net revenues for the third quarter of fiscal 2009 in
the range of
Conference Call
China Distance Education Holdings Limited senior management will host a
conference call at
A live webcast of the conference call and replay will be available on the investor relations page of China Distance Education Holdings Limited's website at: http://ir.cdeledu.com/versions/Financials_en/EarningsAnnouncements_en.html
About China Distance Education Holdings Limited
China Distance Education Holdings Limited is a leading provider of online education in China focusing on professional education. The courses offered by the Company through its websites are designed to help professionals and other course participants obtain and maintain the skills, licenses and certifications necessary to pursue careers in China in the areas of accounting, law, healthcare, construction engineering, information technology and other industries. The Company also offers online test preparation courses to self-taught learners pursuing higher education diplomas or degrees and to secondary school and college students preparing for various academic and entrance exams. In addition, the Company offers online foreign language courses.
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," "anticipate," "future," "intend," "plan," "believe," "is/are likely to," "estimate" and similar statements. Among other things, the outlook for the third quarter of the fiscal year 2009 and quotations from management in this announcement, as well as the Company's strategic and operational plans contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the US Securities and Exchange Commission, or SEC 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 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 Company's goals and growth strategies; its future prospects and market acceptance of its online courses and other products and services; its future business development and results of operations; projected revenues, profits, earnings and other estimated financial information; projected enrollment numbers; its plans to expand and enhance its online courses and other products and services; competition in the online education and test preparation markets; and Chinese laws, regulations and policies, including those applicable to the Internet and Internet content providers, the education and telecommunications industries, mergers and acquisitions, taxation and foreign exchange.
Further information regarding these and other risks is included in the Company's registration statement on Form F-1 and other documents filed with the SEC. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above 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 by the SEC: net income excluding share-based compensation expenses, operating income excluding share-based compensation expenses, gross profit excluding share-based compensation expenses, cost of sales excluding share-based compensation expenses, selling expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, net income margin excluding share-based compensation expenses, operating margin excluding share-based compensation expenses, gross profit margin excluding share-based compensation expenses and basic and diluted earnings per ADS and per share excluding share-based compensation expenses, and the effect of Series A Shares. 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 GAAP to non-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 and liquidity by excluding share-based expenses that may not be indicative of its 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, except basic and diluted earnings per ADS and per share excluding share-based compensation expenses, and the effect of Series A shares. 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 share-based compensation charges will 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.
China Distance Education Holdings Limited Unaudited Consolidated Balance Sheets (in thousands of US Dollars, except number of shares and per share data) September 30, 2008 March 31, 2009 Assets: (audited) (unaudited) Current assets: Cash and cash equivalents 66,223 61,427 Accounts receivable 715 1,690 Inventories 177 353 Prepayment and other current assets 1,469 3,127 Deferred tax assets, current portion 2,297 1,799 Deferred cost ¨C current portion 448 1,309 Total current assets 71,329 69,705 Non-current assets: Property, plant and equipment, net 7,089 8,136 Goodwill 5,278 5,724 Other intangible assets, net 1,390 4,524 Deposit for non-current assets 151 -- Deferred tax assets, non-current portion 89 255 Total non-current assets 13,997 18,639 Total assets 85,326 88,344 Liabilities and shareholders' equity: Current liabilities: Accrued expenses and other liabilities 2,983 2,912 Income tax payable 1,014 215 Deferred revenue, current portion 3,728 8,036 Refundable fees 4,688 1,445 Total current liabilities 12,413 12,608 Non-current liabilities: Deferred revenue, non-current portion 163 116 Deferred tax liabilities, non-current portion -- 487 Total non-current liabilities 163 603 Total liabilities 12,576 13,211 Commitments and contingencies -- -- Minority interest -- 2,064 Shareholders' equity Ordinary shares (par value of US$0.0001 per share at September 30, 2008 and March 31, 2009, respectively; Authorized ¨C 480,000,000 shares at September 30, 2008 and March 31, 2009; Issued and outstanding ¨C141,897,737 and 140,522,137 shares at September 30, 14 14 Additional paid-in capital 76,811 77,381 Foreign currency translation 1,717 1,678 Cumulative deficits (5,792) (6,004) Total shareholders' equity 72,750 73,069 Total liabilities and shareholders' equity 85,326 88,344 China Distance Education Holdings Limited Unaudited Consolidated Statements Of Income (in thousands of US dollars, except number of shares, per share and per ADS data) Three Months Ended March 31, 2008 2009 Sales, net of business tax, value- added tax and related surcharges: Online education services 3,166 5,434 Books and reference materials 201 561 Others 22 757 Total net revenues 3,389 6,752 Cost of sales Cost of services (1,134) (3,166) Cost of tangible goods sold (101) (288) Total cost of sales (1,235) (3,454) Gross profit 2,154 3,298 Operating expenses Selling expenses (432) (1,608) General and administrative expenses (769) (1,707) Total operating expenses (1,201) (3,315) Other operating income -- 292 Operating income 953 275 Interest income 14 177 Interest expense (8) -- Exchange loss (16) (4) Equity in loss of an affiliated company (40) -- Income before income taxes 903 448 Income tax expense (172) (227) Minority interest, net of taxes -- 43 Net income 731 264 Accretion of Series A convertible contingently redeemable preferred shares to redemption amount and accretion of beneficial conversion feature of Series A convertible contingently redeemable preferred shares (398) -- Net income attributable to ordinary shareholders 333 264 Earnings per share Basic 0.00 0.00 Diluted 0.00 0.00 Earnings per ADS Basic 0.01 0.01 Diluted 0.01 0.01 Weighted average number of ordinary shares outstanding: Basic and diluted shares 91,877,000 140,846,061 China Distance Education Holdings Limited Reconciliation of GAAP to non-GAAP measures (In thousands of US Dollars, except number of shares, per share and per ADS data) Three Months Ended March 31, 2008 2009 (Unaudited) (Unaudited) Cost of sales 1,235 3,454 Share-based compensation expense in cost of sales -- 575 Non-GAAP cost of sales 1,235 2,879 Selling expenses 432 1,608 Share-based compensation expense in selling expenses -- 111 Non-GAAP selling expenses 432 1,497 General and administrative expenses 769 1,707 Share-based compensation expense in general and administrative expenses -- 400 Non-GAAP general and administrative expenses 769 1,307 Gross profit 2,154 3,298 Share-based compensation expenses -- 575 Non-GAAP gross profit 2,154 3,873 Gross profit margin 63.5% 48.8% Non-GAAP gross profit margin 63.5% 57.4% Operating income 953 275 Share-based compensation expenses -- 1,086 Non-GAAP operating income 953 1,361 Operating margin 28.1% 4.1% Non-GAAP operating margin 28.1% 20.2% Net income 731 264 Share-based compensation expense -- 1,086 Non-GAAP net income 731 1,350 Net income margin 21.6% 3.9% Non-GAAP net income margin 21.6% 20.0% Earnings per share-basic 0.00 0.00 Earnings per share-diluted 0.00 0.00 Non-GAAP earnings per share-basic 0.01 0.01 Non-GAAP earnings per share-diluted 0.01 0.01 Earnings per ADS-basic (note 1) 0.01 0.01 Earnings per ADS-diluted (note 1) 0.01 0.01 Non-GAAP earnings per ADS basic (note 1) 0.03 0.04 Non-GAAP earnings per ADS-diluted (note 1) 0.03 0.04 Weighted average shares used in calculating basic earnings per share 91,877,000 140,846,061 Weighted average shares used in calculating diluted earnings per share 91,877,000 140,846,061 Weighted average shares used in calculating basic non-GAAP earnings per share 91,877,000 140,846,061 Weighted average shares used in calculating diluted non-GAAP earnings per share 91,877,000 140,846,061 Note 1: Each ADS represents four ordinary shares. For further information, please contact: Investor Contact: China Distance Education Holdings Limited Ping Wei, CFO Tel: +86-10-8231-9999 Email: IR@cdeledu.com Taylor Rafferty Mahmoud Siddig, Director Tel: +1-212-889-4350 Email: cdel@taylor-rafferty.com Ruby Yim, Managing Director Tel: +852-3196-3712 Email: cdel@taylor-rafferty.comSOURCE China Distance Education Holdings Limited
Source: PR Newswire
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