BEIJING, Feb. 19, 2014 /PRNewswire-FirstCall/ -- China
Distance Education Holdings Limited (NYSE: DL) ("CDEL", or the
"Company"), a leading provider of online education in China focusing on professional education,
today announced financial results for the first quarter of fiscal
year 2014 ended December 31,
2013.
First Quarter Fiscal 2014 Financial and Operational
Highlights
- Total course enrollments reached 939,300 in the first quarter
of fiscal 2014, an increase of 4.6% from the first quarter of
fiscal 2013.
- Cash receipts from online course registration increased by
23.7% to $17.2 million from the first
quarter of fiscal 2013.
- Net revenue increased by 43.7% to $18.7
million from $13.0 million in
the prior year period and exceeded the Company's previous guidance
range.
- Gross profit increased by 48.9% to $10.3
million from $6.9 million in
the prior year period. Gross margin increased to 54.9%, as compared
to 53.0% in the prior year period.
- Operating income increased by 129.5% to $3.8 million from $1.7
million in the prior year period.
- Net income increased by 131.9% to $3.4
million from $1.5 million in
the prior year period.
- Basic and diluted net income per American Depositary Share
("ADS") was $0.101 and $0.100, respectively, representing a
year-over-year increase of 129.5% and 127.3%, respectively, from a
basic and diluted net income per ADS of $0.044 each for the first quarter of fiscal 2013.
Each ADS represents four ordinary shares.
- Operating cash flow increased by 53.1% to $8.1 million from $5.3
million in the first quarter of fiscal 2013.
Mr. Zhengdong Zhu, Chairman and
CEO of CDEL, said, "We have started fiscal 2014 on a healthy note,
reaching record first quarter revenue and net income. Our strong
revenue growth was once again led by our leading online accounting
and healthcare verticals. Solid growth from our Engineering
& Construction ("E&C") courses, one of our fastest growing
verticals, also contributed to our success in the first quarter of
fiscal year 2014.
"While we maintain strong operational momentum, enrollment
growth for the quarter was relatively small as course enrollments
for a few of our accounting programs experienced seasonal
fluctuations that pushed some enrollments to later quarters. This
fluctuation in timing is common in our business and we remain on
track to meet our projected growth rate for the year.
"Our leadership position in the large and growing online
professional learning space and our highly scalable business model
present us with huge potential over both the near- and longer-term.
As we move through the year, we will continue to focus on providing
results-driven high quality courses, enhancing our students'
learning experiences and further refining our online and mobile
learning platforms with cutting edge technology that appeals to
everyone's education needs at each stage of their academic and
professional development to capture such growth opportunities."
Ms. Ping Wei, Chief Financial
Officer of CDEL, added, "We are particularly pleased with our
record top- and bottom-line financial results as the first quarter
is typically our seasonally slow period. For the first quarter we
grew our net income by 131.9% year-over-year to $3.4 million, and grew our net revenues by 43.7%
year-over-year to $18.7 million. Our
strong first quarter growth was due to strong revenue contribution
from accounting, healthcare and E&C verticals. Our margins also
improved compared with the same period last year as we continue to
benefit from our highly scalable business model and prudent
expansion strategy. We also significantly improved our cash
position during the quarter, growing our operating cash flow to
$8.1 million, compared to
$5.3 million in the same quarter of
fiscal 2013."
First Quarter Fiscal 2014 Financial Results
Net Revenue. Total net revenue increased by 43.7%
to $18.7 million in the first quarter
of fiscal 2014 from $13.0 million in
the first quarter of fiscal 2013. This increase was primarily due
to higher revenue in accounting, healthcare and E&C verticals.
Net revenue from online education services, books and reference
materials, and other sources contributed to 84.2%, 5.9% and 9.9% of
total net revenue for the first quarter of fiscal 2014,
respectively.
Online education services. Net revenue from online
education services increased by 45.9% to $15.7 million in the
first quarter of fiscal 2014 from $10.8
million in the prior year period, mainly due to higher
revenue from accounting, healthcare and E&C courses.
Books and reference materials. Net revenue from books and
reference materials increased by 46.0% to $1.1 million in the first quarter of fiscal 2014
from $0.8 million in the first
quarter of fiscal 2013.
Others. Net revenue from other sources increased by 27.0%
to $1.9 million in the first quarter
of fiscal 2014 from $1.5 million in
the first quarter of fiscal 2013. The increase was mainly due to
higher revenue in other offline supplementary training courses and
courseware production services.
Cost of Sales. Cost of sales increased by 37.9% to
$8.4 million in the first quarter of
fiscal 2014 from $6.1 million in the
first quarter of fiscal 2013. The increase in cost of sales was
mainly due to increased server lease fees and bandwidth costs,
salaries and related expenses, lecturer fees, rental and related
expenses, and other miscellaneous expenses.
Gross Profit. Gross profit increased by
48.9% to $10.3 million in the first
quarter of fiscal 2014 from $6.9
million in the prior year period. Gross margin increased to
54.9% in the first quarter of fiscal 2014, as compared to 53.0% in
the first quarter of fiscal 2013 due to the scalability of the
Company's online model as revenue growth outpaced increases in
costs.
Operating Expenses. Total operating expenses
increased by 24.2% to $6.5 million in
the first quarter of fiscal 2014 from $5.2
million in the prior year period. This increase was
primarily due to increased salaries and related expenses,
advertising and promotional activities, and commission to the
Company's distributors.
Selling expenses. Selling expenses increased by 37.5% to
$3.8 million in the first quarter of fiscal 2014 from
$2.8 million in the prior year
period, which was primarily driven by increased salaries and
related expenses, advertising and promotional activities, and
commission to the Company's distributors.
General and administrative expenses. General and
administrative expenses increased by 9.1% to $2.7 million in the first quarter of fiscal 2014
from $2.5 million in the prior year
period.
Income Tax Expense. Income tax expenses increased
by 105.8% to $0.9 million in the
first quarter of fiscal 2014 from $0.4
million in the prior year period, primarily due to the
increase in taxable income.
Net Income. As a result of the foregoing, net
income increased by 131.9% to $3.4
million in the first quarter of fiscal 2014 from
$1.5 million in the prior year
period.
Operating Cash Flow.Net operating cash inflow
increased by 53.1% to $8.1 million in
the first quarter of fiscal 2014 from $5.3
million in the prior year period, primarily as a result of
increased net income generated in the first quarter of fiscal 2014.
Increases in deferred revenue and refundable fees, accrued expenses
and other liabilities, and a decrease in accounts receivable also
contributed to the increase. This operating cash inflow was
partially offset by the increase in prepayment and other current
assets and decrease in income tax payable.
Cash and Cash Equivalents, Term Deposits and Restricted
Cash. Cash and cash equivalents, term deposits and
restricted cash as of December 31,
2013 increased by 11.9% to $81.4
million, as compared to $72.7
million as of September 30,
2013, mainly due to robust cash flow generated from
operating activities in the first quarter of fiscal 2014. Out of
that, approximately $16.5 million was
invested in restricted cash.
Outlook
For the second quarter of fiscal 2014, the Company expects to
generate total net revenues in the range of $16.2 to $16.9 million, representing
year-over-year growth of approximately 25% to 30%.
For the 2014 fiscal year, the Company expects to generate total
net revenue in the range of $88.5 to $92.7
million, representing year-over-year growth of approximately
24% to 30%.
The above guidance reflects the Company's current and
preliminary view, which is subject to change.
Conference Call
The Company will host a conference call at 8:30 a.m. Eastern Time on February 20, 2014 to discuss its first quarter
fiscal 2014 financial results and recent developments. The
conference call may be accessed by calling 1-855-298-3404 (US),
1-631-5142-526 (International), 400-120-0539 (China), 800-905-927 (Hong Kong), or 44-(0)20-3078-7622 (UK). The
passcode is CDEL or DL.
A telephone replay will be available shortly after the call
until February 27, 2014 at
1-866-846-0868 (US), 61-2-9641-7900 (International), 400-184-2240
(China), 800-966-697 (Hong Kong), or 0800-169-7301 (UK). The
conference ID is 9553681.
A live and archived webcast of the conference call will be
available at http://ir.cdeledu.com.
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, healthcare,
E&C, and other industries. The Company also offers other
professional education courses for the national judicial
examination, English proficiency test for professionals, computer
application skills, and other occupational certifications or
skills, online test-preparation courses for self-taught learners
pursuing higher education diplomas or degrees, test preparation
courses for university students intending to take the nationwide
graduate school entrance exam, and online language courses. For
further information, please visit http://ir.cdeledu.com.
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,"
"predict," "anticipate," "future," "intend," "plan," "believe,"
"is/are likely to," "estimate" and similar statements. Among other
things, the outlook for the second quarter of fiscal year 2014 and
the full fiscal year 2014 and quotations from management in this
announcement, as well as the Company's strategic and operational
plans (including the Company's open-platform strategy) contain
forward-looking statements. The Company may also make written or
oral forward-looking statements in its periodic and annual reports
to the SEC, 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: our goals and growth strategies; our future prospects
and market acceptance of our courses and other products and
services; our future business development and results of
operations; projected revenues, profits, earnings and other
estimated financial information; projected enrollment numbers; our
plans to expand and enhance our courses and other products and
services; competition in the education and test preparation
markets; and changes of 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 annual report on Form 20-F and other documents
filed or furnished with the SEC. All information provided in this
press release is as of the date of this press release. The Company
does not undertake any obligation to update any forward-looking
statement, except as required under applicable law.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth in this press
release 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.
Contacts:
China Distance
Education Holdings Limited
Lingling Kong, IR
manager
Tel:
+86-10-8231-9999 ext1805
Email:
IR@cdeledu.com
|
The Piacente Group |
Investor Relations
Brandi
Piacente
Tel: +1
212-481-2050
Email:
dl@tpg-ir.com
|
(Financial Tables on Following Pages)
China Distance
Education Holdings Limited
|
Consolidated
Balance Sheets
|
(in thousands of
US Dollars, except number of shares and per share
data)
|
|
|
|
|
|
|
|
|
September 30, 2013
|
|
December 31, 2013
|
|
|
(Derived from
Audited)
|
|
(Unaudited)
|
|
Assets:
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
71,919
|
|
55,783
|
|
|
Term
deposit
|
817
|
|
9,085
|
|
|
Restricted
cash
|
6
|
|
-
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of US$1,801 and US$1,773
as of December 31, 2013 and September 30, 2013,
respectively
|
3,518
|
|
2,826
|
|
|
Inventories
|
698
|
|
619
|
|
|
Prepayment and other
current assets
|
4,087
|
|
4,637
|
|
|
Deferred tax assets,
current portion
|
1,751
|
|
1,553
|
|
|
Deferred
cost
|
1,889
|
|
1,613
|
|
|
Total
current assets
|
84,685
|
|
76,116
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property, plant and
equipment, net
|
10,202
|
|
10,666
|
|
|
Goodwill
|
7,711
|
|
7,795
|
|
|
Other intangible
assets, net
|
1,476
|
|
1,422
|
|
|
Deposit for purchase
of non-current assets
|
374
|
|
105
|
|
|
Restricted
cash
|
-
|
|
16,519
|
|
|
Other non-current
assets
|
1,546
|
|
2,114
|
|
|
Total
non-current assets
|
21,309
|
|
38,621
|
|
|
|
|
|
|
|
|
Total
assets
|
105,994
|
|
114,737
|
|
|
|
|
|
|
|
Liabilities and
equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accrued expenses and
other liabilities (including accrued expenses and other liabilities
of
the consolidated VIE without recourse to China Distance Education
Holdings Limited of
US$15,428 and US$13,361 as of December 31, 2013 and September 30,
2013, respectively)
|
15,072
|
|
17,905
|
|
|
Income tax payable
(including income tax payable of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$2,367
and US3,661 as of
December 31, 2013 and September 30, 2013, respectively)
|
4,282
|
|
3,219
|
|
|
Deferred revenue
(including deferred revenue of the consolidated VIE without
recourse to
China Distance Education Holdings Limited of US$19,062 and US17,120
as of
December 31, 2013 and September 30, 2013, respectively)
|
17,143
|
|
19,085
|
|
|
Refundable fees
(including refundable fees of the consolidated VIE without recourse
to
China Distance Education Holdings Limited of US$4,636 and US$4,300
as of
December 31, 2013 and September 30, 2013, respectively)
|
4,300
|
|
4,636
|
|
|
Total
current liabilities
|
40,797
|
|
44,845
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Deferred tax
liabilities, non-current portion (including non-current portion of
deferred tax
liabilities of the consolidated VIE without recourse to China
Distance Education Holdings
Limited of nil and nil as of December 31, 2013 and September 30,
2013, respectively)
|
677
|
|
775
|
|
|
Total
non-current liabilities
|
677
|
|
775
|
|
|
|
|
|
|
|
|
Total
liabilities
|
41,474
|
|
45,620
|
|
Equity:
|
|
|
|
|
|
Ordinary shares (par
value of US$0.0001 per share at December 31, 2013 and
September 30, 2013, respectively; Authorized – 480,000,000 shares
at December 31, 2013 and
September 30, 2013, respectively; Issued and outstanding –
136,336,789 and 135,532,141
shares at December 31, 2013 and September 30, 2013,
respectively)
|
14
|
|
14
|
|
|
Additional paid-in
capital
|
46,742
|
|
47,196
|
|
|
Accumulated other
comprehensive income
|
6,295
|
|
7,015
|
|
|
Retained
Earnings
|
11,469
|
|
14,892
|
|
|
Total China Distance Education Holdings Limited
shareholders' equity
|
64,520
|
|
69,117
|
|
|
Total
equity
|
64,520
|
|
69,117
|
|
|
Total
liabilities and equity
|
105,994
|
|
114,737
|
|
|
|
|
|
|
|
China Distance
Education Holdings Limited
|
Unaudited
Consolidated Statements Of Operations
|
(in
thousands of US dollars, except number of shares, per share and per
ADS data)
|
|
|
Three Months
Ended December 31,
|
|
2012
|
|
2013
|
|
|
|
|
Sales, net of
business tax, value-added tax and related
surcharges:
|
|
|
|
|
Online education
services
|
10,779
|
|
15,722
|
|
Books and reference
materials
|
761
|
|
1,111
|
|
Others
|
1,463
|
|
1,858
|
|
Total
net revenues
|
13,003
|
|
18,691
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
Cost of
services
|
(5,604)
|
|
(7,852)
|
|
Cost of tangible
goods sold
|
(509)
|
|
(578)
|
|
Total
cost of sales
|
(6,113)
|
|
(8,430)
|
|
|
|
|
|
Gross
profit
|
6,890
|
|
10,261
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
(2,779)
|
|
(3,822)
|
|
General and
administrative expenses
|
(2,454)
|
|
(2,678)
|
|
Total
operating expenses
|
(5,233)
|
|
(6,500)
|
Other operating
income
|
3
|
|
49
|
|
|
|
|
|
Operating
income
|
1,660
|
|
3,810
|
|
|
|
|
Interest
income
|
253
|
|
507
|
Exchange
loss
|
(21)
|
|
(38)
|
|
|
|
|
|
Income
before income taxes
|
1,892
|
|
4,279
|
Less: Income tax
expense
|
(416)
|
|
(856)
|
|
|
|
|
Net
income attributable to China Distance Education
Holdings Limited
|
1,476
|
|
3,423
|
Net income
per share:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited shareholders
|
|
|
|
|
Basic
|
0.011
|
|
0.025
|
|
Diluted
|
0.011
|
|
0.025
|
Net income
per ADS:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited shareholders
|
|
|
|
|
Basic
|
0.044
|
|
0.101
|
|
Diluted
|
0.044
|
|
0.100
|
|
|
|
|
Weighted average
shares used in calculating net income per
share:
|
|
|
|
|
Basic
|
134,754,567
|
|
135,805,355
|
|
Diluted
|
135,496,638
|
|
137,117,556
|
SOURCE China Distance Education Holdings Limited