BEIJING, Aug. 13, 2014 /PRNewswire/ -- 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 unaudited financial results for the third quarter
of fiscal year 2014 ended June 30,
2014.
Third Quarter Fiscal 2014 Financial and Operational
Highlights
- Total course enrollments reached 925,000 in the third quarter
of fiscal 2014, an increase of 42.6% from the third quarter of
fiscal 2013.
- Cash receipts from online course registration reached
$26.2 million, a 20.9% increase over
the third quarter of fiscal 2013.
- Net revenue increased by 36.6% to $25.0
million from $18.3 million in
the prior year period, exceeding the Company's guidance range of
$23.2 million to $24.1 million.
- Gross profit increased by 44.3% to $14.5
million from $10.1 million in
the prior year period. Gross margin increased to 58.1%, as compared
to 55.0% in the prior year period.
- Operating income increased by 138.7% to $6.0 million from $2.5
million in the prior year period.
- Net income increased by 139.5% to $5.3
million from $2.2 million in
the prior year period.
- Basic and diluted net income per American Depositary Share
("ADS") was $0.148 and $0.147, respectively, representing a
year-over-year increase of 127.7% and 129.7%, respectively, from
basic and diluted net income per ADS of $0.065 and $0.064,
respectively for the third quarter of fiscal 2013. Each ADS
represents four ordinary shares.
- Operating cash outflow was $8.0
million, which included $17.0
million of cash generated from operating activities offset
by the payback of $25.0 million that
had been held on behalf of certain selling shareholders in the
Company's follow-on offering completed in March 2014, as compared to operating cash inflow
of $12.9 million in the third quarter
of fiscal 2013.
Mr. Zhengdong Zhu, Chairman and
CEO of CDEL, said, "I am very pleased with our execution this
quarter as we continue to achieve healthy enrollment and revenue
growth across our core accounting, healthcare, and engineering and
construction verticals. We also continue to experience rapid
enrollment growth with our innovative mobile courses, cumulatively
registering over 31,000 paid enrollments with the three stand-alone
mobile accounting courses that we initiated in October 2013. Our plan is to continue to
capitalize on this trend by rolling out additional mobile course
offerings going forward."
"The delivery of education in China is evolving rapidly to be more online
and mobile-based learning. As a leading online education
company with over 14 years of operating history and a comprehensive
and integrated online and mobile learning platform, we are well
positioned to capitalize on this trend. We remain the provider of
choice as we continue to leverage our leadership and expertise in
providing a first-class online learning experience particularly via
the rapidly growing mobile-based platforms. Continued expansion of
mobile learning across our core verticals remains a key component
of our growth strategy, and we are pleased with the progress we
have made to date, and will continue to look for innovations and
breakthroughs with this key strategy. "
Ms. Ping Wei, Chief Financial
Officer of CDEL, added, "We reported another strong quarter with
total net revenue above our previously announced guidance, and we
leveraged our cost structure to achieve improved margins and higher
net income. Our revenue growth in the fiscal third quarter was
driven by enrollment gains across our core verticals. Going
forward, we will continue to expand prudently to balance growth and
profitability through conservative cost control
measures."
Third Quarter Fiscal 2014 Financial Results
Net Revenue. Total net revenue increased by 36.6%
to $25.0 million in the third quarter
of fiscal 2014, from $18.3 million in
the third quarter of fiscal 2013. The increase was primarily due to
higher revenue in the accounting, healthcare, and engineering and
construction ("E&C") verticals. Net revenue from online
education services, books and reference materials, and other
sources contributed to 82.5%, 7.0% and 10.5%, respectively, of our
total net revenue for the third quarter of fiscal 2014.
Online education services. Net revenue from online
education services increased by 40.2% to $20.6 million in the third quarter of fiscal
2014, from $14.7 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 27.9% to $1.7 million in the third quarter of fiscal 2014,
from $1.4 million in the third
quarter of fiscal 2013.
Others. Net revenue from other sources increased by 17.8%
to $2.6 million in the third quarter
of fiscal 2014, from $2.2 million in
the third quarter of fiscal 2013. The increase was mainly due to
higher revenue from our "Tax School", in-person accounting
professional training courses and courseware production services.
This increase was partially offset by a revenue decrease in
business start-up training courses and other in-person training
courses.
Cost of Sales. Cost of sales increased by 27.1% to
$10.5 million in the third quarter of
fiscal 2014, from $8.2 million in the
third quarter of fiscal 2013. The increase in cost of sales was
mainly due to increased lecture fees, salaries and related
expenses, server lease fees and bandwidth costs, rental and related
expenses, and cost of books and reference materials.
Gross Profit. Gross profit increased by
44.3% to $14.5 million in the third
quarter of fiscal 2014, from $10.1
million in the prior year period. Gross margin increased to
58.1% in the third quarter of fiscal 2014, as compared to 55.0% in
the third quarter of fiscal 2013.
Operating Expenses. Total operating expenses
increased by 15.0% to $8.7 million in
the third quarter of fiscal 2014, from $7.6
million in the prior year period. This increase was
primarily due to higher marketing and promotional expenses,
increased commissions to the Company's distributors, and increased
salaries and related expenses.
Selling expenses. Selling expenses increased by 22.5% to
$6.3 million in the third quarter of
fiscal 2014, from $5.1 million in the
prior year period, primarily driven by increased commissions to the
Company's online distributors, an expansion of our marketing and
promotional activities, and increased salaries and related
expenses.
General and administrative expenses. General and
administrative expenses were flat at $2.4
million in the third quarter of fiscal years 2014 and 2013,
respectively.
Income Tax Expense. Income tax expense increased
by 112.3% to $1.3 million in the
third quarter of fiscal 2014, from $620,000 in the prior year period, primarily due
to the increase in taxable income.
Net Income. Net income increased by 139.5% to
$5.3 million in the third quarter of
fiscal 2014 from $2.2 million in the
prior year period.
Operating Cash Flow. Net operating cash
outflow was $8.0 million in the third
quarter of fiscal 2014, as compared to net operating cash inflow of
$12.9 million in the prior year
period, primarily as $17.0 million of
cash generated from operating activities due to increased cash
revenue and profitability in the quarter are offset by the payback
of $25.0 million of proceeds that the
Company temporarily held for its certain selling shareholders
related to the Company's follow-on offering completed on
March 17, 2014.
Cash and Cash Equivalents, Term Deposits and Restricted
Cash. Cash and cash equivalents, term deposits and
restricted cash as of June 30, 2014
were $132.3 million, as compared with
$140.8 million as of March 31, 2014. The decrease was primarily due to
the payback of $25.0 million that had
been held on behalf of certain selling shareholders, partially
offset by $17.0 million in cash
generated from operating activities other than this payback during
the fiscal third quarter.
Outlook
For the fourth quarter of fiscal 2014, the Company expects to
generate total net revenue in the range of $32.4 million to $33.6 million, representing
year-over-year growth of approximately 20% to 24%.
For the 2014 fiscal year, the Company is again raising its
guidance for total net revenue to the range of $94.3 million to $95.5 million, representing
year-over-year growth of approximately 32% to 34%. The Company's
prior fiscal 2014 full-year total net revenue guidance range was
$90.6 million to $94.2 million.
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 8:00 a.m. Eastern Time on August 14, 2014 to discuss its third 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 two hours after the call
until August 20, 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 replay
passcode is 1782219.
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 fourth 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 (in particular, the Company's mobile strategies) 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
|
China Distance
Education Holdings Limited
|
Consolidated
Balance Sheets
|
(in thousands of
US Dollars, except number of shares and per share
data)
|
|
|
|
|
|
|
|
|
September
30, 2013
|
|
June 30,
2014
|
|
|
(Derived from
Audited)
|
|
(Unaudited)
|
|
Assets:
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
71,919
|
|
106,451
|
|
|
Term
deposit
|
817
|
|
9,672
|
|
|
Restricted
cash
|
6
|
|
83
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of US$1,305 and
US$1,773 as of June
30, 2014 and September 30, 2013, respectively
|
3,518
|
|
2,038
|
|
|
Inventories
|
698
|
|
1,132
|
|
|
Prepayment and other
current assets
|
4,087
|
|
2,725
|
|
|
Deferred tax assets,
current portion
|
1,751
|
|
1,758
|
|
|
Deferred
cost
|
1,889
|
|
1,747
|
|
|
Total
current assets
|
84,685
|
|
125,606
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property, plant and
equipment, net
|
10,202
|
|
10,624
|
|
|
Goodwill
|
7,711
|
|
7,608
|
|
|
Other intangible
assets, net
|
1,476
|
|
1,269
|
|
|
Deposit for purchase
of non-current assets
|
374
|
|
265
|
|
|
Restricted
cash
|
-
|
|
16,120
|
|
|
Other non-current
assets
|
1,546
|
|
2,181
|
|
|
Total
non-current assets
|
21,309
|
|
38,067
|
|
|
|
|
|
|
|
|
Total
assets
|
105,994
|
|
163,673
|
|
|
|
|
|
|
|
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$17,043 and US$13,361 as of June 30, 2014 and
September 30, 2013,
respectively)
|
15,072
|
|
19,404
|
|
|
Income tax payable
(including income tax payable of the consolidated VIE
without
recourse to China
Distance Education Holdings Limited of US$2,712 and
US$3,661 as of
June 30, 2014 and September 30, 2013, respectively)
|
4,282
|
|
3,676
|
|
|
Deferred revenue
(including deferred revenue of the consolidated VIE
without
recourse to China
Distance Education Holdings Limited of US$35,137 and
US$17,120 as of June
30, 2014 and September 30, 2013, respectively)
|
17,143
|
|
35,248
|
|
|
Refundable fees
(including refundable fees of the consolidated VIE
without
recourse to China
Distance Education Holdings Limited of US$4,432 and
US$4,300 as of June
30, 2014 and September 30, 2013, respectively)
|
4,300
|
|
4,432
|
|
|
Total
current liabilities
|
40,797
|
|
62,760
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Long-term bank loan
(including long-term bank loan of the consolidated VIE
without recourse to
China Distance Education Holdings Limited of nil and nil as
of
June 30, 2014 and
September 30, 2013, respectively)
|
-
|
|
16,314
|
|
|
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 June 30, 2014 and September
30,
2013,
respectively)
|
677
|
|
937
|
|
|
Total
non-current liabilities
|
677
|
|
17,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
41,474
|
|
80,011
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Ordinary shares (par
value of US$0.0001 per share at June 30, 2014 and
September 30, 2013,
respectively; Authorized –500,000,000 and 480,000,000
shares at June 30,
2014 and September 30, 2013, respectively; Issued and
outstanding
–142,747,045 and 135,532,141 shares at June 30, 2014 and
September
30, 2013,
respectively)
|
14
|
|
14
|
|
|
Additional paid-in
capital
|
46,742
|
|
71,708
|
|
|
Accumulated other
comprehensive income
|
6,295
|
|
5,373
|
|
|
Retained
Earnings
|
11,469
|
|
6,567
|
|
|
Total China Distance Education Holdings Limited
shareholders' equity
|
64,520
|
|
83,662
|
|
|
Total
equity
|
64,520
|
|
83,662
|
|
|
Total
liabilities and equity
|
105,994
|
|
163,673
|
|
|
|
|
|
|
|
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 June 30,
|
|
2013
|
|
2014
|
|
|
|
|
Sales, net of
business tax, value-added tax and related
surcharges:
|
|
|
|
|
Online education
services
|
14,689
|
|
20,595
|
|
Books and reference
materials
|
1,366
|
|
1,747
|
|
Others
|
2,236
|
|
2,635
|
|
Total
net revenues
|
18,291
|
|
24,977
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
Cost of
services
|
(7,567)
|
|
(9,502)
|
|
Cost of tangible
goods sold
|
(665)
|
|
(964)
|
|
Total
cost of sales
|
(8,232)
|
|
(10,466)
|
|
|
|
|
|
Gross
profit
|
10,059
|
|
14,511
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
(5,122)
|
|
(6,276)
|
|
General and
administrative expenses
|
(2,430)
|
|
(2,410)
|
|
Total
operating expenses
|
(7,552)
|
|
(8,686)
|
Other operating
income
|
3
|
|
166
|
|
|
|
|
|
Operating
income
|
2,510
|
|
5,991
|
|
|
|
|
Interest
income
|
340
|
|
728
|
Interest
expense
|
-
|
|
(97)
|
Exchange
loss
|
(31)
|
|
(40)
|
|
|
|
|
|
Income
before income taxes
|
2,819
|
|
6,582
|
Less: Income tax
expense
|
(620)
|
|
(1,316)
|
|
|
|
|
Net
income attributable to China Distance Education
Holdings Limited
|
2,199
|
|
5,266
|
Net income
per share:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited
shareholders
|
|
|
|
|
Basic
|
0.016
|
|
0.037
|
|
Diluted
|
0.016
|
|
0.037
|
Net income
per ADS:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited
shareholders
|
|
|
|
|
Basic
|
0.065
|
|
0.148
|
|
Diluted
|
0.064
|
|
0.147
|
|
|
|
|
Weighted average
shares used in calculating net income per
share:
|
|
|
|
|
Basic
|
135,319,720
|
|
142,615,012
|
|
Diluted
|
136,511,524
|
|
143,260,655
|
SOURCE China Distance Education Holdings Limited