BEIJING, Nov. 18, 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 fourth quarter
and fiscal year 2014 ended September 30,
2014.
Fourth Quarter Fiscal 2014 Financial and Operational
Highlights
- Total course enrollments reached 880,000, an increase of 14.7%
from the fourth quarter of fiscal 2013.
- Cash receipts from online course registration reached
$16.8 million, a 28.6% increase over
the fourth quarter of fiscal 2013.
- Net revenue increased by 30.3% to $35.3
million from $27.1 million in
the prior year period, exceeding the Company's guidance range of
$32.4 million to $33.6 million.
- Gross profit increased by 30.6% to $24.1
million from $18.4 million in
the prior year period.
- Operating income increased by 27.7% to $14.2 million from $11.1
million in the prior year period.
- Net income increased by 47.5% to $13.4
million from $9.1 million in
the prior year period.
- Basic and diluted net income per American Depositary Share
("ADS") was $0.376 and $0.375, respectively, representing a
year-over-year increase of 39.8% and 41.0%, respectively, from
basic and diluted net income per ADS of $0.269 and $0.266,
respectively for the fourth quarter of fiscal 2013. Each ADS
represents four ordinary shares.
- Operating cash flow increased by 5.7% to $7.4 million from $7.0
million in the fourth quarter of fiscal 2013.
Fiscal Year 2014 Financial and Operational
Highlights
- Total course enrollments were 3.2 million in fiscal year 2014,
representing a year-over-year increase of 19.9%, compared to 2.7
million in fiscal year 2013.
- Net revenues increased 36.2% to $97.2
million for fiscal year 2014, compared to $71.4 million for fiscal year 2013.
- Gross profit for fiscal year 2014 increased 38.5% to
$57.4 million, compared to
$41.4 million in fiscal year 2013.
Gross margin was 59.0% and 58.1% in fiscal year 2014 and 2013,
respectively.
- Operating income increased 53.3% to $24.6 million in fiscal year 2014, compared to
$16.0 million in fiscal year
2013.
- Net income increased 72.6% to $23.4
million in fiscal year 2014, compared to $13.6 million in fiscal year 2013.
- Basic and diluted net income per ADS was $0.670 and $0.666,
respectively, compared to $0.401 and
$0.398 for fiscal year 2013,
respectively.
Mr. Zhengdong Zhu, Chairman and
CEO of CDEL, said, "We finished the year on a very strong note,
delivering 30.3% and 36.2% revenue growth for the quarter and for
the year, respectively, both exceeding guidance. In addition, we
achieved yet another year of extraordinary net income growth of
72.6% for the year. These strong results reflect the successful
execution of our balanced growth strategy, namely, our unrelenting
focus on providing our students with high quality courses, services
and best-in-class online learning experiences, which helps our
students achieve their educational goals and helps the Company
build well-known and trusted online education brands; our financial
discipline that balances expansion and profitability, paving a
healthy runway for our sustained long-term growth; and our ongoing
commitment to innovation that fosters development of the most
comprehensive online learning systems."
"Continuous innovation and a focus on quality remain the
cornerstones of our model, and have served our students well as
they continue to migrate from traditional off-line to online
learning. Going forward, we will continue to build shareholder
value with the same focused growth strategy, expanding our market
reach from our traditional test-preparation and continuing
education courses to a true life-long, comprehensive online
learning program, which encompasses career enhancement professional
skills training courses, soft-skill improvement courses,
hobby-based courses, and courses that help people improve their
quality of life. We have built a solid foundation for such
expansion as our continuous investments in our cutting-edge online
and mobile learning systems, in content development capabilities,
and in our people, have started to pay off. We will work with all
our partners to reach more potential users and better serve our
large registered user base of close to 30 million students through
the adaptation of 'big data' solutions with their life-long
learning needs."
"Along with robust revenue growth and high scalability inherent
to our model, as we continue to expand, we are confident that we
will continue to achieve greater economies of scale, increase
profitability and generate higher value for our shareholders," Mr.
Zhu concluded.
Ms. Ping Wei, Chief Financial
Officer of CDEL, added, "I am very pleased with our financial
performance during the fourth quarter, which again reflects strong
enrollment gains and disciplined expense control. Our preliminary
revenue guidance for 2015, which calls for growth of 27% to 32%,
reflects our expectation that we will continue to gain on-line
market share as students seek best-in-class course content. From
our core online courses, to our innovative e-books and
rapidly-growing mobile platform, our goal is to maintain the high
quality for which we are known while cultivating new avenues for
growth."
Fourth Quarter Fiscal 2014 Financial Results
Net Revenue. Total net revenue increased by 30.3%
to $35.3 million in the fourth
quarter of fiscal 2014, from $27.1
million in the fourth quarter of fiscal 2013. The increase
was primarily due to higher revenue in our accounting, healthcare,
and engineering and construction ("E&C") verticals. Net revenue
from online education services, books and reference materials, and
other sources contributed to 85.1%, 5.0% and 9.9%, respectively, of
our total net revenue for the fourth quarter of fiscal 2014.
Online education services. Net revenue from online
education services increased by 28.2% to $30.0 million in the fourth quarter of fiscal
2014, from $23.4 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 10.5% to $1.8 million in the fourth quarter of fiscal
2014, from $1.6 million in the fourth
quarter of fiscal 2013.
Others. Net revenue from other sources increased by 70.7%
to $3.5 million in the fourth quarter
of fiscal 2014, from $2.0 million in
the fourth quarter of fiscal 2013. The increase was mainly due to
higher revenue from our "Tax School," in-person accounting
professional training courses, and business start-up training
courses.
Cost of Sales. Cost of sales increased by 29.8% to
$11.2 million in the fourth quarter
of fiscal 2014, from $8.6 million in
the fourth 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
30.6% to $24.1 million in the fourth
quarter of fiscal 2014, from $18.4
million in the prior year period. Gross margin increased to
68.2% in the fourth quarter of fiscal 2014, as compared to 68.1% in
the fourth quarter of fiscal 2013.
Operating Expenses. Total operating expenses
increased by 35.4% to $9.9 million in
the fourth quarter of fiscal 2014, from $7.3
million in the prior year period. This increase was
primarily due to higher marketing and promotional expenses,
increased commissions to the Company's distributors, increased
salaries and related expenses, and increased performance-based
employee bonus.
Selling expenses. Selling expenses increased by 30.9% to
$5.6 million in the fourth quarter of
fiscal 2014 from $4.3 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 increased by 41.9% to $4.2 million in the fourth quarter of fiscal
2014, from $3.0 million in the prior
year period, primarily due to increased performance-based employee
bonus.
Income Tax Expense. Income tax expense decreased
by 38.7% to $1.6 million in the
fourth quarter of fiscal 2014, from $2.5
million in the prior year period, primarily due to the
reverse of certain accumulated unpaid income tax expense accrued in
earlier fiscal years.
Net Income. Net income increased by 47.5% to
$13.4 million in the fourth quarter
of fiscal 2014 from $9.1 million in
the prior year period.
Operating Cash Flow. Net operating cash
inflow was $7.4 million in the fourth
quarter of fiscal 2014, as compared to net operating cash inflow of
$7.0 million in the prior year
period.
Cash and Cash Equivalents, Term Deposits and Restricted
Cash. Cash and cash equivalents, term deposits and
restricted cash as of September 30,
2014 were $140.4 million, as
compared with $132.3 million as of
June 30, 2014.
Fiscal Year 2014 Financial Results
Net Revenues. Total net revenues increased by
36.2% to $97.2 million in the fiscal
year 2014, from $71.4 million in the
fiscal year 2013.
Net revenues from online education services for the fiscal year
2014 increased by 37.5% to $80.5
million from $58.6 million in
the fiscal year 2013.
Net revenues from books and reference materials for the fiscal
year 2014 increased by 24.6% to $6.4
million from $5.1 million in
the fiscal year 2013. In addition, net revenues from other sources
increased by 34.0% year-over-year to $10.3
million in the fiscal year 2014 from $7.7 million in the fiscal year 2013.
Cost of Sales. Cost of sales increased by 33.0% to
$39.8 million for the fiscal year
2014, from $29.9 million in the
fiscal year 2013.
Gross Profit. Gross profit increased by 38.5% to
$57.4 million for the fiscal year
2014 from $41.4 million in the fiscal
year 2013. Gross profit margin for the fiscal year 2014 was 59.0%,
an increase from 58.1% in the fiscal year 2013.
Operating Expenses. For the fiscal year 2014,
total operating expenses increased by 29.9% to $33.1 million from $25.5
million in the fiscal year 2013.
For the fiscal year 2014, selling expenses increased by 36.8% to
$21.4 million, compared to
$15.7 million in the fiscal year
2013.
For the fiscal year 2014, general and administrative expenses
increased by 18.8% to $11.6 million,
compared to $9.8 million in the
fiscal year 2013.
Income Tax Expense. For the fiscal year 2014,
income tax expense was $4.1 million,
an increase of 6.7% from $3.8 million
in the fiscal year 2013.
Net Income. Net income was $23.4 million for the fiscal year 2014, an
increase of 72.6% from $13.6 million
in the fiscal year 2013.
Operating Cash Flow. Net operating cash
inflow for fiscal year 2014 was $44.1
million, compared to $32.1
million in the fiscal year 2013.
Cash and Cash Equivalents, Term Deposits and Restricted
Cash. Cash and cash equivalents, term deposits and
restricted cash as of September 30,
2014 increased to $140.4
million from $72.7 million as
of September 30, 2013.
Dividend
The Company today announced that its Board of Directors has
approved and declared a cash dividend of $0.20 per ordinary share on its outstanding
shares to shareholders of record as of the close of trading on
January 6, 2015.
Holders of American Depositary Shares ("ADS"), each representing
four ordinary shares of CDEL, are accordingly entitled to the cash
dividend of $0.80 per ADS. The
depository, Deutsche Bank Trust Company Americas, will charge a fee
of $0.02 per ADS when the dividends
are distributed on or about January 10,
2015.
Subject to the Company's ongoing financial performance, cash
position, budget and business plan and market conditions, the
Company's Board of Directors will, on a yearly basis, consider
paying a dividend.
Outlook
For the 2015 fiscal year, the Company expects to generate total
net revenue in the range of $123.4 million
to $128.3 million, representing year-over-year growth of
approximately 27% to 32%.
For the first quarter of fiscal 2015, the Company expects to
generate total net revenue in the range of $20.0 million to $20.9 million, representing
year-over-year growth of approximately 7% to 12% as our quarterly
revenue distribution fluctuates year to year.
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 November 19, 2014 to discuss its fourth quarter
and fiscal year 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 November 24, 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 9522275.
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 first quarter of fiscal year 2015 and
the full fiscal year 2015 and quotations from management in this
announcement, as well as the Company's strategic and operational
plans (in particular, the Company's mobile strategies and plan to
build life-long, comprehensive online learning program and adapt
"big data" solutions) 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
|
|
September 30,
2014
|
|
|
(Audited)
|
|
(Unaudited)
|
|
Assets:
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
71,919
|
|
118,075
|
|
|
Term
deposit
|
817
|
|
5,702
|
|
|
Restricted
cash
|
6
|
|
16,637
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of US$1,250 and US$1,773 as of September 30, 2014
and
2013, respectively
|
3,518
|
|
1,637
|
|
|
Inventories
|
698
|
|
449
|
|
|
Prepayment and other
current assets
|
4,087
|
|
3,749
|
|
|
Deferred tax assets,
current portion
|
1,751
|
|
2,116
|
|
|
Deferred
cost
|
1,889
|
|
1,248
|
|
|
Total
current assets
|
84,685
|
|
149,613
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property, plant and
equipment, net
|
10,202
|
|
10,721
|
|
|
Goodwill
|
7,711
|
|
7,689
|
|
|
Other intangible
assets, net
|
1,476
|
|
1,384
|
|
|
Deposit for purchase
of non-current assets
|
374
|
|
94
|
|
|
Other non-current
assets
|
1,546
|
|
2,128
|
|
|
Total
non-current assets
|
21,309
|
|
22,016
|
|
|
|
|
|
|
|
|
Total
assets
|
105,994
|
|
171,629
|
|
|
|
|
|
|
|
Liabilities and
equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term bank loan
(including short-term bank loan of the consolidated VIE without recourse to China
Distance
Education Holdings Limited of nil and nil as of September 30,
2014 and 2013, respectively)
|
-
|
|
16,583
|
|
|
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$21,275 and US$13,361 as of September 30, 2014 and
2013, respectively)
|
15,072
|
|
22,695
|
|
|
Income tax payable
(including income tax payable of the consolidated VIE without recourse to China
Distance
Education Holdings Limited of US3,504 and US3,661
as of September 30, 2014 and 2013, respectively)
|
4,282
|
|
4,209
|
|
|
Deferred revenue
(including deferred revenue of the
consolidated VIE without recourse to China Distance
Education Holdings Limited of US23,319 and US17,120 as of
September 30, 2014 and 2013, respectively)
|
17,143
|
|
23,423
|
|
|
Refundable fees
(including refundable fees of the consolidated
VIE without recourse to China Distance Education
Holdings
Limited of US5,199
and US4,300 as of September 30, 2014
and 2013, respectively)
|
4,300
|
|
5,199
|
|
|
Total
current liabilities
|
40,797
|
|
72,109
|
|
|
|
|
|
|
|
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 September 30, 2014 and 2013,
respectively)
|
677
|
|
1,110
|
|
|
Total
non-current liabilities
|
677
|
|
1,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
41,474
|
|
73,219
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Ordinary shares (par
value of US$0.0001 per share at
September 30, 2014 and 2013, respectively; Authorized –
500,000,000 and 480,000,000 at September 30, 2014 and
2013, respectively; Issued and outstanding –142,752,873 and
135,532,141 shares at September 30, 2014 and 2013,
respectively)
|
14
|
|
14
|
|
|
Additional paid-in
capital
|
46,742
|
|
72,190
|
|
|
Accumulated other
comprehensive income
|
6,295
|
|
6,220
|
|
|
Retained
Earnings
|
11,469
|
|
19,986
|
|
|
Total China Distance Education Holdings Limited
shareholders' equity
|
64,520
|
|
98,410
|
|
|
Total
equity
|
64,520
|
|
98,410
|
|
|
Total
liabilities and equity
|
105,994
|
|
171,629
|
|
|
|
|
|
|
|
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 September 30,
|
|
2013
|
|
2014
|
|
|
|
|
Sales, net of
business tax, value-added tax and related
surcharges:
|
|
|
|
|
Online education
services
|
23,430
|
|
30,033
|
|
Books and reference
materials
|
1,601
|
|
1,769
|
|
Others
|
2,039
|
|
3,480
|
|
Total
net revenues
|
27,070
|
|
35,282
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
Cost of
services
|
(7,883)
|
|
(9,524)
|
|
Cost of tangible
goods sold
|
(755)
|
|
(1,688)
|
|
Total
cost of sales
|
(8,638)
|
|
(11,212)
|
|
|
|
|
|
Gross
profit
|
18,432
|
|
24,070
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
(4,308)
|
|
(5,639)
|
|
General and
administrative expenses
|
(2,978)
|
|
(4,227)
|
|
Total
operating expenses
|
(7,286)
|
|
(9,866)
|
Other operating
income
|
-
|
|
32
|
|
|
|
|
|
Operating
income
|
11,146
|
|
14,236
|
|
|
|
|
Interest
income
|
507
|
|
1,045
|
Interest
expense
|
-
|
|
(97)
|
Exchange
loss
|
(16)
|
|
(210)
|
|
|
|
|
|
Income before
income taxes
|
11,637
|
|
14,974
|
Less: Income tax
expense
|
(2,538)
|
|
(1,555)
|
|
|
|
|
Net income
attributable to China Distance Education
Holdings Limited
|
9,099
|
|
13,419
|
Net income per
share:
|
|
|
|
Net income
attributable to China Distance Education
Holdings Limited shareholders
|
|
|
|
|
Basic
|
0.067
|
|
0.094
|
|
Diluted
|
0.067
|
|
0.094
|
Net income per
ADS:
|
|
|
|
Net income
attributable to China Distance Education
Holdings Limited shareholders
|
|
|
|
|
Basic
|
0.269
|
|
0.376
|
|
Diluted
|
0.266
|
|
0.375
|
|
|
|
|
Weighted average
shares used in calculating net income
per share:
|
|
|
|
|
Basic
|
135,349,711
|
|
142,624,622
|
|
Diluted
|
136,697,750
|
|
143,269,355
|
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)
|
|
|
Year Ended
September 30,
|
|
2013
|
|
2014
|
|
|
|
|
Sales, net of
business tax, value-added tax and related
surcharges:
|
|
|
|
|
Online education
services
|
58,573
|
|
80,545
|
|
Books and reference
materials
|
5,129
|
|
6,392
|
|
Others
|
7,658
|
|
10,259
|
|
Total
net revenues
|
71,360
|
|
97,196
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
Cost of
services
|
(27,073)
|
|
(35,300)
|
|
Cost of tangible
goods sold
|
(2,844)
|
|
(4,503)
|
|
Total
cost of sales
|
(29,917)
|
|
(39,803)
|
|
|
|
|
|
Gross
profit
|
41,443
|
|
57,393
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
(15,673)
|
|
(21,445)
|
|
General and
administrative expenses
|
(9,806)
|
|
(11,645)
|
|
Total operating
expenses
|
(25,479)
|
|
(33,090)
|
Other operating
income
|
59
|
|
253
|
|
|
|
|
|
Operating
income
|
16,023
|
|
24,556
|
|
|
|
|
Interest
income
|
1,415
|
|
2,964
|
Interest
expense
|
-
|
|
(291)
|
Exchange
gain/(loss)
|
(77)
|
|
232
|
|
|
|
|
|
Income before
income taxes
|
17,361
|
|
27,461
|
Less: Income tax
expense
|
(3,797)
|
|
(4,052)
|
|
|
|
|
Net income
attributable to China Distance Education
Holdings Limited
|
13,564
|
|
23,409
|
Net income per
share:
|
|
|
|
Net income
attributable to China Distance Education
Holdings Limited shareholders
|
|
|
|
|
Basic
|
0.100
|
|
0.168
|
|
|
|
|
|
|
Diluted
|
0.100
|
|
0.167
|
Net income per
ADS:
|
|
|
|
Net income
attributable to China Distance Education
Holdings Limited shareholders
|
|
|
|
|
Basic
|
0.401
|
|
0.670
|
|
Diluted
|
0.398
|
|
0.666
|
|
|
|
|
Weighted average
shares used in calculating net income
per share:
|
|
|
|
|
Basic
|
135,174,562
|
|
139,613,967
|
|
Diluted
|
136,399,233
|
|
140,497,204
|
SOURCE China Distance Education Holdings Limited