BEIJING, Aug. 28 /Xinhua-PRNewswire/ -- ATA Inc. ("ATA" or the
"Company") (NASDAQ:ATAI), the leading provider of computer-based
testing and testing-related services in China, today announced its
unaudited financial results for its fiscal first quarter ended June
30, 2008 ("First Quarter 2009"). First Quarter 2009 Highlights --
Net revenues increased by 158.2% year-over-year to approximately
RMB68.3 million (US$10.0 million). -- Gross profit increased by
184.8% year-over-year to approximately RMB39.2 million (US$5.7
million). -- Income from operations was approximately RMB17.7
million (US$2.6 million) compared to a loss from operations of
RMB1.3 million in the same period last year. -- Net income was
approximately RMB12.4 million (US$1.8 million) compared to a net
loss of RMB0.8 million in the same period last year. -- Net income
excluding share-based compensation expense and foreign currency
exchange gain (losses) (non-GAAP) was approximately RMB13.7 million
(US$2.0 million) compared to a non-GAAP net loss of RMB0.1 million
in the same period last year. -- Basic and diluted earnings per ADS
were RMB0.56 (US$0.08) and RMB0.54 (US$0.08), respectively. Basic
and diluted earnings per ADS excluding share-based compensation
expense and foreign currency exchange gain (losses) (non-GAAP) were
RMB0.60 (US$0.09) and RMB0.58 (US$0.08), respectively. Each ADS
represents two common shares of the Company. -- For the quarter,
ATA delivered approximately 1.5 million tests, an increase of
215.5% year-over-year. In addition, average revenue per test
increased to RMB36.0 from RMB17.4 in the same period last year. "We
are pleased to report a very strong start to our fiscal year 2009,"
said Kevin Ma, ATA's Chairman and Chief Executive Officer. "These
results are a testament that ATA has a proven and solid growth
platform to take full advantage of China's fast-growing test and
test-related sectors. Looking forward, we expect ATA to continue to
benefit from the high barriers to entry we have built over the
years, and from very positive trends in our industry as the pace of
new computerized test offerings as well as the conversion of
existing paper-based tests accelerate in the quarters and years
ahead. We hope to win new large testing contracts leveraging our
strong track record and unique capabilities in delivering
nationwide computer-based tests in a cost effective and secure
manner and we expect our growth to continue to be resilient to
economic factors such as the volatility in China's securities
market, the Sichuan earthquake in May 2008 and the 2008 Olympics to
reach new milestones. We are very excited about the outlook for our
business and see a long runway ahead in our market." ATA's Chief
Financial Officer, Carl Yeung, stated, "ATA's net revenues and
gross and operating margins for the quarter have reached a new
record relative to any prior fiscal first quarter. Our growth in
the fiscal first quarter 2009 was mainly driven by the annual China
Banking Association ("CSA") exam, which last year occurred during
our fiscal second quarter. The volume of test takers for this
year's CSA exam was approximately 470,000 candidates compared to
zero candidates last year. In addition to our strong results we are
very excited to have Mr. Jeffery Gao join ATA as Finance Director.
Mr. Gao brings 11 years of audit and advisory experience from
PricewaterhouseCoopers, and he recently worked at Ernst & Young
as a Director of risk advisory services. At ATA we are constantly
seeking to enhance our corporate governance and to make progress on
our Sarbanes-Oxley compliance readiness plan, and Mr. Gao's
appointment will contribute positively to our effort to position
ATA as a well-governed company that can create lasting value for
our shareholders." Financial Results for the First Quarter 2009 For
First Quarter 2009, net revenues were RMB68.3 million (US$10.0
million), representing a 158.2% increase year-over-year. This
increase was mainly driven by a 566.2% increase in net revenues
from testing services. Net revenues from test-based educational
programs increased by 3.1% year-over-year, while net revenues from
test preparation and training solutions declined by 91.0% as we did
not make sales of NTET software in the June quarter. The overall
number of tests we delivered increased by 215.5% year-over-year to
approximately 1.5 million in First Quarter 2009, while the average
revenue per test delivered rose to RMB36.0 from RMB17.4 in the same
period of fiscal year 2008. This increase in average revenue per
test was due to approximately 470,000 tests delivered for the China
Banking Association. Gross profit increased by 184.8%
year-over-year to approximately RMB39.2 million (US$5.7 million)
from RMB13.8 million in the same period last year. Gross margin
increased to 57.3% in First Quarter 2009 from 52.0% in the same
period last year, driven by higher contribution from the Company's
more profitable testing services as a percentage of total net
revenues. Operating expenses increased by 42.9% year-over-year to
RMB21.5 million (US$3.1 million) from RMB15.0 million in the same
period last year, primarily due to an increase in general and
administrative expenses. General and administrative expenses
increased by 86.8% to RMB12.2 million (US$1.8 million), primarily
related to accrued bonuses, share-based compensation, and
incremental expenses related to being a public company. Sales and
marketing expenses were flat at RMB6.0 million (US$0.9 million)
while research and development expenses increased by 28.9%
year-over-year to RMB3.3 million (US$0.5 million) from RMB2.6
million in the same period last year, primarily due to an increase
in research and development personnel from 51 as of June 30, 2007
to 78 as of June 30, 2008. Income from operations for First Quarter
2009 was RMB17.7 million (US$2.6 million) compared to a loss from
operations of RMB1.3 million in the same period last year.
Operating margin was 25.9% in First Quarter 2009 compared to
negative 4.8% in the same period last year. Operating margin
improved due to stable operating expenses and a fast-growing
revenue base. Net income for First Quarter 2009 was RMB12.4 million
(US$1.8 million) compared to a net loss of RMB0.8 million in the
same period last year. Basic and diluted earnings per common share
were RMB0.28 (US$0.04) and RMB0.27 (US$0.04), respectively, and
basic and diluted earnings per ADS were RMB0.56 (US$0.08) and
RMB0.54 (US$0.08), respectively. Net income excluding share-based
compensation expense and foreign currency exchange gain (losses)
(non-GAAP) was RMB13.7 million (US$2.0 million) for First Quarter
2009 compared to a non-GAAP loss of RMB0.1 million in the same
period last year. Basic and diluted earnings per ADS excluding
share-based compensation expense and foreign currency exchange gain
(losses) (non-GAAP) were RMB0.60 (US$0.09) and RMB0.58 (US$0.08),
respectively. Other Operating Data As of June 30, 2008, ATA had
1,886 authorized test centers located throughout China. The number
of weighted average ADSs used to calculate basic and diluted
earnings per ADS for the quarter ended June 30, 2008 were 22.5
million and 23.4 million respectively. ATA had 45.7 million common
shares outstanding as of June 30, 2008. Second Quarter 2009 and
Full Year Fiscal Year 2009 Guidance For the fiscal second quarter
2009, ATA forecasts net revenues will be in the range of RMB50
million to RMB53 million, representing year-over-year growth in the
range of 0% to 6%. ATA re-iterates the expectation that net
revenues for the fiscal year ended March 31, 2009 will be in the
range of RMB340 million to RMB350 million, which is expected to
represent a 98% to 103% growth over fiscal year 2008. This is ATA's
current and preliminary view, which is subject to change. Our
results of operations for First Quarter 2009 are not necessarily
indicative of our operating results for any future periods.
Conference Call The Company will host a conference call at 9:00
a.m. ET on August 28, 2008, to discuss the results for the first
quarter 2008. Joining Kevin Ma, CEO of ATA Inc., will be Walter
Wang, Director and President, and Carl Yeung, Chief Financial
Officer. To participate in the conference call, please dial +1(866)
578-5771 five to ten minutes prior to the scheduled conference call
time and mention the passcode 10565544. International callers
should dial +1(617)213-8055, and mention the pass code 10565544. If
you are unable to participate in the call at this time, a replay
will be available on August 28 at 11:00 a.m. ET, through September
4, 2008. To access the replay, dial +1(888)286-8010, international
callers should dial +1(617)801-6888, and enter the pass code
58866634. This conference call will be broadcast live over the
Internet and can be accessed by all interested parties on ATA
Inc.'s website at http://www.ata.net.cn/ . To listen to the live
webcast, please go to ATA Inc.'s website at least fifteen minutes
prior to the start of the call to register, download, and install
any necessary audio software. For those unable to participate
during the live broadcast, a replay will be available shortly after
the call on ATA Inc.'s website for 90 days. About ATA Inc.: ATA is
the leading provider of computer-based testing services in China.
The Company offers comprehensive services for the creation and
delivery of computer-based tests based on its proprietary testing
technologies and test delivery platform. The Company's
computer-based testing services are used for professional licensure
and certification tests in various industries, including
information technology, or IT, services, banking, teaching,
securities, insurance and accounting. ATA's test center network
comprised 1,886 authorized test centers located throughout China as
of June 30, 2008, which the Company believes is the largest test
center network of any commercial testing service provider in China.
Combined with its test delivery technologies, this network allows
ATA's clients to administer large-scale nationwide tests in a
consistent, secure and cost-effective manner. ATA has delivered
approximately 25 million tests including 15 million billable tests
since it commenced operations in 1999, and in June 2008 delivered
tests to approximately 470,000 test takers over a single weekend
for the China Banking Association through its test delivery
platform. For further information, please visit:
http://www.ata.net.cn/ . Cautionary Note Regarding Forward-looking
Statements This announcement contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be identified by
terminology such as "look forward to," "outlook," "forecast,"
"will," "expect," "anticipate," "future," "intend," "plan,"
"believe," "estimate" and similar terminology and include, among
other things, the Company's anticipated financial and operating
results for the fiscal quarter ending September 30, 2008 and the
fiscal year ending March 31, 2009. Among the factors that could
cause the Company's actual financial and operating results to
differ from what the Company currently anticipate may include the
Company's ability to meet challenges associated with its rapid
expansion, the Company's ability to meet the expectations of
current and future clients, the Company's ability to implement and
maintain effective internal controls over financial reporting, the
health of the PRC economy, and uncertainties with respect to the
PRC legal and regulatory environments. The financial information
contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's annual report on Form 20-F for its fiscal year ended
March 31, 2008, which was filed with the U.S. Securities and
Exchange Commission on August 28, 2008 and is available on the
Securities and Exchange Commission's website at http://www.sec.gov/
. For additional information on these and other important factors
that could adversely affect our business, financial condition,
results of operations and prospects, see the "Risk Factors" section
of the Company's Form 20-F for the fiscal year ended March 31,
2008. The forward-looking statements in this release involve known
and unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about the
Company and the markets in which it operates. The Company
undertakes no obligation to update forward-looking statements,
which speak only of the Company's views as of the date of this
release, to reflect subsequent events or circumstances, or to
changes in its expectations, except as may be required by law.
Although the Company believes that the expectations expressed in
these forward-looking statements are reasonable, the Company cannot
assure you that its expectations will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results. About Non-GAAP Financial Measures To
supplement ATA's consolidated financial information presented in
accordance with U.S. generally accepted accounting principles
("GAAP"), ATA uses the following measures defined as non-GAAP
financial measures by the U.S. Securities and Exchange Commission:
net income excluding share-based compensation expenses and foreign
currency exchange gain (losses) and basic and diluted earnings per
ADS excluding share-based compensation expenses and foreign
currency exchange gain (losses). 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 non-GAAP measures to the most comparable GAAP
measures" set forth at the end of this release. ATA believes that
these non-GAAP financial measures provide meaningful supplemental
information regarding its performance and liquidity by excluding
share-based compensation expenses and foreign currency exchange
gain (losses), which may not be indicative of its operating
performance from a cash perspective. ATA 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 ATA's historical
performance and liquidity. ATA computes its non-GAAP financial
measures using the consistent method from quarter to quarter. ATA
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 using non-GAAP net income
excluding share-based compensation expenses and basic and diluted
earnings per share and per ADS excluding share-based compensation
expenses is that share-based compensation charges have been and are
expected to continue to be for the foreseeable future a significant
recurring expense in ATA's business. Management compensates for
these limitations by providing specific information regarding the
GAAP amounts excluded from each non-GAAP measure. The accompanying
table captioned "Reconciliations of Non-GAAP measures to the most
comparable GAAP measures" set forth at the end this release, has
more details on the reconciliations between GAAP financial measures
that are most directly comparable to the non-GAAP financial
measures used by ATA. Currency Convenience Translation The
Company's financial information is stated in RMB. The translation
of RMB amounts for the first quarter 2009 into United States
dollars is included solely for the convenience of readers and has
been made at the rate of RMB6.8591 to US$1.00, the noon buying rate
as of June 30, 2008 in the City of New York for cable transfers in
RMB per US dollar as certified for customs purposes by the Federal
Reserve Bank of New York. Such translations should not be construed
as representations that RMB amounts could be converted into US
dollar at that rate or any other rate, or to be the amounts that
would have been reported under US GAAP. ATA INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS March 31, June 30,
June 30, 2008 2008 2008 RMB RMB USD ASSETS Current assets: Cash
332,196,672 333,089,081 48,561,631 Accounts receivable, net
63,502,408 64,530,545 9,408,019 Inventories 2,951,966 2,398,238
349,643 Prepaid expenses and other current assets 4,657,608
7,983,738 1,163,963 Total current assets 403,308,654 408,001,602
59,483,256 Property and equipment, net 10,668,300 11,083,170
1,615,834 Goodwill 6,880,123 6,880,123 1,003,065 Other assets
15,776,667 17,503,238 2,551,827 Total assets 436,633,744
443,468,133 64,653,982 LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accrued expenses and other payables 29,822,313
42,442,092 6,187,706 Deferred revenues 36,707,916 16,961,778
2,472,887 Total current liabilities 66,530,229 59,403,870 8,660,593
Deferred revenues 7,025,971 6,893,342 1,004,992 Total liabilities
73,556,200 66,297,212 9,665,585 Shareholders' equity: Common
shares: 3,656,210 3,799,418 553,924 Treasury shares (16,106,940)
(16,106,940) (2,348,259) Receivable from shareholders --
(5,226,173) (761,933) Additional paid-in capital 498,374,024
512,484,581 74,716,010 Accumulated other comprehensive loss
(7,933,512) (15,315,434) (2,232,863) Accumulated deficit
(114,912,238) (102,464,531) (14,938,482) Total shareholders' equity
363,077,544 377,170,921 54,988,397 Total liabilities and
shareholders' equity 436,633,744 443,468,133 64,653,982 ATA INC.
AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS Three-month Period Ended June 30, March 31, June 30,
June 30, 2007 2008 2008 2008 RMB RMB RMB USD Net revenues
26,469,430 29,160,319 68,331,931 9,962,230 Testing services
8,088,396 11,479,177 53,885,098 7,856,001 Test-based educational
services 10,690,059 15,573,374 11,024,193 1,607,236 Test
preparation and training solutions 5,675,317 442,813 508,088 74,075
Other revenue 2,015,658 1,664,955 2,914,552 424,918 Cost of
revenues 12,717,028 13,163,771 29,163,638 4,251,817 Gross profit
13,752,402 15,996,548 39,168,293 5,710,413 Operating expenses:
Research and development 2,550,832 3,272,577 3,287,178 479,243
Sales and marketing 5,927,449 8,348,702 5,961,055 869,072 General
and administrative 6,539,136 11,167,965 12,218,300 1,781,329 Total
operating expenses 15,017,417 22,789,244 21,466,533 3,129,644
Income (loss) from operations (1,265,015) (6,792,696) 17,701,760
2,580,769 Equity in income (loss) of an affiliate 988,133 Interest
income 120,732 67,559 190,472 27,770 Foreign currency exchange gain
(loss), net (91,992) 379,425 609,647 88,881 Earnings (loss) before
income taxes (248,142) (6,345,712) 18,501,879 2,697,420 Income tax
benefit (expense) (522,821) 623,840 (6,054,172) (882,648) Net
income (loss) (770,963) (5,721,872) 12,447,707 1,814,772 Basic
earnings (loss) per common share (0.04) (0.16) 0.28 0.04 Diluted
earnings (loss) per common share (0.04) (0.16) 0.27 0.04 Basic
earnings (loss) per ADS (0.08) (0.32) 0.56 0.08 Diluted earnings
per (loss) ADS (0.08) (0.32) 0.54 0.08 UNAUDITED RECONCILIATIONS OF
NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES Three-month
Period Ended June 30, June 30, 2007 2008 RMB RMB GAAP net income
(loss) (770,963) 12,447,707 Share-based compensation expenses
554,085 1,908,875 Foreign currency exchange (gain) loss, net 91,992
(609,647) Non-GAAP net income (loss) (124,886) 13,746,935 GAAP
earnings (loss) per ADS: Basic (0.08) 0.56 Diluted (0.08) 0.54
Share-based compensation expenses per ADS: Basic 0.05 0.07 Diluted
0.05 0.07 Foreign currency exchange gain (losses) per ADS: Basic
0.01 (0.03) Diluted 0.01 (0.03) Non-GAAP earnings (loss) per ADS:
Basic (0.02) 0.60 Diluted (0.02) 0.58 For more information, please
contact: ATA Inc. Carl Yeung, CFO Tel: +86-10-6518-1122 x5107
Email: CCG Elite Investor Relations Crocker Coulson, President Tel:
+1-646-213-1915 Email: Ed Job, CFA Tel: +1-646-213-1914 Email:
DATASOURCE: ATA Inc. CONTACT: Carl Yeung, CFO of ATA Inc.,
+86-10-6518-1122 x5107, or ; Or Crocker Coulson, President,
+1-646-213-1915, or ; Or Ed Job, CFA, +1-646-213-1914, or , both of
CCG Elite Investor Relations Web site: http://www.ata.net.cn/
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