16.5% Increase in First Quarter Net Revenue Year-Over-Year with
First Quarter Net Revenue Exceeding Guidance Live Conference Call
to be held on Thursday, May 21, 2009 at 8 a.m. (Eastern) / 5 a.m.
(Pacific) / 8 p.m. (Beijing/Hong Kong) BEIJING, May 20
/PRNewswire-Asia-FirstCall/ -- ChinaEdu Corporation (NASDAQ:CEDU)
("ChinaEdu" or the "Company"), an educational services provider in
China, today announced its unaudited financial results for the
first quarter ended March 31, 2009(1). First Quarter 2009
Highlights (in thousands, unaudited) 3 Months Ended Period March
March March over Period Ended 31, 2008 31, 2009 31, 2009 Period %
Currency in thousands RMB RMB USD Financial Data: Net revenue
69,655 81,170 11,880 17% Gross profit 45,500 48,600 7,113 7% Income
from operations 12,825 17,536 2,566 37% Net income attributable to
CEDU 2,087 9,564 1,400 358% Adjusted EBITDA (Non-GAAP) 18,338
25,588 3,745 40% Adjusted net income attributable to CEDU
(Non-GAAP) 4,782 13,379 1,959 180% EPS 0.04 0.19 0.03 375% Adjusted
EPS 0.08 0.27 0.04 238% Earnings per ADS 0.12 0.57 0.09 375%
Adjusted earnings per ADS 0.24 0.81 0.12 238% Operating Data:
Revenue students for online degree program 91,000 118,000 118,000
30% -- Total net revenue for the first quarter of 2009 increased by
16.5% to RMB81.2 million ($11.9 million) from RMB69.7 million for
the corresponding period in 2008. -- Net revenue from online degree
programs, the Company's major business segment, increased by 19.7%
to RMB65.8 million ($9.6 million) for the first quarter of 2009
from RMB55.0 million for the corresponding period in 2008. -- The
number of revenue students(2) in online degree programs during the
first quarter of 2009 increased by approximately 30% to over
118,000 from approximately 91,000 for the corresponding period in
2008. -- Adjusted EBITDA, which is a non-GAAP measure defined as
net income before interest income, taxes, depreciation,
amortization, share-based compensation and goodwill and intangibles
impairment charges, if applicable, increased by 39.5% to RMB25.6
million ($3.7 million) in the first quarter of 2009 from RMB18.3
million for the corresponding period in 2008. -- Income from
operations for first quarter of 2009 increased by 36.7% to RMB17.5
million ($2.6 million) from RMB12.8 million for the corresponding
period in 2008. -- Net income attributable to ChinaEdu Corporation,
which is net income excluding net income attributable to
noncontrolling interest, for the first quarter of 2009 increased by
358.3% to RMB9.6 million ($1.4 million) from RMB2.1 million for the
corresponding period in 2008. -- Adjusted net income attributable
to ChinaEdu Corporation, which is a non-GAAP measure defined as net
income attributable to ChinaEdu Corporation excluding share-based
compensation, noncontrolling interest for share-based compensation,
amortization and goodwill and intangibles impairment charges, if
applicable, increased by 179.8% to RMB13.4 million ($1.9 million)
in the first quarter of 2009 from RMB4.8 million for the
corresponding period in 2008. (1) This announcement contains
translations of certain Renminbi ("RMB") amounts into U.S. dollar
("$") amounts at specified rates solely for the convenience of the
reader. Unless otherwise stated, all translations from RMB to U.S.
dollars were made at the rate of RMB6.8329 to $1.00, the noon
buying rate in effect on March 31, 2009 in the H. 10 statistical
release of the Federal Reserve Board. The Company makes no
representation that the RMB or U.S. dollar amounts referred to
could be converted into U.S. dollars or RMB, as the case may be, at
any particular rate or at all. For analytical presentation, all
percentages are calculated using the numbers presented in the
financial statements contained in this earnings release. An
explanation of the Company's non-GAAP financial measures is
included in the section entitled "Non-GAAP Financial Measures"
below, and the related reconciliations to GAAP financial measures
are presented in the accompanying financial statements. (2)
"Revenue students" refers to students of university online degree
programs who have paid tuition in the applicable period. "We are
pleased to report healthy growth for the first quarter of 2009,
which reflects solid enrollment growth for the fall semester of
2008 compared to the fall semester of 2007. In the first quarter of
2009, we have continued to invest in the company's future," said
Ms. Julia Huang, ChinaEdu's Chairman and Chief Executive Officer.
"We continued to build out additional franchised learning centers
and were focused on preparing for the spring semester enrollment
for all of our learning centers. Progress for our 101 online
tutoring program and Phase II construction for the Anqing School
are both on track. We have also continued to invest in courseware
development, technology upgrade and the learning platform for both
online degree and non-degree programs, establishing a strong
foundation for future growth. We strongly believe our current
investments will contribute to the growth and success of our
company." Financial Results for the First Quarter Ended March 31,
2009 Net Revenue Total net revenue for the first quarter of 2009
was RMB81.2 million ($11.9 million), representing a 16.5% increase
from the corresponding period in 2008. Net revenue from online
degree programs for the first quarter of 2009 was RMB65.8 million
($9.6 million), representing a 19.7% increase from RMB55.0 million
for the corresponding period in 2008. The growth in net revenue was
primarily due to strong enrollment growth for the fall semester of
2008, which registered over 118,000 revenue students compared to
91,000 revenue students for the fall semester of 2007. Net revenue
from the Company's non-online degree programs (online tutoring
program, international curriculum programs and private primary and
secondary schools) for the first quarter of 2009 was RMB15.4
million ($2.3 million), representing a 4.8% increase from RMB14.7
million for the corresponding period in 2008. This increase was
attributable to the increase in student enrollment at Anqing School
for the academic year beginning in September 2008 as a result of
the completion of Phase I of the new campus construction as well as
a slight increase in net revenue for the 101 online tutoring
programs. Cost of revenue Total cost of revenue for the first
quarter of 2009 was RMB32.6 million ($4.8 million), representing an
increase of 34.8% as compared to RMB24.2 million for the
corresponding period of 2008. Cost of revenue for online degree
programs for the first quarter of 2009 was RMB22.7 million ($3.3
million), representing an increase of 48.2% as compared to RMB15.3
million for the first quarter of 2008. The increase in cost of
revenue for online degree programs was attributable primarily to
enrollment growth in our university partners' online degree
programs in the fall semester of 2008 compared to fall semester of
2007, which recorded an approximate 30% growth in the number of
registered students, as well as the expansion of our learning
center network. We had 49 operational learning centers by the first
quarter of 2009 compared to one operational learning center in the
first quarter of 2008. In addition, in the first quarter of 2009,
we continued to make investments in courseware development for
selected university partners at our collaborative alliances(3).
Cost of revenue for non-online degree programs for the first
quarter of 2009 was RMB9.9 million ($1.4 million), representing an
11.7% increase from RMB8.9 million for the corresponding period in
2008. This increase was attributable primarily to increased cost of
revenue related to Anqing School's new campus, which was partially
offset by a decrease in cost of revenue for the international
curriculum programs. (3) "Collaborative alliance" or "Collaborative
alliances" refer to the subsidiary or subsidiaries that the Company
formed with certain university partners to provide services to
their online degree programs, which subsidiaries are majority owned
by the Company. Gross Profit Gross profit for the first quarter of
2009 was RMB48.6 million ($7.1 million), representing a 6.8%
increase from RMB45.5 million for the corresponding period of 2008.
Gross margin for the first quarter of 2009 was 59.9% as compared to
65.3% for the corresponding period of 2008. This decrease was
primarily attributable to our continued investment in our learning
center network. Operating Expenses Total operating expenses were
RMB31.1 million ($4.5 million) for the first quarter of 2009,
representing a 4.9% decrease from RMB32.7 million for the
corresponding period in 2008. This decrease was attributable
primarily to the factors discussed below. -- General and
administrative expenses for the first quarter of 2009 were RMB19.6
million ($2.9 million), which represented a 6.4% decrease from
RMB20.9 million for the corresponding period of 2008. This decrease
was attributable primarily to a decrease in provisional
performance-based annual bonuses in 2009 as compared to 2008. --
Selling and marketing expenses were RMB4.9 million ($0.7 million)
for the first quarter of 2009, which represented a 16.2% decrease
from RMB5.9 million for the corresponding period in 2008. This
decrease is attributable primarily to controlled sales and
marketing expenses, specifically as a result of a decrease in the
amount spent on advertising and promotional activities, for our
learning center operations in the first quarter in 2009. --
Research and development expenses for the first quarter of 2009
were RMB6.6 million ($1.0 million), representing an 11.4% increase
from RMB5.9 million for the corresponding period in 2008. This
increase was attributable primarily to increased technological
support and a platform upgrade for some of our collaborative
alliances in order to further enhance and support our online degree
programs. -- Share-based compensation for the first quarter of
2009, which was allocated to the related cost and operating expense
line items, was RMB2.3 million ($0.3 million) as compared to RMB
0.4 million for the corresponding period in 2008. The increase was
attributable primarily to adjust lower forfeiture rate for previous
years in the first quarter of 2008 and an increase in the number of
options granted in the fourth quarter of 2008, which in turn
increased share-based compensation for the first quarter of 2009.
Income from Operations As a result of the factors discussed above,
income from operations for the first quarter of 2009 was RMB17.5
million ($2.6 million), which increased by 36.7% from RMB12.8
million for the corresponding period of 2008. Adjusted income from
operations, which is a non-GAAP measure defined as income from
operations excluding share-based compensation, amortization and
goodwill and intangibles impairment charges, if applicable, was
RMB21.6 million ($3.2 million) for the first quarter of 2009, which
increased by 38.7% as compared to RMB15.6 million in the
corresponding period of 2008. The increase was attributable
primarily to the net revenue growth and the decrease in operating
expenses (each as discussed above), which was partially offset by
the increase in the cost of revenue discussed above. Interest
Income Interest income was RMB1.7 million ($0.2 million) in the
first quarter of 2009, as compared to RMB2.7 million in the
corresponding quarter of 2008. This decrease was attributable
primarily to a reduced fixed deposit balance, which earned less
interest income than the corresponding period in 2008, when the
fixed deposit balance was higher. Income Tax Expense Income tax
income for the first quarter was RMB2.7 million ($0.4 million), as
compared to income tax expense of RMB4.9 million for the
corresponding period in 2008. This was attributable primarily to
the fact that, in the fourth quarter of 2008, seven of our
subsidiaries and affiliate companies applied and qualified for the
"new and high technology enterprise" status under the new Chinese
Enterprise Income Tax Regulation, which came into effect on January
1, 2008. As a result of their qualification for the "new and high
technology enterprises" status, these subsidiaries received certain
tax exemptions and a preferential statutory tax rate of 15%,
thereby reducing the effective tax rate for the first quarter of
2009 as compared to the corresponding period in 2008. The effective
tax rate in the first quarter of 2009 was 13.7%, which reflects the
preferential tax rate of 15% applicable to the Company's main
operating entity as a High and New Technology Enterprises and the
preferential tax rate of 7.5% applicable to certain of the
Company's subsidiaries and affiliate companies. Noncontrolling
Interest Noncontrolling interest was RMB7.6 million ($1.1 million)
in the first quarter of 2009, representing a 7.0% decrease from
RMB8.1 million in the corresponding period in 2008, which was
attributable primarily to reduced profitability at one of our
collaborative alliances as a result of increased courseware
development costs. Net Income (loss) attributable to ChinaEdu
Corporation Net income attributable to ChinaEdu Corporation, which
is net income excluding net income attributable to noncontrolling
interest, was RMB9.6 million ($1.4 million) for the first quarter
of 2009, representing an increase of 358.3% from net income
attributable to ChinaEdu Corporation of RMB2.1 million for the
corresponding period in 2008. Adjusted net income attributable to
ChinaEdu Corporation (non-GAAP) increased by 179.8% to RMB13.4
million ($2.0 million) for the first quarter of 2009, as compared
to RMB4.8 million in the corresponding period of 2008. The increase
in both net income and adjusted net income attributable to ChinaEdu
Corporation (non-GAAP) was primarily due to strong revenue growth
in our online degree programs and private primary and secondary
schools, and well controlled operating expenses. Adjusted EBITDA
(Non-GAAP) Adjusted EBITDA (non-GAAP) was RMB25.6 million ($3.7
million) for the first quarter of 2009, which increased by 39.5% as
compared to RMB18.3 million for the corresponding period in 2008.
Deferred Revenue Deferred revenue at the end of the first quarter
of 2009 was RMB36.5 million ($5.3 million), with current deferred
revenue of RMB29.6 million ($4.3 million) and non-current deferred
revenue of RMB6.9 million ($1.0 million). Deferred revenue at the
end of the first quarter of 2009 decreased significantly compared
to deferred revenue of RMB102.1 million at the end of the fourth
quarter 2008 due to the seasonality of enrollments, which results
in tuition being received generally during the second quarter
(spring semester) and the fourth quarter (fall semester) of each
year. Cash and Cash Equivalents As of March 31, 2009, ChinaEdu
reported cash and cash equivalents of RMB243.7 million ($35.7
million), which primarily consisted of cash-on-hand, demand
deposits and term deposits with maturity periods of three months or
less. Term Deposits and Amount Due from Related Parties Term
deposits and the amount due from related parties (which represents
cash owed to us by our collaborative alliance partners) amounted to
RMB94.5 million ($13.8 million) and RMB114.7 million ($16.8
million), respectively, at March 31, 2009. Second Quarter 2009
Total Net Revenue Guidance For the second quarter of 2009, ChinaEdu
expects its total net revenue to be in the range of RMB83 million
($12.1 million) to RMB87 million ($12.7 million). This forecast
reflects ChinaEdu's current and preliminary view, which is subject
to change. Conference Call ChinaEdu senior management will host a
conference call on Thursday, May 21, 2009 at 8:00 a.m. U.S. Eastern
time / 5:00 a.m. U.S. Pacific time / 8:00 p.m. Beijing/Hong Kong
time. The conference call may be accessed by calling (US) 866 700
7441/ (International) +1 617 213 8839/ (HK) +852 3002 1672/ (China)
+86 10 800 130 0399, and entering the passcode: 82148177. A
telephone replay of the conference call will be available shortly
after the call until May 28, 2009 at (US) 888 286 8010/
(International) +1 617 801 6888 and entering passcode: 62253206. A
live and archived webcast may be accessed via the Internet at
http://ir.chinaedu.net/ . Non-GAAP Financial Measures To supplement
the unaudited condensed consolidated financial information
presented in accordance with Accounting Principles Generally
Accepted in the United States of America ("GAAP"), the Company uses
non-GAAP measures of income from operations and net income
attributable to ChinaEdu Corporation, which are adjusted from
results based on GAAP to exclude certain non-cash items of
share-based compensation, amortization and goodwill and intangibles
impairment charges, if applicable. The Company also uses adjusted
EBITDA, which is also a non-GAAP measure and is adjusted from GAAP
results of net income to exclude interest income, taxes,
depreciation, amortization, share-based compensation and goodwill
and intangibles impairment charges, if applicable. These non-GAAP
financial measures are provided to enhance the investors' overall
understanding of the Company's current and past financial
performance in on-going core operations as well as prospects for
the future. These measures should be considered in addition to
results prepared and presented in accordance with GAAP, but should
not be considered a substitute for or superior to GAAP results.
Management considers the non-GAAP information as important measures
internally and therefore deems it important to provide all of this
information to investors. About ChinaEdu ChinaEdu Corporation is an
educational services provider in China, incorporated as an exempted
limited liability company in the Cayman Islands. Established in
1999, the Company's primary business is to provide comprehensive
services to the online degree programs of leading Chinese
universities. These services include academic program development,
technology services, enrollment marketing, student support services
and finance operations. The Company's other lines of businesses
include the operation of private primary and secondary schools,
online interactive tutoring services and providing marketing and
support for international curriculum programs. The Company believes
it is the largest service provider to online degree programs in
China in terms of the number of higher education institutions that
are served and the number of student enrollments supported. The
Company currently has 12 long-term, exclusive contracts that
generally vary from 15 to 50 years in length. ChinaEdu also
performs recruiting services for 15 universities through our
nationwide learning center network. Forward-Looking Statement This
press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
including certain plans, expectations, goals, and projections,
which are subject to numerous assumptions, risks, and
uncertainties. Forward-looking statements involve known and unknown
risks, uncertainties and contingencies, many of which are beyond
our control which may cause actual results, levels of activity,
performance or achievements to differ materially from any future
results, levels of activity, performance or achievements expressed
or implied by such forward-looking statements. The Company's actual
results could differ materially from those contained in the
forward-looking statements due to a number of factors, including
those described under the heading "Risk Factors" in the Company's
Annual Report on Form 20-F for the year ended December 31, 2007,
and in documents subsequently filed by the Company from time to
time with the Securities and Exchange Commission. Unless required
by law, the Company undertakes no obligation to (and expressly
disclaim any such obligation to) update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Company Contacts: Lily Liu, CFO
ChinaEdu Corporation Tel: +86-10-8418-6655 x1002 Email: S. Jimmy
Xia, IR Manager ChinaEdu Corporation Tel: +86-10-8418-6655 x1150
Email: ChinaEdu Corporation Unaudited Condensed Consolidated
Balance Sheets December 31,2008 As March March (in thousands,
unaudited) Adjusted (1) 31, 2009 31, 2009 RMB RMB US$ Current
assets: Cash and cash equivalents 353,933 243,710 35,667 Accounts
receivable, net 14,854 4,414 646 Term deposits 63,500 94,499 13,830
Prepaid expenses and other current assets 20,251 22,129 3,239
Amounts due from related parties 150,472 114,688 16,785 Deferred
tax assets 3,986 1,743 255 Total current assets 606,996 481,183
70,422 Cost method investment 1,210 1,210 177 Land use rights, net
28,344 28,330 4,146 Property and equipment, net 161,925 165,802
24,265 Deposits paid for acquisition of property and equipment
8,619 8,619 1,261 Intangible assets, net 70,377 69,192 10,126
Deferred tax assets 2,096 2,645 387 Rental deposits 958 911 133
Goodwill 38,155 38,155 5,584 Total assets 918,680 796,047 116,501
Liabilities and equity Current liabilities: Accounts payable 8,530
6,905 1,011 Deferred revenues 96,068 29,641 4,338 Accrued expenses
and other current liabilities 51,629 49,595 7,257 Amounts due to
related parties 25,769 30,072 4,401 Income taxes payable 27,917
18,688 2,735 Other taxes payable 12,008 7,475 1,094 Total current
liabilities 221,921 142,376 20,836 Deferred revenues 6,073 6,885
1,008 Deferred tax liabilities 11,069 11,170 1,635 Unrecognized tax
benefit 5,473 5,821 852 Total liabilities 244,536 166,252 24,331
Total shareholders' equity: 589,829 541,036 79,180 Noncontrolling
interest (2) 84,315 88,759 12,990 Total equity 674,144 629,795
92,170 Total liabilities and equity 918,680 796,047 116,501 (1)
Effective January 1, 2009, the Company adopted SFAS 160. SFAS 160,
which was retrospectively applied, requires noncontrolling
interests to be separately presented as a component of
stockholders' equity on the unaudited condensed consolidated
financial statements. (2) December 31, 2008 balances were extracted
from the form 6-K for the quarters ended December 31, 2008, as
adjusted resulting from the adoption of Statement of Financial
Accounting Standards No. 160. ChinaEdu Corporation Unaudited
Condensed Consolidated Statements of Operations Three Months Ended
(in thousands, except for March December percentage, share, and per
31, 2008 As 31, 2008 As March March share information) Adjusted(3)
Adjusted(3) 31, 2009 31, 2009 RMB RMB RMB US$ Net Revenue: Online
degree programs 54,960 69,945 65,764 9,625 International curriculum
programs 7,542 5,300 5,583 817 Online tutoring programs 3,277 4,472
3,592 526 Private primary and secondary schools 3,876 6,823 6,231
912 Total net revenue 69,655 86,540 81,170 11,880 Cost of revenue:
Online degree programs 15,302 28,195 22,683 3,320 International
curriculum programs 4,765 3,532 2,948 431 Online tutoring programs
727 1,443 1,441 211 Private primary and secondary schools 3,361
5,828 5,498 805 Total cost of revenue 24,155 38,998 32,570 4,767
Gross profit: Online degree programs 39,658 41,750 43,081 6,305
International curriculum programs 2,777 1,768 2,635 386 Online
tutoring programs 2,550 3,029 2,151 315 Private primary and
secondary schools 515 995 733 107 Total gross profit 45,500 47,542
48,600 7,113 Online degree programs 72.2% 59.7% 65.5% 65.5%
International curriculum programs 36.8% 33.4% 47.2% 47.2% Online
tutoring programs 77.8% 67.7% 59.9% 59.9% Private primary and
secondary schools 13.3% 14.6% 11.8% 11.8% Gross margin 65.3% 54.9%
59.9% 59.9% Operating expenses: General and administrative 20,915
27,410 19,583 2,866 Selling and marketing 5,862 8,202 4,910 719
Research and development 5,898 8,947 6,571 962 Goodwill and
intangible assets impairment -- 52,236 -- -- Total operating
expenses 32,675 96,795 31,064 4,547 Income (loss) from operations
12,825 (49,253) 17,536 2,566 Operating margin 18.4% -56.9% 21.6%
21.6% Other income (expense) 151 145 626 92 Interest income 2,748
2,973 1,672 245 Interest expense (606) (1) -- -- Income (loss)
before income tax provisions 15,118 (46,136) 19,834 2,903 Income
tax expense (4,900) 19,621 (2,708) (396) Net income 10,218 (26,515)
17,126 2,507 Net income attributable to the noncontrolling interest
(4) (8,131) (12,469) (7,562) (1,107) Net income attributable to
ChinaEdu Corporation 2,087 (38,984) 9,564 1,400 Net margin 3.0%
-45.0% 11.8% 11.8% Net income (loss) per share: Basic 0.04 (0.70)
0.19 0.03 Diluted 0.03 (0.70) 0.18 0.03 Net income (loss) per ADS:
Basic 0.12 (2.10) 0.57 0.09 Diluted 0.09 (2.10) 0.54 0.09 Weighted
average aggregate number of ordinary shares outstanding: Basic
58,434,407 55,951,673 49,983,675 49,983,675 Diluted 62,789,582
55,951,673 52,919,048 52,919,048 (3) Effective January 1, 2009, the
Company adopted SFAS 160. SFAS 160, which was retrospectively
applied, requires noncontrolling interests to be separately
presented as a component of stockholders' equity on the unaudited
condensed consolidated financial statements. (4) Amounts were
extracted from Form 6-K for the quarter ended March 31, 2008 and
for the quarter ended December 31, 2008, as adjusted resulting from
the adoption of Statement of Financial Accounting Standards No.
160. ChinaEdu Corporation Unaudited Condensed Consolidated
Statements of Cash Flow Three Months Ended March December March
March (in thousands) 31, 2008 31, 2008 31, 2009 31, 2009 RMB RMB
RMB US$ Operating activities: Net income 10,218 (26,515) 17,126
2,507 Share-based compensation 383 1,683 2,262 331 Depreciation
2,734 3,570 3,941 577 Amortization of land use rights 141 182 163
24 Amortization of intangible assets 2,255 2,087 1,686 247 Goodwill
and intangible assets impairment -- 52,236 -- -- Accounts
receivable write- off -- 1,215 62 9 Interest expense 606 -- -- --
Loss (gain) from disposal of property and equipment -- 1,663 78 11
Deferred income taxes 5,856 (16,310) 1,795 263 Accounts receivable
(163) (10,341) 10,378 1,519 Prepaid expenses and other current
assets (7,386) (7,287) (1,881) (275) Amounts due from related
parties 35,589 (22,991) 46,384 6,788 Rental deposits 828 107 47 7
Accounts payable (147) (1,084) 1,084 159 Deferred revenues (57,483)
68,925 (65,617) (9,603) Accrued expenses and other current
liabilities (10,114) 16,213 (2,046) (299) Amounts due to related
parties (12,052) (29,096) 1,005 147 Unrecognized tax benefit 133
872 348 51 Other taxes payable (4,307) 5,287 (4,533) (663) Income
tax payable (7,182) (4,556) (9,229) (1,351) Net cash provided by
(used in) operating activities (40,091) 35,860 3,053 449 Investing
activities: Purchase of land use right -- (160) (949) (139)
Purchase of property and equipment (8,485) (4,745) (10,605) (1,552)
Deposits paid for acquisition of property and equipment (31)
(2,616) -- -- Purchase of term deposit (1,958) 41,000 (31,008)
(4,538) Purchase of contractual right -- -- (500) (73) Proceeds
from disposal of property and equipment 31 -- -- -- Net cash
provided by (used in) investing activities (10,443) 33,479 (43,062)
(6,302) Financing activities: Repurchase of ordinary shares --
(13,714) (61,647) (9,022) Repayment of long-term loan interest and
principal (1,671) -- -- -- Cash dividends paid to noncontrolling
shareholders -- (7,269) (10,600) (1,551) Capital contributions by
noncontrolling shareholders -- -- 980 143 Proceeds from exercise of
options -- 1,383 713 104 Net cash provided by (used in) financing
activities (1,671) (19,600) (70,554) (10,326) Effect of foreign
exchange rate changes (12,930) 865 340 48 CASH AND CASH
EQUIVALENTS, beginning of period 497,114 303,329 353,933 51,798
CASH AND CASH EQUIVALENTS, end of period 431,979 353,933 243,710
35,667 Net increase (decrease) in cash (65,135) 50,604 (110,223)
(16,131) ChinaEdu Corporation Reconciliations of non-GAAP results
of operations measures to GAAP measures Three Months Ended March
December March March (in thousands, unaudited) 31, 2008 31, 2008
31, 2009 31, 2009 RMB RMB RMB US$ Income (loss) from operations
GAAP Result 12,825 (49,253) 17,536 2,566 Share-based compensation
383 1,683 2,262 331 Amortization 2,396 2,269 1,849 271 Goodwill and
intangible assets impairment -- 52,236 -- -- Adjusted income from
operations (Non-GAAP) 15,604 6,935 21,647 3,168 Adjusted operating
margin 22.4% 8.0% 26.7% 26.7% Net income (loss) attributable to
ChinaEdu Corporation GAAP Result 2,087 (38,984) 9,564 1,400
Share-based compensation 383 1,683 2,262 331 Noncontrolling
interest for share-based compensation (84) (203) (296) (43)
Amortization 2,396 2,269 1,849 271 Goodwill and intangible assets
impairment -- 52,236 -- -- Adjusted net income attributable to
ChinaEdu Corporation (Non-GAAP) 4,782 17,001 13,379 1,959 Adjusted
net margin 6.9% 19.6% 16.5% 16.5% Adjusted net income per share:
Basic 0.08 0.30 0.27 0.04 Diluted 0.08 0.30 0.25 0.04 Weighted
average aggregate number of ordinary shares outstanding: Basic
58,434,407 55,951,673 49,983,675 49,983,675 Diluted 62,789,582
57,563,770 52,919,048 52,919,048 Adjusted income from operations,
which is a non-GAAP measure defined as income from operations
excluding share-based compensation, amortization and goodwill and
intangibles impairment, if applicable. Adjusted net income
attributable to ChinaEdu Corporation, which is a non-GAAP measure
defined as net income attributable to the ChinaEdu Corporation
excluding share-based compensation, noncontrolling interest for
share-based compensation, amortization and goodwill and intangibles
impairment charges, if applicable. ChinaEdu Corporation
Reconciliation from net income to adjusted EBITDA (*) Three Months
Ended March December March March (in thousands, unaudited) 31, 2008
31, 2008 31, 2009 31, 2009 RMB RMB RMB US$ Net income 10,218
(26,515) 17,126 2,507 Income tax provision 4,900 (19,621) 2,708 396
Interest income and other, net (2,293) (3,117) (2,298) (337)
Depreciation 2,734 3,570 3,941 577 Amortization 2,396 2,269 1,849
271 Goodwill and intangible assets impairment -- 52,236 -- --
Share-based compensation 383 1,683 2,262 331 Adjusted EBITDA 18,338
10,505 25,588 3,745 Adjusted EBITDA margin 26.3% 12.1% 31.5% 31.5%
Adjusted EBITDA, which is a non-GAAP measure defined as earnings
before interest income, taxes, depreciation, amortization,
share-based compensation and goodwill and intangibles impairment
charges, if applicable. DATASOURCE: ChinaEdu Corporation CONTACT:
Lily Liu, CFO, ChinaEdu Corporation at +86-10-8418-6655 x1002 or ;
Or S. Jimmy Xia, IR Manager, ChinaEdu Corporation at
+86-10-8418-6655 x1150 or Web site: http://ir.chinaedu.net/
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