BEIJING, June 1, 2011 /PRNewswire-Asia/ -- ChinaEdu
Corporation (NASDAQ: CEDU) ("ChinaEdu" or the "Company"), a leading
online education services provider in China, today announced its unaudited financial
results for the first quarter ended March
31, 2011.(1)
First Quarter 2011 Highlights
- First quarter 2011 total net revenue grew 4.7 percent
year-over-year to $14.0 million, in
line with Company guidance.
- First quarter 2011 net revenue from online degree programs
increased 4.6 percent year-over-year to $10.9 million.
- Operating margin in the first quarter of 2011 was 11.9
percent.
- Net income attributable to ChinaEdu per diluted ADS(2) in the
first quarter of 2011 was $0.031.
- Adjusted net income attributable to ChinaEdu per diluted ADS(3)
was $0.054 in the first quarter of
2011.
- The number of revenue students(4) in online degree programs
during the 2010 fall semester increased 10 percent year-over-year
from approximately 140,000 to approximately 154,000.(5)
Julia Huang, chairman and chief
executive officer of ChinaEdu commented, "Our financial results for
the first quarter are in line with our expectations and we are
pleased with the progress we've made executing our growth strategy.
During the first quarter, recognizing a growing market demand for
more consumer-focused products and services, we launched a series
of marketing campaigns that will expand throughout 2011 and are
focused on enhancing brand awareness among students, institutions
and parents. These marketing efforts have already started to impact
engagement with our student-centric learning products in the first
quarter. Traffic of users and teachers to our new web-based
interactive tutoring question and answer service grew dramatically,
reaching 17 million accumulated page views in the first quarter. In
our off-line businesses in the first quarter, management focused on
building and training targeted marketing and operational teams to
complete the groundwork for our newly launched Elite and
International programs. Efforts have begun to pay off as the market
reaction to these programs has been very positive. With our degree
programs contributing consistent revenue, we are well positioned to
leverage our educational expertise and well-known brand name to
access the tremendous opportunities presented by today's education
market."
Financial Results for the First Quarter Ended March 31, 2011
Net Revenue
Total net revenue for the first quarter of 2011 was $14.0 million, representing a 4.7 percent
increase from $13.3 million in the
corresponding period in 2010. Net revenue from online degree
programs for the first quarter of 2011 was $10.9 million, a 4.6 percent increase from
$10.5 million for the corresponding
period in 2010. The increase in net revenue was primarily due to
the continued expansion of our learning center network. It is also
due to organic growth in revenue students enrolled in our online
degree programs. Enrollment for 2010 fall semester online degree
programs was approximately 154,000 revenue students, representing
an increase of 10 percent as compared to approximately 140,000
revenue students in the 2009 fall semester.
By the end of the first quarter of 2011, the Company had 96
operational learning centers of which 53 were proprietary
centers(6) and 43 were contracted centers(7). This compares to 62
operational learning centers as of the end of the first quarter of
2010, of which 24 were proprietary and 38 were contracted. Our
learning centers network served a total of 21 university online
degree programs, as of the end of the first quarter of 2011.
Net revenue from our non-degree programs (online tutoring
programs, private primary and secondary schools and international
curriculum programs) in the first quarter of 2011 was $3.0 million, representing a 4.9 percent increase
from $2.9 million in the
corresponding period in 2010. The increase in net revenue from our
non-degree programs was mainly attributable to a 21.1 percent
increase in net revenue contributed from increased student
enrollment at our private school in Anqing
Online tutoring programs continued to expand in terms of program
offerings in the first quarter of 2011. While not yet contributing
significant revenue, our two new web-based products, "Weekly
Practice" and "Key Knowledge Points" have gained traction,
attracting a larger number of users to their respective websites
thus far in 2011.
Cost of Revenue
Total cost of revenue for the first quarter of 2011 was
$6.1 million, representing an
increase of 26.8 percent, compared to $4.8
million in the corresponding period of 2010. Cost of revenue
for online degree programs for the first quarter of 2011 was
$4.1 million, representing an
increase of 26.9 percent compared to $3.2
million in the corresponding period of 2010. The increase in
cost of revenue for online degree programs was primarily the result
of continued expansion of the Company's learning centers network as
well as continued efforts developing certain training programs
hosted by our collaborative alliance partners.
Cost of revenue for non-degree programs in the first quarter of
2011 was $2.0 million, representing
an increase of 26.6 percent from $1.6
million in the corresponding period in 2010. This increase
was primarily the result of an increase in costs associated with
the Anqing School as well as additional headcount required to
develop interactive and personalized learning products for online
tutoring programs. The rise in cost was also due to an increase in
teaching costs related to the expansion of our international and
elite programs to meet market demand for study-abroad programs.
Gross Profit and Gross Margin
Gross profit for the first quarter of 2011 was $7.9 million, compared to $8.5 million in the corresponding period of 2010.
Total gross margin in the first quarter of 2011 decreased to 56.5
percent, compared to 64.1 percent for the corresponding period in
2010. Gross margin for online degree programs decreased to 62.7
percent for the first quarter of 2011, compared to 69.3 percent in
the corresponding period of 2010, primarily due to the rapid
expansion of our learning centers network and increased costs
associated with developing training programs.
Gross margin for the online tutoring programs decreased to 64.4
percent for the first quarter of 2011, as compared to 78.4 percent
in the corresponding period of 2010, largely due to increased staff
costs associated with expanding course offerings and newly added
off-line personalized tutoring services. The gross margin for
private primary and secondary schools decreased to 25.6 percent, as
compared to 27.5 percent in the corresponding period in 2010. The
decrease was primarily attributable to increased depreciation as
well as increased teaching staff costs incurred at our Anqing
school.
Operating Expenses
Total operating expenses were $6.2
million in the first quarter of 2011, representing an 11.8
percent increase from $5.6 million
for the corresponding period in 2010. As a percentage of net
revenue, total operating expenses increased to 44.6 percent,
compared with 41.7 percent in the corresponding period in 2010. The
increase in total operating expenses resulted from the
following:
- General and administrative expenses for the first quarter of
2011 were $3.3 million, representing
a 9.9 percent increase from $3.0
million for the corresponding period in 2010. As a
percentage of net revenue, general and administrative expenses
increased to 24.0 percent, compared with 22.8 percent in the same
period last year. The increase was mainly due to rising costs for
leased facilities to accommodate a growing number of employees.
- Selling and marketing expenses were $1.4
million in the first quarter of 2011, representing a 17.2
percent increase from $1.2 million
for the corresponding period in 2010. As a percentage of net
revenue, selling and marketing expenses increased to 9.9 percent,
rising from 8.9 percent in the same period last year. The increase
in selling and marketing expenses were mainly related to growth in
sales force headcount for online tutoring programs in Beijing and expenses related to national
promotional and marketing activities.
- Research and development expenses for the first quarter of 2011
were $1.5 million, representing an
increase of 11.3 percent from $1.3
million in the corresponding period in 2010. As a percentage
of net revenue, research and development expenses increased to 10.7
percent, rising slightly from 10.0 percent in the same period of
last year. The increase was mainly attributable to an increase in
research and development headcount in connection with upgrading our
learning management systems and enhancing courseware development,
particularly for interactive product development.
- Share-based compensation for the first quarter of 2011, which
is allocated to the related cost and operating expense line items,
decreased 27.3 percent to $0.2
million, compared to $0.3
million in the corresponding period in 2010.
Income from Operations
Income from operations for the first quarter of 2011 was
$1.7 million, a decrease of 44.2
percent as compared to $3.0 million
in the corresponding period of 2010. Operating margin decreased to
11.9 percent for the first quarter of 2011, as compared to 22.3
percent in the corresponding period of 2010.
Adjusted income from operations, a non-GAAP measure defined as
income from operations excluding share-based compensation, and
amortization of intangible assets and land use rights, was
$2.1 million for the first quarter of
2011, representing a decrease of 40.5 percent as compared to
$3.5 million in the corresponding
period of 2010.
Adjusted operating margin, a non-GAAP measure defined as the
ratio of adjusted operating income from operations (non-GAAP) over
net revenue, for the first quarter of 2011 decreased to 14.9
percent, as compared to 26.2 percent for the corresponding period
of 2010.
Income Tax Expense
In the first quarter of 2011, income tax expense was
$0.4 million and the effective income
tax rate was 19 percent. The lower effective income tax rate was
primarily due to the fact that in December
2010, one of our collaborative alliance partners received
notice from the tax authority that it had qualified as a "new and
high technology enterprise" and was therefore entitled to a
preferential tax rate of 15 percent for 2010. This is reflected as
a change in the enacted tax rate in the first quarter of 2011 and
resulted in a reduction of income tax expense of approximately
$0.7 million for the first
quarter.
Net Income attributable to ChinaEdu
Net income attributable to ChinaEdu, which is net income,
excluding net income attributable to non-controlling interests, was
$0.5 million in the first quarter of
2011, representing a decrease of 51.7 percent from $1.1 million in the corresponding period of
2010.
Net income attributable to ChinaEdu per basic and diluted ADS
was $0.034 and $0.031, respectively, for the first quarter of
2011, as compared to $0.069 and
$0.064, respectively, for the
corresponding period in 2010.
Adjusted net income attributable to ChinaEdu (non-GAAP)(8) was
$0.9 million in the first quarter of
2011 compared to $1.6 million in the
corresponding period of 2010. Adjusted net margin, a non-GAAP
measure defined as the ratio of adjusted net income attributable to
ChinaEdu (non-GAAP) over net revenue, was 6.7 percent in the first
quarter of 2011, as compared to 11.9 percent in the corresponding
period of 2010.
Adjusted net income attributable to ChinaEdu per basic and
diluted ADS (non-GAAP) was $0.058 and
$0.054, respectively, for the first
quarter of 2011, as compared to $0.099 and $0.092,
respectively, in the corresponding period of 2010.
Deferred Revenue
At the end of the first quarter of 2011 current deferred revenue
was $6.7 million and non-current
deferred revenue was $1.6 million or
$8.3 million in aggregate. In
general, fall semester tuition is received during the fourth
quarter but is recognized both in the fourth quarter of that year
as well as in the first quarter of the following year.
Cash and Cash Equivalents and Term Deposits
As of March 31, 2011, the Company
reported cash and cash equivalents and term deposits of
$51.5 million, as compared to
$47.5 million as of December 31, 2010(9).
Amounts Due from Related Parties
Amounts due from related parties, which represents cash owed to
the Company by collaborative alliance partners, were $26.6 million as of March
31, 2011 as compared to $37.7
million as of December 31,
2010.
Second Quarter 2011 Total Net Revenue Guidance
ChinaEdu expects total net revenue in the second quarter of 2011
to range from RMB100 million to RMB105
million or $15.3 million to $16.0
million. This forecast reflects ChinaEdu's current and
preliminary view, which is subject to change.
Conference Call
ChinaEdu's management will hold an earnings conference call at
8:00 a.m. U.S. Eastern Time on
June 2, 2011 (8:00 p.m. Beijing/Hong Kong Time on June 2, 2011).
Dial-in details for the earnings conference call are as
follows:
U.S. Toll Free
Number
|
1-800-561-2693
|
|
International Dial-in
Number
|
1- 617-614-3523
|
|
Mainland China Toll Free
Number
|
10-800-130-0399
|
|
Hong Kong Dial-in
Number
|
852-3002-1672
|
|
Conference ID:
|
14203725
|
|
|
|
A live and archived webcast of the conference call will be
available on the investor relations page of ChinaEdu's website at
http://ir.chinaedu.net and a replay of the conference call may be
accessed by phone at the following numbers until June 25, 2011.
Dial-in numbers for the replay are as follows:
U.S. Toll Free
Number
|
1-888-286-8010
|
|
International Dial-in
Number
|
1-617-801-6888
|
|
Conference ID:
|
24296013
|
|
|
|
Non-GAAP Financial Measures
To supplement the unaudited condensed consolidated financial
information presented in accordance with Generally Accepted
Accounting Principles in the United
States of America ("GAAP"), the Company uses non-GAAP
measures of income from operations and net income attributable to
ChinaEdu, which are adjusted from results based on GAAP to exclude
certain non-cash items of share-based compensation and amortization
of intangible assets and land use rights. 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, support for international curriculum programs
and online learning community for adult students.
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 17 long-term contracts that generally vary
from 10 to 50 years in length. ChinaEdu also performs
recruiting services for 21 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, 2009, 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.
(1) The reporting currency
of the Company is RMB, but for the convenience of the reader, the
amounts for the three months ended on March 31, 2010 and March 31,
2011 are presented in U.S. dollars. Unless otherwise stated, all
translations from RMB to U.S. dollars were made at the rate of
RMB6.5483 to $1.00, the noon buying rate in effect on March 31,
2011 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 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) "ADS" is American Depositary
Share. Each ADS represents three ordinary shares.
|
|
(3) "Adjusted net income
attributable to ChinaEdu per diluted ADS" is a non-GAAP measure
which is computed using adjusted net income attributable to
ChinaEdu over number of ADSs used in net income attributable to
ChinaEdu per diluted ADS calculation.
|
|
(4) "Revenue students" refers to
students of university online degree programs who have paid
tuition. The numbers for the three months ended March 31, 2010 and
2011 are revenue students in fall 2009 and fall 2010,
respectively.
|
|
(5) In general, the fall
semester refers to a period of time that spans the fourth quarter
and the first quarter of the following year.
|
|
(6) Proprietary centers refer to
learning centers owned by the Company and operated under either the
Company's own brand name or the brand name of a university pursuant
to a licensing arrangement with the university.
|
|
(7) Contracted
centers refer learning centers owned by third parties who provide
facilities and staff assistance to ChinaEdu for the online degree
programs.
|
|
(8) Adjusted net income
attributable to ChinaEdu is a non-GAAP
measure, which is adjusted
from results based on GAAP to exclude certain non-cash items of
share-based compensation and amortization of intangible assets and
land use rights.
|
|
(9) Cash, cash equivalents
and term deposits primarily consisted of cash, demand deposits with
original maturity terms of three months or less, and term deposits
with original maturity terms of greater than three months but less
than one year.
|
|
|
For investor
and media inquiries, please contact:
|
|
|
|
Helen Plummer
Senior Investor Relations
Coordinator
ChinaEdu Corporation
Phone:
+86-139-1167-2124
E-mail: helen@chinaedu.net
|
|
|
|
Jin Yu
Investor Relations
Manager
ChinaEdu Corporation
Phone:
+86-157-1109-6022
E-mail: jinyu@chinaedu.net
|
|
|
ChinaEdu
Corporation
Unaudited Condensed Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
(in thousands,
unaudited)
|
December
31,2010
|
March
31,2011
|
March
31,2011
|
|
|
|
RMB
|
RMB
|
US$
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
190,493
|
173,586
|
26,509
|
|
|
Term deposits
|
120,500
|
163,500
|
24,968
|
|
|
Short-term
investments
|
32,469
|
38,440
|
5,870
|
|
|
Accounts receivable,
net
|
35,091
|
15,295
|
2,336
|
|
|
Inventories
|
358
|
360
|
55
|
|
|
Prepaid expenses and other
current assets
|
30,966
|
31,435
|
4,800
|
|
|
Amounts due from related
parties
|
246,925
|
173,867
|
26,551
|
|
|
Deferred tax
assets-current
|
5,003
|
2,316
|
354
|
|
Total current
assets
|
661,805
|
598,799
|
91,443
|
|
|
Deferred tax
assets-non-current
|
3,470
|
4,958
|
757
|
|
|
Rental deposits
|
936
|
2,253
|
344
|
|
|
Land use rights
|
27,265
|
27,113
|
4,140
|
|
|
Property and equipment,
net
|
227,507
|
232,715
|
35,538
|
|
|
Deposits paid for acquisition of
property and equipment
|
19,792
|
12,768
|
1,950
|
|
|
Acquired intangible assets,
net
|
65,849
|
64,832
|
9,901
|
|
|
Goodwill
|
43,255
|
43,255
|
6,606
|
|
Total assets
|
1,049,879
|
986,693
|
150,679
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable
(including accounts payable of the consolidated VIE without
recourse to the
Group of 10,277 and 7,810
as of December 31, 2010 and March 31, 2011)
|
11,410
|
8,846
|
1,351
|
|
|
Deferred revenues-current
(including deferred revenues of the consolidated VIE without
recourse to
the Group of 18,762 and
18,547 as of December 31, 2010 and March 31, 2011)
|
105,891
|
43,886
|
6,702
|
|
|
Accrued expenses and other
current liabilities (including accrued expenses and other
current
liabilities of the
consolidated VIE without recourse to the Group of 12,486 and
13,098
as of December 31, 2010
and March 31, 2011)
|
83,486
|
76,494
|
11,682
|
|
|
Amounts due to related
parties (including amounts due to related parties of the
consolidated VIE
without recourse to the
Group of 2,201 and 1,212 as of December 31, 2010 and March 31,
2011)
|
31,177
|
53,717
|
8,203
|
|
|
Income taxes payable
(including income taxes payable of the consolidated VIE without
recourse to the
Group of 8,432 and 8,608
as of December 31, 2010 and March 31, 2011)
|
44,612
|
33,353
|
5,093
|
|
|
Other taxes payable
(including other taxes payable of the consolidated VIE without
recourse to the
Group of 2,482 and 2,512
as of December 31, 2010 and March 31, 2011)
|
20,508
|
13,534
|
2,067
|
|
Total current
liabilities
|
297,084
|
229,830
|
35,098
|
|
|
Deferred
revenues-non-current (including deferred revenues of the
consolidated VIE without recourse
to the Group of 71 and 57
as of December 31, 2010 and March 31, 2011)
|
5,885
|
6,758
|
1,032
|
|
|
Deferred other
income
|
3,919
|
3,750
|
573
|
|
|
Deferred tax
liabilities-non-current (including deferred tax liabilities of the
consolidated VIE without
recourse to the Group of
1,057 and 1,047 as of December 31, 2010 and March 31,
2011)
|
9,836
|
9,684
|
1,479
|
|
|
Unrecognized tax benefit
(including unrecognized tax benefit of the consolidated VIE
without
recourse to the Group of
1,251 and 1,519 as of December 31, 2010 and March 31,
2011)
|
3,691
|
4,287
|
655
|
|
Total liabilities
|
320,415
|
254,309
|
38,837
|
|
|
|
|
|
|
|
ChinaEdu
shareholders’ equity
|
596,930
|
602,431
|
91,997
|
|
|
Noncontrolling
interests
|
132,534
|
129,953
|
19,845
|
|
Total
equity
|
729,464
|
732,384
|
111,842
|
|
Total liabilities and
equity
|
1,049,879
|
986,693
|
150,679
|
|
|
|
|
|
|
ChinaEdu
Corporation
Unaudited Condensed Consolidated
Statements of Operations
|
|
|
|
Three Months
Ended
|
|
(in thousands, except for
percentage, share, and per share information)
|
|
March
31,2010
|
|
December
31,2010
|
|
March
31,2011
|
|
March
31,2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
Gross Revenue
*
|
|
91,089
|
|
102,023
|
|
95,862
|
|
14,639
|
|
|
|
|
|
|
|
|
|
|
|
Business Tax
|
|
3,812
|
|
1,046
|
|
4,512
|
|
690
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue:
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
68,515
|
|
80,742
|
|
71,665
|
|
10,944
|
|
Online tutoring
programs
|
|
5,401
|
|
6,004
|
|
5,656
|
|
863
|
|
Private primary and secondary
schools
|
|
9,280
|
|
11,472
|
|
11,240
|
|
1,716
|
|
International curriculum
programs
|
|
4,081
|
|
2,759
|
|
2,789
|
|
426
|
|
Total net revenue
|
|
87,277
|
|
100,977
|
|
91,350
|
|
13,949
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
21,048
|
|
30,455
|
|
26,712
|
|
4,079
|
|
Online tutoring
programs
|
|
1,165
|
|
1,977
|
|
2,013
|
|
307
|
|
Private primary and secondary
schools
|
|
6,724
|
|
9,401
|
|
8,361
|
|
1,277
|
|
International curriculum
programs
|
|
2,411
|
|
2,591
|
|
2,665
|
|
407
|
|
Total cost of revenue
|
|
31,348
|
|
44,424
|
|
39,751
|
|
6,070
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
47,467
|
|
50,287
|
|
44,953
|
|
6,865
|
|
Online tutoring
programs
|
|
4,236
|
|
4,027
|
|
3,643
|
|
556
|
|
Private primary and secondary
schools
|
|
2,556
|
|
2,071
|
|
2,879
|
|
439
|
|
International curriculum
programs
|
|
1,670
|
|
168
|
|
124
|
|
19
|
|
Total gross profit
|
|
55,929
|
|
56,553
|
|
51,599
|
|
7,879
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
69.3%
|
|
62.3%
|
|
62.7%
|
|
62.7%
|
|
Online tutoring
programs
|
|
78.4%
|
|
67.1%
|
|
64.4%
|
|
64.4%
|
|
Private primary and secondary
schools
|
|
27.5%
|
|
18.1%
|
|
25.6%
|
|
25.6%
|
|
International curriculum
programs
|
|
40.9%
|
|
6.1%
|
|
4.4%
|
|
4.4%
|
|
Gross margin
|
|
64.1%
|
|
56.0%
|
|
56.5%
|
|
56.5%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
19,920
|
|
26,185
|
|
21,897
|
|
3,344
|
|
Selling and marketing
|
|
7,740
|
|
11,980
|
|
9,068
|
|
1,385
|
|
Research and
development
|
|
8,771
|
|
9,410
|
|
9,758
|
|
1,490
|
|
Total operating
expenses
|
|
36,431
|
|
47,575
|
|
40,723
|
|
6,219
|
|
Income from
operations
|
|
19,498
|
|
8,978
|
|
10,876
|
|
1,660
|
|
Operating margin
|
|
22.3%
|
|
8.9%
|
|
11.9%
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
144
|
|
141
|
|
123
|
|
19
|
|
Interest income
|
|
1,057
|
|
1,590
|
|
1,910
|
|
292
|
|
Interest expense
|
|
-
|
|
(5)
|
|
-
|
|
-
|
|
Gain from acquisition
|
|
-
|
|
260
|
|
-
|
|
-
|
|
Income before income
tax
|
|
20,699
|
|
10,964
|
|
12,909
|
|
1,971
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense/(credit)
|
|
(8,171)
|
|
6,002
|
|
(2,475)
|
|
(378)
|
|
Net income
|
|
12,528
|
|
16,966
|
|
10,434
|
|
1,593
|
|
Net income attributable to the
noncontrolling interests
|
|
(5,296)
|
|
(10,151)
|
|
(6,940)
|
|
(1,060)
|
|
Net income attributable to
ChinaEdu
|
|
7,232
|
|
6,815
|
|
3,494
|
|
533
|
|
Net margin
|
|
8.3%
|
|
6.7%
|
|
3.8%
|
|
3.8%
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
ChinaEdu per ADS:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.45
|
|
0.43
|
|
0.22
|
|
0.034
|
|
Diluted
|
|
0.42
|
|
0.39
|
|
0.20
|
|
0.031
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average aggregate
number of ADSs outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
15,954,875
|
|
15,976,963
|
|
15,910,224
|
|
15,910,224
|
|
Diluted
|
|
17,396,275
|
|
17,267,688
|
|
17,229,640
|
|
17,229,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Gross revenue are detailed as
follows
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
72,458
|
|
81,462
|
|
75,809
|
|
11,577
|
|
Online tutoring
programs
|
|
5,033
|
|
6,163
|
|
5,850
|
|
893
|
|
Private primary and secondary
schools
|
|
9,280
|
|
11,479
|
|
11,252
|
|
1,718
|
|
International curriculum
programs
|
|
4,318
|
|
2,919
|
|
2,951
|
|
451
|
|
|
|
|
|
|
|
|
|
|
ChinaEdu
Corporation
Unaudited Condensed Consolidated
Statements of Cash Flow
|
|
|
|
Three Months
Ended
|
|
(in thousands,
unaudited)
|
|
March
31,2010
|
|
December
31,2010
|
|
March
31,2011
|
|
March
31,2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
12,528
|
|
16,966
|
|
10,434
|
|
1,593
|
|
Adjustments
to reconcile net income to net cash provided by
operating
activities:
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
2,138
|
|
2,079
|
|
1,555
|
|
237
|
|
Depreciation and amortization of property and
equipment
|
|
4,690
|
|
6,504
|
|
5,787
|
|
884
|
|
Amortization of land use rights
|
|
152
|
|
152
|
|
152
|
|
23
|
|
Amortization of acquired intangible assets
|
|
1,080
|
|
1,171
|
|
1,017
|
|
156
|
|
Loss on discontinued operations
|
|
-
|
|
-
|
|
16
|
|
2
|
|
Provision for amounts due from related parties and account
receivables
|
|
-
|
|
540
|
|
-
|
|
-
|
|
Loss from disposal of property and equipment
|
|
4
|
|
82
|
|
65
|
|
10
|
|
Deferred income taxes
|
|
485
|
|
(5,036)
|
|
1,047
|
|
160
|
|
Gain from acquisition
|
|
-
|
|
(260)
|
|
-
|
|
-
|
|
Changes in
assets and liabilities
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
12,880
|
|
(11,973)
|
|
19,796
|
|
3,023
|
|
Inventory
|
|
400
|
|
971
|
|
(2)
|
|
-
|
|
Prepaid expenses and other current assets
|
|
9,500
|
|
(9,950)
|
|
(489)
|
|
(75)
|
|
Amounts due from related parties
|
|
34,831
|
|
(42,571)
|
|
72,795
|
|
11,117
|
|
Rental deposits
|
|
(11)
|
|
126
|
|
(1,317)
|
|
(201)
|
|
Accounts payable
|
|
(808)
|
|
(864)
|
|
1,321
|
|
202
|
|
Deferred revenues
|
|
(60,777)
|
|
69,753
|
|
(61,134)
|
|
(9,336)
|
|
Deferred other income
|
|
(144)
|
|
(141)
|
|
(138)
|
|
(21)
|
|
Accrued expenses and other current liabilities
|
|
(5,446)
|
|
5,789
|
|
(6,952)
|
|
(1,062)
|
|
Amounts due to related parties
|
|
10,730
|
|
(21,336)
|
|
(12,945)
|
|
(1,977)
|
|
Income tax payable
|
|
(2,311)
|
|
2,173
|
|
(11,259)
|
|
(1,719)
|
|
Other taxes payable
|
|
(4,834)
|
|
4,476
|
|
(6,974)
|
|
(1,065)
|
|
Unrecognized tax benefit
|
|
362
|
|
(4,583)
|
|
596
|
|
91
|
|
Change in restricted cash
|
|
-
|
|
365
|
|
-
|
|
-
|
|
Net cash provided by operating
activities
|
|
15,449
|
|
14,433
|
|
13,372
|
|
2,042
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
(6,690)
|
|
(4,608)
|
|
(7,921)
|
|
(1,210)
|
|
Proceeds from discontinued operations
|
|
-
|
|
-
|
|
233
|
|
36
|
|
Purchase of business, net of cash acquired
|
|
-
|
|
1,382
|
|
-
|
|
-
|
|
Purchase of term deposits
|
|
(2,019)
|
|
40,971
|
|
(43,000)
|
|
(6,567)
|
|
Purchase of investments
|
|
-
|
|
(1,598)
|
|
(6,000)
|
|
(916)
|
|
Proceeds from disposal of property and equipment
|
|
49
|
|
4
|
|
-
|
|
-
|
|
Net cash (used in) provided by
investing activities
|
|
(8,660)
|
|
36,151
|
|
(56,688)
|
|
(8,657)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of share options
|
|
1,339
|
|
3,315
|
|
280
|
|
43
|
|
Prepayment for shares repurchase
|
|
-
|
|
1,089
|
|
-
|
|
-
|
|
Repurchase and cancellation of ordinary shares
|
|
(113)
|
|
(13,142)
|
|
-
|
|
-
|
|
Short term loan
|
|
-
|
|
(5,725)
|
|
-
|
|
-
|
|
Loan from related party
|
|
-
|
|
-
|
|
35,500
|
|
5,421
|
|
Cash dividends paid to noncontrolling
shareholders
|
|
(1,470)
|
|
-
|
|
(10,521)
|
|
(1,607)
|
|
Capital contributions by noncontrolling
shareholders
|
|
-
|
|
490
|
|
1,000
|
|
153
|
|
Net cash (used in) provided by
financing activities
|
|
(244)
|
|
(13,973)
|
|
26,259
|
|
4,010
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate
changes
|
|
(4)
|
|
(106)
|
|
150
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
beginning of period
|
|
203,143
|
|
153,988
|
|
190,493
|
|
29,090
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end
of period
|
|
209,684
|
|
190,493
|
|
173,586
|
|
26,509
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash and cash equivalents
|
|
6,541
|
|
36,505
|
|
(16,907)
|
|
(2,581)
|
|
|
|
|
|
|
|
|
|
|
ChinaEdu
Corporation
Reconciliations from income from
operations to adjusted income from operations (non-GAAP) and
adjusted operating margin (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
(in thousands,
unaudited)
|
|
March
31,2010
|
|
December
31,2010
|
|
March
31,2011
|
|
March
31, 2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
87,277
|
|
100,977
|
|
91,350
|
|
13,949
|
|
Income from
operations
|
|
19,498
|
|
8,978
|
|
10,876
|
|
1,660
|
|
Adjustment:
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
2,138
|
|
2,079
|
|
1,555
|
|
237
|
|
Amortization of intangible
assets and land use rights
|
|
1,232
|
|
1,318
|
|
1,169
|
|
179
|
|
Adjusted income from operations
(non-GAAP)
|
|
22,868
|
|
12,375
|
|
13,600
|
|
2,076
|
|
Adjusted operating margin
(non-GAAP)
|
|
26.2%
|
|
12.3%
|
|
14.9%
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
ChinaEdu
Corporation
Reconciliations from net income
attributable to ChinaEdu to adjusted net income attributable to
ChinaEdu (non-GAAP), adjusted net margin (non-GAAP) and adjusted
net income per ADS (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
(in thousands,
unaudited)
|
|
March
31,2010
|
|
December
31,2010
|
|
March
31,2011
|
|
March
31, 2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
87,277
|
|
100,977
|
|
91,350
|
|
13,949
|
|
Net income attributable to
ChinaEdu
|
|
7,232
|
|
6,815
|
|
3,494
|
|
533
|
|
Adjustment:
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
2,138
|
|
2,079
|
|
1,555
|
|
237
|
|
Share-based compensation
attributable to the noncontrolling interest
|
|
(243)
|
|
(140)
|
|
(134)
|
|
(20)
|
|
Amortization of intangible
assets and land use rights
|
|
1,232
|
|
1,318
|
|
1,169
|
|
179
|
|
Adjusted net income attributable
to ChinaEdu (non-GAAP)
|
|
10,359
|
|
10,072
|
|
6,084
|
|
929
|
|
Adjusted net margin
(non-GAAP)
|
|
11.9%
|
|
10.0%
|
|
6.7%
|
|
6.7%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income attributable
to ChinaEdu per ADS (non-GAAP)
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.65
|
|
0.63
|
|
0.38
|
|
0.058
|
|
Diluted
|
|
0.60
|
|
0.58
|
|
0.35
|
|
0.054
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average aggregate
number of ADSs outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
15,954,875
|
|
15,976,963
|
|
15,910,224
|
|
15,910,224
|
|
Diluted
|
|
17,396,275
|
|
17,267,688
|
|
17,229,640
|
|
17,229,640
|
|
|
|
|
|
|
|
|
|
|
SOURCE ChinaEdu Corporation