BEIJING, Sept.18, 2012
/PRNewswire/ -- ChinaEdu Corporation (NASDAQ: CEDU) ("ChinaEdu" or
the "Company"), a leading online educational services provider in
China, today announced its
unaudited financial results for the second quarter ended
June 30, 2012.(1)
Second Quarter 2012 Highlights
- Total net revenue for the second quarter of 2012 was
$18.1 million, a 4.5 percent increase
from $17.3 million in the
corresponding period in 2011.
- Net revenue from online degree programs was $14.5 million, an increase of 4.5 percent from
$13.9 million in the corresponding
period of 2011.
- Net income attributable to ChinaEdu was $1.5 million.
- Adjusted net income attributable to ChinaEdu(2) was
$1.9 million.
- Net income attributable to ChinaEdu per diluted ADS(3) was
$0.086.
- Adjusted net income attributable to ChinaEdu per diluted ADS(4)
was $0.114.
- Operating margin in the second quarter of 2012 was 19.7
percent.
- The number of revenue students(5) in online degree programs
during the Spring 2012 semester increased roughly 21.4 percent
year-over-year to approximately 193,000 students.
Julia Huang, executive chairman
of ChinaEdu commented, "The plans we laid for the second quarter of
2012 were well executed and we encountered very few surprises
during the quarter. Net revenue for online degree programs
increased steadily over the corresponding period in 2011. This
growth was complimented by equally steady growth in our non-degree
programs, allowing the Company to meet the high end of our
quarterly revenue guidance. We continue to leverage our competency
in interactive learning to find scalability and persist in our push
to be the market leader across our industry. As always, strict cost
control measures allow us to build on our strong track record of
ongoing profitability."
Financial Results for the Second Quarter
Ended June 30,
2012
Net Revenue
Total net revenue for the second quarter of 2012 was
$18.1 million, a 4.5 percent increase
from $17.3 million in the
corresponding period in 2011.
Net revenue from online degree programs for the second quarter
of 2012 was $14.5 million, a 4.5
percent increase over $13.9 million
in the corresponding period in 2011. As seen in the previous
quarter, the increase in net revenue from online degree programs in
the second quarter was primarily due to organic growth in revenue
students enrolled in core online degree programs. Growth was also
attributed to greater revenue contribution from our learning
centers network and increased revenue contribution from our online
non-degree training programs. Enrollment for online degree programs
in the Spring 2012 semester was approximately 193,000 revenue
students, an increase of 21.4 percent from approximately 159,000
revenue students enrolled in the Spring 2011 semester.
As of June 30 2012, ChinaEdu's
learning centers network was providing recruiting services for 22
universities with 113 operational learning centers, of which 55
were proprietary centers(6) and 58 were contracted centers(7). This
compares to 100 operational learning centers as of June 30, 2011, of which 57 were proprietary and
43 were contracted centers.
Net revenue from non-degree programs, including online tutoring
programs, private primary and secondary schools and international
and elite curriculum programs, in the second quarter of 2012 was
$3.6 million, a 4.5 percent increase
from $3.5 million in the second
quarter of 2011. The growth was mainly driven by an increase in
student enrollments at our private schools in Anqing and
Pingdingshan.
Cost of Revenue
Total cost of revenue for the second quarter of 2012 was
$7.4 million, representing an
increase of 6.4 percent, compared to $6.9
million in the corresponding period of 2011.
Cost of revenue for online degree programs in the second quarter
of 2012 was $4.9 million, an increase
of 5.2 percent from $4.6 million in
the corresponding period of 2011. The increase in cost of revenue
was primarily due to an increase in staff costs that resulted from
a headcount increase across the Company.
Cost of revenue for non-degree programs in the second quarter of
2012 was $2.5 million, an increase of
8.8 percent from $2.3 million in the
second quarter of 2011. The cost of revenue increase in this area
of the business was primarily related to employee costs, leasing
costs and service fees associated with our 101 online tutoring
programs and teaching costs, dormitory, canteen and transportation
costs related to our private primary schools in Anqing and
Pingdingshan.
Gross Profit and Gross Margin
Gross profit in the second quarter of 2012 was $10.7 million, compared to $10.4 million in the corresponding period of
2011. Gross margin decreased slightly to 59.2 percent, compared to
59.9 percent in the corresponding period in 2011.
Gross margin for online degree programs decreased very slightly
to 66.3 percent for the second quarter of 2012, compared to 66.5
percent in the corresponding period of 2011.
Gross margin for private schools decreased to 26.1 percent,
compared to 29.3 percent in the corresponding period in 2011. The
decrease was primarily due to increased teaching costs as well as
dormitory, canteen and transportation costs at the Anqing School
and Pingdingshan School.
Gross margin for online tutoring programs decreased to 57.7
percent, from 71.4 percent in second quarter of 2011, largely due
to decreased barter transaction revenue as well as increased staff
and leasing costs associated with these programs.
Operating Expenses
Total operating expenses were $7.2
million in the second quarter of 2012, representing a 7.6
percent decrease from $7.7 million in
the corresponding period in 2011. As a percentage of net revenue,
total operating expenses decreased to 39.5 percent, compared to
44.7 percent in the corresponding period in 2011. The decrease in
the total operating expense was the result of the following:
- General and administrative expenses for the second quarter of
2012 were $3.8 million, a decrease of
1.5 percent compared to $3.9 million
in the corresponding period in 2011. As a percentage of net
revenue, general and administrative expenses decreased to 21.1
percent, compared with 22.4 percent in the same period in 2011, the
result of increased net revenue.
- Selling and marketing expenses were $1.8
million in the second quarter of 2012,a decrease of 19.6
percent compared to $2.2 million in
the corresponding period in 2011. The decrease in selling and
marketing expenses was primarily attributable to a significant
decrease in marketing activities surrounding elite curriculum
programs. As a percentage of net revenue, selling and marketing
expenses decreased to 9.8 percent, compared with 12.8 percent in
the same period in 2011.
- Research and development expenses for the second quarter of
2012 were $1.6 million, a decrease of
5.8 percent compared to $1.7 million
in the corresponding period in 2011, primarily because we deployed
some research and development employees into maintaining services
in 2012. As a percentage of net revenue, the research and
development expense was 8.6 percent in the second quarter of 2012,
decreasing from 9.5 percent in the same period in 2011.
Income from Operations
Income from operations in the second quarter of 2012 was
$3.6 million, an increase of 35.4
percent compared to $2.6 million in
the corresponding period of 2011. This significant increase was
mainly due to a substantial rise in student enrollment in online
degree programs in the Spring semester. Operating margin increased
to 19.7 percent for the second quarter of 2012, compared to 15.2
percent in the corresponding period of 2011.
Adjusted income from operations, a non-GAAP measure defined as
income from operations excluding share-based compensation,
amortization of intangible assets and land use rights, was
$4.0 million for the second quarter
of 2012, an increase of 31.7 percent compared to $3.1 million in the corresponding period of
2011.
Adjusted operating margin, a non-GAAP measure defined as the
ratio of adjusted income from operations (non-GAAP) over net
revenue, for the second quarter of 2012 increased to 22.3 percent,
compared to 17.7 percent in the corresponding period of 2011.
Interest and Investment Income
Interest and investment income for the second quarter of 2012
increased 57.8 percent to $0.7
million, compared to $0.4
million for the corresponding quarter of 2011.
Income Tax Expense
In the second quarter of 2012, the income tax expense was
$0.9 million and the effective income
tax rate was 21.4 percent. This compares with an income tax expense
of $0.6 million and effective income
tax rate of 20.1 percent in same period of 2011.
Net Income Attributable to Non-controlling
Interests
Net income attributable to non-controlling interests increased
to $1.9 million in the second quarter
of 2012, compared to $1.7 million in
the corresponding period in 2011.
Net Income Attributable to ChinaEdu
Net income attributable to ChinaEdu, which is net income,
excluding net income attributable to non-controlling interests, was
$1.5 million in the second quarter of
2012, representing an increase of 84.4 percent from $0.8 million in the corresponding period of
2011.
Net income attributable to ChinaEdu per basic and diluted ADS
was $0.092 and $0.086, respectively, for the second quarter of
2012, compared to $0.050 and
$0.047, respectively, for the
corresponding period in 2011.
Adjusted net income attributable to ChinaEdu (non-GAAP) was
$1.9 million in the second quarter of
2012 compared to $1.2 million in the
corresponding period of 2011. Adjusted net margin, a non-GAAP
measure defined as the ratio of adjusted net income attributable to
ChinaEdu (non-GAAP) over net revenue, was 10.7 percent in the
second quarter of 2012, compared to 7.0 percent in the
corresponding period of 2011.
Adjusted net income attributable to ChinaEdu per basic and
diluted ADS (non-GAAP) was $0.121 and
$0.114, respectively, for the second
quarter of 2012, compared to $0.077
and $0.072, respectively, in the
corresponding period of 2011.
Deferred Revenue
As of June 30, 2012, deferred
revenue was $21.7 million, consisting
of current deferred revenue in the amount of $20.1 million and non-current deferred revenue in
the amount of $1.6 million. Spring
semester tuition is generally received during the second quarter
but is recognized both in the second quarter and the third quarter
of the calendar year.
Private school revenue is generally received in September, but
is amortized over 6 or 12 months. Online tutoring program revenue
can be received at program enrollment and is mostly amortized
within 12 months.
Cash and Cash Equivalents and Term Deposits
As of June 30, 2012, the Company
reported cash and cash equivalents and term deposits of
$59.1 million, which 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.
Amounts Due from Related Parties
Amounts due from related parties, which represents cash owed to
the Company by collaborative alliance partners, were $47.1 million as of June
30, 2012 compared to $37.5
million as of December 31,
2011.
2012 Year-to-Date Financial Results
Net Revenue
For the six months ended June 30,
2012, total net revenue was $36.0
million, representing an increase of 13.7 percent over
$31.7 million in the corresponding
period in 2011. Net revenue from online degree programs for the
first half of 2012 was $29.0 million,
representing a 15.2 percent increase from $25.1 million in the corresponding period in
2011. Net revenue from non-online degree programs for the first
half of 2012 was $7.1 million,
compared to $6.6 million in 2011, an
8.0 percent increase. The growth in total net revenue was
attributable to strong enrollment in online degree programs in the
Fall semester of 2011 and in the Spring semester of 2012,
particularly at learning centers. Growth in net revenue at the
Anqing School increased, while the Company saw a decrease in
revenue contributed by 101 online tutoring programs and
international and elite curriculum programs.
Cost of Revenue
For the six months ended June 30,
2012, total cost of revenue was $14.6
million, an increase from $13.2
million in the corresponding period in 2011. Cost of revenue
for online degree programs in the first half of 2012 was
$9.7 million, an increase of 9.1
percent compared to $8.8 million in
the corresponding period of 2011. The increase was primarily due to
cost increases in headcount and the expansion of the Company's
learning centers network.
Cost of revenue for non-online degree programs in the first half
of 2012 was $4.9 million, an increase
of 12.4 percent compared to $4.4
million in the corresponding period of 2011. The cost of
revenue increase was primarily related to employee costs, leasing
costs associated with our 101 online tutoring programs and teaching
costs, dormitory, canteen and transportation costs related to our
private primary schools in Anqing and Pingdingshan. Cost of revenue
for international and elite curriculum programs decreased as those
programs have grown smaller.
Gross Profit
Gross profit for the six months ended June 30, 2012 was $21.5
million, an increase of 16.2 percent compared with
$18.5 million for the corresponding
period in 2011. The increase was primarily due to an increase in
gross margin across online degree programs.
Income from Operations
Income from operations was $7.1
million for the six months ended June
30, 2012, representing an increase of 63.1 percent from
$4.3 million for the corresponding
period in 2011. Operating margin was 19.6 percent for the six
months ended June 30, 2012 compared
to 13.7 percent for the corresponding period in 2011.
Adjusted income from operations (non-GAAP) was $8.1 million for the first half of 2012,
representing an increase of 55.3 percent, compared to $5.2 million in the corresponding period of 2011.
Adjusted operating margin (non-GAAP) for the six months ended
June 30, 2012 was 22.5 percent,
compared to 16.4 percent for the corresponding period in 2011.
Interest Income and Investment Income
Interest income and investment income increased 71.7 percent to
$1.3 million in the first half of
2012, compared to $0.7 million in the
corresponding period of last year.
Income Tax Expense
Income tax expense for the first half of 2012 was $1.8 million, as compared with $1.0 million for the corresponding period of last
year.
Net Income Attributable to Non-controlling
Interests
Net income attributable to non-controlling interests was
$3.6 million in first half of 2012,
an increase of 27.8 percent compared to $2.8
million in the first half of 2011. The increase was
primarily attributable to a non-controlling interest impact related
to the increase in net income from online degree programs in the
first half of 2012.
Net Income attributable to ChinaEdu
Net income attributable to ChinaEdu was $3.1 million for the six months ended
June 30, 2012, representing an
increase of 129.9 percent from $1.3
million for the corresponding period in 2011. Net margin was
8.6 percent for the six months ended June
30, 2012, compared to 4.2 percent for the corresponding
period in 2011.
Adjusted net margin was 11.3 percent for the six months ended
June 30, 2012, compared to 6.9
percent for the corresponding period of 2011.The increase was
primarily due to increased net profit in the first half of
2012.
Third Quarter 2012 Guidance
ChinaEdu management expects total net revenue in the third
quarter of 2012 to range from RMB119 million
to RMB122 million or $18.7 million to
$19.2 million, representing a five percent to seven percent
increase compared to the corresponding period in 2011. 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
September 19, 2012 (8:00 p.m. Beijing/Hong Kong Time on September 19, 2012).
Dial-in details for the earnings conference call are as
follows:
|
International:
|
+6567239381
|
|
Hong
Kong:
|
+85224750994
|
|
United
States:
|
+1 (718) 354-1231
|
|
Toll-free China,
Mobile:
|
4006208038
|
|
Toll-free
China:
|
8008190121
|
|
Toll-free United
States:
|
+1 (866)
519-4004
|
|
Passcode:
|
22035522
|
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 until September 26,
2012.
Dial-in numbers for the replay are as follows:
|
Toll Free United
States
|
+1 866 214
5335
|
|
International
|
+1 718 354
1232
|
|
Conference
ID:
|
22035522
|
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. Adjusted operating margin
defined as the ratio of adjusted operating income from operation
over net revenue. Adjusted net income attributable to ChinaEdu per
basic and diluted ADS are a non-GAAP measure which are computed
using adjusted net income attributable to ChinaEdu over the number
of ADSs used in net income attributable to ChinaEdu per basic and
diluted ADS calculation.
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 and elite 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 entered into collaborative alliances with 12
universities, ranging from 10 to 50 years in length. The Company
has also entered into technology agreements with 6 universities.
Besides, ChinaEdu performs recruiting services for 22 universities
through nationwide learning center network.
Forward-Looking Statements
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, 2011, 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.
For investor and media inquiries, please contact:
Helen Plummer
Senior Investor Relations Coordinator
ChinaEdu Corporation
Phone: +1 908-442-9395
E-mail: helen@chinaedu.net
Jin Yu
Investor Relations Manager
ChinaEdu Corporation
Phone: +86 15711096022
E-mail: jinyu@chinaedu.net
|
(1) The reporting
currency of the Company is RMB, but for the convenience of the
reader, the amounts for the three and six months ended on June 30,
2012 are presented in U.S. dollars. Unless otherwise stated, all
translations from RMB to U.S. dollars were made at the rate of
RMB6.353 to $1.00, the noon buying rate in effect on June 30, 2012
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) "Adjusted net income
attributable to ChinaEdu" is a non-GAAP measure defined as net
income attributable to ChinaEdu excluding share-based compensation
net of non-controlling interests' portion, and amortization of
intangible assets and land use rights.
|
|
(3) "ADS" is American
Depositary Share. Each ADS represents three ordinary
shares.
|
|
(4) "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 the number of ADSs used in net income attributable to
ChinaEdu per diluted ADS calculation.
|
|
(5) "Revenue students"
refers to students of university online degree programs who have
paid tuitions. The numbers for the three months ended June 30, 2012
and 2011 are revenue students in Spring 2012 and Spring 2011,
respectively.
|
|
(6) Proprietary centers
refer to self-owned learning centers operated either under the
Company's own brand name or the brand name of a university pursuant
to a licensing arrangement with that university.
|
|
(7) Contracted centers
refer to agreement with third party learning centers pursuant to
which the Company only provides assistance in applying for approval
from provincial level education authorities as well as securing
additional university online degree programs. In return, the
Company receives a percentage of the tuition earned by these third
party learning centers.
|
|
ChinaEdu
Corporation
|
|
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
(in thousands,
unaudited)
|
December 31,
2011
|
June 30,
2012
|
June 30,
2012
|
|
|
RMB
|
RMB
|
US$
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
273,746
|
179,271
|
28,218
|
|
Term
deposits
|
98,163
|
196,028
|
30,856
|
|
Short-term
investments
|
34,648
|
23,072
|
3,632
|
|
Accounts receivable,
net
|
31,478
|
47,231
|
7,434
|
|
Prepaid expenses and
other current assets
|
22,725
|
26,222
|
4,127
|
|
Amounts due from related
parties
|
238,016
|
299,101
|
47,080
|
|
Deferred tax
assets-current
|
5,697
|
1,180
|
186
|
|
Assets held for
sale
|
-
|
4,201
|
661
|
|
Total current
assets
|
704,473
|
776,306
|
122,194
|
|
Deferred tax
assets-non-current
|
8,217
|
9,420
|
1,483
|
|
Rental
deposits
|
2,213
|
1,776
|
280
|
|
Land use
rights
|
26,657
|
26,353
|
4,148
|
|
Property and equipment,
net
|
239,210
|
228,632
|
35,988
|
|
Deposits paid for
acquisition of property and equipment
|
17,902
|
17,902
|
2,818
|
|
Acquired intangible
assets, net
|
63,638
|
62,598
|
9,853
|
|
Goodwill
|
43,255
|
43,255
|
6,809
|
|
Total
assets
|
1,105,565
|
1,166,242
|
183,573
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
(including accounts payable of the consolidated VIE without
recourse to the Group of 1,975 and 7,026 as of December 31,
2011 and June 30, 2012, respectively)
|
2,239
|
7,064
|
1,112
|
|
Deferred
revenues-current (including deferred revenues of the consolidated
VIE without recourse to the Group of 20,525 and 21,092 as of
December 31, 2011 and June 30, 2012, respectively)
|
125,332
|
127,546
|
20,076
|
|
Accrued expenses and
other current liabilities (including accrued expenses and other
current liabilities of the consolidated VIE without recourse to the
Group of 18,644 and 23,849as of December 31, 2011 and June 30,
2012, respectively)
|
91,980
|
101,161
|
15,923
|
|
Amounts due to related
parties (including amounts due to related parties of the
consolidated VIE without recourse to the Group of 1,953 and
1,501 as of December 31, 2011 and June 30, 2012,
respectively)
|
13,146
|
34,159
|
5,377
|
|
Income taxes payable
(including income taxes payable of the consolidated VIE without
recourse to the Group of 8,893 and 10,717 as of December 31,
2011 and June 30, 2012, respectively)
|
51,448
|
44,860
|
7,061
|
|
Other taxes payable
(including other taxes payable of the consolidated VIE without
recourse to the Group of 3,047 and 3,408 as of December 31, 2011
and June 30, 2012, respectively)
|
21,970
|
18,568
|
2,923
|
|
Total current
liabilities
|
306,115
|
333,358
|
52,472
|
|
Deferred
revenues-non-current (including deferred revenues of the
consolidated VIE without recourse to the Group of 33 and 29 as
of December 31, 2011 and June 30, 2012, respectively)
|
12,059
|
10,210
|
1,608
|
|
Deferred tax
liabilities-non-current (including deferred tax liabilities of the
consolidated VIE without recourse to the Group of 1,017 and
997 as of December 31, 2011 and June 30, 2012,
respectively)
|
9,243
|
8,894
|
1,400
|
|
Unrecognized tax benefit
(including unrecognized tax benefit of the consolidated VIE
without recourse to the Group of 2,364 and 2,927 as of
December 31, 2011 and June 30, 2012, respectively)
|
6,089
|
7,314
|
1,151
|
|
Total
liabilities
|
333,506
|
359,776
|
56,631
|
|
|
|
|
|
|
ChinaEdu shareholders' equity
|
604,806
|
632,030
|
99,485
|
|
Noncontrolling
interests
|
167,253
|
174,436
|
27,457
|
|
Total
equity
|
772,059
|
806,466
|
126,942
|
|
Total liabilities and
equity
|
1,105,565
|
1,166,242
|
183,573
|
|
ChinaEdu
Corporation
|
|
Unaudited Condensed
Consolidated Statements of Operations
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in thousands,except
for percentage, share, and per share information)
|
|
June 30, 2011
|
|
June 30, 2012
|
|
June 30, 2012
|
|
June 30, 2011
|
|
June 30,
2012
|
|
June 30,
2012
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Revenue
*
|
|
115,327
|
|
119,519
|
|
18,813
|
|
211,189
|
|
239,151
|
|
37,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Tax
|
|
5,296
|
|
4,486
|
|
706
|
|
9,808
|
|
10,191
|
|
1,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
88,085
|
|
92,089
|
|
14,495
|
|
159,750
|
|
184,016
|
|
28,965
|
|
Online tutoring
programs
|
|
7,250
|
|
6,389
|
|
1,006
|
|
12,906
|
|
12,398
|
|
1,952
|
|
Private primary and
secondary schools
|
|
11,880
|
|
13,815
|
|
2,175
|
|
23,120
|
|
27,351
|
|
4,305
|
|
International and elite
curriculum programs
|
|
2,816
|
|
2,740
|
|
431
|
|
5,605
|
|
5,195
|
|
818
|
|
Total net
revenue
|
|
110,031
|
|
115,033
|
|
18,107
|
|
201,381
|
|
228,960
|
|
36,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
29,500
|
|
31,035
|
|
4,885
|
|
56,212
|
|
61,354
|
|
9,657
|
|
Online tutoring
programs
|
|
2,077
|
|
2,700
|
|
425
|
|
4,090
|
|
5,421
|
|
853
|
|
Private primary and
secondary schools
|
|
8,395
|
|
10,205
|
|
1,606
|
|
16,756
|
|
20,011
|
|
3,150
|
|
International and elite
curriculum programs
|
|
4,168
|
|
3,020
|
|
475
|
|
6,833
|
|
5,683
|
|
895
|
|
Total cost of
revenue
|
|
44,140
|
|
46,960
|
|
7,391
|
|
83,891
|
|
92,469
|
|
14,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
58,585
|
|
61,054
|
|
9,610
|
|
103,538
|
|
122,662
|
|
19,308
|
|
Online tutoring
programs
|
|
5,173
|
|
3,689
|
|
581
|
|
8,816
|
|
6,977
|
|
1,099
|
|
Private primary and
secondary schools
|
|
3,485
|
|
3,610
|
|
569
|
|
6,364
|
|
7,340
|
|
1,155
|
|
International and elite
curriculum programs
|
|
(1,352)
|
|
(280)
|
|
(44)
|
|
(1,228)
|
|
(488)
|
|
(77)
|
|
Total gross
profit
|
|
65,891
|
|
68,073
|
|
10,716
|
|
117,490
|
|
136,491
|
|
21,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
66.5%
|
|
66.3%
|
|
66.3%
|
|
64.8%
|
|
66.7%
|
|
66.7%
|
|
Online tutoring
programs
|
|
71.4%
|
|
57.7%
|
|
57.7%
|
|
68.3%
|
|
56.3%
|
|
56.3%
|
|
Private primary and
secondary schools
|
|
29.3%
|
|
26.1%
|
|
26.1%
|
|
27.5%
|
|
26.8%
|
|
26.8%
|
|
International and elite
curriculum programs
|
|
(48.0%)
|
|
(10.2%)
|
|
(10.2%)
|
|
(21.9%)
|
|
(9.4%)
|
|
(9.4%)
|
|
Gross margin
|
|
59.9%
|
|
59.2%
|
|
59.2%
|
|
58.3%
|
|
59.6%
|
|
59.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
24,612
|
|
24,251
|
|
3,817
|
|
46,509
|
|
50,061
|
|
7,880
|
|
Selling and
marketing
|
|
14,083
|
|
11,316
|
|
1,781
|
|
23,151
|
|
21,779
|
|
3,428
|
|
Research and
development
|
|
10,501
|
|
9,894
|
|
1,557
|
|
20,259
|
|
19,671
|
|
3,096
|
|
Total operating
expenses
|
|
49,196
|
|
45,461
|
|
7,155
|
|
89,919
|
|
91,511
|
|
14,404
|
|
Income from
operations
|
|
16,695
|
|
22,612
|
|
3,561
|
|
27,571
|
|
44,980
|
|
7,081
|
|
Operating
margin
|
|
15.2%
|
|
19.7%
|
|
19.7%
|
|
13.7%
|
|
19.6%
|
|
19.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
299
|
|
266
|
|
42
|
|
422
|
|
513
|
|
81
|
|
Interest
income
|
|
2,139
|
|
3,583
|
|
564
|
|
4,049
|
|
6,571
|
|
1,034
|
|
Investment
income
|
|
629
|
|
786
|
|
124
|
|
629
|
|
1,460
|
|
230
|
|
Income before income
tax
|
|
19,762
|
|
27,247
|
|
4,291
|
|
32,671
|
|
53,524
|
|
8,426
|
|
Income tax
expense
|
|
(3,981)
|
|
(5,831)
|
|
(919)
|
|
(6,456)
|
|
(11,314)
|
|
(1,782)
|
|
Net income
|
|
15,781
|
|
21,416
|
|
3,372
|
|
26,215
|
|
42,210
|
|
6,644
|
|
Net income attributable
to the noncontrolling interests
|
|
(10,741)
|
|
(12,124)
|
|
(1,908)
|
|
(17,681)
|
|
(22,593)
|
|
(3,556)
|
|
Net income attributable
to ChinaEdu
|
|
5,040
|
|
9,292
|
|
1,464
|
|
8,534
|
|
19,617
|
|
3,088
|
|
Net margin
|
|
4.6%
|
|
8.1%
|
|
8.1%
|
|
4.2%
|
|
8.6%
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to ChinaEdu per ADS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.32
|
|
0.59
|
|
0.092
|
|
0.54
|
|
1.24
|
|
0.195
|
|
Diluted
|
|
0.30
|
|
0.55
|
|
0.086
|
|
0.50
|
|
1.16
|
|
0.184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
aggregate number of ADSs outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
15,853,838
|
|
15,852,495
|
|
15,852,495
|
|
15,881,875
|
|
15,799,250
|
|
15,799,250
|
|
Diluted
|
|
17,000,614
|
|
16,927,279
|
|
16,927,279
|
|
17,114,971
|
|
16,844,208
|
|
16,844,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Gross revenue are
detailed as follows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
93,028
|
|
96,268
|
|
15,153
|
|
168,837
|
|
193,586
|
|
30,471
|
|
Online tutoring
programs
|
|
7,414
|
|
6,511
|
|
1,025
|
|
13,264
|
|
12,668
|
|
1,994
|
|
Private primary and
secondary schools
|
|
11,905
|
|
13,837
|
|
2,178
|
|
23,157
|
|
27,395
|
|
4,312
|
|
International and elite
curriculum programs
|
|
2,980
|
|
2,903
|
|
457
|
|
5,931
|
|
5,502
|
|
866
|
|
ChinaEdu
Corporation
|
|
Unaudited Condensed
Consolidated Statements of Comprehensive
Income
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in thousands,
unaudited)
|
|
June 30,
2011
|
|
June 30,
2012
|
|
June 30,
2012
|
|
June 30,
2011
|
|
June 30,
2012
|
|
June 30,
2012
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Net income
|
|
15,781
|
|
21,416
|
|
3,372
|
|
26,215
|
|
42,210
|
|
6,644
|
|
Other comprehensive
income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(246)
|
|
120
|
|
19
|
|
86
|
|
127
|
|
20
|
|
Change in fair
value of available for sale investments
|
|
(14)
|
|
205
|
|
32
|
|
(177)
|
|
442
|
|
70
|
|
Comprehensive
income
|
|
15,521
|
|
21,741
|
|
3,423
|
|
26,124
|
|
42,779
|
|
6,734
|
|
Less: comprehensive
income attributable to the noncontrollng interest
|
|
12,665
|
|
11,106
|
|
1,748
|
|
20,653
|
|
21,552
|
|
3,392
|
|
Comprehensive income
attributable to Chinaedu
|
|
2,856
|
|
10,635
|
|
1,675
|
|
5,471
|
|
21,227
|
|
3,342
|
|
ChinaEdu
Corporation
|
|
Unaudited Condensed
Consolidated Statements of Cash Flow
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in thousands,
unaudited)
|
|
June 30, 2011
|
|
June 30, 2012
|
|
June 30, 2012
|
|
June 30, 2011
|
|
June 30,
2012
|
|
June 30,
2012
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
15,781
|
|
21,416
|
|
3,372
|
|
26,215
|
|
42,210
|
|
6,644
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
1,649
|
|
1,892
|
|
298
|
|
3,204
|
|
4,111
|
|
647
|
|
Depreciation and amortization of property and
equipment
|
|
5,748
|
|
6,304
|
|
992
|
|
11,535
|
|
12,608
|
|
1,985
|
|
Amortization of land use rights
|
|
152
|
|
152
|
|
24
|
|
304
|
|
304
|
|
48
|
|
Amortization of acquired intangible assets
|
|
1,017
|
|
1,036
|
|
163
|
|
2,034
|
|
2,021
|
|
318
|
|
Gain on sale of investment
|
|
(687)
|
|
(158)
|
|
(25)
|
|
(687)
|
|
(227)
|
|
(36)
|
|
Loss on sale of bonds
|
|
58
|
|
-
|
|
-
|
|
58
|
|
-
|
|
-
|
|
Loss on discontinued operations
|
|
-
|
|
-
|
|
-
|
|
16
|
|
-
|
|
-
|
|
Loss from disposal of property and equipment
|
|
17
|
|
16
|
|
3
|
|
82
|
|
828
|
|
130
|
|
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(22,492)
|
|
(24,932)
|
|
(3,924)
|
|
(2,696)
|
|
(16,093)
|
|
(2,533)
|
|
Inventory
|
|
360
|
|
-
|
|
-
|
|
358
|
|
-
|
|
-
|
|
Provision for Accounts Receivable
|
|
-
|
|
-
|
|
-
|
|
-
|
|
340
|
|
54
|
|
Prepaid expenses and other current assets
|
|
(1,576)
|
|
(377)
|
|
(60)
|
|
(2,065)
|
|
(2,590)
|
|
(409)
|
|
Amounts due from related parties
|
|
(96,759)
|
|
(65,981)
|
|
(10,386)
|
|
(23,964)
|
|
(64,143)
|
|
(10,097)
|
|
Rental deposits
|
|
(275)
|
|
(34)
|
|
(5)
|
|
(1,592)
|
|
437
|
|
69
|
|
Accounts payable
|
|
3,261
|
|
2,324
|
|
366
|
|
4,582
|
|
4,838
|
|
762
|
|
Deferred revenues
|
|
74,726
|
|
79,370
|
|
12,493
|
|
13,454
|
|
379
|
|
60
|
|
Accrued expenses and other current liabilities
|
|
17,173
|
|
3,167
|
|
499
|
|
10,221
|
|
9,141
|
|
1,439
|
|
Amounts due to related parties
|
|
8,368
|
|
(6,596)
|
|
(1,038)
|
|
(1,637)
|
|
3,356
|
|
528
|
|
Income tax payable
|
|
3,535
|
|
4,021
|
|
633
|
|
(7,724)
|
|
(6,581)
|
|
(1,036)
|
|
Other taxes payable
|
|
3,401
|
|
1,558
|
|
245
|
|
(3,573)
|
|
(3,402)
|
|
(535)
|
|
Deferred income taxes
|
|
(1,079)
|
|
608
|
|
96
|
|
(32)
|
|
2,964
|
|
467
|
|
Unrecognized tax benefit
|
|
662
|
|
586
|
|
92
|
|
1,258
|
|
1,226
|
|
193
|
|
Net cash provided by
(used in) operating activities
|
|
13,040
|
|
24,372
|
|
3,838
|
|
29,351
|
|
(8,273)
|
|
(1,302)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
(6,355)
|
|
(2,071)
|
|
(326)
|
|
(14,276)
|
|
(2,874)
|
|
(452)
|
|
Proceeds from discontinued operations
|
|
-
|
|
-
|
|
-
|
|
233
|
|
-
|
|
-
|
|
Deposits paid for acquisition of property and
equipment
|
|
(14,546)
|
|
-
|
|
-
|
|
(14,546)
|
|
-
|
|
-
|
|
Purchase of/ maturity of term deposits
|
|
37,401
|
|
(122,000)
|
|
(19,204)
|
|
(5,599)
|
|
(97,865)
|
|
(15,405)
|
|
Purchase of investments
|
|
(11,000)
|
|
(12,571)
|
|
(1,979)
|
|
(17,000)
|
|
(12,571)
|
|
(1,979)
|
|
Proceeds from the sale of investment
|
|
8,687
|
|
14,634
|
|
2,303
|
|
8,687
|
|
24,952
|
|
3,928
|
|
Proceeds from the sale of bonds
|
|
2,859
|
|
-
|
|
-
|
|
2,859
|
|
-
|
|
-
|
|
Proceeds of exclusive contractual right
|
|
-
|
|
(980)
|
|
(154)
|
|
-
|
|
(980)
|
|
(154)
|
|
Proceeds from disposal of property and equipment
|
|
1
|
|
1
|
|
-
|
|
1
|
|
1
|
|
-
|
|
Net cash
provided by (used in) investing activities
|
|
17,047
|
|
(122,987)
|
|
(19,360)
|
|
(39,641)
|
|
(89,337)
|
|
(14,062)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid to noncontrolling shareholders
|
|
-
|
|
(4,642)
|
|
(731)
|
|
(13,461)
|
|
(4,642)
|
|
(731)
|
|
Capital contributions by noncontrolling
shareholders
|
|
-
|
|
-
|
|
-
|
|
1,000
|
|
-
|
|
-
|
|
Capital contributions by shareholders
|
|
-
|
|
980
|
|
154
|
|
-
|
|
980
|
|
154
|
|
Proceeds from exercise of share options
|
|
94
|
|
2,777
|
|
437
|
|
374
|
|
3,722
|
|
586
|
|
Prepayment for shares repurchase
|
|
(130)
|
|
(886)
|
|
(139)
|
|
(130)
|
|
(886)
|
|
(139)
|
|
Repurchase and cancellation of ordinary shares
|
|
(5,723)
|
|
(385)
|
|
(61)
|
|
(5,723)
|
|
(385)
|
|
(61)
|
|
Repayment of loan from related party
|
|
(25,000)
|
|
-
|
|
-
|
|
(25,000)
|
|
-
|
|
-
|
|
Loan from related party
|
|
-
|
|
5,500
|
|
866
|
|
35,500
|
|
5,500
|
|
866
|
|
Net cash (used in)
provided by financing activities
|
|
(30,759)
|
|
3,344
|
|
526
|
|
(7,440)
|
|
4,289
|
|
675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(39)
|
|
(6)
|
|
(1)
|
|
112
|
|
(11)
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
|
173,586
|
|
275,691
|
|
43,395
|
|
190,493
|
|
273,746
|
|
43,089
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
|
172,875
|
|
180,414
|
|
28,398
|
|
172,875
|
|
180,414
|
|
28,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents
|
|
(711)
|
|
(95,277)
|
|
(14,997)
|
|
(17,618)
|
|
(93,332)
|
|
(14,691)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breakdown of cash and
cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in cash and cash equivalents
|
|
172,875
|
|
179,271
|
|
28,218
|
|
172,875
|
|
179,271
|
|
28,218
|
|
Included in assets held for sale
|
|
-
|
|
1,143
|
|
180
|
|
-
|
|
1,143
|
|
180
|
|
ChinaEdu
Corporation
|
|
Unaudited
reconciliations from income from operations to adjusted income from
operations (non-GAAP) and adjusted operating margin
(non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in thousands,
unaudited)
|
|
June 30, 2011
|
|
June 30, 2012
|
|
June 30, 2012
|
|
June 30, 2011
|
|
June 30,
2012
|
|
June 30,
2012
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
110,031
|
|
115,033
|
|
18,107
|
|
201,381
|
|
228,960
|
|
36,040
|
|
Income from
operations
|
|
16,695
|
|
22,612
|
|
3,561
|
|
27,571
|
|
44,980
|
|
7,081
|
|
Adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
1,649
|
|
1,892
|
|
298
|
|
3,204
|
|
4,111
|
|
647
|
|
Amortization of
intangible assets and land use rights
|
|
1,169
|
|
1,188
|
|
187
|
|
2,338
|
|
2,325
|
|
366
|
|
Adjusted income from
operations (non-GAAP)
|
|
19,513
|
|
25,692
|
|
4,046
|
|
33,113
|
|
51,416
|
|
8,094
|
|
Adjusted operating
margin (non-GAAP)
|
|
17.7%
|
|
22.3%
|
|
22.3%
|
|
16.4%
|
|
22.5%
|
|
22.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ChinaEdu
Corporation
|
|
Unaudited
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
|
|
Six Months
Ended
|
|
(in thousands,
unaudited)
|
|
June 30, 2011
|
|
June 30, 2012
|
|
June 30, 2012
|
|
June 30, 2011
|
|
June 30,
2012
|
|
June 30,
2012
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
110,031
|
|
115,033
|
|
18,107
|
|
201,381
|
|
228,960
|
|
36,040
|
|
Net income attributable
to ChinaEdu
|
|
5,040
|
|
9,292
|
|
1,464
|
|
8,534
|
|
19,617
|
|
3,088
|
|
Adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
1,649
|
|
1,892
|
|
298
|
|
3,204
|
|
4,111
|
|
647
|
|
Share-based
compensation attributable to the noncontrolling interest
|
|
(122)
|
|
(110)
|
|
(17)
|
|
(256)
|
|
(287)
|
|
(45)
|
|
Amortization of
intangible assets and land use rights
|
|
1,169
|
|
1,188
|
|
187
|
|
2,338
|
|
2,325
|
|
366
|
|
Adjusted net income
attributable to ChinaEdu (non-GAAP)
|
|
7,736
|
|
12,262
|
|
1,932
|
|
13,820
|
|
25,766
|
|
4,056
|
|
Adjusted net margin
(non-GAAP)
|
|
7.0%
|
|
10.7%
|
|
10.7%
|
|
6.9%
|
|
11.3%
|
|
11.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to ChinaEdu per ADS (non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.49
|
|
0.77
|
|
0.121
|
|
0.87
|
|
1.63
|
|
0.26
|
|
Diluted
|
|
0.46
|
|
0.72
|
|
0.114
|
|
0.81
|
|
1.53
|
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
aggregate number of ADSs outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
15,853,838
|
|
15,852,495
|
|
15,852,495
|
|
15,881,875
|
|
15,799,250
|
|
15,799,250
|
|
Diluted
|
|
17,000,614
|
|
16,927,279
|
|
16,927,279
|
|
17,114,971
|
|
16,844,208
|
|
16,844,208
|
SOURCE ChinaEdu Corporation