BEIJING, Sept. 11, 2013 /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, 2013.[1]
Second Quarter 2013 Highlights
- Total net revenue was $22.9
million for the second quarter of 2013, exceeding the
Company's guidance range for the quarter and representing a 21.9
percent increase from $18.7 million
in the corresponding period of 2012. Excluding non-recurring
revenue of $1.2 million, total net
revenue increased by 16.1% to $21.7
million
- Net revenue from online degree programs was $18.5 million, an increase of 23.6 percent from
$15.0 million in the corresponding
period of 2012.
- Net income attributable to ChinaEdu was $2.8 million, an increase of 84.3 percent from
$1.5 million in the corresponding
period of 2012.
- Adjusted net income attributable to ChinaEdu[2] was
$3.3 million, an increase of 66.8
percent from $2.0 million in the
corresponding period of 2012.
- Net income attributable to ChinaEdu per diluted ADS[3] was
$0.279, an increase of 210.9 percent
from $0.089 in the corresponding
period of 2012.
- Adjusted net income attributable to ChinaEdu per diluted ADS[4]
was $0.333, an increase of 183.3
percent from $0.118 in the
corresponding period of 2012.
- The number of revenue students[5] enrolled in online degree
programs during the Spring 2013 semester increased by 14.5 percent
year-over-year to approximately 221,000 students.
[1]
|
The reporting
currency of the Company is RMB, but for the convenience of the
reader, the amounts for the three months ended June 30, 2013 are
presented in U.S. dollars. Unless otherwise stated, all
translations from RMB to U.S. dollars were made at the rate of
RMB6.1374 to $1.00, the noon buying rate in effect on June 30, 2013
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, amortization of
intangible assets and land use rights, and intangible assets
impairment.
|
[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, 2013
and 2012 are revenue students in Spring 2013 and Spring 2012,
respectively.
|
Julia Huang, executive chairman
of ChinaEdu commented, "We are pleased with our financial
performance in the second quarter of 2013. We ended the Spring
Semester of our core online degree program with growth exceeding
our expectation. Looking forward into the second half of 2013, we
will continue to execute on plans laid out by our board of
directors and management team at the beginning of the year and
focus on continuously developing industry leading interactive
technology while remaining vigilant in regard to cost control to
ensure ongoing profitability. However, we maintain a conservative
outlook on the upcoming Fall enrollment and remain committed to
quality of students as well as programs."
Financial Results for the Second Quarter
Ended June 30,
2013
Net Revenue
Total net revenue for the second quarter of 2013 was
$22.9 million, a 21.9 percent
increase from $18.7 million in the
corresponding period of 2012. Excluding non-recurring revenue of
$1.2 million, the result of certain
technology services being provided to online degree programs, total
net revenue increased by 16.1% to $21.7
million.
Net revenue from online degree programs for the second quarter
of 2013 was $18.5 million, a 23.6
percent increase over $15.0 million
in the corresponding period of 2012. The increase in net revenue
from online degree programs was primarily due to organic growth in
revenue students enrolled in online degree programs, and continued
expansion and optimization of the Company's learning centers
network. Enrollment for 2013 Spring semester online degree programs
was approximately 221,000 revenue students, a 14.5 percent increase
from approximately 193,000 revenue students enrolled in the Spring
semester in 2012.
By the end of the second quarter of 2013, ChinaEdu's learning
centers network was providing recruiting services for 23
universities with 125 operational learning centers, of which 61
were proprietary centers[6] and 64 were contracted centers[7]. This
compares to 113 operational learning centers as of June 30, 2012, of which 55 were proprietary and
58 were contracted centers.
Net revenue from non-degree programs, including online tutoring
programs, private primary and secondary schools and international
curriculum programs in the second quarter of 2013 was $4.3 million, a 15.2 percent increase from
$3.7 million in the second quarter of
2012. Of that, approximately $0.4
million was attributable to enrollment growth and increased
tuition at our private school in Anqing.
[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 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.
|
Cost of Revenue
Total cost of revenue for the second quarter of 2013 was
$8.3 million, an increase of 8.9
percent, from $7.7 million in the
corresponding period of 2012.
Cost of revenue for online degree programs in the second quarter
of 2013 was $5.8 million, an increase
of 15.4 percent compared to $5.1
million in the corresponding period of 2012. The increase in
cost of revenue was primarily related to staff costs increasing by
$0.3 million and service station fees
increasing by $0.4 million.
Cost of revenue for non-degree programs in the second quarter of
2013 was $2.5 million, a decrease of
3.9 percent from $2.6 million in the
second quarter of 2012. The decrease in cost of revenue for
non-degree programs was primarily related to decreased leasing
costs associated with our international curriculum programs and
online tutoring programs.
Gross Profit and Gross Margin
Gross profit for the second quarter of 2013 was $14.5 million, compared to $11.1 million in the corresponding period of
2012. Gross margin increased to 63.5 percent, compared to 59.2
percent for the corresponding period of 2012.
Gross margin for online degree programs was 68.5 percent, an
increase from 66.3 percent in the second quarter of 2012. The
increase was primarily the result of the significant increase in
total net revenue as well as the continued effect of cost control
measures.
Gross margin for online tutoring programs increased
significantly to 67.0 percent from 57.7 percent in the second
quarter of 2012, mainly due to increased net revenue as well as
decreased lease and service costs.
Gross margin for private schools in the second quarter of 2013
increased to 30.4 percent, compared to 26.1 percent in the
corresponding period of 2012. The increase in gross margin was
primarily the result of increased net revenue at our Anqing
school.
Operating Expenses
Total operating expenses were $7.7
million in the second quarter of 2013, an increase of 4.5
percent from $7.4 million in the
corresponding period of 2012. As a percentage of net revenue, total
operating expenses decreased to 33.9 percent, compared to 39.5
percent in the corresponding period in 2012. The increase in total
operating expense was the result of the following:
- General and administrative expenses for the second quarter of
2013 were $3.9 million, a slight
decrease of 1.6 percent from $4.0
million in the corresponding period of 2012. As a percentage
of net revenue, general and administrative expenses decreased to
17.0 percent from 21.1 percent in the same period in 2012.
- Selling and marketing expenses were $1.9
million in the second quarter of 2013, an increase of 3.8
percent compared to $1.8 million in
the corresponding period of 2012. As a percentage of net revenue,
selling and marketing expenses decreased to 8.4 percent from 9.8
percent in the same period in 2012. The increase in selling and
marketing expense was primarily related to increased advertising
expenses associated with our online tutoring programs and travel
expenses associated with our online degree programs.
- Research and development expenses for the second quarter of
2013 were $1.9 million, an increase
of 20.2 percent compared to $1.6
million in the corresponding period of 2012. As a percentage
of net revenue, the research and development expense decreased
slightly to 8.5 percent in the second quarter of 2013, compared to
8.6 percent in the corresponding period of 2012. The increase in
the research and development expenses was primarily the result of
increased staff costs associated with the company's investment in
technology upgrades.
Income from Operations
Income from operations in the second quarter of 2013 was
$6.8 million, an increase of 83.9
percent compared to $3.7 million in
the corresponding period of 2012. Operating margin increased to
29.7 percent in the second quarter of 2013, compared to 19.7
percent in the corresponding period of 2012.
Adjusted income from operations, a non-GAAP measure defined as
income from operations excluding share-based compensation,
amortization of intangible assets, land use rights and intangible
assets impairment, was $7.3 million
in the second quarter of 2013, an increase of 74.8 percent compared
to $4.2 million in the corresponding
period of 2012.
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 2013 increased to 32.0 percent,
compared to 22.3 percent in the corresponding period of 2012.
Interest expense
Interest expense for the second quarter of 2013 was $0.5 million, which was primarily related to
loans with The Bank of East Asia,
Limited.
Income Tax Expense
In the second quarter of 2013, the income tax expense was
$1.6 million and the effective income
tax rate was 23.9 percent.
Net Income Attributable to ChinaEdu
Net income attributable to ChinaEdu, which is net income,
excluding net income attributable to non-controlling interests, was
$2.8 million in the second quarter of
2013, representing an increase of 84.3 percent from $1.5 million in the corresponding period of 2012.
The increase was primarily the result of a significant increase in
gross profit, as well as effective cost and expense control.
Net income attributable to ChinaEdu per basic and diluted ADS
was $0.310 and $0.279, respectively, for the second quarter of
2013, compared to $0.096 and
$0.089, respectively, for the
corresponding period of 2012. The increase was the result of the
significant increase in net income attributable to ChinaEdu and a
significant decrease of the number of diluted ADS after a share
repurchase of 21,460,293 ordinary shares in aggregate between
January and June 2013.
Adjusted net income attributable to ChinaEdu (non-GAAP) was
$3.3 million in the second quarter of
2013, compared to $2.0 million in the
corresponding period of 2012. Adjusted net margin, a non-GAAP
measure defined as the ratio of adjusted net income attributable to
ChinaEdu (non-GAAP) over net revenue, was 14.6 percent in the
second quarter of 2013, compared to 10.7 percent in the
corresponding period of 2012.
Adjusted net income attributable to ChinaEdu per basic and
diluted ADS (non-GAAP) was $0.370 and
$0.333 respectively, for the second
quarter of 2013, compared to $0.126
and $0.118, respectively, for the
corresponding period of 2012.
Deferred Revenue
As of June 30, 2013, deferred
revenue was $24.3 million, consisting
of current deferred revenue in the amount of $22.9 million and non-current deferred revenue in
the amount of $1.4 million.
In general, Spring semester tuition for online degree programs
is received during the second quarter but is recognized both in the
second quarter and the third quarter of the fiscal year.
Private school revenue is received in September, but amortized
over 6 or 12 months while online tutoring program revenue is mostly
received at program enrollment and is amortized within 12
months.
Cash and Cash Equivalents and Term Deposits
As of June 30, 2013, the Company
reported cash and cash equivalents and term deposits of
$57.0 million, which primarily
consisted of cash and cash equivalents, 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 $64.2 million as of June
30, 2013 compared to $49.2
million as of December 31,
2012.
2013 Year-to-Date Financial Results
Net Revenue
For the six months ended June 30,
2013, total net revenue was $42.3
million, representing an increase of 13.4 percent over
$37.3 million in the corresponding
period of 2012. Net revenue from online degree programs for the
first half of 2013 was $33.9 million,
representing a 13.1 percent increase from $30.0 million in the corresponding period of
2012. Net revenue from non-online degree programs for the first
half of 2013 was $8.4 million,
compared to $7.3 million in 2012, a
14.7 percent increase. Growth in total net revenue in the first
half of 2013 was the result of strong enrollment in online degree
programs in the Fall semester of 2012 as well as the Spring
semester of 2013. Net revenue at the Anqing School increased by
$0.7 million or 21.8% compared to the
corresponding period in 2012, while the Company saw a continued
decrease in revenue contributed by international and elite
curriculum programs.
Cost of Revenue
For the six months ended June 30,
2013, total cost of revenue was $15.9
million, an increase from $15.1
million in the corresponding period of 2012. Cost of revenue
for online degree programs in the first half of 2013 was
$11.1 million, an increase of 10.8
percent compared to $10.0 million in
the corresponding period of 2012. The increase in cost of revenue
in the first half of 2013 was primarily the result of cost
increases associated with a larger headcount and the expansion of
the Company's learning centers network.
Cost of revenue for non-online degree programs in the first half
of 2013 was $4.8 million, a decrease
of 4.6 percent compared to $5.1
million in the corresponding period of 2012. The decrease in
cost of revenue was primarily related to the decrease in leasing
costs and service costs associated with our 101 online tutoring
programs, a decrease in leasing costs as well as a decrease in
depreciation and amortization costs associated with international
curriculum programs.
Gross Profit
Gross profit for the six months ended June 30, 2013 was $26.4
million, an increase of 18.7 percent compared with
$22.2 million for the corresponding
period in 2012.
Income from Operations
Income from operations was $11.1
million for the six months ended June
30, 2013, representing an increase of 51.3 percent from
$7.3 million for the corresponding
period of 2012. Operating margin was 26.2 percent for the six
months ended June 30, 2013 compared
to 19.6 percent for the corresponding period of 2012.
Adjusted income from operations (non-GAAP) was $12.2 million for the first half of 2013,
representing an increase of 45.4 percent, compared to $8.4 million in the corresponding period of 2012.
Adjusted operating margin (non-GAAP) for the six months ended
June 30, 2013 was 28.8 percent,
compared to 22.5 percent for the corresponding period in 2012.
Interest expense
Interest expense for the first half of 2013 was $0.8 million, which was primarily related to
loans with The Bank of East Asia,
Limited.
Income Tax Expense
Income tax expense for the first half of 2013 was $2.6 million, as compared with $1.8 million for the corresponding period of in
2012.
Net Income Attributable to Non-controlling
Interests
Net income attributable to non-controlling interests was
$4.1 million in first half of 2013,
an increase of 10.9 percent compared to $3.7
million in the first half of 2012. The increase was
primarily attributable to the non-controlling interest impact
related to the increase in net income from online degree programs
in the first half of 2013.
Net Income attributable to ChinaEdu
Net income attributable to ChinaEdu was $4.7 million for the six months ended
June 30, 2013. This represents an
increase of 46.0 percent from $3.2
million for the corresponding period of 2012. Net margin was
11.0 percent for the six months ended June
30, 2013, compared to 8.6 percent for the corresponding
period of 2012.
Adjusted net margin was 13.6 percent for the six months ended
June 30, 2013, compared to 11.3
percent for the corresponding period of 2012.The increase was
primarily due to increased net income in the first half of
2013.
Third Quarter 2013
Guidance
ChinaEdu management expects total net revenue in the third
quarter of 2013 to range from RMB132 million
to RMB137 million or $21.5 million to
$22.3 million, representing a 6 percent to 10 percent
increase from RMB124 million or
$20.2 million compared to the
corresponding period of 2012.
Conference Call
ChinaEdu's management will hold an earnings conference call at
8:00 a.m. U.S. Eastern Time on
September 12, 2013 (8:00 p.m. Beijing/Hong Kong Time on September 12, 2013).
Dial-in details for the earnings conference call are as
follows:
China
|
400 120
0539
|
Hong Kong
|
800 905
927
|
United Kingdom
|
0800 015
9725
|
United States
|
1 855 298
3404
|
New York City (Toll)
|
1 631 514
2526
|
Conference
Title:
|
ChinaEdu Q2 2013
Earnings Conference Call
|
Conference
Passcode:
|
ChinaEdu
|
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 18,
2013.
Dial-in numbers for the replay are as follows:
China
|
4001842240
|
Hong Kong
|
800 966
697
|
United
Kingdom
|
0800 169
7301
|
United
States
|
1 866 846
0868
|
Conference
Title:
|
ChinaEdu Q2 2013
Earnings Conference Call
|
Replay
Passcode:
|
2286813
|
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, amortization of
intangible assets and land use rights and intangible assets
impairment. 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 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 provides technical, recruiting and other services to 27
universities with online degree programs and provides services and
support to 11 additional universities that are awaiting regulatory
approval to launch their online programs. Of these 38 universities,
13 of them have entered into collaborative alliances with ChinaEdu,
ranging from 15 to 50 years in length. Eight of them have entered
into technology service agreements, ranging from 3 to 20 years in
length. ChinaEdu also performs recruiting services through its
nationwide learning center network for 23 universities, including 6
with which the Company has either established collaborative
alliances or entered into technology service agreements.
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, 2012, 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
Simon Mei
Chief Financial Officer
ChinaEdu Corporation
Phone: +86 (10) 84187301
E-mail: simon@chinaedu.net
ChinaEdu
Corporation
|
Unaudited
Condensed Consolidated Balance Sheets
|
(in thousands,
unaudited)
|
|
|
December 31,
2012
|
June 30,
2013
|
June 30,
2013
|
|
|
RMB
|
RMB
|
US$
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
385,922
|
230,341
|
37,531
|
|
Term
deposits
|
92,028
|
119,746
|
19,511
|
|
Short-term
investments
|
23,575
|
9,310
|
1,517
|
|
Accounts
receivable
|
34,917
|
38,465
|
6,267
|
|
Prepaid expenses and
other current assets
|
23,455
|
26,673
|
4,346
|
|
Amounts due from
related parties-current
|
260,184
|
352,077
|
57,366
|
|
Deferred tax
assets-current
|
9,571
|
4,029
|
656
|
Total current
assets
|
829,652
|
780,641
|
127,194
|
|
Term deposits -non
current
|
-
|
95,850
|
15,617
|
|
Property and
equipment, net
|
238,563
|
233,113
|
37,982
|
|
Amounts due from a
related party-non-current
|
41,979
|
41,979
|
6,840
|
|
Land use
rights
|
26,049
|
25,745
|
4,195
|
|
Deposits paid for
acquisition of property and equipment
|
3,873
|
3,873
|
631
|
|
Deferred tax
assets-non-current
|
2,085
|
1,977
|
322
|
|
Long-term
investments
|
801
|
824
|
134
|
|
Rental
deposits
|
1,497
|
1,384
|
226
|
|
Acquired intangible
assets, net
|
54,499
|
52,906
|
8,620
|
|
Goodwill
|
43,255
|
43,255
|
7,048
|
Total
assets
|
1,242,253
|
1,281,547
|
208,809
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
loan
|
-
|
67,395
|
10,981
|
|
Accounts payable
(including accounts payable of the consolidated VIE without
recourse to the
Group of RMB2,007 and RMB8,120 as of December 31,
2012 and June 30, 2013, respectively)
|
2,401
|
8,493
|
1,384
|
|
Deferred
revenues-current (including deferred revenues of
the consolidated VIE without recourse to
the Group of RMB23,518 and RMB24,376 as of
December 31, 2012 and June 30, 2013, respectively)
|
134,175
|
140,349
|
22,868
|
|
Accrued expenses and
other current liabilities (including accrued expenses and
other current
liabilities of the consolidated VIE without
recourse to the Group of RMB22,113 and RMB24,523
as of December 31, 2012 and June 30,
2013, respectively)
|
113,558
|
111,423
|
18,155
|
|
Amounts due to
related parties-current (including amounts due to related
parties of the consolidated
VIE without recourse to the Group of RMB1,926 and RMB1,865
as of December 31, 2012 and June
30, 2013, respectively)
|
35,507
|
54,967
|
8,956
|
|
Income taxes payable
(including income taxes payable of the consolidated VIE
without recourse to the
Group of RMB10,004 and RMB9,749 as of December 31, 2012
and June 30, 2013, respectively)
|
49,294
|
41,117
|
6,699
|
|
Other taxes payable
(including other taxes payable of the consolidated VIE without
recourse to the
Group of RMB4,442 and RMB4,532 as of December 31,
2012 and June 30, 2013, respectively)
|
27,294
|
29,404
|
4,791
|
Total current
liabilities
|
362,229
|
453,148
|
73,834
|
|
Long-term
loan
|
-
|
156,735
|
25,538
|
|
Deferred
revenues-non-current (including deferred revenues of the
consolidated VIE without recourse
to the Group of RMB29 and RMB29 as of December 31,
2012 and June 30, 2013, respectively)
|
10,654
|
8,564
|
1,395
|
|
Deferred tax
liabilities-non-current (including deferred tax liabilities of
the consolidated VIE without
recourse to the Group of RMB978 and RMB958 as of
December 31, 2012 and June 30, 2013, respectively)
|
13,473
|
13,369
|
2,178
|
|
Unrecognized tax
benefit (including unrecognized tax benefit of the
consolidated VIE without
recourse to the Group of RMB3,555 and RMB4,187 as of
December 31, 2012 and June 30, 2013, respectively)
|
8,795
|
9,986
|
1,627
|
Total
liabilities
|
395,151
|
641,802
|
104,572
|
|
|
|
|
|
Total ChinaEdu
Corporation shareholders' equity
|
650,191
|
430,086
|
70,076
|
|
Noncontrolling
interests
|
196,911
|
209,659
|
34,161
|
Total
equity
|
847,102
|
639,745
|
104,237
|
Total liabilities
and equity
|
1,242,253
|
1,281,547
|
208,809
|
ChinaEdu
Corporation
|
Unaudited
Condensed Consolidated Statements of
Operations
|
(in
thousands,except for percentage, share, and per share
information)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2012
|
June 30,
2013
|
|
June 30,
2013
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
|
RMB
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Revenue
*
|
|
119,519
|
143,591
|
|
23,396
|
|
239,151
|
|
265,764
|
|
43,303
|
|
|
|
|
|
|
|
|
|
|
|
|
Business
Tax
|
|
4,486
|
3,353
|
|
546
|
|
10,191
|
|
6,067
|
|
990
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
92,089
|
113,816
|
|
18,545
|
|
184,016
|
|
208,131
|
|
33,912
|
Online tutoring
programs
|
|
6,389
|
7,647
|
|
1,246
|
|
12,398
|
|
14,378
|
|
2,343
|
Private primary and
secondary schools
|
|
13,815
|
16,574
|
|
2,700
|
|
27,351
|
|
32,429
|
|
5,283
|
International
curriculum programs
|
|
2,740
|
2,201
|
|
359
|
|
5,195
|
|
4,759
|
|
775
|
Total net
revenue
|
|
115,033
|
140,238
|
|
22,850
|
|
228,960
|
|
259,697
|
|
42,313
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
31,035
|
35,828
|
|
5,838
|
|
61,354
|
|
67,990
|
|
11,078
|
Online tutoring
programs
|
|
2,700
|
2,523
|
|
411
|
|
5,421
|
|
4,923
|
|
802
|
Private primary and
secondary schools
|
|
10,205
|
11,538
|
|
1,880
|
|
20,011
|
|
22,202
|
|
3,617
|
International
curriculum programs
|
|
3,020
|
1,241
|
|
202
|
|
5,683
|
|
2,550
|
|
415
|
Total cost of
revenue
|
|
46,960
|
51,130
|
|
8,331
|
|
92,469
|
|
97,665
|
|
15,912
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
61,054
|
77,988
|
|
12,707
|
|
122,662
|
|
140,141
|
|
22,834
|
Online tutoring
programs
|
|
3,689
|
5,124
|
|
835
|
|
6,977
|
|
9,455
|
|
1,541
|
Private primary and
secondary schools
|
|
3,610
|
5,036
|
|
820
|
|
7,340
|
|
10,227
|
|
1,666
|
International
curriculum programs
|
|
(280)
|
960
|
|
157
|
|
(488)
|
|
2,209
|
|
360
|
Total gross
profit
|
|
68,073
|
89,108
|
|
14,519
|
|
136,491
|
|
162,032
|
|
26,401
|
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
66.3%
|
68.5%
|
|
68.5%
|
|
66.7%
|
|
67.3%
|
|
67.3%
|
Online tutoring
programs
|
|
57.7%
|
67.0%
|
|
67.0%
|
|
56.3%
|
|
65.8%
|
|
65.8%
|
Private primary and
secondary schools
|
|
26.1%
|
30.4%
|
|
30.4%
|
|
26.8%
|
|
31.5%
|
|
31.5%
|
International
curriculum programs
|
|
(10.2%)
|
43.6%
|
|
43.6%
|
|
(9.4%)
|
|
46.4%
|
|
46.4%
|
Gross
margin
|
|
59.2%
|
63.5%
|
|
63.5%
|
|
59.6%
|
|
62.4%
|
|
62.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
24,251
|
23,875
|
|
3,890
|
|
50,061
|
|
49,102
|
|
8,000
|
Selling and
marketing
|
|
11,316
|
11,746
|
|
1,914
|
|
21,779
|
|
21,957
|
|
3,578
|
Research and
development
|
|
9,894
|
11,894
|
|
1,938
|
|
19,671
|
|
22,940
|
|
3,738
|
Total operating
expenses
|
|
45,461
|
47,515
|
|
7,742
|
|
91,511
|
|
93,999
|
|
15,316
|
Income from
operations
|
|
22,612
|
41,593
|
|
6,777
|
|
44,980
|
|
68,033
|
|
11,085
|
Operating
margin
|
|
19.7%
|
29.7%
|
|
29.7%
|
|
19.6%
|
|
26.2%
|
|
26.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
3,583
|
3,685
|
|
600
|
|
6,571
|
|
6,591
|
|
1,074
|
Interest
expense
|
|
-
|
(2,912)
|
|
(474)
|
|
-
|
|
(4,679)
|
|
(762)
|
Investment
income
|
|
786
|
-
|
|
-
|
|
1,460
|
|
368
|
|
60
|
Other
income
|
|
266
|
440
|
|
72
|
|
513
|
|
863
|
|
141
|
Foreign exchange
loss
|
|
-
|
(1,887)
|
|
(307)
|
|
-
|
|
(2,136)
|
|
(348)
|
Income before income
tax and equity method investments
|
|
27,247
|
40,919
|
|
6,668
|
|
53,524
|
|
69,040
|
|
11,250
|
Income tax
expense
|
|
(5,831)
|
(9,890)
|
|
(1,611)
|
|
(11,314)
|
|
(15,843)
|
|
(2,581)
|
Net income before
income from equity method investments
|
|
21,416
|
31,029
|
|
5,057
|
|
42,210
|
|
53,197
|
|
8,669
|
Income from equity
method investments, net of taxes
|
|
-
|
546
|
|
89
|
|
-
|
|
503
|
|
82
|
Net income
|
|
21,416
|
31,575
|
|
5,146
|
|
42,210
|
|
53,700
|
|
8,751
|
Net income
attributable to the noncontrolling interests
|
|
(12,124)
|
(14,447)
|
|
(2,354)
|
|
(22,593)
|
|
(25,053)
|
|
(4,082)
|
Net income
attributable to ChinaEdu
|
|
9,292
|
17,128
|
|
2,792
|
|
19,617
|
|
28,647
|
|
4,669
|
Net margin
|
|
8.1%
|
12.2%
|
|
12.2%
|
|
8.6%
|
|
11.0%
|
|
11.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to ChinaEdu per ADS:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.59
|
1.90
|
|
0.310
|
|
1.24
|
|
2.75
|
|
0.448
|
Diluted
|
|
0.55
|
1.71
|
|
0.279
|
|
1.16
|
|
2.50
|
|
0.408
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
aggregate number of ADSs outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
15,852,495
|
9,009,390
|
|
9,009,390
|
|
15,799,250
|
|
10,420,408
|
|
10,420,408
|
Diluted
|
|
16,927,279
|
10,006,833
|
|
10,006,833
|
|
16,844,208
|
|
11,441,855
|
|
11,441,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Gross revenue are
detailed as follows
|
|
|
|
|
|
|
|
|
|
|
|
Online degree
programs
|
|
96,268
|
116,964
|
|
19,058
|
|
193,586
|
|
213,759
|
|
34,829
|
Online tutoring
programs
|
|
6,511
|
7,776
|
|
1,267
|
|
12,668
|
|
14,648
|
|
2,387
|
Private primary and
secondary schools
|
|
13,837
|
16,608
|
|
2,706
|
|
27,395
|
|
32,490
|
|
5,294
|
International
curriculum programs
|
|
2,903
|
2,243
|
|
365
|
|
5,502
|
|
4,867
|
|
793
|
ChinaEdu
Corporation
|
Unaudited
Condensed Consolidated Statements of Cash Flow
|
(in thousands,
unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
21,416
|
|
31,575
|
|
5,146
|
|
42,210
|
|
53,700
|
|
8,751
|
Adjustments to
reconcile net income to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
1,892
|
|
2,383
|
|
388
|
|
4,111
|
|
4,846
|
|
790
|
Depreciation and amortization of property and
equipment
|
|
6,304
|
|
6,383
|
|
1,040
|
|
12,608
|
|
12,756
|
|
2,078
|
Amortization of land use rights
|
|
152
|
|
152
|
|
25
|
|
304
|
|
304
|
|
50
|
Amortization of acquired intangible assets
|
|
1,036
|
|
794
|
|
129
|
|
2,021
|
|
1,593
|
|
260
|
Investment income
|
|
(158)
|
|
-
|
|
-
|
|
(227)
|
|
(368)
|
|
(60)
|
Amortization of debt discount
|
|
-
|
|
353
|
|
58
|
|
-
|
|
587
|
|
96
|
Loss from equity method investment
|
|
-
|
|
(66)
|
|
(11)
|
|
-
|
|
(23)
|
|
(4)
|
Foreign exchange loss
|
|
-
|
|
1,887
|
|
307
|
|
-
|
|
2,136
|
|
348
|
Provision for accounts receivables
|
|
-
|
|
117
|
|
19
|
|
340
|
|
261
|
|
43
|
Loss(gain) from disposal of property and
equipment
|
|
16
|
|
(53)
|
|
(9)
|
|
828
|
|
(44)
|
|
(7)
|
Changes in
assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(24,932)
|
|
(22,373)
|
|
(3,645)
|
|
(16,093)
|
|
(3,809)
|
|
(621)
|
Prepaid expenses and other current assets
|
|
(377)
|
|
(7,222)
|
|
(1,176)
|
|
(2,590)
|
|
(3,078)
|
|
(502)
|
Amounts due from related parties
|
|
(65,981)
|
|
(98,031)
|
|
(15,972)
|
|
(64,143)
|
|
(91,935)
|
|
(14,978)
|
Rental deposits
|
|
(34)
|
|
(18)
|
|
(3)
|
|
437
|
|
113
|
|
18
|
Accounts payable
|
|
2,324
|
|
2,813
|
|
458
|
|
4,838
|
|
6,092
|
|
993
|
Deferred revenues
|
|
79,370
|
|
82,937
|
|
13,513
|
|
379
|
|
4,116
|
|
671
|
Accrued expenses and other current liabilities
|
|
3,167
|
|
(2,621)
|
|
(427)
|
|
9,141
|
|
(2,253)
|
|
(368)
|
Amounts due to related parties
|
|
(6,596)
|
|
(7,219)
|
|
(1,176)
|
|
3,356
|
|
(21,672)
|
|
(3,531)
|
Income taxes payable
|
|
4,021
|
|
8,696
|
|
1,417
|
|
(6,581)
|
|
(8,177)
|
|
(1,332)
|
Other taxes payable
|
|
1,558
|
|
10,741
|
|
1,750
|
|
(3,402)
|
|
2,110
|
|
344
|
Deferred income taxes
|
|
608
|
|
(474)
|
|
(77)
|
|
2,964
|
|
5,546
|
|
904
|
Unrecognized tax benefit
|
|
586
|
|
603
|
|
98
|
|
1,226
|
|
1,191
|
|
194
|
Net cash provided
by (used in) operating activities
|
|
24,372
|
|
11,357
|
|
1,852
|
|
(8,273)
|
|
(36,008)
|
|
(5,863)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
(2,071)
|
|
(5,438)
|
|
(886)
|
|
(2,874)
|
|
(7,399)
|
|
(1,206)
|
(Purchase) maturity of term deposits
|
|
(122,000)
|
|
4,500
|
|
733
|
|
(97,865)
|
|
(123,619)
|
|
(20,142)
|
Purchase of investments
|
|
(12,571)
|
|
-
|
|
-
|
|
(12,571)
|
|
-
|
|
-
|
Proceeds from sale of investments
|
|
14,634
|
|
-
|
|
-
|
|
24,952
|
|
5,482
|
|
893
|
Proceeds from disposal of exclusive partnership with
universities
|
|
(980)
|
|
-
|
|
-
|
|
(980)
|
|
-
|
|
-
|
Proceeds from disposal of property and equipment
|
|
1
|
|
138
|
|
22
|
|
1
|
|
138
|
|
22
|
Proceeds from disposal of equity method
investments
|
|
-
|
|
8,000
|
|
1,303
|
|
-
|
|
8,000
|
|
1,303
|
Net cash (used in)
provided by investing activities
|
|
(122,987)
|
|
7,200
|
|
1,172
|
|
(89,337)
|
|
(117,398)
|
|
(19,130)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid to noncontrolling shareholders
|
|
(4,642)
|
|
-
|
|
-
|
|
(4,642)
|
|
-
|
|
-
|
Capital contributions by noncontrolling
shareholders
|
|
980
|
|
-
|
|
-
|
|
980
|
|
-
|
|
-
|
Proceeds from exercise of share options
|
|
2,777
|
|
266
|
|
43
|
|
3,722
|
|
266
|
|
43
|
Financing cost in connection with loans
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(3,751)
|
|
(611)
|
Prepayment for shares repurchase
|
|
(886)
|
|
-
|
|
-
|
|
(886)
|
|
-
|
|
-
|
Proceeds from borrowings of short-term debt
|
|
-
|
|
-
|
|
-
|
|
-
|
|
68,410
|
|
11,146
|
Proceeds from borrowings of long-term debt
|
|
-
|
|
-
|
|
-
|
|
-
|
|
159,750
|
|
26,029
|
Repurchase and cancellation of ordinary shares
|
|
(385)
|
|
(21,929)
|
|
(3,573)
|
|
(385)
|
|
(253,287)
|
|
(41,269)
|
Loan from related party
|
|
5,500
|
|
26,000
|
|
4,236
|
|
5,500
|
|
26,000
|
|
4,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
|
3,344
|
|
4,337
|
|
706
|
|
4,289
|
|
(2,612)
|
|
(426)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(6)
|
|
(1)
|
|
-
|
|
(11)
|
|
437
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
275,691
|
|
207,448
|
|
33,801
|
|
273,746
|
|
385,922
|
|
62,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
180,414
|
|
230,341
|
|
37,531
|
|
180,414
|
|
230,341
|
|
37,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(decrease) increase in cash and cash equivalents
|
|
(95,277)
|
|
22,893
|
|
3,730
|
|
(93,332)
|
|
(155,581)
|
|
(25,349)
|
ChinaEdu
Corporation
|
Unaudited
Condensed Consolidated Statements of Comprehensive
Income
|
(in thousands,
unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Net income
|
|
21,416
|
|
31,575
|
|
5,146
|
|
42,210
|
|
53,700
|
|
8,751
|
Other comprehensive
income, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
120
|
|
2,581
|
|
421
|
|
127
|
|
3,330
|
|
543
|
Change in fair
value of available for sale investments
|
|
205
|
|
(665)
|
|
(108)
|
|
442
|
|
(1,002)
|
|
(163)
|
Comprehensive
income
|
|
21,741
|
|
33,491
|
|
5,459
|
|
42,779
|
|
56,028
|
|
9,131
|
Less: comprehensive
income attributable to the noncontrollng interest
|
|
11,106
|
|
16,908
|
|
2,755
|
|
21,552
|
|
28,081
|
|
4,575
|
Comprehensive
income attributable to ChinaEdu
|
|
10,635
|
|
16,583
|
|
2,704
|
|
21,227
|
|
27,947
|
|
4,556
|
ChinaEdu
Corporation
|
Unaudited
reconciliations from income from operations to adjusted income from
operations (non-GAAP) and adjusted operating margin
(non-GAAP)
|
(in thousands,
unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
115,033
|
|
140,238
|
|
22,850
|
|
228,960
|
|
259,697
|
|
42,313
|
Income from
operations
|
|
22,612
|
|
41,593
|
|
6,777
|
|
44,980
|
|
68,033
|
|
11,085
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
1,892
|
|
2,383
|
|
388
|
|
4,111
|
|
4,846
|
|
790
|
Amortization
of intangible assets and land use rights
|
|
1,188
|
|
946
|
|
154
|
|
2,325
|
|
1,897
|
|
309
|
Adjusted income
from operations (non-GAAP)
|
|
25,692
|
|
44,922
|
|
7,319
|
|
51,416
|
|
74,776
|
|
12,184
|
Adjusted operating
margin (non-GAAP)
|
|
22.3%
|
|
32.0%
|
|
32.0%
|
|
22.5%
|
|
28.8%
|
|
28.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
(in thousands,
unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2013
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
115,033
|
|
140,238
|
|
22,850
|
|
228,960
|
|
259,697
|
|
42,313
|
Net income(loss)
attributable to ChinaEdu
|
|
9,292
|
|
17,128
|
|
2,792
|
|
19,617
|
|
28,647
|
|
4,668
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
1,892
|
|
2,383
|
|
388
|
|
4,111
|
|
4,846
|
|
790
|
Share-based
compensation attributable to the noncontrolling interest
|
|
(110)
|
|
-
|
|
-
|
|
(287)
|
|
-
|
|
-
|
Amortization
of intangible assets and land use rights
|
|
1,188
|
|
946
|
|
154
|
|
2,325
|
|
1,897
|
|
309
|
Adjusted net
income attributable to ChinaEdu (non-GAAP)
|
|
12,262
|
|
20,457
|
|
3,334
|
|
25,766
|
|
35,390
|
|
5,767
|
Adjusted net margin
(non-GAAP)
|
|
10.7%
|
|
14.6%
|
|
14.6%
|
|
11.3%
|
|
13.6%
|
|
13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to ChinaEdu per ADS (non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.77
|
|
2.27
|
|
0.370
|
|
1.63
|
|
3.40
|
|
0.553
|
Diluted
|
|
0.72
|
|
2.04
|
|
0.333
|
|
1.53
|
|
3.09
|
|
0.504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
aggregate number of ADSs outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
15,852,495
|
|
9,009,390
|
|
9,009,390
|
|
15,799,250
|
|
10,420,408
|
|
10,420,408
|
Diluted
|
|
16,927,279
|
|
10,006,833
|
|
10,006,833
|
|
16,844,208
|
|
11,441,855
|
|
11,441,855
|
SOURCE ChinaEdu Corporation