Indicate by check mark whether
the registrant files or will file annual reports under cover Form
20-F
or Form
40-F.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule
12g3-2(b)
under the Securities Exchange Act of 1934.
If
Yes is marked, indicate below the file number assigned to the registrant in connection with Rule
12g3-2(b):
82-
N/A
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
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China Distance Education Holdings Limited
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By:
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/s/ Mark Marostica
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Name:
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Mark Marostica
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Title:
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Co-Chief
Financial Officer
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By:
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/s/ Philip Chan
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Name:
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Philip Chan
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Title:
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Co-Chief
Financial Officer
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Date: November 29, 2017
3
Exhibit 99.1
China Distance Education Holdings Limited Reports Financial Results for Fourth Quarter and Fiscal Year
2017
- Fourth Quarter 2017 Net Revenue Up 9.1% Year-Over-Year to $41.7 Million,
At
High-End
of Guidance Range -
- Fourth Quarter 2017 Cash Receipts from Online Course Registration Up 22.2% Year-Over-Year to $22.3 Million -
- Declares Annual Special Cash Dividend of $0.1125 per Ordinary Share or $0.45 per ADS -
BEIJING
November 28, 2017 China Distance Education Holdings Limited (NYSE: DL) (CDEL, or the Company), a leading
provider of online education and value-added services for professionals and corporate clients in China, today announced unaudited financial results for the fourth quarter and fiscal year 2017 ended September 30, 2017.
Fourth Quarter Fiscal 2017 Financial and Operational Highlights
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Total course enrollments were 830,000, a decrease of 17.8% from the fourth quarter of fiscal 2016.
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Cash receipts from online course registration were $22.3 million, a 22.2% increase from the fourth quarter of fiscal 2016.
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Net revenue increased by 9.1% to $41.7 million from $38.2 million in the prior year period.
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Gross profit was $25.2 million, flat compared with the prior year period.
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Non-GAAP
1
gross profit was $25.2 million, flat compared with the prior year period.
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Gross margin was 60.3%, compared with 65.8% in the prior year period.
Non-GAAP
1
gross margin was 60.4%, compared with 65.9% in
the prior year period.
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Operating income decreased by 27.7% to $10.5 million from $14.6 million in the prior year period.
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Non-GAAP
1
operating income decreased by 25.9% to $11.2 million from $15.1 million in the prior year period.
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Net income decreased by 52.0% to $5.9 million from $12.2 million in the prior year period.
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Non-GAAP
1
net income decreased by 43.5% to $7.2 million from $12.7 million in the prior year period.
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Basic and diluted net income per American Depositary Share (ADS) were $0.178 and $0.177, respectively, compared with basic and diluted net income per ADS of $0.370 and $0.369, respectively, for the fourth
quarter of fiscal 2016. Each ADS represents four ordinary shares.
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1
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For more information about the
non-GAAP
financial measures contained in this press release, please see Use of
Non-GAAP
Financial
Measures below.
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4
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Basic and diluted
non-GAAP
1
net income per ADS were $0.219 and $0.218, respectively, compared with basic and diluted
non-GAAP
1
net income per ADS of $0.387 and $0.385, respectively, for the fourth quarter of fiscal 2016.
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Cash flow from operations decreased by 49.8% to $2.9 million from $5.8 million in the fourth quarter of fiscal 2016.
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Completion of acquisition of 40% equity interest in Beijing Ruida in September 2017.
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Fiscal Year 2017
Financial and Operational Highlights
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Total course enrollments were 3.4 million, a decrease of 8.5% from fiscal year 2016.
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Cash receipts from online course registration were $109.5 million, a 12.5% increase from fiscal year 2016.
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Net revenue increased by 11.4% to $131.0 million from $117.5 million in fiscal year 2016.
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Gross profit increased by 6.3% to $73.6 million from $69.2 million in fiscal year 2016.
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Non-GAAP
1
gross profit increased by 6.3% to $73.7 million from $69.4 million in fiscal year 2016.
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Gross margin was 56.2%, compared with 58.9% in fiscal year 2016.
Non-GAAP
1
gross margin was 56.3%, compared with 59.0% in
fiscal year 2016.
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Operating income decreased by 26.5% to $21.1 million from $28.7 million in fiscal year 2016.
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Non-GAAP
1
operating income decreased by 24.5% to $23.2 million from $30.7 million in fiscal year 2016.
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Net income decreased by 43.2% to $14.9 million from $26.3 million in fiscal year 2016.
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Non-GAAP
1
net income decreased by 37.4% to $17.7 million from $28.3 million in fiscal year 2016.
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Basic and diluted net income per American Depositary Share (ADS) were $0.453 and $0.448, respectively, compared with basic and diluted net income per ADS of $0.767 and $0.759, respectively, for fiscal year
2016. Each ADS represents four ordinary shares.
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Basic and diluted
non-GAAP
1
net income per ADS were $0.539 and $0.532, respectively, compared with basic and diluted
non-GAAP
1
net income per ADS of $0.829 and $0.818, respectively, for fiscal year 2016.
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Cash flow from operations decreased by 4.6% to $37.1 million from $38.9 million in fiscal year 2016.
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Mr. Zhengdong Zhu, Chairman and CEO of CDEL, said, We are pleased to report fourth quarter fiscal 2017 revenue growth of 9.1% year-over-year, at
the high end of our guidance range, driven by the continued robust growth of our accounting vertical and strong growth from the sale of learning simulation software. Our fourth quarter total enrollments declined by 17.8% year-over-year, primarily
due to a decline in Accounting Certificate and accounting continuing education course enrollments, as a result of the previously disclosed suspension of the Accounting Certificate examination. Excluding the enrollments of these courses, however, our
fourth quarter total enrollments increased by 28.2% year-over-year.
5
Despite the adverse impact of the suspension of the Accounting Certificate Examination, we saw healthy
growth in total cash receipts from online course registration, which increased by 22.2% year-over-year in the fourth quarter, led once again by strong growth in cash receipts from online accounting course registration of 29.9% year-over-year.
Continuing the momentum in cash receipts growth, we are pleased to report that weve
kicked-off
fiscal year 2018 on a positive note, as our total cash receipts from online course registration in the first
quarter fiscal 2018 through last week grew over 50% year-over-year.
Mr. Zhu added,
In-line
with
our strategy to build out certain practice areas where we see strong growth potential with complementary offerings, in September 2017 we successfully closed our acquisition of a 40% equity interest in Beijing Ruida Chengtai Education Technology Co.,
Ltd. (Beijing Ruida), a leading provider of exam preparation services for participants in Chinas National Judicial Examination, for RMB192 million ($28.8 million) as previously announced. Our early integration efforts have
been seamless with Beijing Ruida delivering strong revenue of over RMB190 million during the 2017 National Judicial Examination preparation season. In addition, our investment in Beijing Ruida will enable us to leverage our leading online
learning platform to gain a deeper foothold in the legal education services arena.
We continue to focus on growing our existing industry verticals,
and utilizing our resources to broaden our course offerings and services in key disciplines. Our goal is to build industry-leading education verticals that promote our lifelong learning ecosystem, with a commitment to providing
best-of-breed
content as well as different modalities of learning and solutions to best serve a broad constituency of student and enterprise needs. As we head into fiscal
2018, we remain confident in our ability to deliver superior learning outcomes, expand our service offerings and maximize shareholder value, Mr. Zhu concluded.
Mr. Mark Marostica,
Co-Chief
Financial Officer of CDEL, said, The significant year-over-year decrease in
our fourth quarter and fiscal year 2017 operating margins was primarily due to increased salaries and related expenses, as well as an increase in advertising and promotional expenses. The softer growth in revenue due to the suspension of the
Accounting Certificate Examination also adversely impacted our operating margins. The increase in salaries and related expenses was mainly attributable to an upfront investment in additional headcount ahead of fiscal 2018 to best position CDEL to
drive key growth initiatives in the coming quarters. As such, we expect headcount to remain relatively stable over the next few quarters. The increase in our advertising and promotional expenses in the fourth quarter was aimed at driving key growth
initiatives as well, and as we have previously indicated, we expect the level of advertising and promotional spending to moderate in fiscal 2018. We are pleased to see early returns from these investments and are encouraged by the acceleration in
growth of cash receipts in our fourth quarter fiscal 2017 and in our first quarter fiscal 2018 to date. As always, we strive to maintain operating efficiency while balancing our growth and profitability.
6
Dividend
The Company today announced that its Board of Directors has declared a special cash dividend of $0.1125 per ordinary share on its outstanding shares to
shareholders of record as of the close of trading on January 12, 2018.
Holders of American Depositary Shares (ADS), each representing
four ordinary shares of CDEL, are accordingly entitled to a cash dividend of $0.45 per ADS. The depository, Deutsche Bank Trust Company Americas, will charge a fee of $0.02 per ADS when the dividends are distributed on or about January 18,
2018.
Subject to the Companys ongoing financial performance, cash position, budget and business plan, and market conditions, the Companys
Board of Directors will, on a yearly basis, consider paying a dividend.
Fourth Quarter Fiscal 2017 Financial Results
Net Revenue.
Total net revenue increased by 9.1% to $41.7 million in the fourth quarter of fiscal 2017 from $38.2 million in the fourth
quarter of fiscal 2016. Net revenue from online education services, books and reference materials, and other sources contributed 76.8%, 5.0% and 18.2%, respectively, of total net revenues for the fourth quarter of fiscal 2017.
Online education services.
Net revenue from online education services increased by 5.2% to $32.0 million in the fourth quarter of fiscal 2017 from
$30.5 million in the fourth quarter of fiscal 2016, mainly due to relatively higher revenue growth from CDELs accounting vertical. In particular, the strong revenue growth of APQE, CPA and practical skills training courses in the
accounting vertical more than offset the adverse revenue impact from the suspension of the Accounting Certificate Examination and the downstream effect of this examination suspension on Accounting Continuing Education revenue.
Books and reference materials.
Net revenue from books and reference materials decreased by 24.0% to $2.1 million in the fourth quarter of fiscal
2017, from $2.8 million in the fourth quarter of fiscal 2016.
Others
. Net revenue from other sources increased by 50.5% to $7.6 million
in the fourth quarter of fiscal 2017 from $5.0 million in the fourth quarter of fiscal 2016, primarily due to revenue growth from the sale of learning simulation software.
Cost of Sales.
Cost of sales increased by 26.5% to $16.6 million in the fourth quarter of fiscal 2017 from $13.1 million in the fourth
quarter of fiscal 2016.
Non-GAAP
1
cost of sales increased by 26.6% to $16.5 million in the fourth quarter of fiscal 2017 from $13.0 million in the
fourth quarter of fiscal 2016. The increase was mainly due to increased salaries and related expenses resulting from a growing number of personnel, as well as increased cost of books and reference materials.
Gross Profit and Gross Margin
.
Gross profit was $25.2 million in the fourth quarter of fiscal 2017, flat compared with the prior
year period.
Non-GAAP
1
gross profit was $25.2 million, also flat compared with the prior year period. Gross margin was 60.3% in the fourth quarter of
fiscal 2017, compared with 65.8% in the fourth quarter of fiscal 2016.
Non-GAAP
1
gross margin was 60.4% in the fourth quarter of fiscal 2017, compared with
65.9% in the fourth quarter of fiscal 2016.
7
Operating Expenses.
Total operating expenses increased by 35.6% to $14.9 million in the
fourth quarter of fiscal 2017, from $11.0 million in the prior year period.
Non-GAAP
1
total operating expenses increased by 35.9% to $14.3 million
in the fourth quarter of fiscal 2017, from $10.6 million in the prior year period.
Selling expenses.
Selling expenses increased by 44.2% to
$8.9 million in the fourth quarter of fiscal 2017 from $6.2 million in the prior year period.
Non-GAAP
1
selling expenses increased by 44.4% to
$8.9 million in the fourth quarter of fiscal 2017 from $6.2 million in the prior year period. The increase was primarily driven by increased salaries and related expenses, increased advertising and promotional expenses, and increased
commissions to online agents.
General and administrative expenses.
General and administrative expenses increased by 24.7% to $6.0 million in
the fourth quarter of fiscal 2017 from $4.8 million in the prior year period.
Non-GAAP
1
general and administrative expenses increased by 24.0% to
$5.5 million in the fourth quarter of fiscal 2017 from $4.4 million in the prior year period. The increase was mainly due to increased professional fees, as well as other miscellaneous expenses.
Income Tax Expense.
Income tax expense decreased by 22.7% to $2.1 million in the fourth quarter of fiscal 2017 from $2.7 million in
the prior year period, primarily due to a decrease in taxable income.
Net Income.
As a result of the foregoing, net income decreased by
52.0% to $5.9 million in the fourth quarter of fiscal 2017 from $12.2 million in the prior year period.
Non-GAAP
1
net income decreased by 43.5% to
$7.2 million in the fourth quarter of fiscal 2017 from $12.7 million in the prior year period.
Operating Cash Flow
.
Net
operating cash inflow decreased by 49.8% to $2.9 million in the fourth quarter of fiscal 2017 from $5.8 million in the prior year period. The decrease in operating cash inflow was mainly attributable to the decrease in net income before
non-cash
items generated in the fourth quarter of fiscal 2017. The increase in accounts receivable, prepayments and other current assets, and the decrease in deferred revenue and deferred tax liabilities also
contributed to the operating cash outflow. This operating cash outflow was partially offset by the increase in accrued expenses and other liabilities, and income tax payable.
Cash and Cash Equivalents, Term Deposits, Restricted Cash and Short-term Investments
. Cash and cash equivalents, term deposits, restricted cash
and short-term investments as of September 30, 2017 decreased by 6.3% to $100.6 million from $107.4 million as of June 30, 2017, mainly due to the payment of purchase consideration of 40% equity interest in Beijing Ruida and
10.72% equity interest in Hangzhou Wanting of $28.8 million and $2.6 million, respectively. The decrease was partially offset by operating cash flow generated and a
3-year
bank loan of
$19.9 million raised in the fourth quarter of fiscal 2017.
Fiscal Year 2017 Financial Results
Net revenue.
Total net revenue increased by 11.4% to $131.0 million in fiscal year 2017, from $117.5 million in fiscal year 2016. Net
revenue from online education services, books and reference materials, and other sources contributed 72.9%, 6.9% and 20.2%, respectively, of total net revenues for fiscal year 2017.
8
Online education services.
Net revenue from online education services increased by 1.7% to
$95.5 million in fiscal year 2017 from $93.9 million in fiscal year 2016.
Books and reference materials.
Net revenue from books and
reference materials increased by 11.3% to $9.0 million in fiscal year 2017 from $8.1 million in fiscal year 2016.
Others
. Net revenue
from other sources increased by 70.4% to $26.5 million in fiscal year 2017 from $15.6 million in fiscal year 2016.
Cost of
Sales
.
Cost of sales increased by 18.8% to $57.4 million in fiscal year 2017, from $48.3 million in fiscal year 2016.
Non-GAAP
1
cost of sales increased by 18.8% to $57.2 million in fiscal year 2017 from $48.2 million in fiscal year 2016.
Gross
Profit
.
Gross profit increased by 6.3% to $73.6 million in fiscal year 2017 from $69.2 million in fiscal year 2016.
Non-GAAP
1
gross
profit increased by 6.3% to $73.7 million in fiscal year 2017 from $69.4 million in fiscal year 2016. Gross margin for fiscal year 2017 was 56.2%, compared with 58.9% in fiscal year 2016.
Non-GAAP
1
gross margin for fiscal year 2017 was 56.3%, compared with 59.0% in fiscal year 2016.
Operating
Expenses
.
Total operating expenses increased by 31.7% to $54.4 million in fiscal year 2017 from $41.3 million in fiscal year 2016.
Non-GAAP
1
total operating expenses increased by 32.9% to $52.4 million in fiscal year 2017 from $39.4 million in fiscal year 2016.
Selling expenses.
Selling expenses increased by 42.4% to $34.9 million in fiscal year 2017 from $24.5 million in fiscal year 2016.
Non-GAAP
1
selling expenses increased by 42.5% to $34.8 million in fiscal year 2017 from $24.4 million in fiscal year 2016.
General and administrative expenses.
General and administrative expenses increased by 16.0% to $19.5 million in fiscal year 2017 from
$16.8 million in fiscal year 2016.
Non-GAAP
1
general and administrative expenses increased by 17.3% to $17.6 million in fiscal year 2017 from
$15.0 million in fiscal year 2016.
Income Tax Expense.
Income tax expense decreased by 24.9% to $4.6 million in fiscal year 2017
from $6.2 million in fiscal year 2016.
Net Income.
Net income decreased by 43.2% to $14.9 million in fiscal year 2017 from
$26.3 million in fiscal year 2016.
Non-GAAP
1
net income decreased by 37.4% to $17.7 million in fiscal year 2017 from $28.3 million in fiscal
year 2016.
Operating Cash Flow.
Net operating cash inflow decreased by 4.6% to $37.1 million from $38.9 million in fiscal year
2016.
Outlook
For the first quarter of fiscal 2018,
the Company expects to generate total net revenue in the range of $33.6 million to $35.2 million, representing year-over-year growth of approximately 5% to 10%.
9
For fiscal year 2018, the Company expects to generate total net revenues in the range of $150.6 million
to $157.2 million, representing year-over-year growth of approximately 15% to 20%.
The above guidance reflects the Companys current and
preliminary view, which is subject to change.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Wednesday, November 29, 2017 (9:00 p.m. Beijing Time on November 29, 2017) to
discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:
US Toll Free:
+1-866-519-4004
International:
+65-6713-5090
Mainland China:
400-620-8038
Hong Kong:
+852-3018-6771
United Kingdom:
+44-203-6214-779
Passcode: CDEL or DL
A telephone replay will be available two hours after the call until December 6, 2017 by dialing:
US Toll Free:
+1-855-452-5696
International:
+61-2-8199-0299
Mainland China:
400-632-2162
Hong Kong:
800-963-117
United Kingdom:
0808-234-0072
Replay Passcode: 3166629
Additionally, a live and archived
webcast of the conference call will be available at
http://ir.cdeledu.com
.
About China Distance Education Holdings Limited
China Distance Education Holdings Limited is a leading provider of online education and value-added services for professionals and corporate clients in China.
The courses offered by the Company through its websites are designed to help professionals seeking to obtain and maintain professional licenses and to enhance their job skills through our professional development courses in China in the areas of
accounting, healthcare, engineering & construction, and other industries. The Company also offers professional education courses for participants in the national judicial examination, online test preparation courses for self-taught learners
pursuing higher education diplomas or degrees, test preparation courses for university students intending to take the nationwide graduate school entrance exam, practical accounting training courses for college students and working professionals, as
well as online language courses and third-party developed online courses. In addition, the Company provides business services to corporate clients, including but not limited to tax advisory, bookkeeping and accounting outsourcing services. For
further information, please visit
http://ir.cdeledu.com
.
10
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will, may, should, potential, continue, expect, predict,
anticipate, future, intend, plan, believe, is/are likely to, estimate and similar statements. Among other things, the outlook for the first quarter and full fiscal
year 2018 and quotations from management in this announcement, as well as the Companys strategic and operational plans (in particular, the anticipated benefits of strategic growth initiatives, including acquisition and strategic investments
such as the acquisition of 40% equity interest in Beijing Ruida, as well as cost control) contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic and annual reports to the SEC, in
press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Companys beliefs and expectations, are
forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to
the following: goals and growth strategies; future prospects and market acceptance of the Companys courses and other products and services; future business development and results of operations; projected revenues, profits, earnings and other
estimated financial information; projected enrollment numbers; plans to expand and enhance courses and other products and services; competition in the education and test preparation markets; and Chinese laws, regulations and policies, including
those applicable to the Internet, Internet content providers, the education and telecommunications industries, mergers and acquisitions, taxation and foreign exchange.
Further information regarding these and other risks is included in the Companys annual report on Form
20-F
and
other documents filed or furnished with the SEC. All information provided in this press release is as of the date of this press release. The Company does not undertake any obligation to update any forward-looking statement, except as required under
applicable law.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth in this press release is preliminary and subject to adjustments. Adjustments to the financial statements may be
identified when audit work is performed for the
year-end
audit, which could result in significant differences from this preliminary unaudited financial information.
Use of
Non-GAAP
Financial Measures
To supplement the Companys consolidated financial results presented in accordance with U.S. generally accepted accounting principles, or GAAP, the
Company uses the following measures defined as
non-GAAP
financial measures:
non-GAAP
net income, operating income, gross profit, cost of sales, selling expenses, general
and administrative expenses, net income margin, operating margin, gross profit margin and basic and diluted earnings per ADS and per share. The presentation of these
non-GAAP
financial measures is not intended
to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these
non-GAAP
financial measures, please see the table
captioned Reconciliations of
non-GAAP
measures to comparable GAAP measures set forth at the end of this release.
11
The Company believes that these
non-GAAP
financial measures provide
meaningful supplemental information regarding its performance and liquidity by excluding share-based compensation expenses and impairment loss of long-term investments. However,
non-GAAP
financial measures may
not be indicative of the Companys operating performance from a cash perspective. The Company believes that both management and investors benefit from these
non-GAAP
financial measures in assessing its
performance and when planning and forecasting future periods. These
non-GAAP
financial measures also facilitate managements internal comparisons to the Companys historical performance and
liquidity. The Company computes its
non-GAAP
financial measures using the same consistent method from quarter to quarter. The Company believes these
non-GAAP
financial
measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of excluding share-based compensation expenses and
impairment loss of long-term investments from the above-mentioned line items and presenting these
non-GAAP
measures is that such charges may continue to be for the foreseeable future a significant recurring
expense in our business. Management compensates for this limitation by providing specific information regarding the GAAP amounts excluded from each
non-GAAP
measure. The accompanying table at the end of this
release provides more detail on the reconciliations between GAAP financial measures that are most directly comparable to
non-GAAP
financial measures.
Contacts:
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|
|
China Distance Education Holdings Limited
Investor Relations Department
Tel:
+86-10-8231-9999
ext. 1805
Email:
IR@cdeledu.com
|
|
The Piacente Group | Investor Relations
Brandi Piacente
Tel: +1
212-481-2050
Email:
DL@tpg-ir.com
|
(Financial Tables on Following Pages)
12
China Distance Education Holdings Limited
Consolidated Balance Sheets
(in thousands of US Dollars, except number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
(Derived from Audited)
|
|
|
September 30, 2017
(Unaudited)
|
|
Assets:
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
53,677
|
|
|
|
60,526
|
|
Restricted cash
|
|
|
15,547
|
|
|
|
34,855
|
|
Short term investments
|
|
|
1,278
|
|
|
|
5,261
|
|
Accounts receivable, net of allowance for doubtful accounts of US$1,190 and US$661 as of
September 30, 2017 and September 30, 2016, respectively
|
|
|
5,454
|
|
|
|
5,525
|
|
Inventories
|
|
|
971
|
|
|
|
864
|
|
Prepayment and other current assets
|
|
|
5,893
|
|
|
|
10,439
|
|
Amount due from a related party
|
|
|
208
|
|
|
|
|
|
Deferred tax assets, current portion
|
|
|
1,676
|
|
|
|
1,654
|
|
Deferred cost
|
|
|
1,118
|
|
|
|
711
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
85,822
|
|
|
|
119,835
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
13,908
|
|
|
|
14,022
|
|
Goodwill
|
|
|
29,392
|
|
|
|
29,459
|
|
Long term investments
|
|
|
3,079
|
|
|
|
43,631
|
|
Other intangible assets, net
|
|
|
11,675
|
|
|
|
9,947
|
|
Deposit for purchase of
non-current
assets
|
|
|
1,116
|
|
|
|
641
|
|
Other
non-current
assets
|
|
|
3,928
|
|
|
|
7,016
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
assets
|
|
|
63,098
|
|
|
|
104,716
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
148,920
|
|
|
|
224,551
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity:
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Bank borrowings
|
|
|
15,551
|
|
|
|
29,965
|
|
Accrued expenses and other liabilities (including accrued expenses and other liabilities of the
consolidated VIE without recourse to China Distance Education Holdings Limited of US$31,684 and US$26,279 as of September 30, 2017 and September 30, 2016, respectively)
|
|
|
30,564
|
|
|
|
38,767
|
|
Amount due to a related party
|
|
|
|
|
|
|
1,648
|
|
Income tax payable (including income tax payable of the consolidated VIE without recourse to China
Distance Education Holdings Limited of US$3,641 and US$3,353 as of September 30, 2017 and September 30, 2016, respectively)
|
|
|
5,308
|
|
|
|
6,750
|
|
Deferred revenue (including deferred revenue of the consolidated VIE without recourse to China
Distance Education Holdings Limited of US$49,575 and US$35,437 as of September 30, 2017 and September 30, 2016, respectively)
|
|
|
36,332
|
|
|
|
50,506
|
|
Refundable fees (including refundable fees of the consolidated VIE without recourse to China
Distance Education Holdings Limited of US$1,074 and US$862 as of September 30, 2017 and September 30, 2016, respectively)
|
|
|
862
|
|
|
|
1,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
88,617
|
|
|
|
128,710
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Deferred tax liabilities, non-current portion
|
|
|
3,831
|
|
|
|
3,099
|
|
Long-term bank borrowing
|
|
|
|
|
|
|
19,930
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
3,831
|
|
|
|
23,029
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
92,448
|
|
|
|
151,739
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Ordinary shares (par value of US$0.0001 per share at September 30, 2017 and September 30,
2016, respectively; Authorized 500,000,000 shares at September 30, 2017 and September 30, 2016, respectively; Issued and outstanding 131,854,773 and 131,729,773 shares at September 30, 2017 and September 30, 2016,
respectively)
|
|
|
13
|
|
|
|
13
|
|
Additional
paid-in
capital
|
|
|
15,697
|
|
|
|
19,097
|
|
Accumulated other comprehensive loss
|
|
|
(3,418
|
)
|
|
|
(3,367
|
)
|
Retained Earnings
|
|
|
32,944
|
|
|
|
33,040
|
|
|
|
|
|
|
|
|
|
|
Total China Distance Education Holdings Limited shareholders equity
|
|
|
45,236
|
|
|
|
48,783
|
|
Noncontrolling interest
|
|
|
11,236
|
|
|
|
24,029
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
56,472
|
|
|
|
72,812
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
148,920
|
|
|
|
224,551
|
|
|
|
|
|
|
|
|
|
|
13
China Distance Education Holdings Limited
Unaudited Consolidated Statements Of Operations
(in thousands of US dollars, except number of shares, per share and per ADS data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
2016
|
|
|
2017
|
|
Sales, net of business tax, value-added tax and related surcharges:
|
|
|
|
|
|
|
|
|
Online education services
|
|
|
30,454
|
|
|
|
32,045
|
|
Books and reference materials
|
|
|
2,755
|
|
|
|
2,093
|
|
Others
|
|
|
5,030
|
|
|
|
7,570
|
|
- Sale of learning simulation software
|
|
|
1,910
|
|
|
|
2,930
|
|
- Business
start-up
training services
|
|
|
946
|
|
|
|
1,102
|
|
- Others
|
|
|
2,174
|
|
|
|
3,538
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
|
|
|
38,239
|
|
|
|
41,708
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
Cost of services and others
|
|
|
(11,835
|
)
|
|
|
(14,513
|
)
|
Cost of tangible goods sold
|
|
|
(1,250
|
)
|
|
|
(2,042
|
)
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
|
(13,085
|
)
|
|
|
(16,555
|
)
|
|
|
|
Gross profit
|
|
|
25,154
|
|
|
|
25,153
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
|
(6,175
|
)
|
|
|
(8,906
|
)
|
General and administrative expenses
|
|
|
(4,841
|
)
|
|
|
(6,037
|
)
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
(11,016
|
)
|
|
|
(14,943
|
)
|
Other operating income
|
|
|
445
|
|
|
|
328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
14,583
|
|
|
|
10,538
|
|
Impairment loss from long-term investments
|
|
|
|
|
|
|
(679
|
)
|
Interest income
|
|
|
255
|
|
|
|
375
|
|
Interest expense
|
|
|
(118
|
)
|
|
|
(615
|
)
|
Exchange gain (loss)
|
|
|
243
|
|
|
|
(1,429
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
14,963
|
|
|
|
8,190
|
|
Income tax expense
|
|
|
(2,653
|
)
|
|
|
(2,051
|
)
|
Loss from equity method investment
|
|
|
(91
|
)
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
12,219
|
|
|
|
6,105
|
|
Net loss (income) attributable to noncontrolling interest
|
|
|
6
|
|
|
|
(239
|
)
|
|
|
|
|
|
|
|
|
|
Net income attributable to China Distance Education Holdings Limited
|
|
|
12,225
|
|
|
|
5,866
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Net income attributable to China Distance Education Holdings Limited shareholders
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.093
|
|
|
|
0.044
|
|
Diluted
|
|
|
0.092
|
|
|
|
0.044
|
|
|
|
|
Net income per ADS:
|
|
|
|
|
|
|
|
|
Net income attributable to China Distance Education Holdings Limited shareholders
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.370
|
|
|
|
0.178
|
|
Diluted
|
|
|
0.369
|
|
|
|
0.177
|
|
|
|
|
Weighted average shares used in calculating net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
131,546,652
|
|
|
|
131,517,541
|
|
Diluted
|
|
|
132,362,078
|
|
|
|
132,197,374
|
|
14
China Distance Education Holdings Limited
Consolidated Statements Of Operations
(in thousands of US dollars, except number of shares, per share and per ADS data)
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30,
|
|
|
|
2016
|
|
|
2017
|
|
|
|
(Derived from Audited)
|
|
|
(Unaudited)
|
|
Sales, net of business tax, value-added tax and related surcharges:
|
|
|
|
|
|
|
|
|
Online education services
|
|
|
93,923
|
|
|
|
95,503
|
|
Books and reference materials
|
|
|
8,067
|
|
|
|
8,980
|
|
Others
|
|
|
15,558
|
|
|
|
26,505
|
|
- Sale of learning simulation software
|
|
|
3,036
|
|
|
|
11,522
|
|
- Business
start-up
training services
|
|
|
4,344
|
|
|
|
5,223
|
|
- Others
|
|
|
8,178
|
|
|
|
9,760
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
|
|
|
117,548
|
|
|
|
130,988
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
Cost of services and others
|
|
|
(43,796
|
)
|
|
|
(50,540
|
)
|
Cost of tangible goods sold
|
|
|
(4,538
|
)
|
|
|
(6,872
|
)
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
|
(48,334
|
)
|
|
|
(57,412
|
)
|
|
|
|
Gross profit
|
|
|
69,214
|
|
|
|
73,576
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
|
(24,517
|
)
|
|
|
(34,910
|
)
|
General and administrative expenses
|
|
|
(16,778
|
)
|
|
|
(19,468
|
)
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
(41,295
|
)
|
|
|
(54,378
|
)
|
Other operating income
|
|
|
806
|
|
|
|
1,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
28,725
|
|
|
|
21,110
|
|
Impairment loss from long-term investments
|
|
|
|
|
|
|
(679
|
)
|
Interest income
|
|
|
2,020
|
|
|
|
1,531
|
|
Interest expense
|
|
|
(555
|
)
|
|
|
(1,049
|
)
|
Exchange gain
|
|
|
2,462
|
|
|
|
128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
32,652
|
|
|
|
21,041
|
|
Income tax expense
|
|
|
(6,150
|
)
|
|
|
(4,620
|
)
|
Loss from equity method investment
|
|
|
(91
|
)
|
|
|
(153
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
26,411
|
|
|
|
16,268
|
|
Net income attributable to noncontrolling interest
|
|
|
(121
|
)
|
|
|
(1,333
|
)
|
|
|
|
|
|
|
|
|
|
Net income attributable to China Distance Education Holdings Limited
|
|
|
26,290
|
|
|
|
14,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Net income attributable to China Distance Education Holdings Limited shareholders
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.192
|
|
|
|
0.113
|
|
Diluted
|
|
|
0.190
|
|
|
|
0.112
|
|
|
|
|
Net income per ADS:
|
|
|
|
|
|
|
|
|
Net income attributable to China Distance Education Holdings Limited shareholders
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.767
|
|
|
|
0.453
|
|
Diluted
|
|
|
0.759
|
|
|
|
0.448
|
|
|
|
|
Weighted average shares used in calculating net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
136,497,929
|
|
|
|
131,432,211
|
|
Diluted
|
|
|
138,465,944
|
|
|
|
133,203,255
|
|
15
China Distance Education Holdings Limited
Reconciliations of
non-GAAP
measures to comparable GAAP measures
(In thousands of US Dollars, except number of shares, per share and per ADS data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
2016
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Cost of sales
|
|
|
13,085
|
|
|
|
16,555
|
|
Share-based compensation expense in cost of sales
|
|
|
40
|
|
|
|
43
|
|
Non-GAAP
cost of sales
|
|
|
13,045
|
|
|
|
16,512
|
|
|
|
|
Selling expenses
|
|
|
6,175
|
|
|
|
8,906
|
|
Share-based compensation expense in selling expenses
|
|
|
21
|
|
|
|
22
|
|
Non-GAAP
selling expenses
|
|
|
6,154
|
|
|
|
8,884
|
|
|
|
|
General and administrative expenses
|
|
|
4,841
|
|
|
|
6,037
|
|
Share-based compensation expense in general and administrative expenses
|
|
|
442
|
|
|
|
581
|
|
Non-GAAP
general and administrative expenses
|
|
|
4,399
|
|
|
|
5,456
|
|
|
|
|
Gross profit
|
|
|
25,154
|
|
|
|
25,153
|
|
Share-based compensation expenses
|
|
|
40
|
|
|
|
43
|
|
Non-GAAP
gross profit
|
|
|
25,194
|
|
|
|
25,196
|
|
|
|
|
Gross profit margin
|
|
|
65.8
|
%
|
|
|
60.3
|
%
|
Non-GAAP
gross profit margin
|
|
|
65.9
|
%
|
|
|
60.4
|
%
|
|
|
|
Operating income
|
|
|
14,583
|
|
|
|
10,538
|
|
Share-based compensation expenses
|
|
|
503
|
|
|
|
646
|
|
Non-GAAP
operating income
|
|
|
15,086
|
|
|
|
11,184
|
|
|
|
|
Operating margin
|
|
|
38.1
|
%
|
|
|
25.3
|
%
|
Non-GAAP
operating margin
|
|
|
39.5
|
%
|
|
|
26.8
|
%
|
|
|
|
Net income
|
|
|
12,225
|
|
|
|
5,866
|
|
Share-based compensation expense
|
|
|
503
|
|
|
|
646
|
|
Impairment loss from long-term investments
|
|
|
|
|
|
|
679
|
|
Non-GAAP
net income
|
|
|
12,728
|
|
|
|
7,191
|
|
|
|
|
Net income margin
|
|
|
32.0
|
%
|
|
|
14.1
|
%
|
Non-GAAP
net income margin
|
|
|
33.3
|
%
|
|
|
17.2
|
%
|
|
|
|
Net income per sharebasic
|
|
|
0.093
|
|
|
|
0.044
|
|
Net income per sharediluted
|
|
|
0.092
|
|
|
|
0.044
|
|
Non-GAAP
net income per sharebasic
|
|
|
0.097
|
|
|
|
0.055
|
|
Non-GAAP
net income per sharediluted
|
|
|
0.096
|
|
|
|
0.054
|
|
|
|
|
Net income per ADS attributable to China Distance Education Holdings Limited
shareholdersbasic (note 1)
|
|
|
0.370
|
|
|
|
0.178
|
|
Net income per ADS attributable to China Distance Education Holdings Limited
shareholdersdiluted (note 1)
|
|
|
0.369
|
|
|
|
0.177
|
|
Non-GAAP
net income per ADS attributable to China Distance
Education Holdings Limited shareholdersbasic (note 1)
|
|
|
0.387
|
|
|
|
0.219
|
|
Non-GAAP
net income per ADS attributable to China Distance
Education Holdings Limited shareholdersdiluted (note 1)
|
|
|
0.385
|
|
|
|
0.218
|
|
|
|
|
Weighted average shares used in calculating basic net income per share
|
|
|
131,546,652
|
|
|
|
131,517,541
|
|
Weighted average shares used in calculating diluted net income per share
|
|
|
132,362,078
|
|
|
|
132,197,374
|
|
Weighted average shares used in calculating basic
non-GAAP
net income per share
|
|
|
131,546,652
|
|
|
|
131,517,541
|
|
Weighted average shares used in calculating diluted
non-GAAP
net income per share
|
|
|
132,362,078
|
|
|
|
132,197,374
|
|
16
China Distance Education Holdings Limited
Reconciliations of
non-GAAP
measures to comparable GAAP measures
(In thousands of US Dollars, except number of shares, per share and per ADS data)
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30,
|
|
|
|
2016
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Cost of sales
|
|
|
48,334
|
|
|
|
57,412
|
|
Share-based compensation expense in cost of sales
|
|
|
162
|
|
|
|
164
|
|
Non-GAAP
cost of sales
|
|
|
48,172
|
|
|
|
57,248
|
|
|
|
|
Selling expenses
|
|
|
24,517
|
|
|
|
34,910
|
|
Share-based compensation expense in selling expenses
|
|
|
84
|
|
|
|
85
|
|
Non-GAAP
selling expenses
|
|
|
24,433
|
|
|
|
34,825
|
|
|
|
|
General and administrative expenses
|
|
|
16,778
|
|
|
|
19,468
|
|
Share-based compensation expense in general and administrative expenses
|
|
|
1,769
|
|
|
|
1,862
|
|
Non-GAAP
general and administrative expenses
|
|
|
15,009
|
|
|
|
17,606
|
|
|
|
|
Gross profit
|
|
|
69,214
|
|
|
|
73,576
|
|
Share-based compensation expenses
|
|
|
162
|
|
|
|
164
|
|
Non-GAAP
gross profit
|
|
|
69,376
|
|
|
|
73,740
|
|
|
|
|
Gross profit margin
|
|
|
58.9
|
%
|
|
|
56.2
|
%
|
Non-GAAP
gross profit margin
|
|
|
59.0
|
%
|
|
|
56.3
|
%
|
|
|
|
Operating income
|
|
|
28,725
|
|
|
|
21,110
|
|
Share-based compensation expenses
|
|
|
2,015
|
|
|
|
2,111
|
|
Non-GAAP
operating income
|
|
|
30,740
|
|
|
|
23,221
|
|
|
|
|
Operating margin
|
|
|
24.4
|
%
|
|
|
16.1
|
%
|
Non-GAAP
operating margin
|
|
|
26.2
|
%
|
|
|
17.7
|
%
|
|
|
|
Net income
|
|
|
26,290
|
|
|
|
14,935
|
|
Share-based compensation expense
|
|
|
2,015
|
|
|
|
2,111
|
|
Impairment loss from long-term investments
|
|
|
|
|
|
|
679
|
|
Non-GAAP
net income
|
|
|
28,305
|
|
|
|
17,725
|
|
|
|
|
Net income margin
|
|
|
22.4
|
%
|
|
|
11.4
|
%
|
Non-GAAP
net income margin
|
|
|
24.1
|
%
|
|
|
13.5
|
%
|
|
|
|
Net income per sharebasic
|
|
|
0.192
|
|
|
|
0.113
|
|
Net income per sharediluted
|
|
|
0.190
|
|
|
|
0.112
|
|
Non-GAAP
net income per sharebasic
|
|
|
0.207
|
|
|
|
0.135
|
|
Non-GAAP
net income per sharediluted
|
|
|
0.204
|
|
|
|
0.133
|
|
|
|
|
Net income per ADS attributable to China Distance Education Holdings Limited
shareholdersbasic (note 1)
|
|
|
0.767
|
|
|
|
0.453
|
|
Net income per ADS attributable to China Distance Education Holdings Limited
shareholdersdiluted (note 1)
|
|
|
0.759
|
|
|
|
0.448
|
|
Non-GAAP
net income per ADS attributable to China Distance
Education Holdings Limited shareholdersbasic (note 1)
|
|
|
0.829
|
|
|
|
0.539
|
|
Non-GAAP
net income per ADS attributable to China Distance
Education Holdings Limited shareholdersdiluted (note 1)
|
|
|
0.818
|
|
|
|
0.532
|
|
|
|
|
Weighted average shares used in calculating basic net income per share
|
|
|
136,497,929
|
|
|
|
131,432,211
|
|
Weighted average shares used in calculating diluted net income per share
|
|
|
138,465,944
|
|
|
|
133,203,255
|
|
Weighted average shares used in calculating basic
non-GAAP
net income per share
|
|
|
136,497,929
|
|
|
|
131,432,211
|
|
Weighted average shares used in calculating diluted
non-GAAP
net income per share
|
|
|
138,465,944
|
|
|
|
133,203,255
|
|
Note 1: Each ADS represents four ordinary shares
17