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 PlummerSenior Investor Relations CoordinatorChinaEdu CorporationPhone: +1 908-442-9395E-mail: helen@chinaedu.net
Jin YuInvestor Relations ManagerChinaEdu CorporationPhone: +86 15711096022E-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
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