BEIJING, Feb. 26, 2013 /PRNewswire/ -- China Distance
Education Holdings Limited (NYSE: DL) ("CDEL", or the "Company"), a
leading provider of online education in China focusing on professional education,
today announced financial results for the first quarter of fiscal
2013 ended December 31, 2012.
First Quarter Fiscal 2013 Financial Highlights
- Total course enrollments reached 898,000, an increase of 8.4%
from the first quarter of fiscal 2012.
- Net Revenue increased by 31.3% to $13.0
million from $9.9 million in
the prior year period, exceeding the top-end of the guidance
range.
- Gross profit from continuing operations increased by 30.6% to
$6.9 million from $5.3 million in the prior year period. Gross
margin was stable at 53.0%, compared to 53.3% in the prior year
period.
- Operating income from continuing operations increased 615.5% to
$1.7 million from $232 thousand in the prior year period.
- Net income was $1.5 million,
compared to $367 thousand in the
prior year period, an increase of 302.2%.
- Basic and diluted net income per American Depositary Share
("ADS") was $0.044, compared to
$0.011 for the first quarter of
fiscal 2012. Each ADS represents four ordinary shares.
"We are very pleased to report another strong quarter
highlighted by continuingly robust growth in net revenue, income
and non-APQE course enrollments," stated Mr. Zhengdong Zhu, Chairman and CEO of CDEL. "Our
high-quality course offerings and innovative learning systems keep
attracting new and returning students and generate continuing
revenue growth. Such performance reflects the enduring market
response to our high quality courses and services as well as the
outstanding user experience offered by our online learning
platform, including our mobile learning system."
"Along with our strong revenue growth experienced in the first
quarter, we also expect delayed APQE exams this year to push a
disproportional amount of our revenue and income from second fiscal
quarter to the third and fourth fiscal quarters of fiscal 2013.
Nevertheless, we expect to see robust enrollments and revenue
growth on a yearly basis as we stay focused on further penetrating
the market in our core segments that encompass accounting, health
care and construction engineering test-preparation, career
development and continuous education courses. We also plan to
simultaneously expand into the much larger general online education
market through our open-platform strategy."
Ms. Ping Wei, Chief Financial
Officer of CDEL, added, "Growth very much characterized the first
quarter of fiscal 2013, with net revenue increasing by 31.3% to
$13.0 million and net income surging
three times to $1.5 million as we
continued leveraging on our highly scalable online learning
platform. We remain confident in the outlook for market demand and
our ability to meet that demand. Coupled with prudent cost and
expense controls, we are very confident that while we expect lower
revenue growth for next fiscal quarter due to the delayed timing of
APQE enrollments, our top and bottom line for fiscal 2013 is
expected to maintain the growth momentum we have experienced since
fiscal 2012."
First Quarter Fiscal 2013 Financial Results
Net Revenue. Total net revenue from continuing
operations for the first quarter of fiscal 2013 was $13.0 million, representing a year-over-year
increase of 31.3% from $9.9 million
in the first quarter of fiscal 2012. Net revenue from online
education services, books and reference materials, and other
sources contributed to 82.9%, 5.9% and 11.2% of total net revenue,
respectively.
Net revenue from online education services was $10.8 million, an increase of 39.2% from
$7.7 million in the prior year
period. The increase mainly resulted from higher revenue in the
Company's accounting test preparation courses, healthcare and
construction engineering courses, and the recognition of delayed
APQE and CPA courses revenue relating to the delayed exams in 2012.
Such increase was partially offset by a decrease in revenue of the
Company's accounting continuing education courses due to the
reduced pricing as the Company aggressively expands the market.
Net revenue from books and reference materials for the first
quarter of fiscal 2013 was $761
thousand, a decrease of 20.5% from $957 thousand in the first quarter of fiscal
2012.
Net revenue from other sources for the first quarter of fiscal
2013 was $1.5 million, an increase of
21.4% from $1.2 million in the prior
year period. The increase was mainly a result of increased revenue
in offline business start-up training courses provided by Zhengbao
Yucai and other offline supplementary training courses.
Cost of Sales. Cost of sales from continuing
operations for the first quarter of fiscal 2013 was $6.1 million, representing an increase of 32.1%
from $4.6 million for the first
quarter of fiscal 2012. The increase in cost of sales was mainly
due to increased salaries and related expenses, lecturer fees, and
expenses incurred by the Company's offline business start-up
training courses and other supplementary training courses. Such
increase was partially offset by a decrease in cost of book and
reference materials.
Gross Profit. Gross profit from continuing
operations for the first quarter of fiscal 2013 was $6.9 million, an increase of 30.6% from
$5.3 million in the prior year
period. Gross margin was stable at 53.0%, compared to 53.3% in the
first quarter of fiscal 2012.
Operating expenses. Total operating expenses from
continuing operations for the first quarter of fiscal 2013 were
$5.2 million, a 3.7% increase from
$5.0 million in the prior year
period.
Selling expenses from continuing operations amounted to
$2.8 million for the first quarter of
fiscal 2013, a slight decrease of 3.1% from $2.9 million in the prior year period, primarily
as a result of decreases in advertising and promotional activities,
and commission to the Company's distributors. Such decrease was
partially offset by an increase in salaries and related
expenses.
General and administrative expenses from continuing operations
were $2.5 million in the first
quarter of fiscal 2013, an increase of 12.7% from $2.2 million in the prior year period, primarily
due to increases in salaries and related expenses, professional
fees, and share-based compensation expenses.
Income Tax Expense. Income tax expenses for the
first quarter of fiscal 2013 were $416
thousand, compared to $86
thousand in the prior year period. The increase in income
tax expenses was primarily due to the increase of taxable
income.
Net Income from continuing operations. Net income
from continuing operations was $1.5
million for the first quarter of fiscal 2013, compared to
$373 thousand in the prior year
period.
Net Income. Net income was $1.5
million for the first quarter of fiscal 2013, compared to
$367 thousand in the prior year
period. Net income margin was 11.4%, compared to 3.7% in the prior
year period.
Operating Cash Flow. Net operating cash inflow was
$5.3 million for the first quarter of
fiscal 2013, compared to $5.0 million
in the prior year period. The inflow was primarily the result of
net income before non-cash items generated in the quarter, increase
in accrued expenses and other liabilities, and deferred revenue.
Such inflow was partially offset by the increase in prepayment and
other current assets, other non-current assets, and the decrease in
income tax payable and refundable fees.
Cash and Cash Equivalents, Term Deposits and Restricted
Cash. Cash and cash equivalents, term deposits and
restricted cash as of December 31,
2012 amounted to $46.2 million
as compared to $57.7 million as of
September 30, 2012 primarily due to a
dividend payment of $16.1 million and
capital expenditures of $1.1 million,
partially offset by $5.3 million of
cash flow generated from operating activities in the quarter.
Outlook
For the 2013 fiscal year, the Company estimates total net
revenue from continuing operations in the range of $63.5-$66.5 million, representing year-over-year
growth of approximately 21.2%-27.6%.
For the second quarter of fiscal 2013, after taking into account
the impact of the delayed APQE exams this year, the Company
estimates total net revenue from continuing operations in the range
of $12.9-$13.5 million, representing
year-over-year growth of approximately 5%-10%. Excluding APQE
revenue contributions of $3.4 million
in 2Q12 and an estimated $1.9 million
for 2Q13, estimated revenue other than APQE is expected to grow
24%-30% for 2Q13.
These forecasts reflect the Company's current and preliminary
view, which are subject to change.
Conference Call
The Company will host a conference call at 8:00 a.m. Eastern Time on February 27, 2013 to discuss its first quarter
fiscal 2013 financial results and recent development. The
conference call may be accessed by calling 1-866-519-4004 (US),
800-819-0121 (China Landline), 400-620-8038 (China Mobile),
800-930-346 (Hong Kong), or
0-808-234-6646 (UK). The pass code is CDEL or DL.
A telephone replay will be available shortly after the call
until March 7, 2013 at 1-855-452-5696
(US), 800-870-0205 (China Landline), 400-120-0932 (China Mobile),
800-963-117 (Hong Kong), or
0-808-234-0072 (UK). The Pass code is 97213474.
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 in China
focusing on professional education. The online courses offered by
the Company are designed to help professionals and other course
participants obtain and maintain the skills, licenses and
certifications necessary to pursue careers in China in the areas of accounting, law,
healthcare, construction engineering, and other industries. The
Company also offers online test preparation courses to self-taught
learners pursuing higher education diplomas or degrees and to
secondary school and college students preparing for various
academic and entrance exams. In addition, the Company offers online
foreign language courses and offline business start-up training
courses. For further information please visit
http://ir.cdeledu.com.
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,"
"anticipate," "future," "intend," "plan," "believe," "is/are likely
to," "estimate" and similar statements. Among other things, the
outlook for the fiscal year 2013, the second quarter of the fiscal
year 2013 and quotations from management in this announcement, as
well as the Company's strategic and operational plans (including
the Company's open-platform strategy), contain forward-looking
statements. The Company may also make written or oral
forward-looking statements in its periodic reports to the SEC, in
its annual report to shareholders, 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 Company's 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: our goals and growth strategies; our
future prospects and market acceptance of our online and offline
courses and other products and services; our future business
development and results of operations; projected revenues, profits,
earnings and other estimated financial information; projected
enrollment numbers; our plans to expand and enhance our online and
offline 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 and 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 Company's annual report on Form 20-F and other documents
filed with the SEC. The Company does not undertake any obligation
to update any forward-looking statement, except as required under
applicable law. All information provided in this press release and
in the attachments is as of the date of this press release.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above 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.
Contacts:
China Distance Education
Holdings Limited
Lingling Kong, IR
manager
Tel: +86-10-8231-9999
ext1805
Email:
IR@cdeledu.com
|
Investor
Relations:
Bill Zima
ICR Inc.
Tel: +1
646-328-2550
|
China Distance
Education Holdings Limited
|
Consolidated Balance
Sheets
|
(in thousands of US
Dollars, except number of shares and per share data)
|
|
|
|
|
|
|
|
|
September 30,
2012
|
|
December 31, 2012
|
|
|
(Audited)
|
|
(Unaudited)
|
|
Assets:
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
49,723
|
|
38,160
|
|
|
Term deposit
|
7,956
|
|
8,024
|
|
|
Restricted
cash
|
6
|
|
6
|
|
|
Accounts receivable, net
of allowance for doubtful accounts of US$2,092 and
US$2,105 as of September 30, 2012 and December 31, 2012,
respectively
|
4,081
|
|
3,925
|
|
|
Inventories
|
658
|
|
499
|
|
|
Prepayment and other
current assets
|
3,573
|
|
4,708
|
|
|
Deferred tax assets,
current portion
|
1,856
|
|
1,895
|
|
|
Deferred cost
|
1,795
|
|
1,615
|
|
|
Total current
assets
|
69,648
|
|
58,832
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property, plant and
equipment, net
|
9,676
|
|
10,346
|
|
|
Goodwill
|
7,511
|
|
7,575
|
|
|
Other intangible assets,
net
|
1,929
|
|
1,797
|
|
|
Deposit for purchase of
non-current assets
|
131
|
|
301
|
|
|
Other non-current
assets
|
1,091
|
|
1,404
|
|
|
Total
non-current assets
|
20,338
|
|
21,423
|
|
|
|
|
|
|
|
|
Total
assets
|
89,986
|
|
80,255
|
|
|
|
|
|
|
|
Liabilities and
equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
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$8,789 and US$9,738 as of September 30, 2012
and
December 31, 2012, respectively)
|
9,636
|
|
10,565
|
|
|
Income tax payable
(including income tax payable of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$2,319
and
US$2,055 as of September 30, 2012 and December 31, 2012,
respectively)
|
2,627
|
|
2,348
|
|
|
Deferred revenue
(including deferred revenue of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$9,408
and
US$12,925 as of September 30, 2012 and December 31, 2012,
respectively)
|
9,450
|
|
12,993
|
|
|
Refundable fees
(including refundable fees of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$3,524
and
US$3,270 as of September 30, 2012 and December 31, 2012,
respectively)
|
3,524
|
|
3,270
|
|
|
Total current
liabilities
|
25,237
|
|
29,176
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Deferred tax
liabilities, non-current portion (including non-current portion
of
deferred tax liabilities of the consolidated VIE without recourse
to China Distance
Education Holdings Limited of nil and nil as of September 30, 2012
and December
31, 2012, respectively)
|
132
|
|
252
|
|
|
Total
non-current liabilities
|
132
|
|
252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
25,369
|
|
29,428
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Ordinary shares (par
value of US$0.0001 per share at September 30, 2012 and
December 31 2012, respectively; Authorized – 480,000,000 shares
at
September 30, 2012 and December 31, 2012; Issued and
outstanding –
134,386,849 and 135,432,521 shares at September 30, 2012 and
December 31
2012, respectively)
|
13
|
|
14
|
|
|
Additional paid-in
capital
|
61,777
|
|
46,067
|
|
|
Accumulated other
comprehensive income
|
4,922
|
|
5,365
|
|
|
Cumulative
deficits
|
(2,095)
|
|
(619)
|
|
|
Total China Distance Education Holdings Limited
shareholders' equity
|
64,617
|
|
50,827
|
|
|
Total
equity
|
64,617
|
|
50,827
|
|
|
Total
liabilities and equity
|
89,986
|
|
80,255
|
|
|
|
|
|
|
|
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
December 31,
|
|
2011
|
|
2012
|
|
|
|
|
Sales, net of
business tax, value-added tax and related
surcharges:
|
|
|
|
|
Online education
services
|
7,741
|
|
10,779
|
|
Books and reference
materials
|
957
|
|
761
|
|
Others
|
1,205
|
|
1,463
|
|
Total
net revenues
|
9,903
|
|
13,003
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
Cost of
services
|
(4,056)
|
|
(5,604)
|
|
Cost of tangible goods
sold
|
(571)
|
|
(509)
|
|
Total
cost of sales
|
(4,627)
|
|
(6,113)
|
|
|
|
|
|
Gross
profit
|
5,276
|
|
6,890
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
(2,869)
|
|
(2,779)
|
|
General and
administrative expenses
|
(2,177)
|
|
(2,454)
|
|
Total
operating expenses
|
(5,046)
|
|
(5,233)
|
Other operating
income
|
2
|
|
3
|
|
|
|
|
|
Operating
income
|
232
|
|
1,660
|
|
|
|
|
Interest
income
|
244
|
|
253
|
Exchange loss
|
(17)
|
|
(21)
|
|
|
|
|
|
Income before
income taxes
|
459
|
|
1,892
|
Less: Income tax
expense
|
(86)
|
|
(416)
|
Net income
from continuing operations attributable to China
Distance
Education Holdings Limited
|
373
|
|
1,476
|
|
|
|
|
Net loss from
discontinued operations attributable to China Distance
Education
Holdings Limited, net of tax
|
(6)
|
|
-
|
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited
|
367
|
|
1,476
|
Net income per
share:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited shareholders
|
|
|
|
|
Basic from continuing
operations
|
0.003
|
|
0.011
|
|
Basic from discontinued
operations
|
0.000
|
|
0.000
|
|
Basic
|
0.003
|
|
0.011
|
|
|
|
|
|
|
Diluted from continuing
operations
|
0.003
|
|
0.011
|
|
Diluted from
discontinued operations
|
0.000
|
|
0.000
|
|
Diluted
|
0.003
|
|
0.011
|
Net income per
ADS:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited shareholders
|
|
|
|
|
Basic from continuing
operations
|
0.011
|
|
0.044
|
|
Basic from discontinued
operations
|
0.000
|
|
0.000
|
|
Basic
|
0.011
|
|
0.044
|
|
|
|
|
|
|
Diluted from continuing
operations
|
0.011
|
|
0.044
|
|
Diluted from
discontinued operations
|
0.000
|
|
0.000
|
|
Diluted
|
0.011
|
|
0.044
|
|
|
|
|
Weighted average
shares used in calculating net income per
share:
|
|
|
|
|
Basic
|
130,075,371
|
|
134,754,567
|
|
Diluted
|
130,089,977
|
|
135,496,638
|
SOURCE China Distance Education Holdings Limited