BEIJING, Nov. 9, 2010 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GM:CAST), a leading for-profit, post-secondary and E-learning services provider in China, today announced its financial results for the third quarter ended September 30, 2010.
(1) See financial tables below and the GAAP to non-GAAP reconciliation attached to this press release. The US dollar figures presented in this release are derived from the corresponding RMB figures from the Company's Form 10-Q for the period ended September 30, 2010, and are based on the historical exchange rate of US$1.0 = 6.8 RMB on September 30, 2009, and US$1.0 = 6.7 RMB on September 30, 2010.
"We are pleased to report another strong quarter as we continue to successfully execute our growth strategy to be a leader in the China post-secondary education sector," commented Ron Chan, Chairman and Chief Executive Officer. "During the third quarter we completed the purchase of Hubei Industrial University Business College (HIUBC), which expands our on-campus enrollments by approximately 10,000 students and brings a number of new degree programs including industrial design, computer engineering and law. Overall growth in enrollments and tuition for the beginning of the 2011 academic school year, which began in September, boosted our cash position to $150 million. We are now providing accredited degree programs to approximately 32,700 traditional university students and 143,000 e-learning students throughout China."
"We have also made significant progress in launching our international degree programs with our US education partners such as Seton Hall University and our new distance learning joint venture with the China University of Petroleum (CUP), which will add another 40,000 distance learning students and provides us an entry to the adult continuing education sector. With these new initiatives and the continued long term growth of the post-secondary education sector in China, we believe that we will have tremendous opportunities to accelerate future operating results."
Added Antonio Sena, Chief Financial Officer, "Due to the timing of the HIUBC acquisition which we completed in August, we only recognized one month of revenue contribution during the third quarter. Despite ongoing investments in growth initiatives such as the international degree programs and ongoing campus expansion and one-time costs related to the Hubei acquisition and joint venture with China University of Petroleum, we still generated 62% EBITDA margins and we believe that we are well-capitalized for future acquisitions. In our view, this underscores the high incremental cash flow and profit generation capacity inherent in our business model."
Third Quarter 2010 Financial Results
ChinaCast is organized into two business segments, the Traditional University Group ("TUG") and the E-Learning Services Group ("ELG"). The TUG offers fully-accredited bachelor and diploma degree programs to students from three universities in China: the Foreign Trade and Business College ("FTBC") campus in Chongqing, the Lijiang College ("LJC") campus in Guilin and Hubei Industrial University Business College ("HIUBC) in Wuhan. The ELG encompasses the Company's E-learning education service businesses.
Total Revenues – Total revenues for the quarter increased 55% to $18.7 million from $12.1 million in the third quarter of 2009. TUG revenue for the quarter increased 143% to $11.2 million from $4.6 million in the third quarter of 2009, primarily due to the acquisition of LJC in the fourth quarter of 2009 and the acquisition of HIUBC in the third quarter of 2010. TUG total student enrolment for the quarter increased to approximately 32,700 from approximately 12,200 in the third quarter of 2009. Average revenue per student for the quarter amounted to $463 per student per quarter as compared to $397 per student per quarter in the third quarter of 2009. ELG revenue for the quarter remained flat year-over-year at $7.4 million. ELG total number of post-secondary students enrolled in courses using the Company's distance learning platform in the quarter increased to 143,000 compared to 141,000 in the third quarter of 2009. ELG total number of subscribing schools for K-12 distance learning services for the quarter remained stable year-over-year at 6,500. TUG revenue as a percentage of total revenue for the quarter increased to 60% compared to 38% in the third quarter of 2009.
Cost of Sales – Cost of sales for the quarter increased 115% to $9.6 million from $4.5 million in the third quarter of 2009 primarily due to the acquisition of LJC and HIUBC.
Gross Profit and Gross Margin – Gross profit for the quarter increased 19% to $9.1 million from $7.6 million in the third quarter of 2009. Gross profit margin for the quarter was 49% compared to 63% in the third quarter of 2009 primarily due to the increase in percentage of total revenue attributed to the TUG business which has a lower gross margin than the ELG business. The gross profit margin of the TUG business for the quarter was 27% compared to 39% in the third quarter of 2009 primarily due to the acquisition of LJC and HIUBC. The gross profit margin for the ELG business was 81% compared to 78% primarily due to the decrease in cost of the satellite platform usage fee.
Share Based Compensation – Share based compensation for the quarter decreased 38% to $0.3 million from $0.5 million in the third quarter of 2009.
Amortization of Acquired Intangible Assets – Amortization of acquired intangible assets for the quarter increased 178% to $1.5 million from $0.5 million in the third quarter of 2009 primarily due to the acquisition of LJC and HIUBC.
Operating Expenses – Operating expenses for the quarter decreased 18% to $1.6 million from $2.0 million in the third quarter of 2009 primarily due to a one-time gain of $1.4 million due to an adjustment in the purchase price of the acquisition of LJC partially offset by an increase in administration expenses due to the acquisition of JLC and HIUBC.
Operating Income and Operating Income Margin – Operating income for the quarter increased 32% to $7.5 million from $5.7 million in the third quarter of 2009. Operating income margin for the quarter was 40% compared to 47% in the third quarter of 2009 primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower operating income margin than the ELG business. The operating income margin of the TUG business for the quarter was 18% compared to 35% in the third quarter of 2009 primarily due to the acquisition of LJC and HIUBC. The operating income margin of the ELG business for the quarter was 74% compared to 54% in the third quarter of 2009 primarily due to the decrease in cost of the satellite platform usage fee.
Income Taxes – Income taxes for the quarter increased 4% to $1.2 million from $1.1 million in the third quarter of 2009 primarily due to the one-time gain of $1.4 million due to an adjustment in the purchase price of the acquisition of LJC which is not taxed but partially offset by an increase in business.
Net Income and Net Income Margin – Net income attributable to the Company for the quarter increased 54% to $6.2 million from $4.0 million in the third quarter of 2009. Net income margin for the quarter remained flat year-over-year at 33%.
Diluted EPS - Diluted earnings per share for the quarter were $0.12 compared to $0.11 in the third quarter of 2009 despite a large year-over-year increase in shares used in the computation. The weighted average number of shares used in the computation was 50,370,903 for the third quarter of 2010 and 36,379,884 for the third quarter of 2009. The increase in the diluted share count is primarily due to the capital raise in December 2009 and in June 2010 related to the acquisition of HIUBC.
Adjusted Net Income and Adjusted Net Income Margin - Adjusted net income excluding share based compensation and amortization of acquired intangible assets (non-GAAP) for the quarter increased 59% to $8.0 million from $5.0 million in the third quarter of 2009. Adjusted net income margin (non-GAAP) for the quarter was 44% compared to 42% in the third quarter of 2009.
Adjusted Diluted EPS - Adjusted diluted earnings per share excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the quarter were $0.16 compared to $0.14 in the third quarter of 2009 despite a large year-over-year increase in shares used in the computation.
Adjusted EBITDA and Adjusted EBITDA Margin – Adjusted EBITDA (non-GAAP) for the quarter increased 51% to $11.7 million from $7.7 million in the third quarter of 2009. Adjusted EBITDA margin (non-GAAP) for the quarter was 62% compared to 63% in the third quarter of 2009.
Cash and Bank Balances together with Term Deposits - Cash and bank balances together with term deposits was $150.0 million as of September 30, 2010. Total equity was $276.1 million.
Nine Months 2010 Financial Results
Total Revenues – Total revenues for the first nine months increased 49% to $51.4 million from $34.5 million in the first nine months of 2009. TUG revenue for the first nine months increased 126% to $29.9 million from $13.2 million in the first nine months of 2009 primarily due to the acquisition of LJC in the fourth quarter of 2009 and the acquisition of HIUBC in the third quarter of 2010. ELG revenue for the first nine months remained flat at $21.5 million primarily due to a decrease in equipment sales. TUG revenue as a percentage of total revenue for the first nine months increased to 58% compared to 38% in the first nine months of 2009.
Cost of Sales – Cost of sales for the first nine months increased 87% to $24.6 million from $13.2 million in the first nine months of 2009 primarily due to the acquisition of LJC and HIUBC.
Gross Profit and Gross Margin – Gross profit for the first nine months increased 26% to $26.8 million from $21.3 million in the first nine months of 2009. Gross profit margin for the first nine months was 52% compared to 62% in the first nine months of 2009 primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower gross margin than the ELG business. The gross profit margin of the TUG business for the first nine months was 30% compared to 37% in the first nine months of 2009. The gross profit margin of the ELG business for the first nine months was 84% compared to 78% in the first nine months of 2009.
Share Based Compensation – Share based compensation for the first nine months decreased 49% to $1.0 million from $1.9 million in the first nine months of 2009.
Amortization of Acquired Intangible Assets – Amortization of acquired intangible assets for the first nine months increased 133% to $4.1 million from $1.7 million in the first nine months of 2009 due to the acquisition of LJC and HIUBC.
Operating Expenses – Operating expenses for the first nine months increased 7% to $6.7 million from $6.3 million in the first nine months of 2009 primarily due to an increase in administration expenses due to the acquisition of LJC and HIUBC but partially offset by a one-time gain of $1.4 million due to an adjustment in the purchase price of the acquisition of LJC.
Operating Income and Operating Income Margin – Operating income for the first nine months increased 33% to $20.1 million from $15.1 million in the first nine months of 2009. Operating income margin for the first nine months was 39% compared to 44% in the first nine months of 2009 primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower operating income margin than the ELG business. The operating income margin of the TUG business for the first nine months was 23% compared to 34% in the first nine months of 2009 primarily due to the acquisition of LJC and HIUBC. The operating income margin of the ELG business for the first nine months was 62% compared to 50% in the first nine months of 2009 primarily due to the decrease in cost of the satellite platform usage fee.
Income Taxes – Income taxes for the first nine months increased 33% to $4.1 million from $3.1 million for the first nine months 2009 primarily due to an increase in business but partially offset by the one-time gain of $1.4 million due to an adjustment in the purchase price of the acquisition of LJC which is not taxed.
Net Income and Net Income Margin – Net income attributable to the Company for the first nine months increased 47% to $15.7 million from $10.7 million in the first nine months of 2009. Net income margin for the first nine months was 31% compared to 31% in the first nine months of 2009 despite the large increase in percentage of total revenue attributed to the TUG business which has a lower net income margin than the ELG business.
Diluted EPS - Diluted earnings per share for the first nine months were $0.32 compared to $0.30 in the first nine months of 2009 despite a large year-over-year increase in shares used in the computation. The weighted average number of shares used in the computation was 48,176,902 for the first nine months of 2010 and 35,945,254 for the first nine months of 2009. The increase in the diluted share count is primarily due to capital raises in December 2009 and in June 2010 related to the acquisition of HIUBC.
Adjusted Net Income and Adjusted Net Income Margin - Adjusted net income excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the first nine months increased 45% to $20.8 million from $14.3 million in the first nine months of 2009. Adjusted net income margin excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the first nine months was 40% compared to 42% in the first nine months of 2009 primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower net income margin than the ELG business.
Adjusted Diluted EPS - Adjusted diluted earnings per share excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the first nine months were $0.43 compared to $0.40 despite a large year-over-year increase in shares used in the computation.
Adjusted EBITDA and Adjusted EBITDA Margin – Adjusted EBITDA (non-GAAP) for the first nine months increased 44% to $31.0 million from $21.4 million in the first nine months of 2009. Adjusted EBITDA margin (non-GAAP) for the first nine months was 60% compared to 62% in the first nine months of 2009 primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower adjusted EBITDA margin (non-GAAP) than the ELG business.
Financial Outlook for 2010
For the full year ending December 31, 2010, the Company reaffirmed the following previously provided guidance:
This is the Company's current and preliminary view, which is subject to change.
Conference Call Information
ChinaCast's management team will host an earnings conference call at 8:00 am ET, Wednesday, November 10, 2010. The dial-in details for the earnings conference call are as follows:
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Earnings Call Telephone Numbers: |
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US/Canada Toll Free: +1-877-303-9226 |
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International: +1-760-666-3566 |
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A replay of the earnings conference call will be available at the following numbers:
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Replay Telephone Numbers: |
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US/Canada Toll Free: +1-800-642-1687 |
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International: +1-706-645-9291 |
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Replay Pass Code: 20345209 |
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The replay will be available starting at 11:00 am ET, Wednesday, November 10, 2010, through 11:59 pm ET, Wednesday, November 24, 2010.
Additionally, a live and archived version of the earnings call will be available at www.chinacasteducation.com. Please access the website approximately 10 minutes prior to the start time in order to download and install any necessary software.
About ChinaCast Education Corporation
Established in 1999, ChinaCast Education Corporation is a leading for-profit, post-secondary education and e-Learning services provider in China. The Company provides post-secondary degree and diploma programs through its three universities in China: The Foreign Trade and Business College of Chongqing Normal University, the Lijiang College of Guangxi Normal University and Hubei Industrial University Business College. These universities offer fully accredited, career-oriented bachelor's degree and diploma programs in business, economics, law, IT/computer engineering, hospitality and tourism management, advertising, language studies, art and music. The Company provides its e-Learning services to post-secondary institutions, K-12 schools, government agencies and corporate enterprises via its nationwide satellite/fiber broadband network. These services include interactive distance learning applications, multimedia education content delivery, English language training and vocational training courses. The Company is listed on NASDAQ Global Select Market with the ticker symbol CAST.
Safe Harbor Statement
This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of future performance, statements of management's plans and objectives, future contracts, and forecasts of trends and other matters. These projections, expectations and trends are dependent on certain risks and uncertainties including such factors, among others, as growth in demand for education services, smooth and timely implementation of new training centers and other risk factors listed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009. Forward-looking statements speak only as of the date of this press release, and we undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as "anticipate," "estimate," "expect", "believe," "will likely result," "outlook," "project" and other words and expressions of similar meaning. No assurance can be given that the results in any forward-looking statements will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: adjusted net income, adjusted net-income margin, adjusted EPS (basic and diluted), adjusted EBITDA and adjusted EBITDA margin. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results." These non-GAAP financial measures exclude from our operating performance not only non-cash charges, such as stock-based compensation, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
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Contact: |
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ChinaCast Education |
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Michael Santos, President-International |
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+1-202-361-3403 |
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HC International |
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Ted Haberfield, Executive Vice President |
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+1-760-755-2716 |
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CHINACAST EDUCATION CORPORATION |
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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
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(In thousands, except share-related data) |
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As of |
As of |
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September 30, |
December 31, |
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2010 |
2010 |
2009 |
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US$ |
RMB |
RMB |
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(Note 1) |
(Note 1) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
60,471 |
405,153 |
327,628 |
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Term deposits |
89,552 |
600,000 |
507,000 |
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Accounts receivable |
7,470 |
50,050 |
53,828 |
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Inventory |
215 |
1,438 |
1,386 |
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Prepaid expenses and other current assets |
4,303 |
28,825 |
19,212 |
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Amounts due from related parties |
513 |
3,438 |
6,388 |
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Deferred tax assets |
102 |
682 |
1,010 |
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Current portion of prepaid lease payments for land use rights |
484 |
3,246 |
3,246 |
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Total current assets |
163,110 |
1,092,832 |
919,698 |
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Non-current deposits |
1,815 |
12,159 |
14,550 |
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Property and equipment, net |
109,179 |
731,498 |
516,938 |
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Prepaid lease payments for land use rights - non-current |
26,758 |
179,281 |
144,818 |
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Acquired intangible assets, net |
17,471 |
117,055 |
71,286 |
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Long-term investments |
450 |
3,015 |
3,101 |
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Non-current advances to related party |
14,874 |
99,665 |
99,727 |
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Goodwill |
114,737 |
768,741 |
503,771 |
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Total assets |
448,394 |
3,004,246 |
2,273,889 |
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Liabilities and equity |
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Current liabilities: |
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Accounts payable (including accounts payable of the |
5,938 |
39,782 |
16,061 |
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Accrued expenses and other current liabilities of September 30, 2010 and December 31, 2009, |
39,290 |
263,241 |
215,631 |
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Deferred revenues (including deferred revenues of the |
47,626 |
319,097 |
156,645 |
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Income taxes payable (including income taxes payable |
13,998 |
93,793 |
68,731 |
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Current portion of long-term bank borrowings |
25,075 |
168,000 |
104,400 |
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Current portion of capital lease obligation |
196 |
1,313 |
1,323 |
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Other borrowings |
224 |
1,500 |
200 |
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Total current liabilities |
132,347 |
886,726 |
562,991 |
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Non-current liabilities: |
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Long-term bank borrowings |
16,418 |
110,000 |
134,000 |
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Deferred tax liabilities – non-current |
8,150 |
54,606 |
30,923 |
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Unrecognized tax benefits – non-current (including |
15,111 |
101,244 |
62,457 |
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Total non-current liabilities |
39,679 |
265,850 |
227,380 |
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Total liabilities |
172,026 |
1,152,576 |
790,371 |
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Commitments and contingencies (Note 15) |
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Equity: |
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Ordinary shares (US$0.0001 par value; 100,000,000 |
5 |
36 |
33 |
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Additional paid-in capital |
228,379 |
1,530,140 |
1,290,651 |
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Statutory reserve |
5,842 |
39,139 |
39,139 |
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Accumulated other comprehensive loss |
(599) |
(4,011) |
(6,055) |
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Retained earnings |
36,093 |
241,822 |
136,583 |
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Total ChinaCast Education Corporation shareholders' equity |
269,720 |
1,807,126 |
1,460,351 |
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Noncontrolling interest |
6,648 |
44,544 |
23,167 |
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Total equity |
276,368 |
1,851,670 |
1,483,518 |
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Total liabilities and equity |
448,394 |
3,004,246 |
2,273,889 |
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See notes to unaudited condensed consolidated financial statements. |
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CHINACAST EDUCATION CORPORATION |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) |
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(In thousands, except share-related data) |
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For the three months ended September 30, |
For the nine months ended September 30 |
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2010 |
2010 |
2009 |
2010 |
2010 |
2009 |
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US$ |
RMB |
RMB |
US$ |
RMB |
RMB |
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(Note 1) |
(Note 1) |
(Note 1) |
(Note 1) |
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Revenues: |
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Service |
18,238 |
122,195 |
80,289 |
50,921 |
341,170 |
228,391 |
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Equipment |
436 |
2,924 |
1,896 |
441 |
2,955 |
6,065 |
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18,674 |
125,119 |
82,185 |
51,362 |
344,125 |
234,456 |
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Cost of revenues: |
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Service |
(9,157) |
(61,358) |
(28,468) |
(24,136) |
(161,713) |
(83,479) |
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Equipment |
(423) |
(2,832) |
(1,875) |
(423) |
(2,832) |
(6,001) |
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(9,580) |
(64,190) |
(30,343) |
(24,559) |
(164,545) |
(89,480) |
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Gross profit |
9,094 |
60,929 |
51,842 |
26,803 |
179,580 |
144,976 |
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Operating (expenses) income: |
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Selling and marketing expenses (including share-based |
(59) |
(394) |
(899) |
(254) |
(1,702) |
(3,442) |
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General and administrative expenses (including share-based |
(2,957) |
(19,817) |
(12,964) |
(7,816) |
(52,369) |
(43,603) |
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Foreign exchange gain (loss) |
(1) |
(4) |
(51) |
(83) |
(557) |
65 |
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Management service fee |
- |
- |
510 |
- |
- |
3,806 |
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Gain from change in contingent consideration |
1,413 |
9,467 |
1,413 |
9,467 |
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Other operating income |
(5) |
(34) |
41 |
27 |
180 |
548 |
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Total operating expenses, net |
(1,609) |
(10,782) |
(13,363) |
(6,713) |
(44,981) |
(42,626) |
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Income from operations |
7,485 |
50,147 |
38,479 |
20,090 |
134,599 |
102,350 |
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Interest income |
572 |
3,829 |
2,134 |
1,540 |
10,316 |
6,922 |
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Interest expense |
(606) |
(4,058) |
(2,421) |
(1,585) |
(10,623) |
(5,591) |
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Income before provision for income taxes and earnings in equity |
7,451 |
49,918 |
38,192 |
20,045 |
134,292 |
103,681 |
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Provision for income taxes |
(1,163) |
(7,792) |
(7,619) |
(4,110) |
(27,540) |
(21,090) |
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Net income before earnings in equity investments |
6,288 |
42,126 |
30,573 |
15,935 |
106,752 |
82,591 |
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Loss in equity investments |
(4) |
(26) |
(793) |
(13) |
(86) |
(1,370) |
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Income from continuing operation, net of tax |
6,284 |
42,100 |
29,780 |
15,922 |
106,666 |
81,221 |
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Discontinued operations |
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Loss from discontinued operations, net of taxes of RMB nil for the |
- |
- |
(388) |
- |
- |
(1,441) |
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Net income |
6,284 |
42,100 |
29,392 |
15,922 |
106,666 |
79,780 |
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Less: Net income attributable to noncontrolling interest |
(84) |
(559) |
(2,036) |
(213) |
(1,427) |
(6,945) |
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Net income attributable to ChinaCast Education Corporation |
6,200 |
41,541 |
27,356 |
15,709 |
105,239 |
72,835 |
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Net income |
6,284 |
42,100 |
29,392 |
15,922 |
106,666 |
79,780 |
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Foreign currency translation adjustments |
50 |
338 |
39 |
298 |
1,994 |
(697) |
||||||
|
Comprehensive income |
6,334 |
42,438 |
29,431 |
16,220 |
108,660 |
79,083 |
||||||
|
Comprehensive income attributable to noncontrolling interest |
(76) |
(510) |
(2,036) |
(206) |
(1,377) |
(6,945) |
||||||
|
Comprehensive income attributable to ChinaCast Education |
6,258 |
41,928 |
27,395 |
16,014 |
107,283 |
72,138 |
||||||
|
Net income per share |
||||||||||||
|
Net income attributable to ChinaCast Education Corporation per share: |
||||||||||||
|
Basic |
0.12 |
0.83 |
0.76 |
0.32 |
2.21 |
2.03 |
||||||
|
Diluted |
0.12 |
0.82 |
0.75 |
0.32 |
2.18 |
2.03 |
||||||
|
Weighted average shares used in computation: |
||||||||||||
|
Basic |
49,834,291 |
49,834,291 |
36,133,233 |
47,693,969 |
47,693,969 |
35,814,325 |
||||||
|
Diluted |
50,370,903 |
50,370,903 |
36,379,884 |
48,176,902 |
48,176,902 |
35,945,264 |
||||||
|
See notes to unaudited condensed consolidated financial statements. |
||||||||||||
|
CHINACAST EDUCATION CORPORATION |
||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||
|
(In thousands) |
||||||
|
For the nine months ended September 30, |
||||||
|
2010 |
2010 |
2009 |
||||
|
US$ |
RMB |
RMB |
||||
|
(Note 1) |
(Note 1) |
|||||
|
Cash flows from operating activities: |
||||||
|
Net income |
15,922 |
106,666 |
79,780 |
|||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||
|
Depreciation |
5,497 |
36,832 |
18,268 |
|||
|
Amortization of acquired intangible assets |
4,064 |
27,231 |
11,833 |
|||
|
Amortization of land use rights |
375 |
2,510 |
1,973 |
|||
|
Share-based compensation |
973 |
6,522 |
12,847 |
|||
|
Loss on disposal of property, plant and equipment |
- |
- |
519 |
|||
|
Loss in equity investments |
13 |
86 |
1,370 |
|||
|
Changes in assets and liabilities: |
||||||
|
Accounts receivable |
720 |
4,823 |
(23,080) |
|||
|
Inventory |
(8) |
(52) |
(570) |
|||
|
Prepaid expenses and other current assets |
(538) |
(3,607) |
3,019 |
|||
|
Non-current deposits |
804 |
5,390 |
(133) |
|||
|
Amounts due from related parties |
440 |
2,950 |
5,751 |
|||
|
Accounts payable |
(397) |
(2,657) |
6,587 |
|||
|
Accrued expenses and other current liabilities |
(1,964) |
(13,158) |
(13,856) |
|||
|
Deferred revenues |
23,836 |
159,699 |
23,120 |
|||
|
Amount due to related party |
- |
- |
(599) |
|||
|
Income taxes payable |
2,934 |
19,656 |
13,415 |
|||
|
Deferred tax assets |
139 |
931 |
- |
|||
|
Deferred tax liabilities |
(710) |
(4,765) |
(1,816) |
|||
|
Unrecognized tax benefits |
1,987 |
13,320 |
5,791 |
|||
|
Net cash provided by operating activities |
54,085 |
362,377 |
144,219 |
|||
|
Cash flows from investing activities: |
||||||
|
Advance to related party |
- |
- |
(20,000) |
|||
|
Purchase of subsidiaries, net of cash acquired |
(55,876) |
(374,374) |
||||
|
Cash received from noncontrolling interest for establishing joint venture |
2,985 |
20,000 |
||||
|
Repayment from advance to related party |
9 |
62 |
27,544 |
|||
|
Purchase of property and equipment |
(8,165) |
(54,708) |
(26,153) |
|||
|
Disposal of property, plant and equipment |
120 |
801 |
||||
|
Term deposits |
(13,881) |
(93,000) |
89,000 |
|||
|
Deposits for investments |
(448) |
(3,000) |
(103,000) |
|||
|
Net cash used in investing activities |
(75,376) |
(505,020) |
(32,609) |
|||
|
Cash flows from financing activities: |
||||||
|
Other borrowings raised |
13,955 |
93,500 |
10,350 |
|||
|
Other borrowings raised from related party |
- |
- |
500 |
|||
|
Repayment of other borrowings |
(13,761) |
(92,200) |
(11,367) |
|||
|
Bank borrowings raised |
11,940 |
80,000 |
128,400 |
|||
|
Bank borrowings repaid |
(14,090) |
(94,400) |
(58,400) |
|||
|
Guarantee deposit paid |
- |
- |
(3,000) |
|||
|
Repayment of capital lease obligation |
(1) |
(10) |
88 |
|||
|
Proceeds from issuance of shares, net of issuance costs |
34,772 |
232,970 |
- |
|||
|
Net cash provided by financing activities |
32,815 |
219,860 |
66,571 |
|||
|
Effect of foreign exchange rate changes |
46 |
308 |
- |
|||
|
Net increase in cash and cash equivalents |
11,524 |
77,217 |
178,181 |
|||
|
Cash and cash equivalents at beginning of the period |
48,901 |
327,628 |
220,131 |
|||
|
Cash and cash equivalents at end of the period |
60,471 |
405,153 |
398,312 |
|||
|
See notes to unaudited condensed consolidated financial statements. |
||||||
|
ChinaCast Education Third Quarter and 9 Months FY2010 |
||||
|
Reconciliations of Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures |
||||
|
3 months ended |
3 months ended |
YoY |
||
|
30/9/2010 |
30/9/2009 |
%change |
||
|
US$'000 |
US$'000 |
+/(-) |
||
|
Adjusted Net Income (Non-GAAP) |
||||
|
Net income attributable to ChinaCast Education Corporation |
6,200 |
4,023 |
54.11 |
|
|
Share-based Compensation |
287 |
461 |
(37.74) |
|
|
Amortization of Acquired Intangible Assets |
1,492 |
537 |
177.84 |
|
|
Adjusted Net Income (non-GAAP) |
7,979 |
5,021 |
194 |
|
|
Adjusted Net Margin (non-GAAP) |
43% |
42% |
||
|
Adjusted Diluted EPS (Non-GAAP) |
0.16 |
0.14 |
14.29 |
|
|
Adjusted EBITDA (Non-GAAP) |
||||
|
Net income attributable to ChinaCast Education Corporation |
6,200 |
4,023 |
54.11 |
|
|
Depreciation |
2,333 |
965 |
141.76 |
|
|
Amortization of Acquired Intangible Assets |
1,492 |
537 |
177.84 |
|
|
Amortization of Land Use Rights |
132 |
98 |
34.69 |
|
|
Share-based Compensation |
287 |
461 |
(37.74) |
|
|
Interest Income |
(571) |
(314) |
81.85 |
|
|
Interest Expense |
606 |
356 |
70.22 |
|
|
Provision for income taxes |
1,163 |
1,120 |
3.84 |
|
|
Earnings in equity investments |
4 |
117 |
(96.58) |
|
|
Net income attributable to noncontrolling interest |
83 |
299 |
(72.24) |
|
|
Adjusted EBITDA (non-GAAP) |
11,729 |
7,662 |
371 |
|
|
Adjusted EBITDA Margin (non-GAAP) |
62% |
63% |
||
|
9 months ended |
9 months ended |
YoY |
||
|
30/9/2010 |
30/9/2009 |
%change |
||
|
US$'000 |
US$'000 |
+/(-) |
||
|
Adjusted Net Income (Non-GAAP) |
||||
|
Net income attributable to ChinaCast Education Corporation |
15,709 |
10,711 |
46.66 |
|
|
Share-based Compensation |
973 |
1,889 |
(48.49) |
|
|
Amortization of Acquired Intangible Assets |
4,064 |
1,740 |
133.56 |
|
|
Adjusted Net Income (non-GAAP) |
20,744 |
14,340 |
132 |
|
|
Adjusted Net Margin (non-GAAP) |
40% |
42% |
||
|
Adjusted Diluted EPS (Non-GAAP) |
0.43 |
0.40 |
7.50 |
|
|
Adjusted EBITDA (Non-GAAP) |
||||
|
Net income attributable to ChinaCast Education Corporation |
15,709 |
10,711 |
46.66 |
|
|
Depreciation |
5,497 |
2,686 |
104.65 |
|
|
Amortization of Acquired Intangible Assets |
4,064 |
1,740 |
133.56 |
|
|
Amortization of Land Use Rights |
375 |
290 |
29.31 |
|
|
Share-based Compensation |
973 |
1,889 |
(48.49) |
|
|
Interest Income |
(1,540) |
(1,018) |
51.28 |
|
|
Interest Expense |
1,586 |
822 |
92.94 |
|
|
Provision for income taxes |
4,110 |
3,101 |
32.54 |
|
|
Earnings in equity investments |
13 |
201 |
(93.53) |
|
|
Net income attributable to noncontrolling interest |
213 |
1,021 |
(79.14) |
|
|
Adjusted EBITDA (non-GAAP) |
31,000 |
21,443 |
266 |
|
|
Adjusted EBITDA Margin (non-GAAP) |
60% |
62% |
||
