omniture

ChinaCast Education Reports Third Quarter 2010 Financial Results

2010-11-10 06:21 827

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.

  • Third Quarter 2010 Highlights(1):
    • Total revenues increased 55% to $18.7 million
    • Gross profit increased 19% to $9.1 million; Gross profit margin was 49%
    • Operating income increased 32% to $7.5 million; Operating income margin was 40%
    • Net income increased 54% to $6.2 million; Net income margin was 33%
    • Diluted EPS of $0.12
    • Adjusted net income (non-GAAP) increased 59% to $8.0 million; Adjusted net income (non-GAAP) margin was 43%
    • Adjusted diluted EPS (non-GAAP) of $0.16
    • Adjusted EBITDA (non-GAAP) increased 51% to $11.7 million; Adjusted EBITDA margin (non-GAAP) was 62%
    • Cash, cash equivalents and term deposits was $150.0 million.  Total equity was $276.1 million.
  • Nine Months 2010 Highlights:
    • Total revenues increased 49% to $51.4 million
    • Gross profit increased 26% to $26.8 million; Gross profit margin was 52%
    • Operating income increased 33% to $20.1 million; Operating income margin was 39%
    • Net income increased 47% to $15.7 million; Net income margin was 31%
    • Diluted EPS of $0.32
    • Adjusted net income (non-GAAP) increased 45% to $20.8 million; Adjusted net income margin (non-GAAP) was 40%
    • Adjusted diluted EPS of $0.43
    • Adjusted EBITDA (non-GAAP) increased 44% to $31.0 million; Adjusted EBITDA margin (non-GAAP) was 60%

(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:

  • Total net revenue will be between $78 million to $80 million (a year-on-year increase of 53% to 57%)
  • Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) will be between $25 million to $27 million (a year-on-year increase of 34% to 44%)
  • Adjusted EBITDA excluding share based compensation (non-GAAP) will be between $45 million to $47 million (a year-on-year increase of 58% to 65%)  

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:



Earnings Call Telephone Numbers:


US/Canada Toll Free:  +1-877-303-9226


International:  +1-760-666-3566





A replay of the earnings conference call will be available at the following numbers:



Replay Telephone Numbers:


US/Canada Toll Free:  +1-800-642-1687


International:  +1-706-645-9291


Replay Pass Code:  20345209





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.



Contact:




ChinaCast Education


Michael Santos, President-International


+1-202-361-3403


mjsantos@chinacasteducation.com




HC International


Ted Haberfield, Executive Vice President


+1-760-755-2716


thaberfield@hcinternational.net








CHINACAST EDUCATION CORPORATION


CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)


(In thousands, except share-related data)



As of


As of



September 30,


December 31,



2010


2010


2009



US$


RMB


RMB



(Note 1)




(Note 1)


Assets







Current assets:







 Cash and cash equivalents

60,471


405,153


327,628


 Term deposits

89,552


600,000


507,000


 Accounts receivable

7,470


50,050


53,828


 Inventory

215


1,438


1,386


 Prepaid expenses and other current assets

4,303


28,825


19,212


 Amounts due from related parties

513


3,438


6,388


 Deferred tax assets

102


682


1,010


 Current portion of prepaid lease payments for land use rights

484


3,246


3,246


Total current assets

163,110


1,092,832


919,698


Non-current deposits

1,815


12,159


14,550


Property and equipment, net

109,179


731,498


516,938


Prepaid lease payments for land use rights - non-current

26,758


179,281


144,818


Acquired intangible assets, net

17,471


117,055


71,286


Long-term investments

450


3,015


3,101


Non-current advances to related party

14,874


99,665


99,727


Goodwill

114,737


768,741


503,771


Total assets

448,394


3,004,246


2,273,889


Liabilities and equity







Current liabilities:







 Accounts payable (including accounts payable of the
consolidated VIE without recourse to ChinaCast
Education Corporation of RMB1,705 and RMB719 as of
September 30, 2010 and December 31, 2009,
respectively)

5,938


39,782


16,061


 Accrued expenses and other current liabilities
(including accrued expenses and other liabilities of the
consolidated VIE without recourse to ChinaCast
Education Corporation of RMB18,210 and RMB16,740 as

of September 30, 2010 and December 31, 2009,
respectively)

39,290


263,241


215,631


 Deferred revenues (including deferred revenues of the
consolidated VIE without recourse to ChinaCast
Education Corporation of nil as of September 30, 2010
and December 31, 2009)

47,626


319,097


156,645


 Income taxes payable (including income taxes payable
of the consolidated VIE without recourse to ChinaCast
Education Corporation of RMB4,179 and RMB2,293 as of
September 30, 2010 and December 31, 2009,
respectively)

13,998


93,793


68,731


 Current portion of long-term bank borrowings

25,075


168,000


104,400


 Current portion of capital lease obligation

196


1,313


1,323


 Other borrowings

224


1,500


200


Total current liabilities

132,347


886,726


562,991


Non-current liabilities:







 Long-term bank borrowings

16,418


110,000


134,000


 Deferred tax liabilities – non-current

8,150


54,606


30,923


 Unrecognized tax benefits – non-current (including
unrecognized tax benefits of the consolidated VIE without
recourse to ChinaCast Education Corporation of
RMB5,662 and RMB5,257 as of September 30, 2010 and
December 31, 2009, respectively)

15,111


101,244


62,457


Total non-current liabilities

39,679


265,850


227,380









Total liabilities

172,026


1,152,576


790,371


Commitments and contingencies (Note 15)







Equity:







 Ordinary shares (US$0.0001 par value; 100,000,000
shares authorized; 49,778,952 and 45,170,698 shares
issued and outstanding as of September 30, 2010 and
December 31, 2009, respectively)

5


36


33


 Additional paid-in capital

228,379


1,530,140


1,290,651


 Statutory reserve

5,842


39,139


39,139


 Accumulated other comprehensive loss

(599)


(4,011)


(6,055)


 Retained earnings

36,093


241,822


136,583









Total ChinaCast Education Corporation shareholders' equity

269,720


1,807,126


1,460,351


Noncontrolling interest

6,648


44,544


23,167









Total equity

276,368


1,851,670


1,483,518









Total liabilities and equity

448,394


3,004,246


2,273,889









See notes to unaudited condensed consolidated financial statements.















CHINACAST EDUCATION CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)


(In thousands, except share-related data)





For the three months ended September 30,


For the nine months ended September 30



2010


2010


2009


2010


2010


2009



US$


RMB


RMB


US$


RMB


RMB



(Note 1)




(Note 1)


(Note 1)




(Note 1)


Revenues:













 Service

18,238


122,195


80,289


50,921


341,170


228,391


 Equipment

436


2,924


1,896


441


2,955


6,065
















18,674


125,119


82,185


51,362


344,125


234,456















Cost of revenues:













 Service

(9,157)


(61,358)


(28,468)


(24,136)


(161,713)


(83,479)


 Equipment

(423)


(2,832)


(1,875)


(423)


(2,832)


(6,001)
















(9,580)


(64,190)


(30,343)


(24,559)


(164,545)


(89,480)















Gross profit

9,094


60,929


51,842


26,803


179,580


144,976















Operating (expenses) income:


























Selling and marketing expenses (including share-based
compensation of RMB nil and RMB267 for the three months ended
September 30 for 2010 and 2009, respectively, share-based
compensation of RMB410 and RMB1,373 for the nine months ended
September 30 for 2010 and 2009, respectively)

(59)


(394)


(899)


(254)


(1,702)


(3,442)


General and administrative expenses (including share-based
compensation of RMB1,922 and RMB2,868 for the three months
ended September 30 for 2010 and 2009, respectively, share-based
compensation of RMB6,114 and RMB11,474 for the nine months
ended September 30 for 2010 and 2009, respectively)

(2,957)


(19,817)


(12,964)


(7,816)


(52,369)


(43,603)















Foreign exchange gain (loss)

(1)


(4)


(51)


(83)


(557)


65


Management service fee

-


-


510


-


-


3,806


Gain from change in contingent consideration

1,413


9,467




1,413


9,467




Other operating income

(5)


(34)


41


27


180


548















Total operating expenses, net

(1,609)


(10,782)


(13,363)


(6,713)


(44,981)


(42,626)















Income from operations

7,485


50,147


38,479


20,090


134,599


102,350


Interest income

572


3,829


2,134


1,540


10,316


6,922


Interest expense

(606)


(4,058)


(2,421)


(1,585)


(10,623)


(5,591)


Income before provision for income taxes and earnings in equity
method investments

7,451


49,918


38,192


20,045


134,292


103,681


Provision for income taxes

(1,163)


(7,792)


(7,619)


(4,110)


(27,540)


(21,090)


Net income before earnings in equity investments

6,288


42,126


30,573


15,935


106,752


82,591


Loss in equity investments

(4)


(26)


(793)


(13)


(86)


(1,370)


Income from continuing operation, net of tax

6,284


42,100


29,780


15,922


106,666


81,221


Discontinued operations













Loss from discontinued operations, net of taxes of RMB nil for the
three months and nine months ended September 30 for 2010 and
2009:

-


-


(388)


-


-


(1,441)


Net income

6,284


42,100


29,392


15,922


106,666


79,780


Less: Net income attributable to noncontrolling interest

(84)


(559)


(2,036)


(213)


(1,427)


(6,945)


Net income attributable to ChinaCast Education Corporation

6,200


41,541


27,356


15,709


105,239


72,835


Net income

6,284


42,100


29,392


15,922


106,666


79,780


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
Corporation

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%









Source: ChinaCast Education Corporation
Related Stocks:
NASDAQ:CAST
Keywords: Education
collection