omniture

China Education Alliance Announces Fourth Quarter and Year End 2010 Financial Results

2011-04-18 19:32 1180

HARBIN, China, April 18, 2011 /PRNewswire-Asia-FirstCall/ -- China Education Alliance, Inc. ("China Education Alliance" or the "Company") (NYSE: CEU), a China-based education resource and services company, today announced fourth quarter and fiscal 2010 results.  The Company will host a conference call on Tuesday, April 19, 2011, at 8 a.m. EDT or 8 p.m. Beijing time.

Financial Highlights for the Fourth Quarter ended December 31, 2010

  • Total revenue increased 19.3% year-over-year to $12.4 million.
  • Gross profit rose 16.4% to $10.2 million or 82.3% of sales, compared to 84.3% of sales, or $8.78 million, in the fourth quarter of 2009.
  • Operating income decreased 53.6%.
  • Net income decreased 53.5% year-over-year to $2.1 million.
  • EPS was $0.06 per fully diluted share, compared to EPS of $0.15 per fully diluted share in the fourth quarter of fiscal 2009.
Financial Highlights for Fiscal 2010
  • Total revenue increased 25.1% year-over-year to $46.3 million.
  • Gross profit rose 28.7% to $38.1 million or 82.3% of sales, up 2.2% and 220 basis points, respectively.
  • Operating income totaled $16.6 million, compared to an operating income of $16.2 million in 2009.
  • Net income increased 0.7% year-over-year to $15.2 million
  • EPS was $0.48 per fully diluted share, a decrease of 18.6%
"We are pleased with our solid growth in online education and our training center businesses due to industry organic growth, which validates our focus on exam-oriented educational services and vocational training programs in China," said Mr. Xiqun Yu, Chairman and Chief Executive Officer of China Education Alliance. "Going forward, we will continue to develop and deliver high quality supplemental education resources and professional training programs. This will help us continue our business expansion and reaffirm our position as one of the leading education resource and service company in China."

Fiscal Year 2010 Review:

China Education Alliance reported total revenue of $46.3 million for the year ended December 31, 2010, an increase of 25.1% compared to $37.0 million for 2009. The Company's online education business generated 61.6% of its total revenue in 2010 compared to 60.2% for prior-year. Its training center business generated 34.7% of total revenue in 2010 compared to 32.7% for in 2009; its other business division generated the remaining 3.7% of total revenue in the year of 2010, compared to 7.1% for last year.

Online education revenue was $28.5 million, up 28.4% for the year of 2010 compared to $22.2 million in the in 2009 mainly due to increase of organic growth.

Training center revenue was $16.0 million in 2010, up 32.2% from $12.1 million in 2009. The increase was mainly due to organic growth.

Other revenue was $1.7 million in 2010, a decrease of 34.6% from $2.6 million last year. The significant decrease was due to our shift in focus of our two business lines – examination preparation and vocational training.

Net income for 2010 was $15.2 million, an increase of 0.7% over 2009 net income of $15.1 million. The increase was due to growth in our online education and training center businesses. Diluted earnings per share was $0.48, compared with $0.59 last year. The decrease in EPS was mainly due to the increase in number of shares outstanding with the exercise options and warrants, preferred stock converted into common stocks as well as Company's decision not to reserve their advance on the acquisition of WEI, totaling of 400,000 shares.

Operating income for the year 2010 increased to $16.6 million, from $16.2 million a year ago. Operating margin was 35.8% compared with 43.7% in 2009.

Overall cost of sales increased 10.8% to $8.2 million in 2010, compared to $7.4 million for 2009. Gross profit increased to $38.1 million in 2010, an increase of 28.7% from $29.6 million in 2009.

Selling expenses increased 84.5% to approximately $17.3 million for 2010, compared to $9.4 million in 2009, primarily due to the increase in agency fees associated with increased sales of our debit cards. Administrative expenses were approximately $3.3 million for the year 2010, an increase from $3.1 million in 2009, primarily due to renovations on the ZHLD office building and the increase of U.S. parent company expenses.

2010 Business Highlight

In February, Company incorporated a new company in the PRC, Beijing New Shifan Education & Technology ("New Shifan") who has a significant impact on the secondary education market in China, with a registered capital of RMB 1.95 million (approximately $284,962). Beijing Shifan was the sponsor and organizer of a nationwide contest for middle school and high school students, testing students' academic abilities in mathematics, physics and chemistry. There are over 100,000 students participating in the contest from 23 provinces in the PRC.

Financial Position

As of December 31, 2010, China Education Alliance had approximately $71.4 million in cash and cash equivalents, $72.6 million in working capital, and no long-term debt. Shareholders' equity at December 31, 2010 was approximately $91.8 million, an increase from approximately $75.3 million at December 31, 2009. The Company generated net cash from operating activities of $ million in the year ended December 31, 2009, up % from $18.6 million in the year-end period of 2009.

Conference Call

China Education Alliance will host a conference call and live webcast at 8 a.m. Eastern Daylight Time (EDT) (8 p.m. Harbin/Beijing time on April 19, 2011).

The dial-in details for the live conference call are as follows:


 

 

- Participant Dial In (Toll Free USA): 1.866.713.8564

 

 

- International Dial In: 1.617.597.5312

 

 

- China Toll Free:  108008521490 

 

 

- Hong Kong Toll Free: 800963844

 

 

Conference ID: CEU

 

 

 

 

 
A live webcast of the conference call will be available in the investor relations section of the Company's website at: http://www.chinaeducationalliance.com/index.jsp

A telephone replay of the call will be available 1 hour after the end of the conference for seven days.

The dial-in details for the replay are as follows:


 

 

- US Toll Free:  1.888.286.8010

 

 

- International Toll:  1.617.801.6888

 

 

Passcode Number: 16090924

 

 

 

 

 
About China Education Alliance, Inc.

China Education Alliance, Inc. (http://www.chinaeducationalliance.com) is a fast-growing, leading, China-based company offering high-quality education resources and services to students ages 6 to 18 and adults (university students and professionals) ages 18 and over. For students ages 6 to 18, China Education Alliance offers supplemental, online exam-oriented training materials and onsite, exam-oriented training and tutoring services. The company provides online, downloadable famous-teacher resources and onsite, personalized instruction. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and onsite tutoring is to help Chinese students (ages 6 to 18) pass the two most important and highly competitive exams in their educational career: the senior high school entrance and college entrance exams. For graduates and professionals age 18 and over, China Education Alliance provides vocational training including IT and several professional training programs.

Forward-Looking Statements

Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations of signing new customers and contracts, developing new products, projected revenues and earnings, and the success of new products. These forward-looking statements are based largely on current expectations and are subject to a number of known and unknown risks, uncertainties and other factors beyond our control that could cause actual events and results to differ materially from these statements. These statements are not guarantees of future performance, and readers are cautioned not to place undue reliance on these forward-looking statements, which are relevant as of the date of the given press release and should not be relied upon as of any subsequent date. China Education Alliance undertakes no obligation to update the forward-looking information contained in this press release.


 

 

For more information, please contact:

 

 

 

 

China Education Alliance, Inc.

 

 

Alice Lee Rogers, CFO

 

 

Tel: +1-626-379-5956

 

 

Email: alice@edu-chn.com


 

 

Christensen

 

 

Jenny Wu

 

 

Telephone: +86 10 5826 4939

 

 

Email: jwu@christensenIR.com

 

 

 

 

 



China Education Alliance, Inc. and Subsidiaries

 

 

Consolidated Statements of Operations

 

 

(Expressed in US Dollars)

 

 

For Years Ended December 31, 2009 and 2010

 

 

 

 

 

 

 

 

Year Ended Dec 31

 

 

 

2009

 

 

2010

 

 

Revenues

 

 

 

 

 

Online education revenues

 

22,238,325

 

 

28,495,602

 

 

Training center revenues

 

12,097,375

 

 

16,033,297

 

 

Other Revenues

 

2,631,783

 

 

1,738,090

 

 

Total revenue

 

36,967,483

 

 

46,266,989

 

 

 

 

 

 

 

Cost of Goods Sold

 

 

 

 

 

Online education costs

 

4,584,519

 

 

4,798,259

 

 

Training center costs

 

2,569,538

 

 

3,232,063

 

 

Other costs

 

210,882

 

 

147,656

 

 

Total cost of goods sold

 

7,364,939

 

 

8,177,979

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

Online education gross profit

 

17,653,806

 

 

23,697,343

 

 

Training center gross profit

 

9,527,837

 

 

12,801,233

 

 

Other gross profit

 

2,420,901

 

 

1,590,434

 

 

Total gross profit

 

29,602,544

 

 

38,089,010

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

Selling expenses

 

9,352,392

 

 

17,250,787

 

 

Administrative

 

3,145,094

 

 

3,349,116

 

 

Depreciation and amortization

 

952,193

 

 

913,965

 

 

Total operating expenses

 

13,449,679

 

 

21,513,867

 

 

 

 

 

 

 

Income from operations

 

16,152,865

 

 

16,575,142

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

Other income

 

130,056

 

 

(67)

 

 

Interest income

 

130,675

 

 

223,803

 

 

Investment loss

 

(671)

 

 

-

 

 

Total other income

 

260,060

 

 

223,735

 

 

 

 

 

 

 

Net Income Before Provision for Income Tax

 

16,411,925

 

 

16,798,878

 

 

Provision for income taxes

 

1,295,224

 

 

1,648,158

 

 

 

 

 

 

 

Net Income

 

15,116,701

 

 

15,150,719

 

 

Net loss attributable to the noncontrolling interests

 

(90,071)

 

 

(111,689)

 

 

Net Income - attributable to CEU and Subsidiaries

 

15,206,772

 

 

15,262,408

 

 

 

 

 

 

 

Basic Earnings Per Share

 

0.63

 

 

0.48

 

 

Diluted Earnings Per Share

 

0.59

 

 

0.48

 

 

 

 

 

 

 

Basic Weighted  Average Shares Outstanding

 

24,081,002

 

 

31,928,992

 

 

Diluted Weighted  Average Shares Outstanding

 

25,622,606

 

 

32,033,326

 

 

 

 

 

 

 

The Components of Other Comprehensive Income

 

 

 

 

 

Net income

 

15,206,772

 

 

15,262,408

 

 

Foreign currency translation adjustment

 

189,644

 

 

2,687,478

 

 

 

 

 

 

 

Comprehensive income

 

15,396,416

 

 

17,949,886

 

 

 

 

 

 

 

 



China Education Alliance, Inc. and Subsidiaries

 

 

Consolidated Balance Sheets

 

 

(Expressed in US Dollars)

 

 

As at December 31, 2009 and 2010

 

 

 

 

 

 

 

 

December 31, 2009

 

 

December 31, 2010

 

 

Assets

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

65,035,332

 

 

71,105,415

 

 

Accounts receivable

 

1,274,727

 

 

-

 

 

Other receivables

 

-

 

 

432,030

 

 

Prepaid expenses

 

2,692,310

 

 

2,834,976

 

 

Total Current Assets

 

69,002,369

 

 

74,372,421

 

 

 

 

 

 

 

Non-current Assets

 

 

 

 

 

Note receivable

 

-

 

 

7,172,301

 

 

Property & equipment, net

 

6,589,982

 

 

9,946,729

 

 

Intangible and capitalized software, net

 

737,761

 

 

1,515,381

 

 

Advance on acquisition

 

932,000

 

 

-

 

 

Long-term investment

 

341,686

 

 

559,269

 

 

Total Noncurrent Assets

 

8,601,429

 

 

19,193,680

 

 

Total Assets

 

77,603,798

 

 

93,566,101

 

 

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

1,255,991

 

 

686,102

 

 

Deferred revenues

 

1,008,884

 

 

1,072,373

 

 

Total Current Liabilities

 

2,264,875

 

 

1,758,475

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

Preferred stock ($0.001 par value, 20,000,000 shares authorized,0 and 4,502,143 issued and outstanding, respectively, aggregate liquidation preference of 0 and $1,665,793, respectively)

 

1,867,644

 

 

-

 

 

Common stock ($0.001 par value, 150,000,000 shares authorized,31,261,911 and 30,040,954 issued at December 31, 2010 and 2009, respectively; and 412,536 shares held in treasury at December 31, 2010)

 

30,041

 

 

31,263

 

 

Additional paid in capital

 

38,231,623

 

 

39,705,625

 

 

Statutory reserve

 

3,016,143

 

 

3,731,672

 

 

Accumulated other comprehensive income

 

2,886,087

 

 

5,573,565

 

 

Retained earnings

 

30,044,687

 

 

44,591,566

 

 

Less: Treasury stock

 

-

 

 

(977,072)

 

 

Stockholders' equity - China Education Alliance, Inc. and Subsidiaries

 

76,076,225

 

 

92,656,618

 

 

Noncontrolling interests in subsidiaries

 

(737,302)

 

 

(848,991)

 

 

Total Stockholders' Equity

 

75,338,923

 

 

91,807,627

 

 

Total Liabilities and Stockholders' Equity

 

77,603,798

 

 

93,566,101

 

 

 

 

 

 

 

 

 

 




Source: China Education Alliance, Inc.
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