-- Revenue for the second quarter was $4.60 million, up 3.40% sequentially from $4.45 million in the first quarter
-- Net Income for the second quarter was $1.93 million, up 156.94% sequentially from $0.75 million in the first quarter
-- EPS for the second quarter was $0.09, up 200% from $0.03 in the first quarter
-- Revenue for the six months ended June 30, 2010 was $9.04 million
-- Net Income for the six months ended June 30, 2010 was $2.69 million
-- EPS for the six months ended June 30, 2010 was $0.12
HANGZHOU, China, Aug. 20 /PRNewswire-Asia/ -- China Executive Education Corp. (OTC Bulletin Board: CECX) ("China Executive Education" or "the Company"), a China-based executive training company designed to fit the needs of Chinese entrepreneurs with classes to improve their skills on marketing, sales, public speaking, leadership, business motivation and a variety of business management skills, announced today its financial results for the second quarter of fiscal 2010.
Financial Highlights for the Second Quarter ended June 30, 2010
-- Total revenue for the second quarter was $4.60 million.
-- Gross profit for the second quarter was $3.83 million, yielding a gross
margin of 83.31%.
-- Operating income for the second quarter was $2.43 million.
-- Net income for the second quarter was $1.93 million, with a net margin
of 42.07%.
-- EPS for the second quarter was $0.09 per basic and diluted share.
Kaien Liang, Chairman and Chief Executive Officer of China Executive Education Corp., commented: "We are very pleased with our second quarter performance, which was highlighted by significant increases in net income and earnings per share. Our second quarter results reflect the rising demand for business training services in the rapidly developing Chinese economy, as well as the strength of our executive training platform and featured lecture events. We are confident that the positive growth trend established in our six-month financial performance will continue throughout fiscal 2010 and beyond."
Financial results for the second quarter ended June 30, 2010
China Executive Education reported total revenue of $4.60 million for the second quarter ended June 30, 2010, representing an increase of 3.40% sequentially from $4.45 million in the first quarter, or an increase of 145.17% from $1.87 million for the same period in 2009. Because the Company began operations on April 23, 2009, a complete year-over-year comparison is not available.
The Company's proprietary training courses generated 36.58% of its total revenue in the second quarter of 2010, and its featured lectures business generated the remaining 63.42% of total revenue. Proprietary training courses revenue was $1.68 million for the second quarter of 2010 and was generated through training programs provided to more than 1,177 Chinese business owners and executives from multiple provinces and industries during the three months ended June 30, 2010.
Overall cost of sales was $0.77 million, or 16.69% of revenue, in the second quarter of fiscal 2010. Gross profit was $3.83 million in the second quarter of fiscal 2010. Gross margin for the period was 83.31%. Selling expenses were approximately $0.65 million for the second quarter, or 46.79% of total operating expenses, and consisted primarily of sales commission paid to outside agents for student recruiting and salaries paid to out-source marketing and sales forces. General and administrative ("G&A") expenses were approximately $0.74 million for the second quarter, or 53.21% of total operating expenses. Selling and G&A expenses represented 14.24% and 16.20% of total revenues for the quarter, respectively.
Financial results for the six months ended June 30, 2010
China Executive Education Corp. reported total revenue of $9.04 million for the six months ended June 30, 2010. The Company's proprietary training courses generated $3.92 million, or 43.30% of total revenue, for the six-month period. The featured lectures business generated $5.13 million, or 56.70% of total revenue, for the same period. Because the Company began operations on April 23, 2009, a complete year-over-year comparison is not available.
For the six months ended June 30, 2010, the Company provided its training programs to more than 2,741 Chinese business owners and executives from different provinces and industries. Total operating expenses were $3.28 million for the six months ended June 30, 2010.
Net income was $2.69 million for the six months ended June 30, 2010. Basic and diluted earnings per share were $0.12 for the six-month period.
The strength of the Company's six-month results was attributable to a number of factors, including strong market demand for quality executive training programs in China and an effective execution in its Hangzhou and Shanghai locations. The Company believes that its intelligent business model and early positioning in its target market have given it a considerable advantage over its competitors. Sales revenue has increased dramatically since the Company was established on April 23, 2009, at which time only 11 training courses were offered to students. At this point, the Company has expanded its course offerings to more than 22 courses, resulting in greater sales opportunities and increased business. Furthermore, additional marketing and sales efforts, as well as other advertising efforts, were implemented during the six months ended June 30, 2010.
Financial Condition
As of June 30, 2010, China Executive Education had approximately $6.69 million in cash and cash equivalents, $4.20 million in working capital, and no long-term debt. Shareholders' equity at June 30, 2010 was approximately $4.52 million, an increase of 26.30% from approximately $3.58 million at December 31, 2009.
Business Outlook
China Executive Education believes that as the number of entrepreneurs and affluent businessmen in China increases, it will be able to continue to expand its network into other commercial cities of China to offer a variety of business programs that serve their needs. The Company believes that its proprietary business training programs serve a need in the rapidly changing and surging economy of China. At the same time, the Company looks forward to collaborating with other education consulting companies to offer more courses to its clients in different regions of China, which it believes will continue to lead to a strong increase in the numbers of companies it can serve.
Mr. Liang stated, "Our client base and revenues have grown continuously from month to month since our inception, and we fully anticipate sustained growth for the foreseeable future. As we enter the second half of fiscal 2010, we remain focused on the continued expansion of our business model as we extend our national sales network and increase our marketing efforts in order to capitalize on the numerous untapped growth opportunities in China's commercial cities. Additionally, we intend to broaden our course offerings and services to yield greater revenues in 2010 and beyond. As ever, we remain dedicated to becoming China's top provider of business training services. The Company looks forward optimistically to the future and to sharing additional new and positive developments with our shareholders as they transpire."
About China Executive Education Corp.
China Executive Education Corp., operating through MYL Business, is a fast-growing executive education company in China that offers comprehensive professional training programs in Hangzhou and Shanghai, two prosperous and commercial cities of China. Through open-enrollment training programs, including proprietary training courses and featured lectures, the Company provides Chinese business executives with a different variety of business training such as sales, marketing, leadership development and highly effective personal skill development focused on decision-making skills, negotiation skills, public speaking skills and people skills. The training courses include a 7-course package for CEOs, as well as 22 other business development courses. We are also one of very few business education training companies in China with the reputation and resources to attract world-renowned masters such as management guru Tom Peters, leadership guru John Maxwell, and relationship guru John Gray to China. China Executive Education Corp. will continue to pave the way for Chinese entrepreneurs who would like to have greater success going forward, helping them to reach international markets more easily. Since formally launching in April 2009, the Company has provided its training programs to approximately 2,874 Chinese business owners and executives from a broad range of industries.
Forward-Looking Statements
This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding the Company's financial condition, future revenue and growth strategy, the demand for executive training programs in China, the success of our sales and marketing efforts, our ability to capitalize on potential growth opportunities throughout China, our ability to become China's leading provider of business training services, our ability to continue to attract world-renowned masters and the Company's ability to maintain its customer relationships and to maintain its ability to pursue its commercial objectives. In addition, the Company's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe such as risks associated with, among others, the political, economic and legal environment of the PRC and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available at http://www.sec.gov . Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
CHINA EXECUTIVE EDUCATION CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2010 December 31,
(Unaudited) 2009
CURRENT ASSETS
Cash and cash equivalents $6,692,589 $6,381,770
Restricted cash 294,923 --
Accounts receivable, net of
allowance 12,650 33,324
Other receivables 1,886,061 1,008,565
Advances to vendors 915,646 731,365
Total current assets 9,801,869 8,155,024
PROPERTY AND EQUIPMENT, NET 270,350 87,369
OTHER ASSET -- 91,505
TOTAL ASSETS 10,072,219 8,333,898
CURRENT LIABILITIES
Advance from customers 2,788,348 3,628,810
Taxes payable 812,684 537,541
Payroll payable 91,043 90,419
Other payables and accrued
liabilities 317,760 592,788
Dividend payable 1,593,199 -
Total current liabilities 5,603,034 4,849,558
STOCKHOLDERS' EQUITY
Common Stock, $0.001 par value
70,000,000 shares authorized,
22,660,200 shares and 21,560,000
shares issued and outstanding at
June 30, 2010 and December 31,
2009, respectively 22,660 21,560
Additional paid-in capital 1,390,611 66,311
Statutory reserve 358,026 358,026
Retained earnings 2,895,544 3,131,806
Accumulated other comprehensive
income (loss) (146,295) 1,592
Total stockholders' equity 4,520,545 3,579,295
Non-controlling interest (51,361) (94,955)
Total Equity 4,469,185 3,484,340
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $10,072,219 $8,333,898
CHINA EXECUTIVE EDUCATION CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
From From
Three Inception Six Inception
months (April 23, months (April 23,
ended 2009) to ended 2009) to
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
Revenues $4,596,776 $1,874,937 $9,042,408 $1,874,937
Cost of revenue 767,357 908,085 2,282,101 908,085
Gross profit 3,829,420 966,852 6,760,306 966,852
Operating expenses
Selling expenses 654,758 65,265 1,373,859 65,265
General and
administrative expenses 744,660 93,918 1,907,942 93,918
Total operating expenses 1,399,418 159,182 3,281,801 159,182
Income from operations 2,430,002 807,670 3,478,505 807,670
Other income (expenses)
Interest income
(expenses) 4,713 (13,265) 4,952 (13,265)
Other income (expenses) 95,228 (4,345) 95,228 (4,345)
Total Other
income(expenses) 99,941 (17,609) 100,179 (17,609)
Income before income taxes 2,529,943 790,061 3,578,684 790,061
Provision for income taxes 596,269 266,224 892,437 266,224
Net income 1,933,674 523,837 2,686,247 523,837
Less: net income
attributable to non-
controlling interest 61,067 (274,835) 44,005 (274,835)
Net income attributable to
the Company 1,872,607 798,672 2,642,242 798,672
Comprehensive income
Total foreign currency
translation gain (loss) (149,328) 252 (147,887) 252
Less: foreign currency
translation gain
attributable to non-
controlling interest (336) (64) (411) (64)
Foreign currency
translation gain (loss)
attributable to common
stockholders (149,664) 188 (148,298) 188
Comprehensive income
attributable to the
Company $1,722,943 $798,860 $2,493,944 $798,860
Basic and diluted income
per common share $0.09 $0.02 $0.12 $0.02
Basic and diluted weighted
average common shares
outstanding 22,199,160 21,560,000 22,119,691 21,560,000
Cash dividends per common
share $0.06 $-- $0.06 $--
CHINA EXECUTIVE EDUCATION CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
For the six months ended June 30,
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,686,247 $523,837
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 21,607 61
Stock issued for services 105,000 --
Changes in assets and liabilities
(Increase) decrease in -
Restricted cash (293,008)
Accounts receivable 20,768 --
Other receivables (864,154) (352,662)
Advances for vendor (178,075) --
Increase (decrease) in -
Advance from customers (859,864) 1,962,191
Payroll Payable -- 5,591
Taxes payable 266,515 392,645
Other payables and accrued
liabilities (264,581) 469,627
Net cash provided by operating
activities 640,456 3,001,291
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property & equipment (202,800) (3,305)
Net cash used in investing
activities (202,800) (3,305)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shareholder capital contributions -- 87,808
Dividend paid (1,285,305) --
Proceeds from issuance of common
stock under a private placement 1,220,400 --
Net cash provided by (used in)
financing activities (64,905) 87,808
EFFECT OF EXCHANGE RATE CHANGE ON
CASH & CASH EQUIVALENTS (61,932) 1,097
NET INCREASE IN CASH & CASH
EQUIVALENTS 310,819 3,086,890
CASH & CASH EQUIVALENTS, BEGINNING OF
PERIOD 6,381,770 --
CASH & CASH EQUIVALENTS, END OF
PERIOD $6,692,589 $3,086,890
Supplemental disclosures of cash flow
information:
Income tax paid $702,812 $--
Interest paid $-- $--
Non-cash investing and financing
activities
Common stock issued for services $105,000 $--
Dividend declared $2,878,504 $--
This information is intended to be reviewed in conjunction with the
Company's filings with the Securities and Exchange Commission.
Source: China Executive Education Corp.
