omniture

Noah Education Announces Unaudited Fourth Quarter and Full Fiscal Year 2011 Results

2011-08-31 14:37 1089

SHENZHEN, China, August 31, 2011 /PRNewswire-Asia-FirstCall/ -- Noah Education Holdings Ltd. ("Noah" or the "Company") (NYSE: NED), a leading provider of education services in China, today announced its unaudited financial results for fourth quarter and full fiscal year 2011 ended June 30, 2011.

Fourth Quarter Fiscal 2011 Financial Highlights

  • Net revenue from the education services business (continuing business) increased 186.4% year-over-year to RMB29.6million (US$4.6 million), exceeding guidance.
  • Gross profit increased 189.3% year-over-year to RMB15.7 million (US$2.4 million), and gross profit margin improved to 53.0%.
  • Operating loss increased 11.1% year-over-year to RMB9.6 million (US$1.5 million).
  • Net loss was RMB38.7 million (US$6.0 million), compared to RMB3.0 million (US$0.5 million) in the fourth quarter of fiscal 2010. The net loss in the quarter included a de-recognition of RMB30.7 million (US$4.7 million) accumulative exchange reserve related to the Electronic Learning Products("ELP") business (discontinued business),and RMB3.9 million (US$0.6 million) professional fee associated with the disposal of the ELP business charged during the quarter.
  • Basic and diluted losses per share were RMB1.11 (US$0.17) from continuing operations, andRMB0.08 (US$0.01) from discontinued operations, respectively, compared to basic and diluted losses per share of RMB0.08 from continuing operations and RMB2.11 from discontinued operations, respectively, in the fourth quarter of fiscal 2010.
  • Non-GAAP basic and diluted losses per share were RMB0.97 (US$0.15), compared to non-GAPP basic and diluted losses per share of RMB0.01 in the fourth quarter of fiscal 2010.

Full Fiscal 2011 Financial Highlights

  • Net revenue from the education services business (continuing business) increased 134.3% year-over-year to RMB93.5 million (US$14.4 million), exceeding guidance.
  • Gross profit increased 134.3% year-over-year to RMB50.1 million (US$7.7 million), and gross profit margin maintained at 53.7%.
  • Operating loss was RMB26.6million (US$4.1 million), compared to an operating loss of RMB28.9 million in fiscal year 2010.
  • Net loss was RMB25.5 million (US$3.9 million), compared to RMB11.1 million in fiscal year 2010. The net loss in fiscal 2011 included a de-recognition of RMB30.7 million (US$4.7 million) of accumulative exchange reserve related to the ELP business, and one-time legal and professional expenses of RMB8.7 million (US$1.3 million) associated with the disposal of the ELP business.
  • Basic and diluted losses per share were RMB0.78 (US$0.12) from continuing operations, and RMB10.38 (US$1.60) from discontinued operations, respectively, compared to basic and diluted losses per share of RMB0.29 from continued operations, and RMB0.44 for basic and RMB0.43 for diluted earnings per share from discontinued operation in fiscal 2010.
  • Non-GAAP basic and diluted losses per share were RMB0.47 (US$0.07), compared to Non-GAAP basic and diluted losses per share of RMB0.02 in fiscal 2010.

Recent Business Development

  • Completion of Acquisition of Shanghai Yuanbo Education Information and Consulting Corporation Ltd ("Yuanbo Education") - On July 31, 2011, Noah completed its acquisition of an 80% interest in Yuanbo Education, a company focused on early childhood education services in the Yangtze Delta region, for a total consideration of RMB94.9 million. Yuanbo Education operates 15 kindergartens in the Yangtze Delta region under the brand name Qingan.
  • Completion of Disposal of ELP Business - Noah announced on July 13, 2011 that the company has received the second installment of RMB17.5 million, representing 30% of the total purchase price of RMB100 million, net of adjustment. The final installment of RMB30 million will be paid by October 12, 2011. The final installment will not be subject to any price adjustment and the Company has kept buyer's stock certificate as collateral to secure the third payment obligations under the acquisition agreement.

Commenting on the results, Jerry He, Chief Executive Officer of Noah Educations, said, "We are delighted to finish fiscal year 2011 with a brand new chapter for Noah. With the completion of the acquisition of Yuanbo Education and divestment of the ELP business, Noah has transformed into a pure education services company and firmly established our footprint in the education services segment. Further to the exciting business progress, we are very pleased to report that Noah, the two education service arms LNS and Wentai Education continued to demonstrate the anticipated profitable growth potential, strong margin and highly visible business model, by delivering a 186% and 189% net revenue and gross profit growth in the fourth quarter, concluding the fiscal year 2011 and paving for fiscal year 2012 with a strong growth momentum."

"Looking ahead, our strategic priorities will continue to be driving organic growth from LNS and Wentai Education; integrating and optimizing growth from the newly acquired Yuanbo Education and expanding our presence in the primary, secondary and supplemental education services business, while further increasing the company's presence to capture the promising growth prospects of the education services industry in China."

"In driving organic growth, we will continue to expand the school network of LNS and Wentai Education to increase enrollment and tuition revenue while optimizing revenue opportunities brought by supplementary programs such as Dudu Happy Reading Program for LNS. We expect to add one kindergarten to LNS, and one school and one kindergarten to Wentai Education networks in the coming quarter. The newly acquired Yuanbo Education will provide a new growth engine, adding to the growth momentum in the near term. We expect a profitable fiscal year 2012 beginning next quarter."

"With the strengthened management capabilities in education services, we are on track to integrate internal functions, including standardizing management reporting to strengthen internal control, and pooling marketing, IT and R&D resources, to optimize the potential of and synergies among different education service units."

"On the other hand, we will capitalize on our RMB487.9 million (US$75.5 million) liquidity position to further expand our presence in education service value chain to drive our medium to long term growth. We will continue to focus on pre-school education opportunities which are a highly fragmented, under-served segment in the high growth education service industry in China, and can complement our existing business in the space."

Dora Li, Chief Financial Officer of Noah Education, said, "Despite the impact of one-off non-cash items related to the disposal of the ELP business, our margin profile will increase with our transformation into an education services company."

"The high and stable gross margin for the fourth quarter and the fiscal year 2011 demonstrated the distinctive feature of the education services business. Sales and marketing as well as research and development expenses as a percentage of revenue were also lowered and maintained at more stable levels after the change in business nature, although operating margin was impacted by the high general and administrative expenses as we built the infrastructure for a more sizable operation.

"We believe that the general and administrative expenses as a percentage of revenue has leveled off and will improve as our revenue size continues to expand in fiscal 2012 with the more sizable scale of LNS and Wentai Education, as well as the addition of Yuanbo Education. Meanwhile, we will continue to see gross margin and other operating expenses maintained at a similarly favorable levels."

Fourth Quarter and Fiscal Year 2011 Unaudited Financial Results

Net revenue

Net revenue from education services business (continuing operations) for the fourth quarter increased 186.4% to RMB29.6 million (US$4.6 million) from RMB10.3 million in the fourth quarter of fiscal 2010, driven mainly by the contribution from the newly acquired Wentai Education. Net revenue from Wentai Education was RMB18.2 million (US$2.8 million), representing 61.6% of net revenue. LNS also showed solid growth with revenue increased 9.9% year-over-year to RMB11.4 million (US$1.8 million) from RMB10.3 million.

Net revenue for the fiscal year 2011 increased 134.3% year-over-year to RMB93.5 million (US$14.4million) from RMB39.9 million. Net revenue from Wentai Education was RMB51.9 million (US$8.0 million), representing 55.5% of total.Net revenue from LNS was RMB41.6 million, representing a 4.2% year-over-year increase from RMB39.9 million.

Gross profit and gross profit margin

Gross profit for the fourth quarter increased 189.3% year-over-year to RMB15.7 million (US$2.4 million) from RMB5.4 million. Gross profit margin for the quarter was 53.0%, compared to 52.4% in the fourth quarter of fiscal 2010. The increase of gross profit was primarily driven by the contribution from Wentai Education.

Gross profit for the fiscal year 2011 increased 134.3% to RMB50.1 million (US$7.7 million) from RMB21.4 million in the fiscal year 2010. Gross profit margin for the fiscal year was 53.7%, compared to 53.7% in the fiscal year 2010.

Operating expenses

Total operating expenses for the fourth quarter of were RMB27.5 million (US$4.2 million), a year-over-year increase of 95.4% from RMB14.1 million. The increase in operating expenses was a result of the addition of Wentai Education expenses of RMB6.4 million (US$1.0 million) which were not consolidated in the fourth quarter of fiscal 2010. As a percentage of net revenue, operating expenses were 93.0%, compared to 136.3% in the same period in fiscal 2010. Total operating expenses for the fiscal year increased 63.5% year-over-year to RMB82.2 million (US$12.7 million) from RMB50.3 million. The increase in total operating expenses was primarily due to the inclusion of operating expenses from Wentai Education, which amounted to RMB19.0 million (US$2.9 million), and the professional fees associated with the disposal of the ELP business totaling RMB8.7 million. As a percentage of net revenue, operating expenses were 88.0%, compared to 126.0% in fiscal 2010.

Research and development ("R&D") expenses for the fourth quarter increased 41.7% year-over-year to RMB0.6 million (US$0.1 million) from RMB0.4 million. R&D expenses for the fiscal year increased 17.7% year-over-year to RMB2.2 million (US$0.3million) from RMB1.9 million. The increase in R&D expenses was mainly attributable to R&D investment in LNS associated with enhancing Dudu Happy Reading Program. As a percentage of net revenue, R&D expenses were 2.4%, compared to 4.7% in fiscal 2010. The Company will continue to invest in R&D to strengthen teaching material and content development capabilities.

Sales and marketing ("S&M") expenses for the fourth quarter increased 16.7% year-over-year to RMB1.2 million (US$0.2) from RMB1.0 million. As a percentage of net revenue, S&M expenses were 3.9%, compared to 9.6% in the same period in fiscal 2010. The lower percentage of S&M expenses to net revenue primarily reflected the lower expenditure on advertising and marketing for education services business. S&M expenses for the fiscal year increased 17.4% year-over-year to RMB4.0 million (US$0.6million), from RMB3.4 million, primarily reflecting the additional S&M expenses from Wentai Education. As a percentage of net revenue, S&M expenses were 4.3%, compared to 8.5% in fiscal 2010.

General and administrative ("G&A") expenses for the fourth quarter increased 52.9% year-over-year to RMB15.6 million (US$2.4million) from RMB10.2 million. The increase was mainly attributable to the incremental expenses arising from Wentai Education and the share option expenses incurred during the quarter. As a percentage of net revenue, G&A expenses were 52.8%, compared to 98.9% in the same period in fiscal 2010. G&A expenses for the fiscal year increased 55.2% year-over-year to RMB65.5 million (US$10.1million) from RMB42.2 million. The increase in G&A expenses were mainly attributable to the RMB18.2 million (US$2.8 million) additional expenses from Wentai Education, the RMB3.0 million increase (US$0.4 million) in staff compensation cost for LNS, as well as increased share based payment and travel expenses. As a percentage of net revenue, G&A expenses were 70.0%, compared to 105.7% in fiscal 2010.

Other expenses

Other expenses for the fourth quarter of fiscal 2011 were RMB10.1 million (US$1.6 million), compared to RMB2.4 million in the same quarter of fiscal 2010. The increase was mainly attributable to RMB8.7 million (US$1.3 million) legal and professional fee associated with the sale of ELP business.

Other expenses for fiscal 2011 were RMB10.6 million (US$1.6 million) which includes the one-time legal and professional expenses of RMB8.7 million (US$1.3 million) in relating to the disposal of ELP business.

Operating income/loss

Operating loss for the fourth quarter of fiscal 2011 increased 11.1% to RMB9.6 million (US$1.5 million), from RMB8.7 million in the fourth quarter of fiscal 2010. Operating loss for the fiscal year was RMB26.6 million (US$4.1 million), compared to an operating loss of RMB28.9 million in fiscal year 2010.

Other income, net

Interest income for the fourth quarter of fiscal 2011 was RMB0.3 million (US$0.04million), compared to RMB1.4 million in the fourth quarter of fiscal 2010. Investment income for the fourth quarter of fiscal 2011 was RMB3.8 million (US$0.6million), compared to RMB0.9 million in the fourth quarter of fiscal 2010. Other non-operating loss was RMB30.7 million (US$4.7 million), compared to an income of RMB4.2 million in the same period in fiscal 2010. The loss was mainly due to a one-time dividend paid to LNS original shareholders amounted to RMB5.9 million (US$1.0 million) and de-recognition of accumulative exchange reserve related to ELP business amounted to RMB30.7 million (US$4.7 million).

Interest income for the fiscal year was RMB1.9 million (US$0.3 million), compared to RMB9.1 million in fiscal year 2010. Investment income for the fiscal year was RMB10.4 million (US$1.6million), compared to RMB2.8 million in fiscal year 2010. Other non-operating loss for the fiscal year was RMB4.9 million (US$0.8million), compared to an income of RMB6.0 million in the fiscal year 2010. The loss was mainly due to a one-time dividend paid to LNS original shareholders amounted to RMB5.9 million (US$1.0 million).

Income tax expenses

Income tax expenses were RMB2.5 million (US$0.4 million) in the fourth quarter of fiscal 2011, compared to RMB0.9 million in the same period in fiscal 2010. Income tax expenses for the fiscal year were RMB6.2 million (US$1.0 million), compared to RMB0.2 million in fiscal year 2010.

Net loss

Net loss from continuing operations for the fourth quarter was RMB38.7 million (US$6.0 million) or basic and diluted losses per share of RMB1.11 (US$0.17). Net loss from discontinued operations was RMB3.1 million (US$0.5 million), or basic and diluted losses per share of RMB0.08 (US$0.01).This compares with a loss of RMB3.0 million from continuing operations, or basic and diluted losses per share of RMB0.08 in the fourth quarter of fiscal 2010. Net loss from discontinued operation for the fourth quarter of fiscal 2010 was RMB80.6 million, or basic and diluted losses per share of RMB2.11.

Net loss from continuing operations for the fiscal year was RMB25.5 million (US$3.9 million]), or basic and diluted losses per share of RMB0.78 (US$0.12).Net loss from discontinued operation for fiscal 2011 was RMB382.5 million (US$59.1 million) or basic and diluted losses per share of RMB10.38 (US$1.60). These compare to net income of RMB11.1 million, or basic and diluted losses per share of RMB0.29 in the fiscal year 2010 from continuing operation.

Net loss excluding share-based compensation expenses (non-GAAP) for the fourth quarter of fiscal 2011 was RMB33.3 million (US$5.1million) from continuing operations. Net loss excluding share-based compensation expenses for the fiscal year 2011 was RMB14.0 million (US$2.2 million).

Liquidity

Cash and cash equivalents, short-term bank deposit, and short-term investments totaled RMB487.9 million (US$75.5 million) on June 30, 2011, compared to RMB491.2 million on March 31, 2011. For the three months ended June 30, 2011, the Company generated RMB28.1 million (US$4.4 million) in cash from operations, compared to cash outflow of RMB16.9 million in the same period of fiscal 2010.

Deferred revenue

Deferred revenue as of June 30, 2011was RMB20.4 million (US$3.2 million). This compares with deferred revenue of RMB23.8 million as of March 31, 2011.

Financial Outlook for Full Fiscal 2012 and for the First Quarter of Fiscal 2012

Based on current estimates and market conditions, for the first quarter of fiscal 2012, Noah expects to generate net revenue in the range of RMB33 million (US$5.1million) to RMB35 million (US$5.4million). For the full fiscal 2012, the Company expects to generate revenue between RMB145 million (US$22.4 million) and RMB155 million (US$23.9 million). This forecast reflects Noah's current and preliminary view, which is subject to change.

Conference Call

Noah's senior management will host a conference call at 8:00 am (Eastern)/5:00 am (Pacific)/8:00 pm (China) on Wednesday, August 31, 2011 to discuss its fourth quarter and full fiscal year 2011 financial results and recent business activities. The conference call may be accessed by calling:


Toll Free

Toll

United States

1-866-700-0133

1-617-213-8831

China - South China Telecom

10-800-130-0399


South China Netcom

10-800-852-1490


North China Telecom

10-800-152-1490


Hong Kong


800-96-3844

International


1-617-213-8831

Passcode

"Noah Education", "Noah" or "NED"



Please dial in 10 minutes before the commencement time of this call

A telephone replay will be available shortly after the call until September 7, 2011 by dialing the following numbers:


Toll Free

Toll




United States

1-888-286-8010

1-617-801-6888

International


1-617-801-6888

Passcode

82919718




A live webcast and replay will be available on the investor relations page of Noah's website at http://ir.noahedu.com.cn.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on our year-end financial statements, which could result in significant differences from this unaudited financial information.

Currency Convenience Translation

For the convenience of readers, certain RMB amounts in the statement of operations have been translated into US dollars at the average rate of RMB6.4774, while RMB amounts in balance sheet and cash flow statements have been translated into US dollar at the rate of RMB6.4635 to US$1.00, the noon buying rate for US dollars in effect on June 30, 2011 for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York.

Use of Non-GAAP Financial Measures

In addition to consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP net income which excludes non-cash share-based compensation. The Company believes that the non-GAAP financial measures provide investors with another method for assessing the Company's operating results in a manner that is focused on the performance of its ongoing operations. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of the Company's liquidity and when planning and forecasting future periods.

About Noah Education Holdings Ltd.

Noah is a leading provider of education services in China. The Company's brands include Wentai Education, which operates and manages high-end kindergartens, primary and secondary schools, and Little New Star, which provides English language training for children aged 3-19 in its directly owned and franchised training centers. Noah was founded in 2004 and is listed on the New York Stock Exchange under the ticker symbol NED. For more information about Noah, please visit http://ir.noahedu.com.cn.

Safe Harbor Statement

This press release contains forward-looking statements that reflect Noah's current expectations and views of future events that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Noah has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. You should understand that our actual future results may be materially different from and worse than what Noah expects. Information regarding these risks, uncertainties and other factors is included in Noah's most recent Annual Report on Form 20-F and other filings with the SEC.

Contacts

Noah Education Holdings Ltd.

Lea Wu

T: +86 (755) 82889128

E: ir@noaheducation.com




Noah Education Holdings Ltd.

Consolidated Statements of Operations










Three months ended


Twelve months ended


June 30


June 30


2010

2011


2010

2011


(Unaudited)

(Unaudited)


(Audited)

(Unaudited)


RMB

RMB

USD


RMB

RMB

USD

Net revenue

10,326,762

29,573,879

4,565,726


39,897,671

93,474,859

14,430,997

Cost of revenue

(4,910,962)

(13,904,517)

(2,146,631)


(18,493,517)

(43,325,518)

(6,688,755)

Gross profit (loss)

5,415,800

15,669,361

2,419,094


21,404,154

50,149,342

7,742,242

Research & development expenses

(437,133)

(619,331)

(95,615)


(1,878,735)

(2,212,193)

(341,527)

Sales & marketing expenses

(990,684)

(1,155,773)

(178,433)


(3,390,773)

(3,979,909)

(614,433)

General and administrative expenses

(10,216,272)

(15,612,674)

(2,411,732)


(42,170,343)

(65,468,603)

(10,107,271)

Other expenses

(2,426,928)

(10,102,935)

(1,559,729)


(2,861,942)

(10,571,984)

(1,632,142)

Total operating expenses

(14,071,017)

(27,499,713)

(4,245,508)


(50,301,793)

(82,232,589)

(12,695,373)









Other operating income

167

2,211,990

341,495


44,995

5,512,172

850,990

Operating income (loss)

(8,655,050)

(9,618,361)

(1,484,918)


(28,852,644)

(26,571,075)

(4,102,142)

Interest income

1,419,771

286,449

44,223


9,134,152

1,880,147

290,264

Investment income

907,099

3,848,783

594,189


2,823,770

10,368,364

1,600,707

Other Non-Operating income(loss)

4,253,625

(30,657,217)

(4,732,975)


5,962,348

(4,935,508)

(761,962)

Income before income taxes

(2,074,556)

(36,140,347)

(5,579,481)


(10,932,374)

(19,258,073)

(2,973,133)

Income tax (expenses) credit

(914,701)

(2,534,539)

(391,292)


(164,400)

(6,219,458)

(960,183)

Net income (loss) from continuing operations

(2,989,257)

(38,674,886)

(5,970,773)


(11,096,774)

(25,477,531)

(3,933,316)

less: Net income attributable to non-controlling interest

0

1,763,830

272,307


0

3,344,273

516,301

Net income attributable to controlling interest

(2,989,257)

(40,438,716)

(6,243,080)


(11,096,774)

(28,821,803)

(4,449,617)

















Income(loss) from discontinued ELP business before income tax

(80,725,990)

(35,188,218)

(5,432,488)


14,987,626

(382,515,245)

(59,054,129)

Income tax

160,776

32,115,572

4,958,122


1,768,971



Loss from discontinued ELP operation

(80,565,214)

(3,072,646)

(474,367)


16,756,597

(382,515,245)

(59,054,129)

















Net income per share from continuing operation








Basic

(0.08)

(1.11)

(0.17)


(0.29)

(0.78)

(0.12)

Diluted

(0.08)

(1.11)

(0.17)


(0.29)

(0.78)

(0.12)









Net income per share from discontinued operation








Basic

(2.11)

(0.08)

(0.01)


0.44

(10.38)

(1.60)

Diluted

(2.11)

(0.08)

(0.01)


0.43

(10.38)

(1.60)

















Weighted average ordinary shares outstanding








Basic

38,122,632

36,324,578

36,324,578


38,327,047

36,856,451

36,856,451

Diluted

38,855,771

36,559,316

36,559,316


39,201,389

37,091,473

37,091,473





Noah Education Holdings Ltd.

Consolidated Balance Sheet




March 31


June 30




2011


2011




Unaudited


Unaudited




RMB


RMB

USD

Assets:






Current assets







Cash and cash equivalents


428,178,794


405,874,701

62,794,879


Short term bank deposit




32,000,000

4,950,878


Investments







Held to maturity investment


63,003,441


50,003,441

7,736,279


Accounts receivables, net of allowance


2,665,331


1,668,007

258,066


Inventories


5,418,466


6,197,967

958,918


Prepaid expenses, and other current assets


10,624,568


60,115,668

9,300,792


Assets held for sale (note)


166,919,775


0

0


Total current assets


676,810,375


555,859,783

85,999,812


Investments


23,393,235


12,943,200

2,002,506


Property, plant and equipment, net


163,578,694


171,920,948

26,598,739


Intangible assets, net


40,255,370


39,019,233

6,036,858


Goodwill


85,438,649


103,025,561

15,939,593


Deposit for investment


6,000,000


4,000,000

618,860


Prepaid expenses non-current


0


743,242

114,991


Total assets


995,476,324


887,511,968

137,311,359

Liabilities and Shareholders' Equity






Current liabilities







Accountants payable (including account payables of the consolidated VIEs without recourse to Noah of RMB63,979 as of June 30, 2011)


3,316,979


2,835,594

438,709


Other payables and accruals (including other payables, accruals of the consolidated VIEs without recourse to Noah of RMB7,302,862 as of June 30, 2011)


44,578,437


34,236,815

5,296,947


Advances from customers


372,792


227,516

35,200


Income tax payable(credit) (including income tax payables of the consolidated VIEs without recourse to Noah of RMB3,292,381 as of June 30, 2011)


3,415,484


5,732,080

886,838


Deferred revenue (including deferred revenue of the consolidated VIEs without recourse to Noah of RMB12,817,039 as of June 30, 2011)


23,760,360


20,420,720

3,159,390


Liabilities held for sale (note)


66,919,775


0

0


Total current liabilities


142,363,827


63,452,723

9,817,084


Deferred revenues-non current


5,754,839


5,327,152

824,190


Deferred tax liabilities


4,214,131


4,589,541

710,071


Total non-current liabilities


9,968,970


9,916,693

1,534,261


Total liabilities


152,332,797


73,369,416

11,351,345

Shareholders' Equity






Ordinary shares


14,764


14,799

2,290

Additional paid-in capital


1,037,991,055


1,042,785,726

161,334,529

Accumulated other comprehensive loss


(120,750,781)


(119,328,924)

(18,461,967)

Retained earnings


(116,881,309)


(154,312,678)

(23,874,476)

Total shareholders' equity


800,373,729


769,158,923

119,000,375

Minority interest


42,769,798


44,983,628

6,959,639

Total liabilities and shareholders' equity


995,476,324


887,511,968

137,311,359








Note:







Assets/Liabilities classified as held for sale of ELP business


As of March 31, 2011





Cash and cash equivalents


0





AR (net)


87,131,651





Other receivables


29,820,041





Inventory (net)


37,536,912





Fixed assets (net)


8,852,920





Intangible assets(net)


3,578,250





AP


(17,625,037)





Advance from customer


(4,952,467)





Income tax payable


(48,391)





Deferred tax liabilities


(32,115,572)





Other payables and accruals


(12,178,308)





Total


100,000,000








Noah Education Holdings Ltd.

Reconciliation of Non-GAAP to GAAP



Three months ended


Twelve months ended


June 30


June 30


2010

2011


2010

2011


(Unaudited)

(Unaudited)


(Unaudited)

(Unaudited)


RMB

% of Rev

RMB

USD

% of Rev


RMB

% of Rev

RMB

USD

% of Rev













GAAP net revenue

10,326,762

100.0%

29,573,879

4,565,726

100.0%


39,897,671

100.0%

93,474,859

14,430,997

100.0%













GAAP gross profit (loss)

5,415,800

52.4%

15,669,361

2,419,094

53.0%


21,404,154

53.6%

50,149,342

7,742,242

53.7%

Share-based compensation

76,361

0.7%

125,622

19,394

0.4%


295,940

0.7%

297,460

45,923

0.3%

Non-GAAP gross profit

5,492,161

53.2%

15,794,983

2,438,488

53.4%


21,700,094

54.4%

50,446,801

7,788,165

54.0%













GAAP operating income (loss)

(8,655,050)

-83.8%

(9,618,361)

(1,484,918)

-32.5%


(28,852,644)

-72.3%

(26,571,075)

(4,102,142)

-28.4%

Share-based compensation

2,524,465

24.4%

5,352,237

826,298

18.1%


10,395,821

26.1%

11,437,616

1,765,782

12.2%

Non-GAAP operating income(loss)

(6,130,585)

-59.4%

(4,266,124)

(658,620)

-14.4%


(18,456,823)

-46.3%

(15,133,459)

(2,336,360)

-16.2%













GAAP net income(loss)

(2,989,257)

-28.9%

(38,674,886)

(5,970,773)

-130.8%


(11,096,774)

-27.8%

(25,477,531)

(3,933,316)

-27.3%

Share-based compensation

2,524,465

24.4%

5,352,237

826,298

18.1%


10,395,821

26.1%

11,437,616

1,765,782

12.2%

Non-GAAP net income

(464,792)

-4.5%

(33,322,648)

(5,144,475)

-112.7%


(700,953)

-1.8%

(14,039,915)

(2,167,534)

-15.0%













GAAP net income(loss) per share from continuing operations












Basic

(0.08)


(1.11)

(0.17)



(0.29)


(0.78)

(0.12)


Diluted

(0.08)


(1.11)

(0.17)



(0.29)


(0.78)

(0.12)














Non-GAAP net income(loss) per share












Basic

(0.01)


(0.97)

(0.15)



0.02


(0.47)

(0.07)


Diluted

(0.01)


(0.97)

(0.15)



0.02


(0.47)

(0.07)


























Note: This reconciliation is for illustration purpose to compare GAAP and Non-GAAP performance for the continuing operations





Noah Education Holdings Ltd.

Consolidated Cash Flow Statements


For Three Months Ended


For Twelve Months Ended


June 30


June 30


2010


2011


2011


2010


2011


2011


RMB


RMB


USD


RMB


RMB


USD

Cash flows from operating activities












Net (loss)

(2,989,257)


(38,674,886)


(5,983,583)


(11,096,773)


(25,477,531)


(3,941,755)

Adjustments to reconcile net income (loss)









0



Amortization of intangible assets

416,321


1,256,677


194,427


3,883,436


4,590,181


710,170

Depreciation of PPE

2,116,783


2,955,074


457,194


7,946,558


11,556,571


1,787,974

Gain/loss on disposal of fixed assets

0


1,207,986


186,894


0


1,079,090


166,951

Write off of intangibles

0


150,629


23,305




150,629


23,305

Share-based compensation expense

2,524,465


5,352,237


828,071


10,395,821


11,437,616


1,769,570

Unrealized loss on trading investments

257,134


0


0


(868,255)


(706,454)


(109,299)

Realized gain on trading investments

0


0


0


0


(358,377)


(55,446)

Unrealized Exchange difference

(3,940,411)


20,367,363


3,151,135


(4,290,301)


(2,755,118)


(426,258)

Impairment loss on Franklin B Share investment

0


3,727,642


576,722


0


4,409,508


682,217

Other adjustment

0


6,529,992


1,010,287


0


430,421


66,593













Changes in current assets & liabilities












Trading investments

29,976


0


0


3,354,018


6,558,010


1,014,622

Accounts receivable

(1,306,123)


997,324


154,301


(3,798,559)


2,184,074


337,909

Inventories

(346,744)


(1,009,440)


(156,175)


1,324,208


(1,619,438)


(250,551)

Prepaid and others

99,030




0


(3,058,882)


5,324,173


823,729

Deferred tax assets

1,001,706


41,911


6,484


926,222


47,980


7,423

Related party receivable

0


5,916,520


0


7,481




0

Accounts payable

781,673


(3,676,320)


(568,782)


1,912,833


(4,411,796)


(682,571)

Other payables and accruals

(15,659,798)


(15,502,376)


(2,398,449)


(2,297,597)


(27,611,149)


(4,271,857)

Advances from customers

216,215


(145,276)


(22,476)


(3,161,220)


(275,735)


(42,660)

Income tax payable

(452,049)


2,316,595


358,412


(35,077)


5,402,141


835,792

Deferred revenue

42,300


(3,767,328)


(582,862)


4,449,055


750,753


116,153

Deferred tax liabilities

313,358


95,753


14,814


(1,071,396)


(167,802)


(25,961)

Receipt of consideration

0


87,532,200


13,542,539


0


87,532,200


13,542,539

Receivable from disposal

0


(47,532,200)


(7,353,941)


0


(47,532,200)


(7,353,941)

Operating cash (used in ) from continuing operation

(16,895,420)


28,140,080


4,363,691


4,521,573


30,599,266


4,734,164

Operating cash (used in) from discontinued operation

(93,460,818)


(2,249,513)


(348,033)


(112,936,922)


(29,969,784)


(4,636,773)

Total operating cash flow

(110,356,238)


25,890,566


4,005,657


(108,415,349)


629,482


97,390













Cash flows from investing activities












Acquisition of Properties, plants,& equipments

(5,057,830)


(5,178,973)


(801,265)


(13,681,709)


(22,032,996)


(3,408,834)

Acquisition of Intangible assets

372,428


(171,170)


(26,482)


(4,125,773)


(284,310)


(43,987)

Acquisition of Little New Star

0


0


0


(4,485,215)


(6,636,123)


(1,026,707)

Acquisition of Wentai Education

0


0


0


0


(4,380,923)


(677,794)

Acquisition (WT) of Changsha kindergartens

0


(25,000,000)


0


0


(25,000,000)


(3,867,874)

Repayment of deposit for investment

0


6,000,000


928,290


0


4,200,000


649,803

Deposits for long-term investments

(4,200,000)


(4,000,000)


(618,860)


(4,200,000)


(4,000,000)


(618,860)

(Increase)/decrease in short-term fixed deposits

(40,000,000)


(32,000,000)


(4,950,878)


214,200,000


28,000,000


4,332,018

Decrease in short-term investments (held-to-maturity investment)

0


13,000,000


2,011,294


0


(44,000,000)


(6,807,457)

(Increase)/decrease in AFS short-term investment

0


0


0


(20,480,700)


0


0

Investing cash flow from continuing operation

(48,885,402)


(47,350,143)


(7,325,774)


167,226,603


(74,134,352)


(11,469,692)

Investing cash flow from discontinued operation

(2,157,390)


0


0


(10,378,946)


(5,716,809)


(884,476)

Total investing cash flow

(51,042,792)


(47,350,143)


(7,325,774)


156,847,657


(79,851,161)


(12,354,167)













Cash flows from financing activities












Proceed from issue of shares to employee

0


49


8


0


49


8

Dividend paid to non-controlling shareholders

0


0


0


0


(450,000)


(69,622)

Proceed from exercise of employee share options

665,049


28,464


4,404


10,506,502


386,457


59,791

Shares repurchases

(20,645,601)


(586,043)


(90,670)


(38,698,609)


(18,404,847)


(2,847,505)

Repayment of short-term borrowing of LNS

0


0


0


(7,000,000)


0


0

Financing cash flow from continuing operation

(19,980,553)


(557,530)


(86,258)


(35,192,107)


(18,468,342)


(2,857,328)

Financing cash flow from discontinued operation

0


0


0


0


0


0

Total financing cash flow

(19,980,553)


(557,530)


(86,258)


(35,192,107)


(18,468,342)


(2,857,328)













Effect of exchange rate changes on cash

(147,232)


(286,988)


(44,401)


(424,146)


(3,162,803)


(489,333)

Net increase (decrease) in cash

(181,379,582)


(22,017,107)


(3,406,375)


13,240,200


(97,690,021)


(15,114,105)

Cash and cash equivalents at beginning of year

688,254,341


428,178,794


66,245,655


493,911,466


506,727,524


78,398,317

Cash and cash equivalents at end of year

506,727,527


405,874,699


62,794,879


506,727,520


405,874,700


62,794,879




Source: Noah Education Holdings Ltd.
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