omniture

Noah Education Announces Unaudited Third Quarter Fiscal Year 2011 Financial Results

2011-05-13 04:34 887

Education services revenue rose 115.5% year-over-year to RMB23.1 million, exceeding guidance

Education services net income rose 158.2% year-over-year


SHENZHEN, China, May 13, 2011 /PRNewswire-Asia-FirstCall/ -- Noah Education Holdings Ltd. (NYSE: NED) ("Noah" or "the Company"), a leading provider of education services in China, today announced its unaudited financial results for the third quarter ended March 31, 2011.

Third Quarter Fiscal 2011 Financial Highlights

On March 31, 2011, Noah entered into a definitive agreement to sell its Electronic Learning Product ("ELP") business and operating assets ("discontinued operations"). As a result, the Company adopted the following accounting policy in relation to the discontinued business:

  • Profits and losses relating to the ELP business are presented as discontinued operations, while profits and losses for the remaining business are presented as continuing operations
  • The assets and liabilities of the discontinued operations are classified as assets/liabilities held-for-sale on the face of the balance sheet

Net revenue for the quarter decreased by 71.3% to RMB72.7 million (US$11.1 million), compared with RMB253.7 million in the third quarter of fiscal 2010

  • Net revenue from the education services business was RMB23.1 million (US$3.5 million), a 115.5% increase compared with RMB10.7 million in the third quarter of fiscal 2010
  • Net revenue from the ELP business was RMB49.6 million (US$7.6 million), a 79.6% decrease from RMB242.9 million in the third quarter of fiscal 2010

Total operating loss was RMB43.3 million (US$6.6 million), compared with operating income of RMB32.9 million in the third quarter of fiscal 2010

  • Operating loss from continuing operations was RMB6.0 million (US$0.9 million)
  • Operating loss from discontinued operations was RMB37.3 million (US$5.7 million)  

Net loss was RMB290.9 million (US$44.4 million) compared with net income of RMB36.0 million in the third quarter of fiscal 2010

  • Net loss from discontinued operations (ELP business) was RMB293.2 million (US$44.8 million), which included an impairment loss of  RMB 221.7 million relating to the sale of the ELP business
  • Net income from continuing operations was RMB2.3 million (US$0.3 million)

Basic and diluted losses per share were RMB8.04 (US$1.23), compared with basic and diluted earnings per share of RMB0.94 and RMB0.92 respectively for the third quarter of fiscal 2010. Non-GAAP basic and diluted losses per share, excluding share-based compensation expenses, were RMB7.99 (US$1.22), compared with basic and diluted earnings per share of RMB1.00 and RMB0.98 respectively for the third quarter of fiscal 2010

  • Basic and diluted earnings per share from continuing operations for the third fiscal quarter were RMB0.04 (US$0.01), impacted by legal and financial advisory fees relating to the sale of the ELP business. Excluding these fees, pro-forma basic and diluted earnings per share for the third fiscal quarter were RMB0.10 (US$0.02)
  • Basic and diluted losses per share from discontinued operations for the third fiscal quarter were RMB8.07 (US$1.23)

Commenting on the results, Mr. Jerry He, Noah's Chief Executive Officer ("CEO"), said, "Our education services business continued to enjoy profitable growth during the third fiscal quarter, with 115.5% top-line expansion translating into 158.2% net income growth. This quarter, we benefitted from an increased contribution from Wentai Education as the attractive margin profile of this business enabled our bottom line to outpace revenue growth.  As we continue to expand the Wentai brand, we look forward to building on this trend of profitable growth within the education services space.

"This quarter, we further executed on our objective of acquisitive growth by entering into a definitive agreement to acquire an 80% interest in Yuanbo Education. Operating under the Qingan brand name, Yuanbo's 16 kindergartens in the affluent Yangtze Delta region offer world-class courses and are an ideal complement to Wentai Education's portfolio of schools. Yuanbo has built an impressive track record since its establishment in 2001 and we are confident that the fresh capital from this acquisition, coupled with Noah's extensive experience in the education services sector, will facilitate the ongoing growth of this brand and make it earnings accretive in our fiscal year 2012.

"As we shift our focus to the education services space, we remain on track with the sale of our ELP business. In April, we received the first installment payment and expect the deal to close by the end of May 2011. The sale of this business will enable us to better conserve cash and further strengthen our balance sheet and afford us the financial flexibility to continue investing in our future growth. As a result of our stringent cash flow control, our cash flow from operations was RMB 9.8 million despite the loss incurred from the ELP business.

"With a business structure that allows us to concentrate exclusively on our more stable and higher-margin education services segment, we are in the process of assembling a dedicated management team with relevant experience in the education services segment to ensure we execute on this initiative and capitalize on the robust growth opportunities.

"Looking ahead, our growth remains on track. The four Wentai kindergartens that were under conversion during the third fiscal quarter are due to contribute to revenue in the quarter ended June 2011, three new schools or kindergartens are scheduled to open by September 2011, and contracts have been signed to open three kindergartens and one school in 2012. The US$75 million cash, cash equivalents and short-term investments on our balance sheet at the end of March stands us in good stead to continue our organic and acquisitive growth. As we progress through this transitional period, we anticipate revenue in the range of RMB24.5 million – RMB26 million during the fourth fiscal quarter from Little New Star and Wentai Education, which constitute our existing education services portfolio."

Third Quarter Fiscal 2011 Unaudited Financial Results

The following table provides selected financial results for Noah's ELP and education services businesses


 

 

RMB million (except Gross margin)

 

 

Q3FY11

 

 

Q3FY10

 

 

 

ELP Business

 

Unallocated

 

Education Services  

 

Consolidated

 

ELP Business

 

Unallocated

 

Education Services

 

Consolidated

 

 

Revenue

 

49.6

 

 

23.1

 

72.7

 

242.9

 

 

10.7

 

253.7

 

 

Gross profit

 

11.5

 

 

12.5

 

23.9

 

119.0

 

 

5.3

 

124.3

 

 

Gross margin

 

23.2%

 

 

54.1%

 

33.0%

 

49.0%

 

 

49.5%

 

49.0%

 

 

Operating expenses

 

(63.8)

 

 

(8.2)

 

(71.9)

 

(105.3)

 

 

(3.3)

 

(108.9)

 

 

R&D expenses

 

(10.4)

 

 

(0.5)

 

(10.8)

 

(12.9)

 

 

(0.5)

 

(13.5)

 

 

S&M expenses

 

(35.2)

 

 

(0.8)

 

(36.0)

 

(72.5)

 

 

(0.7)

 

(73.2)

 

 

G&A expenses – discontinued operation

 

(6.0)

 

 

-

 

(6.0)

 

(10.0)

 

 

-

 

(10.0)

 

 

G&A expenses continued operation

 

(12.2)

 

 

(6.9)

 

(19.1)

 

(9.9)

 

 

(2.1)

 

(12.0)

 

 

Other expenses

 

(0.02)

 

 

-

 

(0.02)

 

(0.2)

 

 

-

 

(0.2)

 

 

Operating income/(loss) discontinued operation

 

(37.3)

 

 

-

 

(37.3)

 

40.8

 

 

-

 

40.8

 

 

Operating income/(loss) continued operation

 

 

(12.2)*

 

6.2

 

(6.0)

 

 

(9.9)

 

2.0

 

(7.9)

 

 

Impairment loss on assets held for sale

 

(221.7)

 

 

-

 

(221.7)

 

-

 

 

-

 

-

 

 

Net income discontinued operation

 

(293.2)

 

 

-

 

(293.2)

 

40.8

 

 

-

 

40.8

 

 

Net income(loss) – continued operation

 

 

(3.1)

 

5.4

 

2.3

 

 

(6.8)

 

2.1

 

(4.7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Net Revenue. Net revenue from Noah's traditional ELP business was RMB49.6 million (US$7.6 million), representing a 79.6% decrease from RMB242.9 million in the same period of the previous fiscal year. Net revenue from the education services business was RMB23.1 million (US$3.5 million), a 115.5% increase compared with the third quarter of fiscal 2010. Net revenue from the Little New Star ("LNS") business was RMB10.3 million (US$1.6 million), a 4.1% decrease compared with RMB10.7 million for the third quarter of fiscal 2010, due to lower sales of teaching materials. Net revenue from Shenzhen Wentai Education Industry Development Co., Ltd ("Wentai Education") was RMB12.8 million (US$2.0 million).

The following table provides a breakdown of sales volume and net revenue for Noah's traditional ELP business in the third quarter of fiscal year 2011:


 

 

 

Volume

 

Net Revenue (RMBm )

 

 

Noah

 

Q3FY11

 

Q3FY10

 

Inc/(Dec) (%)

 

Q3FY11

 

Q3FY10

 

Inc/(Dec) (%)

 

 

DLD

 

44,762

 

118,017

 

-62.1%

 

33.0

 

87.3

 

-62.2%

 

 

KLD

 

30,808

 

238,517

 

-87.1%

 

9.0

 

118.4

 

-92.4%

 

 

E-dictionary

 

48,952

 

164,292

 

-70.2%

 

7.6

 

37.1

 

-79.7%

 

 

Others

 

-

 

-

 

-

 

-

 

0.2

 

-100%

 

 

Total

 

124,522

 

520,826

 

-76.1%

 

49.6

 

243.0

 

-79.6%

 

 

 

 

 

 

 

 

 

 

 


Gross Profit and Gross Margin. Gross profit in the third quarter of fiscal 2011 was RMB23.9 million (US$3.7 million), an 80.8% decrease compared with gross profit of RMB124.3 million in the third quarter of fiscal 2010. The gross margin for the third quarter of fiscal 2011 was 33.0%. Gross margin for the traditional ELP business was 23.1%, compared with 49.0% in the third quarter of fiscal 2010. The decrease in ELP gross profit margin was primarily due to a reduction in ELP selling prices amid strong market competition, as well as pricing policies designed to reduce inventory to appropriate levels. The gross margin for the education services business was 54.1%, compared with 49.5% in the same quarter of fiscal 2010.  

Operating Expenses. Total operating expenses for the third quarter of fiscal 2011 were RMB71.9 million (US$11.0 million), representing a 34.0% decrease from RMB108.9 million in the third quarter of fiscal 2010.

Research and development ("R&D") expenses for the third quarter of fiscal 2011 were RMB10.8 million (US$1.7 million), representing a 20.1% decrease from RMB13.5 million in the third quarter of fiscal 2010. The total decrease in R&D expenses was mainly attributable to lower expenses relating to product development and third party software and content development.

Sales and marketing expenses for the third quarter of fiscal 2011 were RMB36.0 million (US$5.5 million), a 50.8% decrease from RMB73.2 million in the third quarter of fiscal 2010, mainly reflecting lower expenditure on advertising and marketing.

General and administrative ("G&A") expenses for the third quarter of fiscal 2011 totaled RMB25.1 million (US$3.8 million), a 14.1% increase from RMB22.0 million in the third quarter of fiscal 2010. The increase in G&A expenses was mainly attributable to the incremental expenses arising from Wentai Education, which was not consolidated in the third quarter of fiscal 2010.

Loss from Operations. Operating loss for the third quarter of fiscal 2011 was RMB43.3 million (US$6.6 million), compared to operating income of RMB33.0 million in the third quarter of fiscal 2010. Operating loss from continuing operations was RMB6.0 million (US$0.9 million), and operating loss from discontinued operations was RMB37.3 million (US$5.7 million).

Impairment Loss on Assets Held for Sale. As of March 31, 2011, the carrying value of assets held for sale and liabilities held for sale amounted to RMB388.6 million (US$59.3 million) and RMB66.9 million (US$10.2 million) respectively. Based on the definitive agreement signed by the Company and First Win Technologies Ltd. dated March 31, 2011, the consideration of the disposal is RMB100 million and the closing is currently expected to occur by the end of May 2011. As such, the Company recognized an impairment loss on assets held for sale of RMB221.7 million (US$33.9 million) during the third quarter of fiscal 2011. The impairment loss on assets held for sale includes an impairment loss on trade receivables of RMB140.3 million (US$21.4 million) and inventories of RMB81.4 million (US$12.4 million), and represents the difference between the fair value of assets held for sale and their carrying amount.

Other Income, Net. Interest income was RMB0.23 million (US$0.04 million) in the third quarter of fiscal 2011. Investment income was RMB2.6 million (US$0.4 million) in the third quarter of fiscal 2011. Other non-operating income was RMB7.3 million (US$1.1 million) in the third quarter of fiscal 2011. Other non-operating income includes RMB6.9 million (US$1.1 million) from foreign exchange gains in the third quarter of fiscal 2011, primarily due to the impact of the U.S dollar depreciation on intercompany loans.

Income Tax Expenses. The Company reported income tax expenses of RMB36.0 million (US$5.5 million). Total tax expenses include accrued withholding tax liabilities of RMB32.1 million (US$4.9 million) relating to the discontinued ELP operation as a result of the waiver of intercompany balances from the discontinued ELP operation due to the Company.

Net Loss. The Company reported a net loss of RMB290.9 million (US$44.4 million), or a loss of RMB8.04 (US$1.23) per basic and diluted share, for the third quarter of fiscal 2011. This compares with net income of RMB36.0 million, or RMB0.94 and RMB0.92 per basic and diluted share respectively, for the third quarter of fiscal 2010.

  • Net loss from discontinued operations (ELP business) was RMB293.2 million (US$44.8 million), which included an impairment loss of  RMB 221.7 million relating to the sale of the ELP business
  • Net income from continuing operations was RMB2.3 million (US$0.3 million)

Net loss excluding share-based compensation expenses (non-GAAP) for the third fiscal quarter ended March 31, 2011 amounted to RMB289.3 million (US$44.2 million), or losses of RMB7.99 (US$1.22) per basic and diluted share.

Liquidity. As of March 31, 2011, Noah had cash, cash equivalents and short-term investments of RMB491.2 million (US$75.0 million). This compares with cash, cash equivalents, short-term deposits and short-term investments of RMB495.7 million as of December 31, 2010.

Business and Operational Highlights

ELP Business Sale

On April 1, 2011, Noah announced that it had entered into a definitive agreement to sell its ELP business and operating assets to First Win Technologies Ltd., a company wholly owned by Mr. Benguo Tang, one of Noah's founders and the former President and Chief Operating Officer of the Company, for the U.S. dollar equivalent of RMB100 million. The Company received the initial installment of the U.S. dollar equivalent of RMB40 million on April 12, 2011. The closing is currently expected to occur by the end of May 2011. The final financial impact is subject to certain adjustments upon closing. The sale of the ELP business will enable Noah to focus more attention on pursuing growth opportunities in the more stable and higher-margin education services space.

Management Appointments

Concurrently with its April 1, 2011 announcement regarding the sale of the ELP business, the Company announced the election of Chief Financial Officer ("CFO") Jerry He as a member of the Board and his appointment as CEO, effective April 1, 2011. Mr. He took over the position from Mr. Dong Xu, who now combines his role as Chairman with the post of Chief Strategy Officer. Dora Li was simultaneously appointed interim CFO, in recognition of her successful track record in senior finance roles since joining Noah in 2007.

Acquisition of Yuanbo Education

On April 13, 2011, Noah entered into a definitive agreement to acquire an 80% interest in Shanghai Yuanbo Education Information and Consulting Corporation Ltd. ("Yuanbo Education"), a company focused on early childhood education services in the Yangtze Delta region, for a total consideration of RMB102.4 million to be funded by the Company's current cash reserve. The transaction is expected to close by July 1, 2011.

Yuanbo Education operates 16 kindergartens in the economically developed and prosperous Yangtze Delta region under the brand name Qingan. Its management team, which has successfully grown the company since its establishment in 2001, will retain a 20% stake in Yuanbo Education.

Of the RMB102.4 million investment, RMB50 million will be used for expansion. With revenue of RMB35 million in 2010 for Yuanbo Education, the acquisition is expected to be accretive to Noah's earnings in the fiscal year ending June 30, 2012.

Financial Outlook for Fourth Quarter and Full Year Fiscal 2011

Based on current estimates and market conditions, Noah expects to generate in the range of RMB24.5 million (US$3.7 million) to RMB26 million (US$4.0 million) in revenue from education services for the fourth quarter of fiscal 2011. For the full fiscal year 2011, Noah expects to generate education services revenue between RMB88.5 million (US$13.5 million) and RMB90 million (US$13.7 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 a.m. (Eastern) / 5:00 a.m. (Pacific) / 8:00 p.m. (China) on Friday, May 13 to discuss its third quarter fiscal 2011 financial results and recent business activities. The conference call may be accessed by calling:


 

 

 

Toll Free                        

 

Toll

 

 

United States          

 

1-866-831-6291

 

1-617-213-8860

 

 

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        

 

 

1-617-213-8860

 

 

Pass code

 

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

 

 

 

 

 

 

 


Please dial in 10 minutes before the call is scheduled to begin.

A telephone replay will be available shortly after the call until May 20, 2011 by dialing the following numbers:


 

 

 

Toll Free                        

 

Toll

 

 

United States          

 

1-888-286-8010

 

1-617-801-6888

 

 

International Dial In                                  

 

 

1-617-801-6888

 

 

Passcode  

 

4864 0988

 

 

 

 

 

 

 

 


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 have been translated into US dollars at the rate of RMB6.5483 to US$1.00, the noon buying rate for US dollars in effect on March 31, 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://www.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

Tel: +86 (755) 8204 3194

Email: wuzy@noahedu.com

 

Investor Relations (US)

Kelly Gawlik

Taylor Rafferty

Tel: +1 (212) 889 4350

Email: noahedu@taylor-rafferty.com

 

 

 

Investor Relations (Hong Kong)

Mahmoud Siddig

Taylor Rafferty

Tel: +852 3196 3712

Email: noahedu@taylor-rafferty.com


 

 

 

 


– FINANCIAL TABLES FOLLOW–


 

 

Noah Education Holdings Ltd.

 

 

Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

March 31

 

 

March 31

 

 

 

2010

 

2011

 

 

2010

 

2011

 

 

 

(Unaudited)

 

(Unaudited)

 

 

(Unaudited)

 

(Unaudited)

 

 

 

RMB

 

RMB

 

USD

 

 

RMB

 

RMB

 

USD

 

 

Net revenue

 

10,736,340

 

23,141,479

 

3,533,967

 

 

29,570,909

 

63,900,981

 

9,758,408

 

 

Cost of revenue

 

(5,464,845)

 

(10,658,055)

 

(1,627,606)

 

 

(13,582,555)

 

(29,421,000)

 

(4,492,922)

 

 

Gross profitloss)

 

5,271,494

 

12,483,424

 

1,906,361

 

 

15,988,354

 

34,479,980

 

5,265,486

 

 

Research & development expenses

 

(537,497)

 

(479,753)

 

(73,264)

 

 

(1,441,602)

 

(1,592,862)

 

(243,248)

 

 

Sales & marketing expenses

 

(680,611)

 

(815,099)

 

(124,475)

 

 

(2,400,089)

 

(2,824,136)

 

(431,278)

 

 

General and administrative expenses

 

(11,962,897)

 

(19,097,247)

 

(2,916,367)

 

 

(34,450,884)

 

(56,701,120)

 

(8,658,907)

 

 

Other expenses

 

0

 

0

 

0

 

 

(103,113)

 

(13,252)

 

(2,024)

 

 

Total operating expenses

 

(13,181,005)

 

(20,392,099)

 

(3,114,106)

 

 

(38,395,687)

 

(61,131,371)

 

(9,335,457)

 

 

 

 

 

 

 

 

 

 

 

Other operating income

 

0

 

1,872,532

 

285,957

 

 

44,828

 

3,045,514

 

465,085

 

 

Operating income (loss)

 

(7,909,511)

 

(6,036,144)

 

(921,788)

 

 

(22,362,506)

 

(23,605,876)

 

(3,604,886)

 

 

Interest income

 

2,191,777

 

237,855

 

36,323

 

 

7,714,381

 

1,593,698

 

243,376

 

 

Investment income

 

298,046

 

2,556,986

 

390,481

 

 

1,916,671

 

6,519,581

 

995,614

 

 

Other Non-Operating income

 

583,487

 

7,312,006

 

1,116,627

 

 

1,712,567

 

25,721,709

 

3,927,998

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

(4,836,201)

 

4,070,704

 

621,643

 

 

(11,018,887)

 

10,229,112

 

1,562,102

 

 

Income tax (expenses) credit

 

129,726

 

(1,787,464)

 

(272,966)

 

 

750,302

 

(3,684,919)

 

(562,729)

 

 

Net income (loss) from continuing operations

 

(4,706,476)

 

2,283,240

 

348,677

 

 

(10,268,585)

 

6,544,193

 

999,373

 

 

less: Net income attributable to non-controlling interest

 

0

 

939,377

 

143,453

 

 

0

 

1,580,442

 

241,352

 

 

Net income attributable to controlling interest from continuing operations

 

(4,706,476)

 

1,343,863

 

205,223

 

 

(10,268,585)

 

4,963,751

 

758,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(Loss) from discontinued operation before income tax (including impairment loss on assets held for sale of RMB221,680,403)

 

40,819,015

 

(258,986,833)

 

(39,550,240)

 

 

97,874,684

 

(338,393,755)

 

(51,676,581)

 

 

Income tax

 

(63,013)

 

(34,204,146)

 

(5,223,363)

 

 

1,608,196

 

(34,395,681)

 

(5,252,612)

 

 

Loss from discontinued operations

 

40,756,002

 

(293,190,979)

 

(44,773,602)

 

 

99,482,880

 

(372,789,436)

 

(56,929,193)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share from continued operation

 

 

 

 

 

 

 

 

 

 Basic

 

(0.12)

 

0.04

 

0.01

 

 

(0.27)

 

0.13

 

0.02

 

 

 Diluted

 

(0.12)

 

0.04

 

0.01

 

 

(0.27)

 

0.13

 

0.02

 

 

 

 

 

 

 

 

 

 

 

Net income per share from discontinued operation

 

 

 

 

 

 

 

 

 

 Basic

 

1.06

 

(8.07)

 

(1.23)

 

 

2.60

 

(10.07)

 

(1.54)

 

 

 Diluted

 

1.04

 

(8.07)

 

(1.23)

 

 

2.54

 

(10.07)

 

(1.54)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average ordinary shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

38,420,502

 

36,314,550

 

36,314,550

 

 

38,223,281

 

37,033,095

 

37,033,095

 

 

Diluted

 

39,162,596

 

36,492,546

 

36,492,546

 

 

39,127,490

 

37,265,561

 

37,265,561

 

 

 

 

 

 

 

 

 

 

 

 



Noah Education Holdings Ltd.

 

 

Consolidated Balance Sheet

 

 

 

December 31

 

 

March 31

 

 

 

 

2010

 

 

2011

 

 

 

 

Unaudited

 

 

Unaudited

 

 

 

 

RMB

 

 

RMB

 

USD

 

 

Assets:

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

280,766,291

 

 

428,178,794

 

65,387,779

 

 

 

Investments

 

 

 

 

 

 

 

Held to maturity investment

 

214,959,569

 

 

63,003,441

 

9,621,343

 

 

 

Accounts receivables, net of allowance

 

253,664,008

 

 

2,665,331

 

407,026

 

 

 

Related party receivables

 

368,505

 

 

0

 

0

 

 

 

Inventories

 

136,210,813

 

 

5,418,466

 

827,462

 

 

 

Prepaid expenses, and other current assets

 

47,184,516

 

 

10,624,568

 

1,622,493

 

 

 

Assets held for sale (note)

 

0

 

 

166,919,775

 

25,490,551

 

 

 

Total current assets

 

933,153,702

 

 

676,810,375

 

103,356,654

 

 

 

Investments

 

25,367,008

 

 

23,393,235

 

3,572,413

 

 

 

Property, plant and equipment, net

 

176,057,855

 

 

163,578,694

 

24,980,330

 

 

 

Intangible assets, net

 

45,319,472

 

 

40,255,370

 

6,147,454

 

 

 

Goodwill

 

85,438,649

 

 

85,438,649

 

13,047,455

 

 

 

Deposit for investment

 

0

 

 

6,000,000

 

916,268

 

 

 

Deferred tax asset

 

2,058,180

 

 

0

 

0

 

 

 

Total assets

 

1,267,394,866

 

 

995, 476,323

 

152,020,575

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 Accountants payable  (including account payables of the consolidated VIEs without recourse to Noah of RM70,807 as of March 31, 2011)

 

23,748,761

 

 

3,316,979

 

506,541

 

 

 

 Other payables and accruals (including other payables, accruals of the consolidated VIEs without recourse to Noah of RMB13,605,141 as of March 31, 2011)

 

65,252,696

 

 

44,578,437

 

6,807,635

 

 

 

Advances from customers

 

4,280,223

 

 

372,792

 

56,930

 

 

 

 Income tax payable (including income tax payables of the consolidated VIEs without recourse to Noah of RMB1,700,223 as of March 31, 2011)

 

1,556,003

 

 

3,415,484

 

521,583

 

 

 

 Deferred revenue (including deferred revenue of the consolidated VIEs without recourse to Noah of RMB16,333,258 as of March 31, 2011)

 

15,156,566

 

 

23,760,360

 

3,628,478

 

 

 

Liabilities held for sale (note)

 

-

 

 

66,919,775

 

10,219,412

 

 

 

Total current liabilities

 

109,994,249

 

 

142,363,827

 

21,740,579

 

 

 

Deferred revenues-non current  

 

6,155,890

 

 

5,754,839

 

878,829

 

 

 

Deferred tax liabilities

 

4,377,023

 

 

4,214,131

 

643,546

 

 

 

Total non-current liabilities

 

10,532,912

 

 

9,968,970

 

1,522,375

 

 

 

Total liabilities

 

120,527,161

 

 

152,332,797

 

23,262,954

 

 

Shareholders' Equity

 

 

 

 

 

 

Ordinary shares

 

14,763

 

 

14,764

 

2,255

 

 

Additional paid-in capital

 

1,036,369,505

 

 

1,037,991,055

 

158,513,058

 

 

Accumulated other comprehensive loss

 

(112,243,729)

 

 

(120,750,781)

 

(18,440,020)

 

 

Retained earnings

 

180,896,744

 

 

(116,881,309)

 

(17,849,107)

 

 

Total shareholders' equity

 

1,105,037,282

 

 

800,373,729

 

122,226,186

 

 

Minority interest

 

41,830,422

 

 

42,769,798

 

6,531,435

 

 

Total liabilities and shareholders' equity

 

1,267,394,866

 

 

995,476,324

 

152,020,575

 

 

 

 

 

 

 

 

 

 

Note:

 

 

 

 

 

 

 

Net Assets classified as held for sale as of March 31, 2011

 

 

 

 

 

 

 

Accounts Receivables (net of allowance)

 

 

 

87,131,651

 

13,305,996

 

 

 

Prepaid expenses and other current assets

 

 

 

29,820,041

 

4,553,860

 

 

 

Inventories

 

 

 

37,536,912

 

5,732,314

 

 

 

Property, plant and equipment, (net)

 

 

 

8,852,920

 

1,351,942

 

 

 

Intangible assets(net)

 

 

 

3,578,250

 

546,440

 

 

 

Account Payables

 

 

 

(17,625,037)

 

(2,691,544)

 

 

 

Advances from customer

 

 

 

(4,952,467)

 

(756,298)

 

 

 

Income tax payable

 

 

 

(48,391)

 

(7,390)

 

 

 

Deferred tax liabilities

 

 

 

(32,115,572)

 

(4,904,414)

 

 

 

Other payables and accruals

 

 

 

(12,178,308)

 

(1,859,766)

 

 

 

Total

 

 

 

100,000,000

 

15,271,139

 

 

 

 

 

 

 

 




 

 

Noah Education Holdings Ltd.

 

 

Reconciliation of Non-GAAP to GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

March 31

 

 

March 31

 

 

 

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

 

10,736,340

 

100.0%

 

23,141,479

 

3,533,967

 

100.0%

 

 

29,570,909

 

100.0%

 

63,900,981

 

9,758,408

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit (loss)

 

5,271,494

 

49.1%

 

12,483,424

 

1,906,361

 

53.9%

 

 

15,988,354

 

54.1%

 

34,479,980

 

5,265,486

 

54.0%

 

 

Share-based compensation

 

76,361

 

0.7%

 

32,771

 

5,004

 

0.1%

 

 

219,579

 

0.7%

 

171,838

 

26,242

 

0.3%

 

 

Non-GAAP gross profit

 

5,347,855

 

49.8%

 

12,516,195

 

1,911,365

 

54.1%

 

 

16,207,933

 

54.8%

 

34,651,819

 

5,291,727

 

54.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income (loss)

 

(7,909,511)

 

-73.7%

 

(6,036,144)

 

(921,788)

 

-26.1%

 

 

(22,362,506)

 

-75.6%

 

(23,605,876)

 

(3,604,886)

 

-36.9%

 

 

Share-based compensation

 

2,515,755

 

23.4%

 

1,574,262

 

240,408

 

6.8%

 

 

7,871,356

 

26.6%

 

6,085,378

 

929,307

 

9.5%

 

 

Non-GAAP operating income(loss)

 

(5,393,756)

 

-50.2%

 

(4,461,882)

 

(681,380)

 

-19.3%

 

 

(14,491,150)

 

-49.0%

 

(17,520,498)

 

(2,675,580)

 

-27.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income(loss)

 

(4,706,476)

 

-43.8%

 

2,283,240

 

348,677

 

9.9%

 

 

(10,268,585)

 

-34.7%

 

6,544,193

 

999,373

 

10.2%

 

 

Share-based compensation

 

2,515,755

 

23.4%

 

1,574,262

 

240,408

 

6.8%

 

 

7,871,356

 

26.6%

 

6,085,378

 

929,307

 

9.5%

 

 

Non-GAAP net income

 

(2,190,721)

 

-20.4%

 

3,857,502

 

589,084

 

16.7%

 

 

(2,397,229)

 

-8.1%

 

12,629,571

 

1,928,679

 

19.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income(loss) per share -continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

(0.12)

 

 

0.04

 

0.01

 

 

 

(0.27)

 

 

0.13

 

0.02

 

 

 

Diluted

 

(0.12)

 

 

0.04

 

0.01

 

 

 

(0.27)

 

 

0.13

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income(loss) per share continuing operation

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

(0.06)

 

 

0.08

 

0.01

 

 

 

(0.06)

 

 

0.30

 

0.05

 

 

 

Diluted

 

(0.06)

 

 

0.08

 

0.01

 

 

 

(0.06)

 

 

0.30

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Nine Months Ended

 

 

 

March 31

 

 

March 31

 

 

 

2010

 

 

2011

 

 

2011

 

 

2010

 

 

2011

 

 

2011

 

 

 

RMB

 

 

RMB

 

 

USD

 

 

RMB

 

 

RMB

 

 

USD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(4,706,476)

 

 

2,283,240

 

 

348,677

 

 

(10,268,585)

 

 

6,544,193

 

 

999,373

 

 

Adjustments to reconcile net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

378,125

 

 

787,986

 

 

120,334

 

 

1,030,678

 

 

2,245,046

 

 

342,844

 

 

Depreciation of PPE

 

247,240

 

 

959,863

 

 

146,582

 

 

685,740

 

 

3,250,817

 

 

496,437

 

 

Write down of inventories

 

1,130

 

 

0

 

 

0

 

 

1,130

 

 

0

 

 

0

 

 

Share-based compensation expense

 

2,515,755

 

 

1,574,262

 

 

240,408

 

 

7,871,356

 

 

6,085,378

 

 

929,307

 

 

Unrealized loss on trading investments

 

159,113

 

 

0

 

 

0

 

 

(1,125,389)

 

 

(706,454)

 

 

(107,884)

 

 

Realized gain on trading investments

 

0

 

 

0

 

 

0

 

 

0

 

 

(358,377)

 

 

(54,728)

 

 

Unrealized Exchange difference

 

(208,751)

 

 

(6,884,340)

 

 

(1,051,317)

 

 

(570,529)

 

 

(24,172,917)

 

 

(3,691,480)

 

 

Impairment loss on long term investment

 

0

 

 

681,866

 

 

104,129

 

 

0

 

 

681,866

 

 

104,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in current assets & liab

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading investments

 

1,654

 

 

0

 

 

 

 

3,324,043

 

 

6,561,451

 

 

1,002,008

 

 

Accounts receivable

 

(2,273,247)

 

 

403,603

 

 

61,635

 

 

(2,492,436)

 

 

1,186,750

 

 

181,230

 

 

Inventories

 

553,071

 

 

366,374

 

 

55,950

 

 

1,153,672

 

 

(609,998)

 

 

(93,154)

 

 

Prepaid and others

 

(3,157,121)

 

 

1,999,654

 

 

305,370

 

 

4,829,907

 

 

2,245,152

 

 

342,860

 

 

Deferred tax assets

 

(612,433)

 

 

0

 

 

0

 

 

(1,001,706)

 

 

0

 

 

0

 

 

Accounts payable

 

1,902,461

 

 

(1,575,131)

 

 

(240,540)

 

 

1,131,160

 

 

(715,308)

 

 

(109,236)

 

 

Other payables and accruals

 

1,836,811

 

 

2,127,032

 

 

324,822

 

 

2,262,909

 

 

2,106,416

 

 

321,674

 

 

Advances from customers

 

(20,933)

 

 

79,048

 

 

12,072

 

 

(3,416,907)

 

 

6,342

 

 

969

 

 

Income tax payable

 

312,135

 

 

1,877,478

 

 

286,712

 

 

370,328

 

 

3,085,546

 

 

471,198

 

 

Deferred revenue

 

2,434,239

 

 

8,202,744

 

 

1,252,652

 

 

4,406,754

 

 

4,518,080

 

 

689,962

 

 

Deferred tax liabilities

 

(107,198)

 

 

(162,892)

 

 

(24,875)

 

 

2,352,672

 

 

(263,555)

 

 

(40,248)

 

 

Operating cash from continued operation

 

(744,426)

 

 

12,720,789

 

 

1,942,609

 

 

10,544,796

 

 

11,690,426

 

 

1,785,261

 

 

Operating cash from discontinued operation

 

(42,751,059)

 

 

(2,894,274)

 

 

(441,989)

 

 

(9,128,828)

 

 

(43,643,953)

 

 

(6,664,929)

 

 

Total operating cash flow

 

(43,495,484)

 

 

9,826,516

 

 

1,500,621

 

 

1,415,969

 

 

(31,953,527)

 

 

(4,879,668)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of PPE

 

(345,776)

 

 

(56,145)

 

 

(8,574)

 

 

(1,126,908)

 

 

(9,571,344)

 

 

(1,461,653)

 

 

Acquisition of Intangible assets

 

(2,708,125)

 

 

0

 

 

0

 

 

(6,155,502)

 

 

(125)

 

 

(19)

 

 

Acquisition of LNS

 

-

 

 

(6,636,124)

 

 

(1,013,412)

 

 

(4,485,215)

 

 

(6,636,124)

 

 

(1,013,412)

 

 

Acquisition of Wentai

 

-

 

 

-

 

 

-

 

 

-

 

 

(4,380,923)

 

 

(669,017)

 

 

Repayment of deposit for investment

 

-

 

 

-

 

 

-

 

 

-

 

 

4,200,000

 

 

641,388

 

 

Deposits for acquisition of kindergartens in Wentai

 

-

 

 

(6,000,000)

 

 

(916,268)

 

 

-

 

 

(6,000,000)

 

 

(916,268)

 

 

(Increase) Decrease in short-term fixed deposits

 

210,865,142

 

 

-

 

 

-

 

 

254,200,000

 

 

60,000,000

 

 

9,162,683

 

 

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

 

-

 

 

151,956,128

 

 

23,205,432

 

 

-

 

 

(94,003,441)

 

 

(14,355,396)

 

 

Increase in long-term investment (Franklin)

 

(20,480,701)

 

 

0

 

 

 

 

(20,480,701)

 

 

0

 

 

0

 

 

Decrease in AFS short-term investment

 

 

 

0

 

 

 

 

 

 

37,000,000

 

 

5,650,321

 

 

Investing cash flow from continued operation

 

187,330,540

 

 

139,263,859

 

 

21,267,178

 

 

221,951,673

 

 

-19,391,957

 

 

-2,961,373

 

 

Investing cash flow from discontinued operation

 

(6,349,982)

 

 

(1,394,361)

 

 

(212,935)

 

 

(13,756,946)

 

 

(7,467,067)

 

 

(1,140,306)

 

 

Total investing cash flow

 

180,980,558

 

 

137,869,498

 

 

21,054,243

 

 

208,194,727

 

 

(26,859,024)

 

 

(4,101,679)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid to minority shareholders

 

0

 

 

0

 

 

0

 

 

0

 

 

-450,000

 

 

-68,720

 

 

Proceed from exercise of employee share options

 

5,431,855

 

 

47,290

 

 

7,222

 

 

9,892,940

 

 

357,993

 

 

54,670

 

 

Shares repurchases

 

(18,104,493)

 

 

0

 

 

0

 

 

(18,104,493)

 

 

(17,818,804)

 

 

(2,721,134)

 

 

Repayment of short-term borrowing of LNS

 

0

 

 

0

 

 

0

 

 

-7,000,000

 

 

0

 

 

0

 

 

Financing cash flow from continued operation

 

(12,672,638)

 

 

47,290

 

 

7,222

 

 

(15,211,553)

 

 

(17,910,812)

 

 

(2,735,185)

 

 

Financing cash flow from discontinued operation

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

Total financing cash flow

 

(12,672,638)

 

 

47,290

 

 

7,222

 

 

(15,211,553)

 

 

(17,910,812)

 

 

(2,735,185)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

(18,041)

 

 

(330,798)

 

 

(50,517)

 

 

(56,275)

 

 

(1,825,365)

 

 

(278,754)

 

 

Net increase (decrease) in cash from continued operation

 

173,913,476

 

 

152,031,938

 

 

23,217,009

 

 

217,284,917

 

 

(25,612,343)

 

 

(3,911,297)

 

 

Net increase (decrease) in cash from discontinued operation

 

(49,101,041)

 

 

(4,288,635)

 

 

(654,923)

 

 

(22,885,774)

 

 

(51,111,019)

 

 

(7,805,235)

 

 

Cash and cash equivalents at beginning of yr

 

563,459,955

 

 

280,766,291

 

 

42,876,211

 

 

493,911,466

 

 

506,727,524

 

 

77,383,065

 

 

Cash and cash equivalents at end of yr

 

688,254,349

 

 

428,178,796

 

 

65,387,779

 

 

688,254,334

 

 

428,178,797

 

 

65,387,780

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Source: Noah Education Holdings Ltd.
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