omniture

China Distance Education Holdings Limited Reports Financial Results for Fourth Quarter and Fiscal Year 2018

- Fourth Quarter 2018 Net Revenue Up 28.6% Year-Over-Year to $53.6 Million -
- Fourth Quarter 2018 Non-GAAP Net Income Up 73.9% Year-Over-Year to $12.5 Million -
- Fourth Quarter 2018 Cash Receipts from Online Course Registration Up 61.7% Year-Over-Year to $36.0 Million -
- Completion of further acquisition of Beijing Ruida in July 2018 -

BEIJING, Nov. 21, 2018 /PRNewswire/ -- China Distance Education Holdings Limited (NYSE: DL) ("CDEL", or the "Company"), a leading provider of online education and value-added services for professionals and corporate clients in China, today announced unaudited financial results for the fourth quarter and fiscal year 2018 ended September 30, 2018.

Fourth Quarter Fiscal 2018 Financial and Operational Highlights

  • Net revenue increased by 28.6% to $53.6 million from $41.7 million in the prior year period.
  • Total course enrollments were 805,500, a decrease of 2.9% from the fourth quarter of fiscal 2017.
  • Cash receipts from online course registration were $36.0 million, a 61.7% increase from the fourth quarter of fiscal 2017.
  • Gross profit increased by 8.9% to $27.4 million from $25.2 million in the prior year period.
  • Non-GAAP[1] gross profit increased by 8.9% to $27.4 million from $25.2 million in the prior year period.
  • Gross margin was 51.1%, compared with 60.3% in the prior year period. Non-GAAP1 gross margin was 51.2%, compared with 60.4% in the prior year period.
  • Operating income increased by 15.6% to $12.2 million from $10.5 million in the prior year period.
  • Non-GAAP1 operating income increased by 14.5% to $12.8 million from $11.2 million in the prior year period.
  • Net income increased by 64.8% to $9.7 million from $5.9 million in the prior year period.
  • Non-GAAP1 net income increased by 73.9% to $12.5 million from $7.2 million in the prior year period.
  • Basic and diluted net income per American Depositary Share ("ADS") were $0.290 compared with basic and diluted net income per ADS of $0.178 and $0.177, respectively, for the fourth quarter of fiscal 2017. Each ADS represents four ordinary shares.
  • Basic and diluted non-GAAP1 net income per ADS were $0.377 and $0.375, respectively, compared with basic and diluted non-GAAP1 net income per ADS of $0.219 and $0.218, respectively, for the fourth quarter of fiscal 2017.
  • Cash flow from operations increased by 471.9% to $16.7 million from $2.9 million in the fourth quarter of fiscal 2017.
  • Completion of acquisition of additional 11% equity interest in Beijing Ruida in July 2018, bringing the Company's total equity interest in Beijing Ruida to 51%.

Fiscal Year 2018 Financial and Operational Highlights

  • Net revenue increased by 27.2% to $166.7 million from $131.0 million in fiscal year 2017.
  • Total course enrollments were 3.2 million, a decrease of 7.0% from fiscal year 2017.
  • Cash receipts from online course registration were $158.9 million, a 45.1% increase from fiscal year 2017.
  • Gross profit increased by 7.1% to $78.8 million from $73.6 million in fiscal year 2017.
  • Non-GAAP1 gross profit increased by 7.1% to $78.9 million from $73.7 million in fiscal year 2017.
  • Gross margin was 47.3%, compared with 56.2% in fiscal year 2017. Non-GAAP1 gross margin was 47.4%, compared with 56.3% in fiscal year 2017.
  • Operating income decreased by 24.4% to $15.9 million from $21.1 million in fiscal year 2017.
  • Non-GAAP1 operating income decreased by 21.4% to $18.3 million from $23.2 million in fiscal year 2017.
  • Net income decreased by 22.2% to $11.6 million from $14.9 million in fiscal year 2017.
  • Non-GAAP1 net income decreased by 8.9% to $16.1 million from $17.7 million in fiscal year 2017.
  • Basic and diluted net income per American Depositary Share ("ADS") were $0.347, compared with basic and diluted net income per ADS of $0.453 and $0.448, respectively, for fiscal year 2017. Each ADS represents four ordinary shares.
  • Basic and diluted non-GAAP1 net income per ADS were $0.488 and $0.485, respectively, compared with basic and diluted non-GAAP1 net income per ADS of $0.539 and $0.532, respectively, for fiscal year 2017.
  • Cash flow from operations increased by 33.6% to $50.4 million from $37.7 million in fiscal year 2017.

Mr. Zhengdong Zhu, Chairman and CEO of CDEL, said, "We concluded the fiscal year with fourth quarter revenue growth of 28.6% year-over-year, modestly below our guidance range, mainly due to a higher-than-expected mix of cash receipts from our refundable accounting elite classes, representing 26.8% of cash receipts from online course registration in the fourth quarter. The revenue from elite classes can be recognized only upon the release of related exam results and the expiration of the students' right to receive a refund, under current U.S. GAAP ASC605. However, fourth quarter revenue growth was still driven primarily by our accounting vertical in addition to newly acquired Beijing Ruida."  

Mr. Zhu added, "We continued to see strong growth momentum of cash receipts from online course registration, which were up a robust 61.7% year-over-year during the fourth quarter, primarily due to strong cash receipts from our core accounting test preparation courses, and more student enrollments in our longer duration premium and elite classes. The popularity of these longer duration classes is a testament to the high degree of confidence and trust students place in us. Total course enrollments were down 2.9% year-over-year in the fourth quarter, mainly due to a decrease in enrollments of our continuing education courses. However, excluding the enrollments of continuing education courses, our total course enrollments were up 8.3% year-over-year in the fourth quarter."

Mr. Zhu concluded, "We continue to look for opportunities to further develop our business, drive growth, and strengthen our lifelong learning ecosystem. Our July 2018 acquisition of an additional 11% equity interest in Beijing Ruida brings our total equity interest in Beijing Ruida to 51%. Beijing Ruida, a leading provider of exam preparation services for participants in China's national legal profession qualification examination, further diversifies our business model by elevating our position in China's legal education market. In our healthcare vertical, we recently established a partnership with Tencent, aimed at improving our healthcare educational products and services, providing our students with creative learning tools, and allowing us to explore new teaching approaches in healthcare education."

Mr. Mark Marostica, Co-Chief Financial Officer of CDEL, said, "Our fourth quarter non-GAAP operating margin was down year-over-year yet up sequentially as expected. The year-over-year decline in operating margin was primarily due to the impact of a higher mix of cash receipts from refundable accounting elite classes on our revenue as mentioned by Mr. Zhu, while the related student acquisition costs were incurred up front. The amortization of intangibles arising from the acquisition of Beijing Ruida and an increase in rental expenses from our new Anhui Qiao office location in Beijing, also adversely impacted our fourth quarter operating margin to some extent."

Mr. Marostica, continued, "Despite the fourth quarter operating margin decline, our headcount remained relatively steady compared with fourth quarter fiscal 2017, excluding Jiangsu Asset, acquired in November 2017, and Beijing Ruida. And we are encouraged by the continued momentum of our cash receipts growth in both our fourth quarter fiscal 2018, as well as our first quarter fiscal 2019 to date. As we begin fiscal 2019, we remain steadfast in continuing to balance growth with a keen focus on profitability and prudent cost control."

Disposal of "Tax School Program"

On November 12, 2018, the Board of directors approved to dispose 60% equity interest in Beijing Champion Tax Management and Advisory Co., Ltd. ("Champion Tax Advisory"), which operates the "Tax School Program," to the entity's operating team in consideration of RMB30 million ($4.3 million), subject to changes according to the cash level of Champion Tax Advisory upon execution of transaction documents. The "Tax School Program" offers tax classes for tax and accounting professionals and provides them with subscription-based access to the Company's vast databank of tax, finance, and legal course materials and information. The disposal of Champion Tax Advisory is expected to close in the first quarter of fiscal 2019.

Mr. Zhengdong Zhu, Chairman and CEO of CDEL, said, "We've operated the "Tax School Program" since 2013. This business has not yet generated reasonable returns after several years of investments. Therefore, we decided to dispose of 60% equity interest to the entity's operating team, which can be more flexible in formulating future business development strategies."

CEO Share Purchase Plan

As announced on June 25, 2018 by the Company, Mr. Zhengdong Zhu, Chairman and CEO of CDEL, had informed the Company of his intention to use his personal funds to purchase the Company's shares for an amount up to a maximum of $25 million within one year. As of October 31, 2018, Mr. Zhu had bought a total of approximately $8.2 million of the Company's ordinary shares and ADSs pursuant to a 10b5-1 plan in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

Fourth Quarter Fiscal 2018 Financial Results

Net Revenue. Total net revenue increased by 28.6% to $53.6 million in the fourth quarter of fiscal 2018 from $41.7 million in the fourth quarter of fiscal 2017. Net revenue from online education services, books and reference materials, and other sources contributed 68.1%, 2.1% and 29.8%, respectively, of total net revenues for the fourth quarter of fiscal 2018.

Online education services. Net revenue from online education services increased by 14.0% to $36.5 million in the fourth quarter of fiscal 2018 from $32.0 million in the fourth quarter of fiscal 2017, mainly due to revenue growth from the accounting vertical and revenue from the legal vertical contributed by Beijing Ruida.

Books and reference materials. Net revenue from books and reference materials decreased by 46.2% to $1.1 million in the fourth quarter of fiscal 2018, from $2.1 million in the fourth quarter of fiscal 2017. 

Others. Net revenue from other sources increased by 110.9% to $16.0 million in the fourth quarter of fiscal 2018 from $7.6 million in the fourth quarter of fiscal 2017, primarily due to revenue growth from offline accounting professional training courses, business start-up training services, revenue from offline legal professional training courses contributed by Beijing Ruida, as well as revenue from accounting and related advisory services contributed by Jiangsu Asset.

Cost of Sales. Cost of sales increased by 58.5% to $26.2 million in the fourth quarter of fiscal 2018 from $16.6 million in the fourth quarter of fiscal 2017. Non-GAAP1 cost of sales increased by 58.6% to $26.2 million in the fourth quarter of fiscal 2018 from $16.5 million in the fourth quarter of fiscal 2017. The increase was mainly due to increased salaries and related expenses, increased lecture fees for the expansion of online and offline course offerings, increased rental and related expenses associated with the Company's new office space in Beijing and offline training courses, expenses associated with Beijing Ruida, as well as other miscellaneous expenses.

Gross Profit and Gross Margin. Gross profit was $27.4 million in the fourth quarter of fiscal 2018, up 8.9% from $25.2 million in the prior year period. Non-GAAP1 gross profit was $27.4 million, increasing by 8.9% from $25.2 million in the prior year period. Gross margin was 51.1% in the fourth quarter of fiscal 2018, compared with 60.3% in the fourth quarter of fiscal 2017. Non-GAAP1 gross margin was 51.2% in the fourth quarter of fiscal 2018, compared with 60.4% in the fourth quarter of fiscal 2017.

Operating Expenses. Total operating expenses increased by 34.4% to $20.1 million in the fourth quarter of fiscal 2018, from $14.9 million in the prior year period. Non-GAAP1 total operating expenses increased by 36.0% to $19.5 million in the fourth quarter of fiscal 2018, from $14.3 million in the prior year period.

Selling expenses. Selling expenses increased by 60.4% to $14.3 million in the fourth quarter of fiscal 2018 from $8.9 million in the prior year period. Non-GAAP1 selling expenses increased by 60.6% to $14.3 million in the fourth quarter of fiscal 2018 from $8.9 million in the prior year period. The increase was primarily driven by an increase in salaries and related expenses, higher commissions to agents, and expenses associated with Beijing Ruida. The increase was partially offset by a decrease in advertising and promotional expenses.

General and administrative expenses. General and administrative expenses decreased by 4.0% to $5.8 million in the fourth quarter of fiscal 2018 from $6.0 million in the prior year period. Non-GAAP1 general and administrative expenses decreased by 4.1% to $5.2 million in the fourth quarter of fiscal 2018 from $5.5 million in the prior year period. The decrease was mainly due to decreased provision for doubtful debts, and other general administrative expenses, and was partially offset by expenses associated with Beijing Ruida.

Impairment loss from long-term investments. Impairment loss from long-term investments increased to $2.8 million in the fourth quarter of fiscal 2018 from $0.7 million in the prior year period, due to impairment of value of the Company's investment in investee companies, Beijing Piyingke Technology Co., Ltd. and Mayi White-Collar Investment Management Co., Ltd.

Income Tax Expense. Income tax expense decreased by 16.2% to $1.7 million in the fourth quarter of fiscal 2018 from $2.1 million in the prior year period, primarily due to a decrease in taxable income.

Net Income. As a result of the foregoing, net income increased by 64.8% to $9.7 million in the fourth quarter of fiscal 2018 from $5.9 million in the prior year period. Non-GAAP1 net income increased by 73.9% to $12.5 million in the fourth quarter of fiscal 2018 from $7.2 million in the prior year period.

Operating Cash Flow. Net operating cash inflow increased by 471.9% to $16.7 million in the fourth quarter of fiscal 2018 from $2.9 million in the prior year period. The operating cash inflow was mainly attributable to net income before non-cash items generated in the fourth quarter of fiscal 2018. The decrease in inventories, prepayments and other assets, and the increase in income tax payable and refundable fees generated from our longer duration elite classes, also contributed to the operating cash inflow. The operating cash inflow was partially offset by the increase in accounts receivable and the decrease in deferred revenue.

Cash and Cash Equivalents, Restricted Cash and Short-term Investments. Cash and cash equivalents, restricted cash and short-term investments as of September 30, 2018 increased by 8.9% to $99.6 million from $91.5 million as of June 30, 2018, mainly due to the operating cash inflow generated in the fourth quarter of fiscal 2018, which was partially offset by the capital expenditure of $8.5 million.

Fiscal Year 2018 Financial Results

Net Revenue. Total net revenue increased by 27.2% to $166.7 million in fiscal year 2018 from $131.0 million in fiscal year 2017. Net revenue from online education services, books and reference materials, and other sources contributed 70.2%, 6.1% and 23.7%, respectively, of total net revenues for fiscal year 2018.

Online education services. Net revenue from online education services increased by 22.5% to $117.0 million in fiscal year 2018 from $95.5 million in fiscal year 2017.

Books and reference materials. Net revenue from books and reference materials increased by 13.7% to $10.2 million in fiscal year 2018, from $9.0 million in fiscal year 2017.

Others. Net revenue from other sources increased by 48.8% to $39.4 million in fiscal year 2018 from $26.5 million in fiscal year 2017.

Cost of Sales. Cost of sales increased by 53.1% to $87.9 million in fiscal year 2018 from $57.4 million in fiscal year 2017. Non-GAAP1 cost of sales increased by 53.2% to $87.7 million in fiscal year 2018 from $57.2 million in fiscal year 2017.

Gross Profit and Gross Margin. Gross profit was $78.8 million in fiscal year 2018, up 7.1% from $73.6 million in fiscal year 2017. Non-GAAP1 gross profit was $78.9 million, up 7.1% from $73.7 million in fiscal year 2017. Gross margin was 47.3% in fiscal year 2018, compared with 56.2% in fiscal year 2017. Non-GAAP1 gross margin was 47.4% in fiscal year 2018, compared with 56.3% in fiscal year 2017.

Operating Expenses. Total operating expenses increased by 21.3% to $66.0 million in fiscal year 2018, from $54.4 million in fiscal year 2017. Non-GAAP1 total operating expenses increased by 21.7% to $63.8 million in fiscal year 2018, from $52.4 million in fiscal year 2017.

Selling expenses. Selling expenses increased by 28.1% to $44.7 million in fiscal year 2018 from $34.9 million in fiscal year 2017. Non-GAAP1 selling expenses increased by 28.2% to $44.6 million in fiscal year 2018 from $34.8 million in fiscal year 2017.

General and administrative expenses. General and administrative expenses increased by 9.2% to $21.3 million in fiscal year 2018 from $19.5 million in fiscal year 2017. Non-GAAP1 general and administrative expenses increased by 9.0% to $19.2 million in fiscal year 2018 from $17.6 million in fiscal year 2017.

Impairment loss from long-term investments. Impairment loss from long-term investments increased to $2.8 million in fiscal year 2018 from $0.7 million in fiscal year 2017.

Income Tax Expense. Income tax expense decreased by 50.1% to $2.3 million in fiscal year 2018 from $4.6 million in fiscal year 2017.

Net Income. As a result of the foregoing, net income decreased by 22.2% to $11.6 million in fiscal year 2018 from $14.9 million in fiscal year 2017. Non-GAAP1 net income decreased by 8.9% to $16.1 million in fiscal year 2018 from $17.7 million in fiscal year 2017.

Operating Cash Flow. Net operating cash inflow increased by 33.6% to $50.4 million in fiscal year 2018 from $37.7 million in fiscal year 2017.

Outlook

For the first quarter of fiscal 2019, the Company expects to generate total net revenue in the range of $38.7 million to $40.5 million, representing year-over-year growth of approximately 8% to 13%.

For fiscal year 2019, the Company expects to generate total net revenues in the range of $208.3 million to $216.7 million, representing year-over-year growth of approximately 25% to 30%.

The above guidance reflects the Company's current and preliminary view, which is subject to change.

Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Wednesday, November 21, 2018 (9:00 p.m. Beijing Time on Wednesday, November 21, 2018) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

US Toll Free:

+1-866-519-4004

International:

+65-6713-5090

Mainland China:

400-620-8038

Hong Kong:

+852-3018-6771

United Kingdom:

+44-203-6214-779

Passcode:

CDEL or DL

A telephone replay will be available two hours after the call until November 28, 2018 by dialing:

US Toll Free:

+1-855-452-5696

International:

+61-2-8199-0299

Mainland China:

400-632-2162

Hong Kong:

800-963-117

United Kingdom:

0808-234-0072

Replay Passcode:

7085869

 

Additionally, a live and archived webcast of the conference call will be available at http://ir.cdeledu.com.

About China Distance Education Holdings Limited

China Distance Education Holdings Limited is a leading provider of online education and value-added services for professionals and corporate clients in China. The courses offered by the Company through its websites are designed to help professionals seeking to obtain and maintain professional licenses and to enhance their job skills through our professional development courses in China in the areas of accounting, healthcare, engineering & construction, legal and other industries. The Company also offers professional education courses for participants in the national judicial examination, online test preparation courses for self-taught learners pursuing higher education diplomas or degrees, practical accounting training courses for college students and working professionals, as well as third-party developed online courses. In addition, the Company provides business services to corporate clients, including but not limited to tax advisory and accounting outsourcing services. For further information, please visit http://ir.cdeledu.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "may," "should," "potential," "continue," "expect," "predict," "anticipate," "future," "intend," "plan," "believe," "is/are likely to," "estimate" and similar statements. Among other things, the outlook for the first quarter and full fiscal year 2019 and quotations from management in this announcement, as well as the Company's strategic and operational plans (in particular, the anticipated benefits of strategic growth initiatives, including the acquisition of Beijing Ruida, the partnership with Tencent, the promotion of the Company's lifelong learning ecosystem, as well as cost control) contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic and annual reports to the SEC, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our goals and growth strategies; future prospects and market acceptance of our courses and other products and services; our future business development and results of operations; projected revenues, profits, earnings and other estimated financial information; projected enrollment numbers; our plans to expand and enhance our courses and other products and services; competition in the education and test preparation markets; and Chinese laws, regulations and policies, including those applicable to the Internet, Internet content providers, the education and telecommunications industries, mergers and acquisitions, taxation and foreign exchange.

Further information regarding these and other risks is included in the Company's annual report on Form 20-F and other documents filed or furnished with the SEC. All information provided in this press release is as of the date of this press release. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth in this press release is preliminary and subject to adjustments. Adjustments to the financial statements may be identified when audit work is performed for the year-end audit, which could result in significant differences from this preliminary unaudited financial information.

Use of Non-GAAP Financial Measures

To supplement the Company's consolidated financial results presented in accordance with U.S. generally accepted accounting principles, or GAAP, the Company uses the following measures defined as non-GAAP financial measures: non-GAAP net income, operating income, gross profit, cost of sales, selling expenses, general and administrative expenses, net income margin, operating margin, gross profit margin and basic and diluted earnings per ADS and per share. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to comparable GAAP measures" set forth at the end of this release.

The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based compensation expenses and impairment loss of long-term investments. However, non-GAAP financial measures may not be indicative of the Company's operating performance from a cash perspective. The Company believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance and liquidity. The Company computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of excluding share-based compensation expenses and impairment loss of long-term investments from the above-mentioned line items and presenting these non-GAAP measures is that such items may continue to be for the foreseeable future a significant recurring expense in our business. Management compensates for this limitation by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying table at the end of this release provides more detail on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

Contacts:

China Distance Education Holdings Limited

Investor Relations Department

Tel: +86-10-8231-9999 ext. 1826

Email: IR@cdeledu.com

The Piacente Group | Investor Relations

Brandi Piacente

Tel: +1 212-481-2050

Email: DL@tpg-ir.com

 

[1] For more information about the non-GAAP financial measures contained in this press release, please see "Use of Non-GAAP Financial Measures" below.

 

(Financial Tables on Following Pages)

China Distance Education Holdings Limited

 Consolidated Balance Sheets

(in thousands of US Dollars, except number of shares and per share data)








September 30, 2017


September  30, 2018


(Derived from Audited)


(Unaudited)

Assets:




Current assets:





Cash and cash equivalents

60,526


30,826


Restricted cash

34,855


51,736


Short term investments

5,261


17,073


Accounts receivable, net of allowance for doubtful accounts of US$1,342 and
US$1,191 as of September 30, 2018 and September 30, 2017, respectively

5,525


7,243


Inventories

864


2,782


Prepayment and other current assets

10,439


17,013


Deferred tax assets, current portion

1,654


-


Deferred cost

711


1,125


   Total current assets

119,835


127,798






Non-current assets:





Property, plant and equipment, net

14,022


27,972


Goodwill

29,459


79,910


Long term investments

43,631


33,837


Other intangible assets, net

9,947


39,106


Deposit for purchase of non-current assets

641


8,126


Deferred tax assets, non-current portion

-


5,711


Other non-current assets

7,016


6,428


   Total non-current assets

104,716


201,090







   Total assets

224,551


328,888






Liabilities and equity:




Current liabilities:





Bank borrowings

29,965


50,538


Accrued expenses and other liabilities (including accrued expenses and other
liabilities of the consolidated VIE without recourse to China Distance Education
Holdings Limited of US$33,957 and US$31,684 as of September 30, 2018 and
September 30, 2017, respectively)

38,767


42,141


Amount due to a related party

1,648


-


Income tax payable (including income tax payable of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$4,847 and US$3,641
as of September 30, 2018 and September 30, 2017, respectively)

6,750


9,293


Deferred revenue (including deferred revenue of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$77,262 and
US$49,575 as of September 30, 2018 and September 30, 2017, respectively)

50,506


78,157


Refundable fees (including refundable fees of the consolidated VIE without recourse
to China Distance Education Holdings Limited of US$13,837 and US$1,074 as of
September 30, 2018 and September 30, 2017, respectively)

1,074


13,837


   Total current liabilities

128,710


193,966






Non-current liabilities:





Deferred tax liabilities, non-current portion

3,099


12,693


Long-term bank borrowing

19,930


12,464


Total non-current liabilities

23,029


25,157












   Total liabilities

151,739


219,123






 

Equity:





Ordinary shares (par value of US$0.0001 per share at September 30, 2018 and
September 30, 2017, respectively; Authorized –500,000,000 shares at September 30,
2018 and September 30, 2017, respectively; Issued and outstanding –133,275,521
and 131,854,773 shares at September 30, 2018 and September 30, 2017,
respectively)

13


13


Additional paid-in capital

19,097


21,557


Accumulated other comprehensive loss

(3,367)


(7,013)


Retained earnings

33,040


29,717


   Total China Distance Education Holdings Limited shareholder's equity

48,783


44,274


Noncontrolling interest

24,029


65,491


   Total equity

72,812


109,765


   Total liabilities and equity

224,551


328,888



 

China Distance Education Holdings Limited

Unaudited Consolidated Statements Of Operations

 (in thousands of US dollars, except number of shares, per share and per ADS data)



Three Months Ended September 30,


2017


2018





Sales, net of business tax, value-added tax and related surcharges:





Online education services

32,045


36,539


Books and reference materials

2,093


1,125


Others

7,570


15,962


-  Sale of learning simulation software

2,930


2,974


-  Business start-up training services

1,102


1,724


-  Others

3,538


11,264


   Total net revenues

41,708


53,626






Cost of sales





Cost of services and others

(14,513)


(24,798)


Cost of tangible goods sold

(2,042)


(1,442)


   Total cost of sales

(16,555)


(26,240)






Gross profit

25,153


27,386





Operating expenses





Selling expenses

(8,906)


(14,287)


General and administrative expenses

(6,037)


(5,793)


   Total operating expenses

(14,943)


(20,080)

Change in fair value in connection with business combination

-


3,950

Other operating income

328


926






Operating income 

10,538


12,182





Impairment loss from long-term investments

(679)


(2,835)

Interest income

375


717

Interest expense

(615)


(809)

Exchange gain/(loss)

(1,429)


2,973






Income before income taxes

8,190


12,228

Income tax expense

(2,051)


(1,720)

Loss from equity method investment

(34)


(21)





Net income

6,105


10,487

Net income attributable to noncontrolling interest

(239)


(821)

Net income attributable to China Distance Education Holdings Limited

5,866


9,666

 

Net income per share:




Net income attributable to China Distance Education Holdings Limited 
shareholders





Basic

0.044


0.073


Diluted

0.044


0.072

 

Net income per ADS:




Net income attributable to China Distance Education Holdings Limited 
shareholders





Basic

0.178


0.290


Diluted

0.177


0.290





Weighted average shares used in calculating net income per share:





Basic

131,517,541


132,731,579


Diluted

132,197,374


133,396,825


 

China Distance Education Holdings Limited

Unaudited Consolidated Statements Of Operations

 (in thousands of US dollars, except number of shares, per share and per ADS data)



Year Ended September 30,


2017


2018


(Derived from Audited)



Sales, net of business tax, value-added tax and related surcharges:





Online education services

95,503


117,026


Books and reference materials

8,980


10,213


Others

26,505


39,429


-  Sale of learning simulation software

11,522


11,576


-  Business start-up training services

5,223


4,582


-  Others

9,760


23,271


   Total net revenues

130,988


166,668






Cost of sales





Cost of services and others

(50,540)


(78,936)


Cost of tangible goods sold

(6,872)


(8,947)


   Total cost of sales

(57,412)


(87,883)






Gross profit

73,576


78,785





Operating expenses





Selling expenses

(34,910)


(44,717)


General and administrative expenses

(19,468)


(21,253)


Total operating expenses

(54,378)


(65,970)

Change in fair value in connection with business combination

-


84

Other operating income

1,912


3,051






Operating income 

21,110


15,950





Impairment loss from long-term investments

(679)


(2,835)

Interest income

1,531


2,522

Interest expense

(1,049)


(3,331)

Exchange gain

128


2,476






Income before income taxes

21,041


14,782

Income tax expense

(4,620)


(2,307)

Loss from equity method investment

(153)


(172)





Net income

16,268


12,303

Net income attributable to noncontrolling interest

(1,333)


(677)

Net income attributable to China Distance Education Holdings Limited

14,935


11,626

 

Net income per share:




Net income attributable to China Distance Education Holdings Limited 
shareholders





Basic

0.113


0.087


Diluted

0.112


0.087

 

Net income per ADS:




Net income attributable to China Distance Education Holdings Limited 
shareholders





Basic

0.453


0.347


Diluted

0.448


0.347





Weighted average shares used in calculating net income per share:





Basic

131,432,211


132,363,620


Diluted

133,203,255


133,117,155


 

China Distance Education Holdings Limited

Reconciliations of non-GAAP measures to comparable GAAP measures

(In thousands of US Dollars, except number of shares, per share and per ADS data)






Three Months Ended September 30,



2017


2018



(Unaudited)


(Unaudited)






Cost of sales


16,555


26,240

Share-based compensation expense in cost of sales


43


45

Non-GAAP cost of sales


16,512


26,195






Selling expenses


8,906


14,287

Share-based compensation expense in selling expenses


22


20

Non-GAAP selling expenses


8,884


14,267






General and administrative expenses


6,037


5,793

Share-based compensation expense in general and administrative expenses


581


560

Non-GAAP general and administrative expenses


5,456


5,233






Gross profit


25,153


27,386

Share-based compensation expenses


43


45

Non-GAAP gross profit


25,196


27,431






Gross profit margin


60.3%


51.1%

Non-GAAP gross profit margin


60.4%


51.2%






Operating income


10,538


12,182

Share-based compensation expenses


646


625

Non-GAAP operating income


11,184


12,807






Operating margin


25.3%


22.7%

Non-GAAP operating margin


26.8%


23.9%






Net income


5,866


9,666

Share-based compensation expense


646


625

Impairment loss from long-term investments, net of tax


679


2,212

Non-GAAP net income


7,191


12,503






Net income margin


14.1%


18.0%

Non-GAAP net income margin


17.2%


23.3%






Net income per share—basic


0.044


0.073

Net income per share—diluted


0.044


0.072

Non-GAAP net income per share—basic


0.055


0.094

Non-GAAP net income per share—diluted


0.054


0.094






Net income per ADS attributable to China Distance Education Holdings Limited 
      shareholders—basic (note 1)


0.178


0.290

Net income per ADS attributable to China Distance Education Holdings Limited
      shareholders—diluted (note 1)


0.177


0.290

Non-GAAP net income per ADS attributable to China Distance Education Holdings
      Limited shareholders—basic (note 1)


0.219


 

0.377

Non-GAAP net income per ADS attributable to China Distance Education Holdings
      Limited shareholders—diluted (note 1)


0.218


 

0.375






Weighted average shares used in calculating basic net income per share


131,517,541


132,731,579

Weighted average shares used in calculating diluted net income per share


132,197,374


133,396,825

Weighted average shares used in calculating basic non-GAAP net income per share


131,517,541


132,731,579

Weighted average shares used in calculating diluted non-GAAP net income per share


132,197,374


133,396,825







 

China Distance Education Holdings Limited

Reconciliations of non-GAAP measures to comparable GAAP measures

(In thousands of US Dollars, except number of shares, per share and per ADS data)






Year Ended September 30,



2017


2018



(Unaudited)


(Unaudited)






Cost of sales


57,412


87,883

Share-based compensation expense in cost of sales


164


161

Non-GAAP cost of sales


57,248


87,722






Selling expenses


34,910


44,717

Share-based compensation expense in selling expenses


85


80

Non-GAAP selling expenses


34,825


44,637






General and administrative expenses


19,468


21,253

Share-based compensation expense in general and administrative expenses


1,862


2,065

Non-GAAP general and administrative expenses


17,606


19,188






Gross profit


73,576


78,785

Share-based compensation expenses


164


161

Non-GAAP gross profit


73,740


78,946






Gross profit margin


56.2%


47.3%

Non-GAAP gross profit margin


56.3%


47.4%






Operating income


21,110


15,950

Share-based compensation expenses


2,111


2,306

Non-GAAP operating income


23,221


18,256






Operating margin


16.1%


9.6%

Non-GAAP operating margin


17.7%


11.0%






Net income


14,935


11,626

Share-based compensation expense


2,111


2,306

Impairment loss from long-term investments, net of tax


679


2,212

Non-GAAP net income


17,725


16,144






Net income margin


11.4%


7.0%

Non-GAAP net income margin


13.5%


9.7%






Net income per share—basic


0.113


0.087

Net income per share—diluted


0.112


0.087

Non-GAAP net income per share—basic


0.135


0.122

Non-GAAP net income per share—diluted


0.133


0.121






Net income per ADS attributable to China Distance Education Holdings Limited 
     shareholders—basic (note 1)


0.453


0.347

Net income per ADS attributable to China Distance Education Holdings Limited
     shareholders—diluted (note 1)


0.448


0.347

Non-GAAP net income per ADS attributable to China Distance Education Holdings
     Limited shareholders—basic (note 1)


0.539


 

0.488

Non-GAAP net income per ADS attributable to China Distance Education Holdings
     Limited shareholders—diluted (note 1)


0.532


 

0.485






Weighted average shares used in calculating basic net income per share


131,432,211


132,363,620

Weighted average shares used in calculating diluted net income per share


133,203,255


133,117,155

Weighted average shares used in calculating basic non-GAAP net income per share


131,432,211


132,363,620

Weighted average shares used in calculating diluted non-GAAP net income per share


133,203,255


133,117,155


Note 1: Each ADS represents four ordinary shares

 

Cision View original content:http://www.prnewswire.com/news-releases/china-distance-education-holdings-limited-reports-financial-results-for-fourth-quarter-and-fiscal-year-2018-300753743.html

Source: China Distance Education Holdings Ltd.
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