BEIJING, Aug. 9, 2010 (GLOBE NEWSWIRE) -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq:CAST), a leading for-profit, post-secondary and E-learning services provider in China, today announced its financial results for the second quarter ended June 30, 2010.
- Second Quarter 2010 Highlights[i]:
- Total revenues increased 46% to $16.3 million
- Gross profit increased 25% to $8.6 million; Gross profit margin was 53%
- Operating income increased 22% to $6.3 million; Operating income margin was 39%
- Net income increased 26% to $4.8 million; Net income margin was 29%
- Diluted EPS of $0.10
- Adjusted net income (non-GAAP) increased 30% to $6.3 million; Adjusted net income (non-GAAP) margin was 39%
- Adjusted diluted EPS (non-GAAP) of $0.13
- Adjusted EBITDA (non-GAAP) increased 33% to $9.5 million; Adjusted EBITDA margin (non-GAAP) was 58%
- Cash and bank balances together with term deposits was $156.9 million. Total equity was $262.8 million.
- First Half 2010 Highlights:
- Total revenues increased 44% to $32.2 million
- Gross profit increased 27% to $17.4 million; Gross profit margin was 54%
- Operating income increased 32% to $12.4 million; Operating income margin was 39%
- Net income increased 40% to $9.4 million; Net income margin was 29%
- Diluted EPS of $0.20
- Adjusted net income (non-GAAP) increased 35% to $12.6 million; Adjusted net income margin (non-GAAP) was 39%
- Adjusted diluted EPS of $0.27
- Adjusted EBITDA (non-GAAP) increased 38% to $19.0 million; Adjusted EBITDA margin (non-GAAP) was 59%
"We are pleased to report another profitable quarter of strong performance," commented Ron Chan, Chairman and Chief Executive Officer. "We believe our team's performance reflects the strength of our position as a leader in the PRC for-profit, post-secondary education sector and the continued strong demand and favorable market dynamics for post-secondary education services in China. We believe our momentum going into the third quarter 2010 is strong as we expect to make additional investments to further strengthen and extend our market opportunities such as our summer and international education programs on our campuses in Chongqing and Guilin, the launching of our e-learning joint venture with China University of Petroleum and the acquisition of our third accredited university, Hubei Industrial University Business College."
Added Antonio Sena, Chief Financial Officer, "Our operating and profit margins remained quite robust as we continue to expand our business and integrate acquisitions while exercising efficient fiscal management. We've now reached a major milestone in the Company where the percentage of our total revenue from our traditional university business exceeds that of our e-learning business. While we had a substantial increase in share count primarily due to our capital raise in December 2009, we were able to offset this by a 26% increase in net income. Our cash and bank balances increased to $157 million at the end of the second quarter of 2010 and we intend to deploy $66 million of capital for our third university acquisition which we anticipate to close soon."
[1] See financial tables and the GAAP to non-GAAP reconciliation below. The US dollar figures presented in this release are derived from the corresponding RMB figures from the Company's Form 10-Q for the period ended June 30, 2010, and are based on the historical exchange rate of US$1.0 = 6.8 RMB at June 30, 2010.
Second Quarter 2010 Financial Results
ChinaCast is organized into two business segments: the Traditional University Group ("TUG"), offering accredited bachelor and diploma degree programs to students from the Foreign Trade and Business College ("FTBC") campus in Chongqing, and the Lijiang College ("LJC") campus in Guilin; and the E-Learning Group ("ELG"), encompassing the Company's E-learning education service businesses.
Total Revenues -- Total revenues for the quarter increased 46% to $16.3 million from $11.1 million in the second quarter of 2009. TUG revenue for the quarter increased 120% to $9.3 million from $4.2 million in the second quarter of 2009, primarily due to the acquisition of LJC in December 2009 and an increase in the number of post-secondary students at FTBC. Thus, TUG revenue for the quarter as a percentage of total revenue increased to 57% compared to 38% in the second quarter of 2009. ELG revenue for the quarter remained flat year-over-year at $7.0 million primarily due to a decrease in equipment sales. The Company also reports revenue by service and equipment. Service revenue for the quarter increased 48% to $16.3 million from $11.0 million in the second quarter of 2009, while equipment revenue decreased 100% to $0 from $0.1 million in the second quarter of 2009.
Cost of Sales -- Cost of sales for the quarter increased 80% to $7.7 million from $4.3 million in the second quarter of 2009 due to the acquisition of LJC in the fourth quarter of 2009.
Gross Profit and Gross Margin -- Gross profit for the quarter increased 25% to $8.6 million from $6.9 million in the second quarter of 2009. Gross profit margin for the quarter was 53% compared to 62% in the second quarter of 2009 primarily due to the increase in percentage of total revenue attributed to the TUG business which has a lower gross margin than the ELG business.
Share Based Compensation -- Share based compensation for the quarter decreased 45% to $0.3 million from $0.5 million in the second quarter of 2009, primarily due to the stock options issued to management in 2007 which became fully vested at the end of the first quarter of 2010.
Amortization of Acquired Intangible Assets -- Amortization of acquired intangible assets for the quarter increased 111% to $1.3 million from $0.6 million in the second quarter of 2009 due to the acquisition of LJC in the fourth quarter of 2009.
Operating Expenses -- Operating expenses for the quarter increased 34% to $2.3 million from $1.7 million in the second quarter of 2009, primarily due to the acquisition of LJC in the fourth quarter of 2009.
Operating Income and Operating Income Margin -- Operating income for the quarter increased 22% to $6.3 million from $5.2 million in the second quarter of 2009. Operating income margin for the quarter was 39% compared to 47% in the second quarter of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower operating income margin than the ELG business.
Net Income and Net Income Margin -- Net income attributable to the Company for the quarter increased 26% to $4.8 million from $3.8 million in the second quarter of 2009. Net income margin for the quarter was 29% compared to 34% in the second quarter of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower net income margin than the ELG business.
Diluted EPS -- Diluted earnings per share for the quarter were $0.10 compared to $0.11 in the second quarter of 2009 primarily due to a year-over-year increase in shares used in the computation. The weighted average number of shares used in the computation was 47,454,800 for the second quarter of 2010 and 35,802,327 for the second quarter of 2009. The increase in the diluted share count is primarily due to the capital raise in June 2010 related to the future acquisition of the third accredited university, Hubei Industrial University Business College ("HIUBC").
Adjusted Net Income and Adjusted Net Income Margin -- Adjusted net income excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the quarter increased 30% to $6.3 million from $4.9 million in the second quarter of 2009. Adjusted net income margin (non-GAAP) for the quarter was 39% compared to 44% in the second quarter of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower adjusted net income margin than the ELG business.
Adjusted Diluted EPS -- Adjusted diluted earnings per share excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the quarter were $0.13 compared to $0.14 in the second quarter of 2009 primarily due to a year-over-year increase in shares used in the computation. The increase in the diluted share count is primarily due to the capital raise in December 2009 for the acquisition of the third university.
Adjusted EBITDA and Adjusted EBITDA Margin -- Adjusted EBITDA (non-GAAP) for the quarter increased 33% to $9.5 million from $7.1 million in the second quarter of 2009. Adjusted EBITDA margin (non-GAAP) for the quarter was 58% compared to 64% in the second quarter of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower adjusted EBITDA margin (non-GAAP) than the ELG business.
Cash and Bank Balances together with Term Deposits -- Cash and bank balances together with term deposits was $156.9 million as of June 30, 2010. Total equity was $262.8 million.
First Half 2010 Financial Results
Total Revenues -- Total revenues for the first half increased 44% to $32.2 million from $22.4 million in the first half of 2009. TUG revenue for the first half increased 114% to $18.4 million from $8.6 million in the first half of 2009, primarily due to the acquisition of LJC in the fourth quarter of 2009 and an increase in the number of students at FTBC. Thus, TUG revenue for the first half as a percentage of total revenue increased to 57% compared to 38% in the first half of 2009. ELG revenue for the first half remained flat at $13.8 million primarily due to a decrease in equipment sales. Service revenue for the first half increased 48% to $32.2 million from $21.8 million in the first half of 2009, while equipment revenue decreased 99% to $0.005 million from $0.6 million in the first half of 2009.
Cost of Sales -- Cost of sales for the first half increased 70% to $14.8 million from $8.7 million in the first half of 2009, primarily due to the acquisition of LJC in the fourth quarter of 2009.
Gross Profit and Gross Margin -- Gross profit for the first half increased 27% to $17.4 million from $13.7 million in the first half of 2009. Gross profit margin for the first half was 54% compared to 61% in the first half of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower gross margin than the ELG business.
Share Based Compensation -- Share based compensation for the first half decreased 53% to $0.7 million from $1.4 million in the first half of 2009, primarily due to the stock options issued to management in 2007 which became fully vested at the end of the first quarter of 2010.
Amortization of Acquired Intangible Assets -- Amortization of acquired intangible assets for the first half increased 111% to $2.5 million from $1.3 million in the first half of 2009 due to the acquisition of LJC in the fourth quarter of 2009.
Operating Expenses -- Operating expenses for the first half increased 17% to $5.0 million from $4.3 million in the first half of 2009, primarily due to the acquisition of LJC in the fourth quarter of 2009.
Operating Income and Operating Income Margin -- Operating income for the first half increased 32% to $12.4 million from $9.4 million in the first half of 2009. Operating income margin for the first half was 39% compared to 42% in the first half of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower operating income margin than the ELG business.
Net Income and Net Income Margin -- Net income attributable to the Company for the first half increased 40% to $9.4 million from $6.7 million in the first half of 2009. Net income margin for the first half was 29% compared to 30% in the first half of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower net income margin than the ELG business.
Diluted EPS -- Diluted earnings per share for the first half were $0.20 compared to $0.19 in the first half of 2009, primarily due to a year-over-year increase in shares used in the computation. The weighted average number of shares used in the computation was 46,880,355 for the first half of 2010 and 35,725,311 for the first half of 2009. The increase in the diluted share count is primarily due to the capital raise in December 2009 for the acquisition of HIUBC.
Adjusted Net Income and Adjusted Net Income Margin -- Adjusted net income excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the first half increased 35% to $12.6 million from $9.3 million in the first half of 2009. Adjusted net income margin excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the first half was 39% compared to 42% in the first half of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower net income margin than the ELG business.
Adjusted Diluted EPS -- Adjusted diluted earnings per share excluding share based compensation expenses and amortization of acquired intangible assets (non-GAAP) for the first half were $0.27 compared to $0.26, primarily due to a year-over-year increase in shares used in the computation. The increase in the diluted share count is primarily due to the capital raise in December 2009 for the acquisition of the third university.
Adjusted EBITDA and Adjusted EBITDA Margin -- Adjusted EBITDA (non-GAAP) for the first half increased 38% to $19.0 million from $13.8 million in the first half of 2009. Adjusted EBITDA margin (non-GAAP) for the first half was 59% compared to 62% in the first half of 2009, primarily due to the large increase in percentage of total revenue attributed to the TUG business which has a lower adjusted EBITDA margin (non-GAAP) than the ELG business.
Financial Outlook for 2010
For the full year ending December 31, 2010, the Company reaffirmed the following previously provided guidance:
- Total net revenue will be between $78 million to $80 million (a year-on-year increase of 53% to 57%)
- Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP), will be between $25 million to $27 million (a year-on-year increase of 34% to 44%)
- Adjusted EBITDA excluding share based compensation (non-GAAP) will be between $45 million to $47 million (a year-on-year increase of 58% to 65%)
This is the Company's current and preliminary view, which is subject to change.
Conference Call Information
ChinaCast's management team will host an earnings conference call at 8:30 am ET, Tuesday, August 10, 2010. The dial-in details for the earnings conference call are as follows:
Earnings Call Telephone Numbers:
US/Canada Toll Free: +1-877-303-9226
International: +1-760-666-3566
A replay of the earnings conference call will be available at the following numbers:
Replay Telephone Numbers:
US/Canada Toll Free: +1-800-642-1687
International: +1-706-645-9291
Replay Pass Code: 90627901
The replay will be available starting at 11:30 am ET, Tuesday, August 10, 2010, through 11:59 pm ET, Tuesday, August 24, 2010.
Additionally, a live and archived version of the earnings call will be available at www.chinacasteducation.com. Please access the website approximately 10 minutes prior to the start time in order to download and install any necessary software.
About ChinaCast Education Corporation
Established in 1999, ChinaCast Education Corporation is a leading for-profit, post-secondary education and e-learning services provider in China. The Company provides post-secondary degree and diploma programs through its two universities in China: The Foreign Trade and Business College of Chongqing Normal University and the Lijiang College of Guangxi Normal University. These universities offer fully accredited, career-oriented bachelor's degree and diploma programs in business, economics, law, IT/computer engineering, hospitality and tourism management, advertising, language studies, art and music. The Company provides its e-learning services to post-secondary institutions, K-12 schools, government agencies and corporate enterprises via its nationwide satellite/fiber broadband network. These services include interactive distance learning applications, multimedia education content delivery, English language training and vocational training courses. The company is listed on the NASDAQ with the ticker symbol CAST.
Safe Harbor Statement
This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of future performance, statements of management's plans and objectives, future contracts, and forecasts of trends and other matters. These projections, expectations and trends are dependent on certain risks and uncertainties including such factors, among others, as growth in demand for education services, smooth and timely implementation of new training centers and other risk factors listed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009. Forward-looking statements speak only as of the date of this filing, and we undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as "anticipate," "estimate," "expect," "believe," "will likely result," "outlook," "project" and other words and expressions of similar meaning. No assurance can be given that the results in any forward-looking statements will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: adjusted net income, adjusted net-income margin, adjusted EPS (basic and diluted), adjusted EBITDA and adjusted EBITDA margin. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results. These non-GAAP financial measures exclude from our operating performance not only non-cash charges, such as stock-based compensation, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
| CHINACAST EDUCATION CORPORATION | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||
| (In thousands, except share-related data) | ||||||
|
As of June 30, |
As of December 31, |
|||||
| 2010 | 2010 | 2009 | ||||
| US$ | RMB | RMB | ||||
| (Note 1) | (Note 1) | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | 76,034 | 517,034 | 327,628 | |||
| Term deposits | 80,882 | 550,000 | 507,000 | |||
| Accounts receivable | 7,050 | 47,942 | 53,828 | |||
| Inventory | 212 | 1,440 | 1,386 | |||
| Prepaid expenses and other current assets | 3,127 | 21,263 | 19,212 | |||
| Amounts due from related parties | 506 | 3,438 | 6,388 | |||
| Deferred tax assets | 59 | 404 | 1,010 | |||
| Current portion of prepaid lease payments for land use rights | 477 | 3,246 | 3,246 | |||
| Total current assets | 168,347 | 1,144,767 | 919,698 | |||
| Non-current deposits | 1,929 | 13,115 | 14,550 | |||
| Property and equipment, net | 75,821 | 515,579 | 516,938 | |||
| Prepaid lease payments for land use rights - non-current | 21,058 | 143,191 | 144,818 | |||
| Acquired intangible assets, net | 7,949 | 54,051 | 71,286 | |||
| Long-term investments | 447 | 3,041 | 3,101 | |||
| Non-current advances to related party | 14,659 | 99,682 | 99,727 | |||
| Goodwill | 74,081 | 503,753 | 503,771 | |||
| Total assets | 364,291 | 2,477,179 | 2,273,889 | |||
| Liabilities and equity | ||||||
| Current liabilities: | ||||||
| Accounts payable (including accounts payable of the consolidated VIE without recourse to ChinaCast Education Corporation of RMB718 and RMB719 as of June 30, 2010 and December 31, 2009, respectively) | 2,926 | 19,898 | 16,061 | |||
| Accrued expenses and other current liabilities (including accrued expenses and other liabilities of the consolidated VIE without recourse to ChinaCast Education Corporation of RMB16,553 and RMB16,740 as of June 30, 2010 and December 31, 2009, respectively) | 28,363 | 192,868 | 215,631 | |||
| Deferred revenues | 5,927 | 40,302 | 156,645 | |||
| Income taxes payable (including income taxes payable of the consolidated VIE without recourse to ChinaCast Education Corporation of RMB3,560 and RMB2,293 as of June 30, 2010 and December 31, 2009, respectively) | 12,022 | 81,753 | 68,731 | |||
| Current portion of long-term bank borrowings | 9,706 | 66,000 | 104,400 | |||
| Current portion of capital lease obligation | 188 | 1,279 | 1,323 | |||
| Other borrowings | 2,206 | 15,000 | 200 | |||
| Total current liabilities | 61,338 | 417,100 | 562,991 | |||
| Non-current liabilities: | ||||||
| Long-term bank borrowings | 25,588 | 174,000 | 134,000 | |||
| Deferred tax liabilities – non-current | 4,157 | 28,270 | 30,923 | |||
| Unrecognized tax benefits – non-current (including unrecognized tax benefits of the consolidated VIE without recourse to ChinaCast Education Corporation of RMB5,526 and RMB5,257 as of June 30, 2010 and December 31, 2009, respectively) | 10,372 | 70,527 | 62,457 | |||
| Total non-current liabilities | 40,117 | 272,797 | 227,380 | |||
| Total liabilities | 101,455 | 689,897 | 790,371 | |||
| Commitments and contingencies (Note 14) | ||||||
| Equity: | ||||||
| Ordinary shares (US$0.0001 par value; 100,000,000 shares authorized; 49,778,952 and 45,170,698 shares issued and outstanding as of June 30, 2010 and December 31, 2009, respectively) | 5 | 36 | 33 | |||
| Additional paid-in capital | 224,741 | 1,528,238 | 1,290,651 | |||
| Statutory reserve | 5,756 | 39,139 | 39,139 | |||
| Accumulated other comprehensive loss | (647) | (4,399) | (6,055) | |||
| Retained earnings | 29,453 | 200,281 | 136,583 | |||
| Total ChinaCast Education Corporation shareholders' equity | 259,308 | 1,763,295 | 1,460,351 | |||
| Noncontrolling interest | 3,528 | 23,987 | 23,167 | |||
| Total equity | 262,836 | 1,787,282 | 1,483,518 | |||
| Total liabilities and equity | 364,291 | 2,477,179 | 2,273,889 | |||
| See notes to unaudited condensed consolidated financial statements in the Company's 10-Q filed with the SEC. | ||||||
| CHINACAST EDUCATION CORPORATION | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) | ||||||
| (In thousands, except share-related data) | ||||||
| For the three months ended June 30, | For the six months ended June 30 | |||||
| 2010 | 2010 | 2009 | 2010 | 2010 | 2009 | |
| US$ | RMB | RMB | US$ | RMB | RMB | |
| (Note 1) | (Note 1) | (Note 1) | (Note 1) | |||
| Revenues: | ||||||
| Service | 16,270 | 110,645 | 74,461 | 32,202 | 218,975 | 148,102 |
| Equipment | -- | -- | 1,293 | 5 | 31 | 4,169 |
| 16,270 | 110,645 | 75,754 | 32,207 | 219,006 | 152,271 | |
| Cost of revenues: | ||||||
| Service | (7,667) | (52,136) | (27,644) | (14,759) | (100,355) | (55,011) |
| Equipment | -- | -- | (1,288) | -- | -- | (4,126) |
| (7,667) | (52,136) | (28,932) | (14,759) | (100,355) | (59,137) | |
| Gross profit | 8,603 | 58,509 | 46,822 | 17,448 | 118,651 | 93,134 |
| Operating (expenses) income: | ||||||
| Selling and marketing expenses (including share-based compensation of RMB nil and RMB266 for the three months ended June 30 for 2010 and 2009, respectively; share-based compensation of RMB410 and RMB1,106 for the six months ended June 30 for 2010 and 2009, respectively) | (74) | (503) | (793) | (192) | (1,308) | (2,543) |
| General and administrative expenses (including share-based compensation of RMB1,712 and RMB2,868 for the three months ended June 30 for 2010 and 2009, respectively; share-based compensation of RMB4,192 and RMB8,606 for the six months ended June 30 for 2010 and 2009, respectively) | (2,195) | (14,925) | (13,013) | (4,787) | (32,552) | (30,639) |
| Foreign exchange gain (loss) | (37) | (250) | (53) | (81) | (553) | 116 |
| Management service fee | -- | -- | 2,329 | -- | -- | 3,296 |
| Other operating income | 30 | 207 | 2 | 31 | 214 | 507 |
| Total operating expenses, net | (2,276) | (15,471) | (11,528) | (5,029) | (34,199) | (29,263) |
| Income from operations | 6,327 | 43,038 | 35,294 | 12,419 | 84,452 | 63,871 |
| Interest income | 521 | 3,534 | 2,476 | 954 | 6,488 | 4,788 |
| Interest expense | (529) | (3,594) | (1,717) | (965) | (6,565) | (3,170) |
| Income before provision for income taxes and earnings in equity method investments | 6,319 | 42,978 | 36,053 | 12,408 | 84,375 | 65,489 |
| Provision for income taxes | (1,461) | (9,938) | (7,146) | (2,904) | (19,749) | (13,471) |
| Net income before earnings in equity investments | 4,858 | 33,040 | 28,907 | 9,504 | 64,626 | 52,018 |
| Loss in equity investments | (4) | (30) | (311) | (9) | (60) | (577) |
| Income from continuing operation, net of tax | 4,854 | 33,010 | 28,596 | 9,495 | 64,566 | 51,441 |
| Discontinued operations | ||||||
| Loss from discontinued operations, net of taxes of RMB nil for the three months and six months ended June 30 for 2010 and 2009 | -- | -- | (449) | -- | -- | (1,053) |
| Net income | 4,854 | 33,010 | 28,147 | 9,495 | 64,566 | 50,388 |
| Less: Net income attributable to noncontrolling interest | (64) | (434) | (2,350) | (128) | (868) | (4,909) |
| Net income attributable to ChinaCast Education Corporation | 4,790 | 32,576 | 25,797 | 9,367 | 63,698 | 45,479 |
| Net income | 4,854 | 33,010 | 28,147 | 9,495 | 64,566 | 50,388 |
| Foreign currency translation adjustments | 212 | 1,442 | 62 | 244 | 1,656 | (740) |
| Comprehensive income | 5,066 | 34,452 | 28,209 | 9,738 | 66,222 | 49,648 |
| Comprehensive income attributable to noncontrolling interest | (63) | (448) | (2,352) | (127) | (868) | (4,905) |
| Comprehensive income attributable to ChinaCast Education Corporation | 5,003 | 34,004 | 25,857 | 9,612 | 65,354 | 44,743 |
| Net income per share | ||||||
| Net income attributable to ChinaCast Education Corporation per share: | ||||||
| Basic | 0.10 | 0.69 | 0.72 | 0.20 | 1.37 | 1.28 |
| Diluted | 0.10 | 0.69 | 0.72 | 0.20 | 1.36 | 1.27 |
| Weighted average shares used in computation: | ||||||
| Basic | 47,250,261 | 47,250,261 | 35,656,163 | 46,606,070 | 46,606,070 | 35,652,229 |
| Diluted | 47,454,800 | 47,454,800 | 35,802,327 | 46,880,355 | 46,880,355 | 35,725,311 |
| Amount attributable to ChinaCast Education Corporation: | ||||||
| Income from continuing operation, net of tax | 4,790 | 32,576 | 26,246 | 9,367 | 63,698 | 46,532 |
| Discontinued operations, net of tax | -- | -- | (449) | -- | -- | (1,053) |
| Net income attributable to ChinaCast Education Corporation | 4,790 | 32,576 | 25,797 | 9,367 | 63,698 | 45,479 |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||
| (In thousands) | |||
| For the six months ended June 30, | |||
| 2010 | 2010 | 2009 | |
| US$ | RMB | RMB | |
| (Note 1) | (Note 1) | ||
| Cash flows from operating activities: | |||
| Net income | 9,495 | 64,566 | 50,388 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation | 3,118 | 21,204 | 11,704 |
| Amortization of acquired intangible assets | 2,535 | 17,235 | 8,181 |
| Amortization of land use rights | 239 | 1,627 | 1,308 |
| Share-based compensation | 676 | 4,600 | 9,712 |
| Loss on disposal of property, plant and equipment | -- | 1 | 3 |
| Loss in equity investments | 9 | 60 | 577 |
| Changes in assets and liabilities: | |||
| Accounts receivable | 842 | 5,722 | (13,824) |
| Inventory | (8) | (54) | 10 |
| Prepaid expenses and other current assets | (302) | (2,054) | 1,410 |
| Non-current deposits | 652 | 4,434 | (364) |
| Amounts due from related parties | 434 | 2,950 | 600 |
| Accounts payable | 566 | 3,852 | 2,308 |
| Accrued expenses and other current liabilities | (280) | (1,903) | 6,256 |
| Deferred revenues | (17,109) | (116,343) | (61,280) |
| Amount due to related party | -- | -- | (27) |
| Income taxes payable | 1,915 | 13,022 | 9,145 |
| Deferred tax assets | 89 | 606 | -- |
| Deferred tax liabilities | (390) | (2,653) | (1,252) |
| Unrecognized tax benefits | 1,187 | 8,070 | 3,764 |
| Net cash provided by operating activities | 3,668 | 24,942 | 28,619 |
| Cash flows from investing activities: | |||
| Advance to related party | -- | -- | (20,000) |
| Repayment from advance to related party | 7 | 45 | 29,392 |
| Purchase of property and equipment | (5,743) | (39,051) | (25,142) |
| Term deposits | (6,324) | (43,000) | (137,700) |
| Deposits for investments | (441) | (3,000) | -- |
| Net cash used in investing activities | (12,501) | (85,006) | (153,450) |
| Cash flows from financing activities: | |||
| Other borrowings raised | 12,059 | 82,000 | 10,350 |
| Other borrowings raised from related party | -- | -- | 500 |
| Repayment of other borrowings | (9,882) | (67,200) | (517) |
| Bank borrowings raised | 11,764 | 80,000 | 30,000 |
| Bank borrowings repaid | (11,530) | (78,400) | (3,000) |
| Repayment of capital lease obligation | (6) | (44) | 20 |
| Proceeds from issuance of shares, net of issuance costs | 34,263 | 232,990 | -- |
| Net cash provided by financing activities | 36,668 | 249,346 | 37,353 |
| Effect of foreign exchange rate changes | 18 | 124 | (1) |
| Net increase (decrease) in cash and cash equivalents | 27,853 | 189,406 | (87,479) |
| Cash and cash equivalents at beginning of the period | 48,181 | 327,628 | 220,131 |
| Cash and cash equivalents at end of the period | 76,034 | 517,034 | 132,652 |
| ChinaCast Education Second Quarter and First Half FY2010 | |||
| Reconciliations of Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures | |||
|
3 months ended |
3 months ended |
YoY % change |
|
| 30/6/2010 | 30/6/2009 | +/(--) | |
| US$'000 | US$'000 | ||
| Adjusted Net Income (Non-GAAP) | |||
| Net income attributable to ChinaCast Education Corporation | 4,790 | 3,793 | 26.29 |
| Share-based Compensation | 251 | 461 | (45.55) |
| Amortization of Acquired Intangible Assets | 1,268 | 601 | 110.98 |
| Adjusted Net Income (Non-GAAP) | 6,309 | 4,855 | 29.95 |
| Adjusted Net Margin (non-GAAP) | 38.8% | 43.6% | |
| Adjusted Diluted EPS (Non-GAAP) | 0.13 | 0.14 | (7.14) |
| Adjusted EBITDA (Non-GAAP) | |||
| Net income attributable to ChinaCast Education Corporation | 4,790 | 3,793 | 26.29 |
| Depreciation | 1,508 | 836 | 80.38 |
| Amortization of Acquired Intangible Assets | 1,268 | 601 | 110.98 |
| Amortization of Land Use Rights | 119 | 97 | 22.68 |
| Share-based Compensation | 251 | 461 | (45.55) |
| Interest Income | (521) | (364) | 42.86 |
| Interest Expense | 529 | 252 | 109.92 |
| Provision for income taxes | 1,461 | 1,051 | 39.01 |
| Earnings in equity investments | 4 | 46 | (91.30) |
| Net income attributable to noncontrolling interest | 64 | 347 | (81.50) |
| Adjusted EBITDA (Non-GAAP) | 9,473 | 7,120 | 33.05 |
| Adjusted EBITDA Margin (non-GAAP) | 58.2% | 63.9% | |
|
6 months ended |
6 months ended |
YoY % change |
|
| 30/6/2010 | 30/6/2009 | +/(--) | |
| US$'000 | US$'000 | ||
| Adjusted Net Income (Non-GAAP) | |||
| Net income attributable to ChinaCast Education Corporation | 9,367 | 6,688 | 40.06 |
| Share-based Compensation | 676 | 1,428 | (52.66) |
| Amortization of Acquired Intangible Assets | 2,535 | 1,203 | 110.72 |
| Adjusted Net Income (Non-GAAP) | 12,578 | 9,319 | 34.97 |
| Adjusted Net Margin (non-GAAP) | 39.1% | 41.6% | |
| Adjusted Diluted EPS (Non-GAAP) | 0.27 | 0.26 | 1.88 |
| Adjusted EBITDA (Non-GAAP) | |||
| Net income attributable to ChinaCast Education Corporation | 9,367 | 6,688 | 40.06 |
| Depreciation | 3,118 | 1,721 | 81.17 |
| Amortization of Acquired Intangible Assets | 2,535 | 1,203 | 110.72 |
| Amortization of Land Use Rights | 239 | 192 | 24.48 |
| Share-based Compensation | 676 | 1,428 | (52.66) |
| Interest Income | (954) | (704) | 35.51 |
| Interest Expense | 965 | 466 | 107.08 |
| Provision for income taxes | 2,904 | 1,981 | 46.59 |
| Earnings in equity investments | 9 | 85 | (89.41) |
| Net income attributable to noncontrolling interest | 127 | 722 | (82.41) |
| Adjusted EBITDA (Non-GAAP) | 18,986 | 13,782 | 37.76 |
| Adjusted EBITDA Margin (non-GAAP) | 59.0% | 61.5% | |