China Distance Education Holdings Limited Reports Financial Results for Fourth Quarter and Fiscal Year 2018
BEIJING, Nov. 20, 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-GAAP(1) 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-GAAP(1) 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-GAAP(1) net income per ADS were $0.377 and $0.375,
respectively, compared with basic and diluted non-GAAP(1) 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-GAAP(1) 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-GAAP(1) 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-GAAP(1) 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-GAAP(1) net income per ADS were $0.488 and $0.485,
respectively, compared with basic and diluted non-GAAP(1) 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-GAAP(1 )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-GAAP(1 )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-GAAP(1 )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-GAAP(1) 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-GAAP(1) 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-GAAP(1) 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-GAAP(1) 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-GAAP(1 )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-GAAP(1 )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-GAAP(1 )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-GAAP(1) 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-GAAP(1) 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-GAAP(1) 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-GAAP(1) 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 The Piacente Group |
Limited Investor Relations
Investor Relations Department Brandi Piacente
Tel: +86-10-8231-9999 ext. 1826 Tel: +1 212-481-2050
Email: IR@cdeledu.com 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
, 20
17
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 5,525 7,243
US$1,191 as of September 30, 2018 and September 30, 2017, respectively
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 38,767 42,141
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)
Amount due to a related party 1,648
Income tax payable (including income tax payable of the consolidated VIE without 6,750 9,293
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)
Deferred revenue (including deferred revenue of the consolidated VIE without 50,506 78,157
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)
Refundable fees (including refundable fees of the consolidated VIE without recourse 1,074 13,837
to China Distance Education Holdings Limited of US$13,837 and US$1,074 as of
September 30, 2018 and September 30, 2017, respectively)
Total current liabilities 128,710 193,966
Non-c
urrent 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 13 13
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)
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
3
0
,
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
3
0,
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 0.178 0.290
shareholders-basic (note 1)
Net income per ADS attributable to China Distance Education Holdings Limited 0.177 0.290
shareholders-diluted (note 1)
Non-GAAP net income per ADS attributable to China Distance Education Holdings 0.219
Limited shareholders-basic (note 1)
0.377
Non-GAAP net income per ADS attributable to China Distance Education Holdings 0.218
Limited shareholders-diluted (note 1)
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 0.453 0.347
shareholders-basic (note 1)
Net income per ADS attributable to China Distance Education Holdings Limited 0.448 0.347
shareholders-diluted (note 1)
Non-GAAP net income per ADS attributable to China Distance Education Holdings 0.539
Limited shareholders-basic (note 1)
0.488
Non-GAAP net income per ADS attributable to China Distance Education Holdings 0.532
Limited shareholders-diluted (note 1)
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
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.
