2Q11 Net Revenues Increased 25.6% Year-Over-Year
2Q11 Net Income Increased 35.4% Year-Over-Year
Global Education & Technology Group Ltd. (Nasdaq:GEDU) ("Global
Education" or the "Company"), the largest test preparation provider
for the International English Language Testing System ("IELTS") and
a leading provider of educational courses and related services in
China, today announced unaudited financial results for the second
quarter of 2011.
Second Quarter 2011 Financial Highlights
- Total net revenues increased 25.6% year-over-year to RMB88.9
million ($13.8 million1) from RMB70.8 million in the second quarter
of 2010.
- Net income, including share-based compensation and fair value
change in contingent consideration payable attributable to Global
Education, increased 35.4% to RMB11.1 million ($1.7 million), from
RMB8.2 million in the second quarter of 2010.
- Non-GAAP operating income, excluding share-based compensation
of RMB1.8 million ($0.3 million) versus RMB1.1 million for the
second quarter 2010, decreased 74.1% year-over-year to RMB2.8
million ($0.4 million) from RMB10.8 million in the second quarter
of 2010. GAAP operating income (including share-based compensation)
decreased 89.7% year-over-year to RMB1.0 million ($0.2 million)
from RMB9.7 million in the second quarter of 2010. In the
quarter, we continue to expand our learning center network and
marketing tied to our new, high potential business lines of Kids
Science and after-school tutoring by adding 6 new learning
centers. As of June 30, 2011, we had 36 learning centers in 9
cities covering the kids area.
- Non-GAAP net income, excluding share-based compensation and
fair value change in contingent consideration payable attributable
to Global Education, decreased 17.4% year-over-year to RMB10.9
million ($1.7 million) from RMB13.2 million in the second quarter
of 2010.
- Total course enrollments increased 7.3% year-over-year to
263,043, compared to 245,164 in the second quarter of 2010.
- Total number of learning centers increased to 414, covering 130
cities as of June 30, 2011, up from 379 as of March 31,
2011.
- Total number of directly-owned-and-operated learning centers
increased by 10 to 105 as of June 30, 2011, from 95 as of March 31,
2011. Of these 105 directly-owned-and-operated learning
centers, 69 specialize in IELTS and other language test preparation
and 36 are designated for kids related educational services, which
includes Kids English, Kids Science and after-school tutoring.
Six months ended June 30, 2011 Financial
Highlights
- Total net revenues increased 24.8% year-over-year to RMB165.7
million ($25.6 million1) from RMB132.8 million in the six months
ended June 30, 2010.
- Net income, including share-based compensation and fair value
change in contingent consideration payable attributable to Global
Education, increased 52.7% to RMB22.9 million ($3.5 million), from
RMB15.0 million in the six months ended June 30, 2010.
- Non-GAAP operating income, excluding share-based compensation
of RMB3.8 million ($0.6 million) versus RMB2.2 million for the six
months ended June 30, 2010, decreased 69.1% year-over-year to
RMB6.4 million ($1.0 million) from RMB20.7 million in the six
months ended June 30, 2010. GAAP operating income (including
share-based compensation) decreased 85.9% year-over-year to RMB2.6
million ($0.4 million) from RMB18.5 million in the six months ended
June 30, 2010. In the first half of fiscal year 2011, we
continue to expand our learning center network and marketing,
especially our new, high potential business lines of Kids Science
and after-school tutoring. In the six months ended June 30,
2011, we have added 23 new learning centers, 6 of which related to
our test preparation business and 17 new learning centers relating
to Kids Science and after-school tutoring.
- Non-GAAP net income, excluding share-based compensation and
fair value change in contingent consideration payable attributable
to Global Education, decreased 19.4% year-over-year to RMB17.0
million ($2.6 million) from RMB21.1 million in the six months ended
June 30, 2010.
- Total course enrollments increased 9.7% year-over-year to
460,444, compared to 419,545 in the six months ended June 30,
2010.
- Total number of learning centers increased to 414, covering 130
cities as of June 30, 2011, up from 351 as of December 31,
2010.
- Total number of directly-owned-and-operated learning centers
increased by 23 to 105 as of June 30, 2011, from 82 as of December
31, 2010.
Mr. David Yongqi Zhang, Founder and Chief Executive Officer of
Global Education, commented, "During the second quarter of 2011,
our IELTS revenue maintained positive growth. IELTS enrollments
grew more slowly than expected compared to the historical trend in
the same quarter as more Chinese students chose to study in the US
this year comparing with last year and took TOEFL tests.
Fortunately, because of our strong teacher resources and brand
power, our higher-priced personalized VIP and small-class courses
have been developing rapidly. In the second quarter, we added
another six learning centers for Kids Science and after-school
tutoring and expect to be able to complete the full year expansion
plan of having 40 learning centers for those two programs by the
end of the third quarter. We plan to enhance revenues in the
Kids Science and after-school tutoring through increased
advertising in the cities where these programs are being offered
and adding street-level marketing activities in commercial
districts in the second half of 2011."
Mr. Zhang continued, "I believe fiscal year 2011 represents a
period for additional investment for our sustainable long-term
growth. During this time of expansion, our operating margin
will be under some pressure. As we optimize the Company's
human resource capacity and train new teachers for a more
cost-efficient mix of personnel, we expect to improve operating
margins in the next two years. Going forward, we will
continue to strengthen our competitiveness in IELTS preparation,
further expand VIP and small-class learning centers, and enter new
cities through directly opening new learning centers and
acquisition of franchised centers, in order to drive revenue growth
from IELTS test preparation services."
Ms. Hannah Lee, Vice President and Chief Financial Officer of
Global Education, stated, "Considering the challenges we faced with
IELTS enrollment as mentioned by David, we are pleased with the
25.6% year-over-year revenue growth in the second quarter. We are
also encouraged by the early results of our diversified growth
strategy during a usually slow second quarter. Sales and
marketing expense and general and administrative expense increased
during the period as we continued to expand our learning center
network and invested in marketing and promotional activities for
our kids sub-brands ahead of the historical peak season in the
third quarter."
Second Quarter 2011 Financial Performance
Second quarter 2011 net revenues increased by
25.6% year-over-year to RMB88.9 million ($13.8 million) from
RMB70.8 million in the same period of 2010. The increase was
primarily due to the following:
- Net revenues from educational programs and
services increased by 23.6% to RMB81.8 million ($12.7
million) in the second quarter of 2011 compared to RMB66.2 million
in the second quarter of 2010, mainly due to higher average selling
price and an increase in course enrollments.
- Net revenues from franchise fees, study abroad
consulting services and sales of books and course
materials increased by 54.3% to RMB7.1 million ($1.1
million) in the second quarter of 2011, compared to RMB4.6 million
in the prior year period, driven primarily by increased number of
students serviced and commissions earned in relation to our study
abroad consulting services and increased book sales
revenue.
Cost of revenues, which primarily consisted of
salaries and benefits, rent payments, and books and course material
printing costs, increased 41.4% to RMB43.7 million ($6.8 million)
in the second quarter of 2011 compared to RMB30.9 million in the
same period of 2010. This was mainly due to expansion of our
teaching faculty, increased rental expenses, and costs related to
the growth in the Company's network of directly operated learning
centers. This was especially of the case for Kids Science and
after school tutoring, programs for which the Company opened two
related centers outside of Beijing during the second
quarter. As a result, cost of revenues represented 49.2% of
net revenues in the second quarter of 2011, up from 43.6% of net
revenues in the same period of 2010.
Selling and marketing expenses increased 43.6%
to RMB31.6 million ($4.9 million) in the second quarter of 2011
compared to RMB22.0 million in the same period in 2010, reflecting
an increase in sales and marketing staff as well as additional
marketing and promotional activities in advance of our historically
peak season in the third quarter. These expenses were also
driven by expanded offerings for Kids Science and after-school
tutoring. As a result, selling and marketing expenses represented
35.5% of net revenues in the second quarter of 2011, up from 31.1%
of net revenues in the same period of 2010.
General and administrative expenses increased
53.7% to RMB12.6 million ($1.9 million) in the second quarter of
2011 compared to RMB8.2 million in the same period of 2010 mainly
due to higher share-based compensation expenses of RMB1.5 million
($0.2 million) in the second quarter of 2011 versus RMB0.6 million
in 2010, and increased professional fees compared to the second
quarter in 2010 when we were still a private company. General
and administrative expenses represented 14.2% of net revenues in
the second quarter of 2011, compared to 11.6% in the same period of
2010.
Operating income decreased 89.7% to RMB1.0
million ($0.2 million) in the second quarter of 2011, from RMB9.7
million in the same period of 2010, mainly due to a combined
increase in cost of revenues, sales and marketing expenses, and
general and administrative expenses.
As a result, operating margin for the second
quarter of 2011 was 1.1%, compared to 13.7% in the same period of
last year.
Fair value change in contingent consideration
payable resulted in a gain of RMB2.0 million ($0.3
million) as this non-cash gain relates to mark-to-market adjustment
of our contingent consideration payable for performance-linked
equity of the Shenyang and Kaiyu schools acquisitions. This fair
value change is calculated by multiplying the change of our share
price between March 31, 2011 and June 30, 2011 by the number of
contingent performance-based shares outstanding.
Income tax expenses in the second quarter of
2011 was RMB0.3 million ($0.1 million) compared to income tax
recovery of RMB0.9 million in the same period of 2010. The
effective tax rate was 2.5% in the second quarter of 2011, compared
to an effective tax rate of 12.0% recovery in the same period of
2010. The increase in effective tax rate was due to the
release of accrued tax liabilities in relation to the restructuring
of a city's schools by reallocating learning centers within the
schools in the second quarter of 2010.
Net income increased 35.4% to RMB11.1 million
($1.7 million) in the second quarter of 2011, compared to RMB8.2
million in the same quarter of 2010.
Basic and diluted earnings per ADS were RMB0.44
($0.07) in the second quarter of 2011. The number of weighted
average ADSs used to calculate basic and diluted earnings per ADS
were 25.9 million and 26.0 million, respectively. Each ADS
represents four ordinary shares. The Company had
approximately 103.6 million ordinary shares outstanding as of June
30, 2011.
Non-GAAP net income, excluding share-based
compensation expenses and fair value change in contingent
consideration payable attributable to Global Education, was RMB10.9
million ($1.7 million) in the second quarter of 2011, representing
a 17.4% decrease from the same period of 2010.
Basic and diluted non-GAAP net income per ADS,
excluding share-based compensation expenses and fair value change
in contingent consideration payable attributable to Global
Education, for the second quarter of 2011 were both RMB0.40
($0.06).
Net cash provided by operating activities in
the three months ended June 30, 2011 was approximately RMB43.2
million ($6.7 million) compared to RMB35.0 million in the three
months ended June 30, 2010. The increase was primarily due to our
increased efforts in expanding our learning center network with the
opening of ten new learning centers, and our increased promotional
and marketing activities in advance of the historical peak third
quarter.
Six months ended June 30, 2011 Financial
Performance
Six months ended June 30, 2011 net revenues
increased by 24.8% year-over-year to RMB165.7 million ($25.6
million) from RMB132.8 million in the same period of 2010.
The increase was primarily due to the following:
- Net revenues from educational programs and
services increased by 23.7% to RMB153.8 million ($23.8
million) in the six months ended June 30, 2011 compared to RMB124.3
million in the six months ended June 30, 2010, mainly due to higher
average selling price and an increase in course enrollments.
- Net revenues from franchise fees, study abroad
consulting services and sales of books and course
materials increased by 38.4% to RMB11.9 million ($1.8
million) in the six months ended June 30, 2011, compared to RMB8.6
million in the prior year period, driven primarily by increased
number of students serviced and commissions earned in relation to
our study abroad consulting services and increased book sales
revenue.
Cost of revenues, which primarily consisted of
salaries and benefits, rent payments, and books and course material
printing costs, increased 38.2% to RMB82.2 million ($12.7 million)
in the six months ended June 30, 2011 compared to RMB59.5 million
in the same period of 2010. This was mainly due to larger
teaching faculty, increased rental expenses, and costs related to
the growth in the Company's network of directly operated learning
centers, especially relating to those for Kids Science and after
school tutoring programs. As a result, cost of revenues
represented 49.6% of net revenues in the six months ended June 30,
2011, up from 44.8% of net revenues in the same period of 2010.
Selling and marketing expenses increased 46.9%
to RMB57.6 million ($8.9 million) in the six months ended June 30,
2011 compared to RMB39.2 million in the same period in 2010,
reflecting an increase in sales and marketing staff as well as
additional marketing and promotional activities for the Kids
Science and after-school tutoring business and also in advance of
our summer peak quarter. As a result, selling and marketing
expenses represented 34.8% of net revenues in the six months ended
June 30, 2011, up from 29.5% of net revenues in the same period of
2010.
General and administrative expenses increased
48.4% to RMB23.3 million ($3.6 million) in the six months ended
June 30, 2011 compared to RMB15.7 million in the same period of
2010 mainly due to higher share-based compensation expenses of
RMB3.0 million ($0.5 million) in the six months ended June 30, 2011
versus RMB1.2 million in 2010, and increased professional fees
compared to the first half of 2010 when we were still a private
company. General and administrative expenses represented 14.1%
of net revenues in the six months ended June 30, 2011, compared to
11.8% in the same period of 2010.
Operating income decreased 85.9% to RMB2.6
million ($0.4 million) in the six months ended June 30, 2011, from
RMB18.4 million in the same period of 2010, mainly due to a
combined increase in cost of revenues, sales and marketing
expenses, and general and administrative expenses.
As a result, operating margin for the six
months ended June 30, 2011 was 1.6%, compared to 13.9% in the same
period of last year.
Fair value change in contingent consideration
payable resulted in a gain of RMB9.7 million ($1.5
million) as this non-cash gain relates to mark-to-market adjustment
of our contingent consideration payable for performance-linked
equity of the Shenyang and Kaiyu schools acquisitions. This
fair value change is calculated by multiplying the change of our
share price between December 31, 2010 and June 30, 2011 by the
number of contingent performance-based shares outstanding.
Income tax expenses for the six months ended
June 30, 2011 was RMB1.3 million ($0.2 million) compared to RMB2.5
million in the same period of 2010. The effective tax rate was
5.4% in the six months ended June 30, 2011, compared to an
effective tax rate of 14.3% in the same period of 2010. The
decrease was mainly due to that the IPO-related expenses paid in
the first quarter which were deductible for tax purposes and were
accounted as a reduction of paid-in capital that did not reduce net
income for accounting purposes in accordance with US GAAP.
Net income increased 52.7% to RMB22.9 million
($3.5 million) in the six months ended June 30, 2011, compared to
RMB15.0 million in the same period of
2010.
Basic and diluted earnings per ADS were RMB0.88
($0.14) for the six months ended June 30, 2011. The number of
weighted average ADSs used to calculate basic and diluted earnings
per ADS were 25.9 million and 26.1 million, respectively.
Each ADS represents four ordinary shares.
Non-GAAP net income, excluding share-based
compensation expenses and fair value change in contingent
consideration payable attributable to Global Education, was RMB17.0
million ($2.6 million) in the six months ended June 30, 2011,
representing a 19.4% decrease from RMB21.1 million in the same
period of 2010.
Basic and diluted non-GAAP net income per ADS,
excluding share-based compensation expenses and fair value change
in contingent consideration payable attributable to Global
Education, for the six months ended June 30, 2011 were both RMB0.64
($0.10).
As of June 30, 2011, the Company had cash and cash equivalents
of RMB853.3 million ($132.0 million), compared to RMB367.6 million
as of June 30, 2010.
Net cash provided by operating activities in
the six months ended June 30, 2011 was approximately RMB63.0
million ($9.7 million) compared to RMB57.3 million in the six
months ended June 30, 2010. The increase was primarily due to our
increased efforts in expanding our learning center network with the
opening of ten new learning centers, and our increased promotional
and marketing activities in advance of the historical peak third
quarter.
Deferred revenues increased to RMB140.8 million
($21.8 million) as of June 30, 2011, from RMB102.2 million as of
June 30, 2010. This increase was mainly due to continued
business growth.
As of June 30, 2011, Global Education had repurchased a total of
110,121 ADSs, at an aggregate cost of US$0.6 million. Global
Education's board of directors will review the share repurchase
program periodically, and may continue to repurchase ADSs on the
open market from time to time under the share repurchase program
and/or authorize adjustment of its terms and size accordingly.
Financial Outlook for Third Quarter of 2011
The Company estimates that its net revenues for the third
quarter of 2011 will be in the range of RMB154 million ($23.8
million) to RMB158 million ($24.4 million), an increase of
approximately 20.5% to 23.7% over the same quarter in the previous
year.
This forecast reflects the Company's current and preliminary
view, which is subject to change.
Conference Call
The Company will hold a conference call at 8:00 pm ET on Monday,
August 29, 2011, to discuss its unaudited second quarter 2011
financial results. Listeners may access the call by
dialing:
US Toll Free:
+1-800-860-2442 |
International:
+1-412-858-4600 |
Access code: Global Education
& Technology |
A replay of the call will be available through September 5,
2011. Listeners may access the replay by dialing:
US Toll
Free: +1-877-344-7529 |
International:
+1-412-317-0088 |
Access code: 10003316 |
A webcast will also be available through the Company's website
at http://ir.globaleducation.cn until September 6, 2011.
About Global Education
Global Education & Technology Group Ltd. (Nasdaq:GEDU) is
the largest test preparation provider for IELTS and a leading
provider of educational courses and related services in China.
Under its "Global" brand, the Company also offers diversified
services that span a student's educational life cycle, including
after-school courses, overseas study consulting, and professional
certification test preparation. As of June 30, 2011, the
Company's network comprised 105 directly operated and 309
franchised learning centers across China, as well as an online
course delivery platform with more than one million registered
members. For more information, please visit www.gedu.org.
Forward-looking Statements
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and as defined in the Private Securities Litigation Reform Act of
1995.
These forward-looking statements can be identified by terms such
as "anticipate," "believe," "could," "estimate," "expect,"
"forecast," "future," "intend," "look forward to," "outlook,"
"plan," "should," "will," and similar terms and include, among
other things, the Company's guidance relating to anticipated
financial and operating results for the third quarter of 2011, the
Company's future plans and the growth prospects of the Company's
business and industry, including without limitation the Company's
Kids Science, after-school tutoring and TOEFL test preparation
businesses. The factors that could cause the Company's actual
financial and operating results to differ from what the Company
currently anticipates can include its ability to meet challenges
associated with its rapid expansion, its ability to anticipate and
meet market demand, the growth of China's economy and education
market, uncertainties with respect to the China's legal and
regulatory environments, and other factors, including those stated
in the Company's filings with the U.S. Securities and Exchange
Commission (the "SEC"). The financial information contained in this
release should be read in conjunction with the consolidated
financial statements and related notes included in the Company's
prospectus dated October 7, 2010 which was filed with the SEC and
is available on the SEC's website at www.sec.gov.
The forward-looking statements in this release involve known and
unknown risks and uncertainties and are based on current
expectations, assumptions, estimates, and projections about Global
Education and the markets in which it operates. The Company
undertakes no obligation to update forward-looking statements,
which speak only of the Company's views as of the date of this
release, to reflect subsequent events or circumstances, or to
changes in its expectations, except as may be required by law.
Although the Company believes that the expectations expressed in
these forward-looking statements are reasonable, the Company cannot
assure you that its expectations and assumptions will turn out to
be correct, and investors are cautioned that actual results may
differ materially from the anticipated results.
About Non-GAAP Measures
To supplement Global Education's unaudited consolidated
financial results presented in accordance with United States
Generally Accepted Accounting Principles (GAAP), the Company uses
the following measures defined as non-GAAP financial measures: net
income excluding share-based compensation expenses and fair value
change in contingent consideration, operating income excluding
share-based compensation expenses, operating costs and expenses
excluding share-based compensation expenses, general and
administrative expenses excluding share-based compensation
expenses, operating margin excluding share-based compensation
expenses, and basic and diluted net income per ADS attributable to
ordinary shareholders excluding share-based compensation expenses
and fair value change in contingent consideration
payable.
Global Education believes that these non-GAAP financial measures
are useful for its management and investors to assess and analyze
the Company's core operating results as share-based compensation
expenses and fair value change in contingent consideration payable
is not directly attributable to the underlying performance of the
Company's business operations and may not be indicative of its
operating performance from a cash perspective. These non-GAAP
financial measures also facilitate management's internal
comparisons to its historical performance and liquidity. A
limitation of using these non-GAAP financial measures is that these
non-GAAP measures exclude the share-based compensation charge and
fair value change in contingent consideration payable that have
been and will continue to be for the foreseeable future a
significant recurring expense in Global Education's business.
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. The Company is only providing these non-GAAP performance
measures in the press release, and will not incorporate into GAAP
financial statements. For more information on these non-GAAP
financial measures, please see the tables captioned "Reconciliation
of Unaudited non-GAAP measures to the Most comparable GAAP
measures" set forth at the end of this press release.
1. This press release contains translations of certain
Renminbi amounts into US dollars at specified rates solely for the
convenience of readers. Unless otherwise noted, all translations
from Renminbi to US dollars for the quarter ended and six months
ended June 30, 2011 were made at a rate of RMB6.4635 to USD1.00,
the U.S. dollar exchange rate against the Renminbi on June 30, 2011
as set forth in the H.10 weekly statistical release of Federal
Reserve Board. Global Education makes no representation that the
Renminbi or US dollar amounts referred to in this press release
could have been or could be converted into US dollars or Renminbi,
at any particular rate or at all
GLOBAL EDUCATION &
TECHNOLOGY GROUP LIMITED |
Unaudited Condensed
Consolidated Balance Sheets |
(In
thousands) |
|
|
|
|
|
As of June 30,
2011 |
As of March 31,
2011 |
As of June 30,
2011 |
|
RMB |
RMB |
USD |
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
853,291 |
814,337 |
132,017 |
Restricted cash |
771 |
771 |
119 |
Term deposits |
-- |
5,000 |
-- |
Accounts receivable, net of
allowance |
4,574 |
2,968 |
708 |
Prepaid expenses and other current
assets |
28,623 |
23,403 |
4,428 |
Deferred tax assets, current |
6,770 |
5,605 |
1,047 |
Amounts due from a related party |
320 |
-- |
50 |
Total current assets |
894,349 |
852,084 |
138,369 |
|
|
|
|
Property and equipment, net |
85,064 |
85,674 |
13,161 |
Acquired intangible assets, net |
6,168 |
5,168 |
954 |
Goodwill |
36,136 |
35,906 |
5,591 |
Other non-current assets |
5,696 |
4,908 |
881 |
Total Assets |
1,027,413 |
983,740 |
158,956 |
|
|
|
|
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED SHARES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
18,990 |
14,605 |
2,938 |
Deferred revenue |
140,752 |
104,968 |
21,776 |
Accrued expenses and other current
liabilities |
39,856 |
34,794 |
6,167 |
Deferred tax liabilities, current |
395 |
366 |
61 |
Tax payable |
3,273 |
6,961 |
507 |
Amount due to a related party |
298 |
-- |
46 |
Total current
liabilities |
203,564 |
161,694 |
31,495 |
|
|
|
|
Contingent consideration payable |
13,379 |
15,386 |
2,069 |
Deferred tax liabilities, non-current |
2,900 |
2,042 |
449 |
Other non-current liabilities |
3,868 |
4,204 |
598 |
Total Liabilities |
223,711 |
183,326 |
34,611 |
|
|
|
|
Shareholders' Equity |
|
|
|
Ordinary shares |
75 |
75 |
12 |
Additional paid-in capital |
708,830 |
706,888 |
109,667 |
Treasury stock |
(3,607) |
-- |
(558) |
Statutory reserves |
27,369 |
26,252 |
4,234 |
Retained earnings |
84,609 |
74,674 |
13,090 |
Accumulated other comprehensive
loss |
(13,574) |
(7,475) |
(2,100) |
Total Shareholders'
Equity |
803,702 |
800,414 |
124,345 |
|
|
|
|
Total Liabilities, Redeemable
Convertible Preferred Shares and Shareholders' Equity |
1,027,413 |
983,740 |
158,956 |
|
|
GLOBAL EDUCATION &
TECHNOLOGY GROUP LIMITED |
Unaudited Interim
Condensed Consolidated Statements of Operations |
(In thousands, except
ADS and per ADS data) |
|
|
|
|
|
For the three
months ended June 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
Revenues |
|
|
|
Educational programs and services |
81,805 |
66,197 |
12,656 |
Franchise fees, study abroad consulting
services and sales of books and course materials |
7,052 |
4,614 |
1,091 |
Total revenues |
88,857 |
70,811 |
13,747 |
|
|
|
|
Operating costs and
expenses |
|
|
|
Cost of revenues |
(43,708) |
(30,918) |
(6,762) |
Selling and marketing expenses |
(31,592) |
(22,018) |
(4,888) |
General and administrative expenses |
(12,565) |
(8,169) |
(1,944) |
Total operating costs and
expenses |
(87,865) |
(61,105) |
(13,594) |
Operating income |
992 |
9,706 |
153 |
|
|
|
|
Interest income |
4,969 |
1,769 |
769 |
Foreign exchange gain/(loss), net |
3,397 |
(94) |
526 |
Consideration payable fair value change |
2,008 |
(3,915) |
311 |
Other income/(expense), net |
(27) |
(154) |
(4) |
Income before income
taxes |
11,339 |
7,312 |
1,755 |
|
|
|
|
Income tax (expense)/benefit |
(287) |
874 |
(45) |
Net income |
11,052 |
8,186 |
1,710 |
|
|
|
|
Accretion of convertible redeemable preferred
shares |
-- |
977 |
-- |
Income allocated to participating preferred
shareholder |
-- |
(3,024) |
-- |
|
|
|
|
Net income attributable to ordinary
shareholders |
11,052 |
6,139 |
1,710 |
|
|
|
|
Net income per share: |
|
|
|
Basic |
0.11 |
0.12 |
0.02 |
Diluted |
0.11 |
0.11 |
0.02 |
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
Basic |
103,604,136 |
49,799,748 |
103,604,136 |
Diluted |
103,966,309 |
75,071,246 |
103,966,309 |
|
|
|
|
|
For the three
months ended June 30, |
|
2011 |
2010 |
2011 |
Share-based compensation expense included
in: |
RMB |
RMB |
USD |
Cost of revenues |
120 |
142 |
19 |
Selling and marketing expenses |
235 |
357 |
36 |
General and administrative expenses |
1,474 |
598 |
228 |
Total |
1,829 |
1,097 |
283 |
|
|
GLOBAL EDUCATION &
TECHNOLOGY GROUP LIMITED |
Reconciliation of
Unaudited Non-GAAP Measures to the Most Comparable GAAP
Measures |
(In thousands, except
ADS and per ADS data) |
|
|
|
|
|
For the three
months ended June 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
|
|
|
|
General and administrative expenses |
12,565 |
8,169 |
1,944 |
Share-based compensation expense in general
and administrative expenses |
1,474 |
598 |
228 |
Non-GAAP general and administrative
expenses |
11,091 |
7,571 |
1,716 |
|
|
|
|
Total operating costs and expenses |
87,865 |
61,105 |
13,594 |
Share-based compensation expenses |
1,829 |
1,097 |
283 |
Non-GAAP operating costs and expenses |
86,036 |
60,008 |
13,311 |
|
|
|
|
Operating income |
992 |
9,706 |
154 |
Share-based compensation expenses |
1,829 |
1,097 |
283 |
Non-GAAP operating income |
2,821 |
10,803 |
437 |
|
|
|
|
Operating margin |
1.1% |
13.7% |
1.1% |
Non-GAAP operating margin |
3.2% |
15.3% |
3.2% |
|
|
|
|
Net income |
11,052 |
8,186 |
1,710 |
Share-based compensation expenses |
1,829 |
1,097 |
283 |
Fair value change in contingent consideration
payable |
(2,008) |
3,915 |
(311) |
Non-GAAP net income |
10,873 |
13,198 |
1,682 |
|
|
|
|
Net income per ADS attributable to ordinary
shareholders - Basic (Note 1) |
0.44 |
0.48 |
0.07 |
Net income per ADS attributable to ordinary
shareholders - Diluted (Note 1) |
0.44 |
0.44 |
0.07 |
|
|
|
|
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Basic (Note 1) |
0.40 |
0.76 |
0.06 |
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Diluted (Note 1) |
0.40 |
0.72 |
0.06 |
|
|
|
|
Weighted average shares used in calculating
basic net income per ADS (Note 1) |
103,604,136 |
49,799,748 |
103,604,136 |
Weighted average shares used in calculating
diluted net income per ADS (Note 1) |
103,966,309 |
75,071,246 |
103,966,309 |
|
|
|
|
Note 1: Each ADS represents four
common shares |
|
|
GLOBAL EDUCATION &
TECHNOLOGY GROUP LIMITED |
Unaudited Interim
Condensed Consolidated Statements of Operations |
(In thousands, except
ADS and per ADS data) |
|
|
|
|
|
For the six
months ended June 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
Revenues |
|
|
|
Educational programs and services |
153,770 |
124,253 |
23,791 |
Franchise fees, study abroad consulting
services and sales of books and course materials |
11,923 |
8,579 |
1,845 |
Total revenues |
165,693 |
132,832 |
25,636 |
|
|
|
|
Operating costs and
expenses |
|
|
|
Cost of revenues |
(82,183) |
(59,478) |
(12,715) |
Selling and marketing expenses |
(57,624) |
(39,179) |
(8,915) |
General and administrative expenses |
(23,334) |
(15,666) |
(3,610) |
Total operating costs and
expenses |
(163,141) |
(114,323) |
(25,240) |
Operating income |
2,552 |
18,509 |
396 |
|
|
|
|
Interest income |
8,069 |
3,224 |
1,248 |
Foreign exchange gain, net |
3,347 |
(100) |
518 |
Consideration payable fair value change |
9,725 |
(3,915) |
1,505 |
Other income/(expense), net |
483 |
(254) |
74 |
Income before income
taxes |
24,176 |
17,464 |
3,741 |
|
|
|
|
Income tax expense |
(1,284) |
(2,485) |
(199) |
Net income |
22,892 |
14,979 |
3,542 |
|
|
|
|
Accretion of convertible redeemable preferred
shares |
-- |
(939) |
-- |
Income allocated to participating preferred
shareholder |
-- |
(5,278) |
-- |
|
|
|
|
Net income attributable to ordinary
shareholders |
22,892 |
8,762 |
3,542 |
|
|
|
|
Net income per share: |
|
|
|
Basic |
0.22 |
0.18 |
0.03 |
Diluted |
0.22 |
0.17 |
0.03 |
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
Basic |
103,636,320 |
49,455,270 |
103,636,320 |
Diluted |
104,248,979 |
50,092,576 |
104,248,979 |
|
|
|
|
|
For the six
months ended June 30, |
|
2011 |
2010 |
2011 |
Share-based compensation expense included
in: |
RMB |
RMB |
USD |
Cost of revenues |
296 |
283 |
46 |
Selling and marketing expenses |
537 |
717 |
83 |
General and administrative expenses |
2,998 |
1,188 |
464 |
Total |
3,831 |
2,188 |
593 |
|
|
GLOBAL EDUCATION &
TECHNOLOGY GROUP LIMITED |
Reconciliation of
Unaudited Non-GAAP Measures to the Most Comparable GAAP
Measures |
(In thousands, except
ADS and per ADS data) |
|
|
|
|
|
For the six
months ended June 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
|
|
|
|
General and administrative expenses |
23,334 |
15,666 |
3,610 |
Share-based compensation expense in general
and administrative expenses |
2,998 |
1,188 |
464 |
Non-GAAP general and administrative
expenses |
20,336 |
14,478 |
3,146 |
|
|
|
|
Total operating costs and expenses |
163,141 |
114,323 |
25,240 |
Share-based compensation expenses |
3,831 |
2,188 |
593 |
Non-GAAP operating costs and expenses |
159,310 |
112,135 |
24,647 |
|
|
|
|
Operating income |
2,552 |
18,509 |
395 |
Share-based compensation expenses |
3,831 |
2,188 |
593 |
Non-GAAP operating income |
6,383 |
20,697 |
988 |
|
|
|
|
Operating margin |
1.5% |
13.9% |
1.5% |
Non-GAAP operating margin |
3.9% |
15.6% |
3.9% |
|
|
|
|
Net income |
22,892 |
14,979 |
3,542 |
Share-based compensation expenses |
3,831 |
2,188 |
593 |
Fair value change in contingent consideration
payable |
(9,725) |
3,915 |
(1,505) |
Non-GAAP net income |
16,998 |
21,082 |
2,630 |
|
|
|
|
Net income per ADS attributable to ordinary
shareholders - Basic (Note 1) |
0.88 |
0.72 |
0.14 |
Net income per ADS attributable to ordinary
shareholders - Diluted (Note 1) |
0.88 |
0.68 |
0.14 |
|
|
|
|
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Basic (Note 1) |
0.64 |
1.04 |
0.10 |
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Diluted (Note 1) |
0.64 |
1.04 |
0.10 |
|
|
|
|
Weighted average shares used in calculating
basic net income per ADS (Note 1) |
103,636,320 |
49,455,270 |
103,636,320 |
Weighted average shares used in calculating
diluted net income per ADS (Note 1) |
104,248,979 |
50,092,576 |
104,248,979 |
|
|
|
|
Note 1: Each ADS represents four
common shares |
CONTACT: Global Education & Technology Group Ltd.
Ms. Hannah Lee, VP & CFO / Ms. Fay Zhang, VP
Phone: +86 10 6212 5800
E-mail: ir@gedu.org
ICR Inc.
Mr. Rob Koepp
Phone: +86-10-6583-7516 or +1-646-328-2520
E-mail: robert.koepp@icrinc.com
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