3Q11 Net Revenues Increased 26.3% Year-Over-Year
to RMB161.4 million
3Q11 Net Income Increased 25.4% Year-Over-Year to
RMB43.0 million
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 third
quarter of 2011.
Third quarter 2011 Financial Highlights
- Total net revenues increased 26.3% year-over-year to RMB161.4
million ($25.3 million1) from RMB127.8 million in the third quarter
of 2010.
- Net income, including share-based compensation and fair value
change in contingent consideration payable attributable to Global
Education, increased 25.4% to RMB43.0 million ($6.7 million), from
RMB34.3 million in the third quarter of 2010.
- Non-GAAP net income, excluding share-based compensation and
fair value change in contingent consideration payable attributable
to Global Education, increased 21.2% year-over-year to RMB43.4
million ($6.8 million) from RMB35.8 million in the third quarter of
2010.
- Global Education added total gross course enrollments of
268,619 students in the third quarter of 2011, compared to 217,995
in the third quarter of 2010.
- Total number of learning centers increased to 442, covering 146
cities as of September 30, 2011, up from 414 learning centers as of
June 30, 2011.
- Total number of directly-owned-and-operated learning centers
increased to 115 as of September 30, 2011, including 74 learning
centers specializing in IELTS and other language test preparation
and 41 learning centers designated for kids related educational
services, which includes Kids English, Kids Science and
after-school tutoring.
Nine months ended September 30, 2011 Financial
Highlights
- Total net revenues increased 25.5% year-over-year to RMB327.0
million ($51.3 million1) from RMB260.6 million in the nine months
ended September 30, 2010.
- Net income, including share-based compensation and fair value
change in contingent consideration payable attributable to Global
Education, increased 33.7% to RMB65.9 million ($10.3 million), from
RMB49.3 million in the nine months ended September 30, 2010.
- Non-GAAP net income, excluding share-based compensation and
fair value change in contingent consideration payable attributable
to Global Education, increased 6.2% year-over-year to RMB60.4
million ($9.5 million) from RMB56.9 million in the nine months
ended September 30, 2010.
- Global Education added total course enrollments of 729,063
students in the nine months ended September 30, 2011, compared to
637,540 in the nine months ended September 30, 2010.
Mr. David Yongqi Zhang, founder and chief executive officer of
Global Education, commented, "We are pleased to report strong
revenue and net income growth during the third quarter of 2011,
driven by our IELTS test preparation and summer camp businesses.
Our enclosed campus also delivered strong performance in the past
quarter. We believe the success of this school model, along with
our higher-priced personalized course offering, provides valuable
experience for enhancing school revenues in first-tier
cities. During the traditional peak season which falls with
the third quarter, total course enrollments increased 23.2%
year-over-year. We attribute such growth to our extensive school
network, recognized brand, high-quality teacher resources,
continuous innovation, as well as our increased investment in
advertising and marketing."
Mr. Zhang continued, "In the third quarter, we exceeded our
full-year expansion plan for Kids Science and after-school tutoring
programs by adding another five learning centers, reaching a total
number of 41 learning centers. We are excited about the encouraging
growth trend shown in the past nine months and plan to keep
investing in this business line for sustainable long-term
growth."
Ms. Rita Liu, Chief Financial Officer of Global Education,
stated, "We are very excited about business developments and
opportunities already mentioned by David. Increased spending on
SG&A as part of the required investment for expansion of our
school network has put the company's operating margin under some
pressure. Through such expansion the company is building valuable
assets and economies of scale that we believe can be leveraged in
the future for enhanced profitability."
Third quarter 2011 Financial Performance
Third quarter 2011 net revenues increased by
26.3% year-over-year to RMB161.4 million ($25.3 million) from
RMB127.8 million in the same period of 2010. The increase was
primarily due to the following:
- Net revenues from educational programs and
services increased by 25.7% to RMB151.8 million ($23.8
million) in the third quarter of 2011 compared to RMB120.9 million
in the third quarter of 2010, due to an increase in course
enrollments.
- Net revenues from franchise fees, study abroad
consulting services and sales of books and course
materials increased by 37.7% to RMB9.5 million ($1.5
million) in the third quarter of 2011, compared to RMB6.9 million
in the third quarter of 2010, mainly due to increases in revenues
from book sales and franchise fees.
Cost of revenues, which primarily consisted of
salaries and benefits, rent payments, and books and course material
printing costs, increased 33.5% to RMB74.5 million ($11.7 million)
in the third quarter of 2011 compared to RMB55.8 million in the
same period of 2010. This increase was due to additional
expenses associated with a larger teaching faculty, increased costs
associated with the offering of summer camp programs and increased
rental costs related to the expansion of the Company's network of
directly operated learning centers. Salaries and benefits of
teaching staff increased to RMB34.2 million in the third quarter of
2011, compared to RMB27.8 million in the same period of
2010. Costs of summer and winter camp programs increased to
RMB17.7 million in the third quarter of 2011, compared to RMB10.6
million in the same period of 2010. As a result, cost of revenues
represented 46.2% of net revenues in the third quarter of 2011, up
from 43.7% of net revenues in the same period of 2010.
Selling and marketing expenses increased 51.4%
to RMB38.6 million ($6.1 million) in the third quarter of 2011
compared to RMB25.5 million in the same period of 2010. This
was due to increased salaries and benefits of sales and marketing
personnel, and increased level of marketing and promotional
activities during our historically peak season in the third
quarter. Salaries and benefits of sales and marketing staff
increased to RMB14.0 million in the third quarter of 2011, compared
to RMB9.2 million in the same period of 2010. Expenses for
advertising activities increased to RMB12.6 million in the third
quarter of 2011, compared to RMB8.3 million in the same period of
2010. As a result, selling and marketing expenses represented
23.9% of net revenues in the third quarter of 2011, up from 20.0%
of net revenues in the same period of 2010.
General and administrative expenses increased
68.0% to RMB16.3 million ($2.6 million) in the third quarter of
2011 compared to RMB9.7 million in the same period of 2010 due to
increased salaries and benefits of general and administrative
personnel, and increased professional fees. General and
administrative expenses represented 10.1% of net revenues in the
third quarter of 2011, compared to 7.6% in the same period of
2010.
Operating income decreased 13.1% to RMB31.9
million ($5.0 million) in the third quarter of 2011, from RMB36.7
million in the same period of 2010, due to a combined increase in
cost of revenues, sales and marketing expenses, and general and
administrative expenses, which grew at a faster rate than net
revenues.
Operating margin for the third quarter of 2011
was 19.8%, compared to 28.7% in the same period of 2010.
Fair value change in contingent consideration
payable resulted in a gain of RMB1.2 million ($0.2
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 June 30, 2011 and September 30, 2011 by the
number of contingent performance-based shares outstanding.
Income tax expenses decreased by 53.1% to
RMB2.3 million ($0.4 million) in the third quarter of 2011, from
RMB4.9 million in the same period of 2010. The effective tax
rate was 5.1% in the third quarter of 2011, compared to 12.5% in
the same period of 2010. The higher effective tax rate in 2010
was due to the withholding tax of RMB3.5 million arising from the
distribution of dividend to shareholders in the third quarter of
2010.
Net income attributed to Global Education &
Technology Group Limited increased 25.4% to RMB43.0 million ($6.7
million) in the third quarter of 2011, compared to RMB34.3 million
in the same period of 2010.
Basic and diluted earnings per ADS were RMB1.6
($0.3) in the third quarter of 2011. The number of weighted
average ADSs used to calculate basic and diluted earnings per ADS
were 26.0 million and 26.0 million, respectively. Each ADS
represents four ordinary shares. The Company had
approximately 104.3 million ordinary shares outstanding as of
September 30, 2011.
Non-GAAP net income, excluding share-based
compensation expenses and fair value change in contingent
consideration payable attributable to Global Education, was RMB43.4
million ($6.8 million) in the third quarter of 2011, representing a
21.2% 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 third quarter of 2011 were both RMB1.7
($0.3).
Net cash provided by operating activities in
the three months ended September 30, 2011 was approximately RMB25.4
million ($ 4 million) compared to RMB28.5 million in the three
months ended September 30, 2010.
Nine months ended September 30, 2011 Financial
Performance
Nine months ended September 30, 2011 net
revenues increased by 25.5% year-over-year to RMB327.0
million ($51.3 million) from RMB260.6 million in the same period of
2010. The increase was primarily due to the
following:
- Net revenues from educational programs and
services increased by 24.7% to RMB305.6 million ($47.9
million) in the nine months ended September 30, 2011 compared to
RMB245.1 million in the nine months ended September 30, 2010, due
to an increase in test preparation and online education course
enrollments.
- Net revenues from franchise fees, study abroad
consulting services and sales of books and course
materials increased by 38.1% to RMB21.4 million ($3.4
million) in the nine months ended September 30, 2011, compared to
RMB15.5 million in the nine months ended September 30, 2010, driven
primarily by increased commissions earned from to our study abroad
consulting services and increased franchise fees.
Cost of revenues, which primarily consisted of
salaries and benefits, rent payments, and books and course material
printing costs, increased 35.9% to RMB156.7 million ($24.6 million)
in the nine months ended September 30, 2011 compared to RMB115.3
million in the same period of 2010. This increase was due to
additional expenses associated with a larger teaching faculty,
increased costs associated with the offering of summer and winter
camp programs, and increased rental costs related to the expansion
of the Company's network of directly operated learning centers.
Salaries and benefits of teaching staff increased to RMB80.9
million in the nine months ended September 30, 2011, compared to
RMB62.8 million in the same period of 2010. Costs of summer and
winter camp programs increased to RMB22.6 million in the nine
months ended September 30, 2011, compared to RMB12.2 million in the
same period of 2010. As a result, cost of revenues represented
47.9% of net revenues in the nine months ended September 30, 2011,
up from 44.2% of net revenues in the same period of 2010.
Selling and marketing expenses increased 48.7%
to RMB96.2 million ($15.1 million) in the nine months ended
September 30, 2011 compared to RMB64.7 million in the same period
in 2010, reflecting an increase in salaries and benefits of sales
and marketing personnel, expenses related to marketing and
promotional activities, and commissions to sales agents. Salaries
and benefits of sales and marketing staff increased to RMB36.5
million in the nine months ended September 30, 2011, compared to
RMB21.6 million in the same period of 2010. Expenses spent in
advertising activities increased to RMB34.3 million in the nine
months ended September 30, 2011, compared to RMB25.4 million in the
same period of 2010. As a result, selling and marketing expenses
represented 29.4% of net revenues in the nine months ended
September 30, 2011, up from 24.8% of net revenues in the same
period of 2010.
General and administrative expenses increased
56.3% to RMB39.7 million ($6.2 million) in the nine months ended
September 30, 2011 compared to RMB25.4 million in the same period
of 2010 mainly due to increased salaries and benefits of general
and administrative personnel, higher share-based compensation
expenses of RMB4.3 million ($0.7 million) in the nine months ended
September 30, 2011 versus RMB2.0 million in 2010, and increased
professional fees. General and administrative expenses
represented 12.1% of net revenues in the nine months ended
September 30, 2011, compared to 9.7% in the same period of
2010.
Operating income decreased 37.5% to RMB34.5
million ($5.4 million) in the nine months ended September 30, 2011
from RMB55.2 million in the same period of 2010.
Operating margin for the nine months ended
September 30, 2011 was 10.6%, compared to 21.2% in the same period
of last year.
Fair value change in contingent consideration
payable resulted in a gain of RMB11.0 million ($1.7
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 September 30, 2011 by the
number of contingent performance-based shares outstanding.
Income tax expenses decreased 52.7% to RMB3.5
million ($0.5 million) in the nine months ended September 30, 2011,
compared to RMB7.4 million in the same period of 2010. The
effective tax rate was 5.1% in the nine months ended September 30,
2011, compared to an effective tax rate of 13.0% in the same period
of 2010. The higher effective tax rate in 2010 was due to the
withholding tax of RMB3.5 million arising from the distribution of
dividend to shareholders in the third quarter of 2010.
Net income attributed to Global Education &
Technology Group Limited increased 33.7% to RMB65.9 million ($10.3
million) in the nine months ended September 30, 2011, compared to
RMB49.3 million in the same period of
2010.
Basic and diluted earnings per ADS were RMB2.6
($0.4) and RMB2.5 ($0.4) for the nine months ended September 30,
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.
Non-GAAP net income, excluding share-based
compensation expenses and fair value change in contingent
consideration payable attributable to Global Education, was RMB60.4
million ($9.5 million) in the nine months ended September 30, 2011,
representing a 6.2% increase from RMB56.9 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 nine months ended September 30, 2011 were both
RMB2.3 ($0.4).
As of September 30, 2011, the Company had cash and cash
equivalents of RMB873.0 million ($136.9 million), compared to
RMB339.8 million as of September 30, 2010.
Net cash provided by operating activities in
the nine months ended September 30, 2011 was approximately RMB 88.4
million ($13.9 million) compared to RMB85.8 million in the nine
months ended September 30, 2010.
Deferred revenues increased to RMB121.5 million
($19.0 million) as of September 30, 2011, from RMB91.8 million as
of September 30, 2010.
As of September 30, 2011, Global Education had repurchased a
total of 119,821 ADSs, at an aggregate cost of US$0.6 million,
under the share repurchase program approved by the Company's board
of directors in May 2011.
Conference Call
The Company will hold a conference call at 8:00 pm ET on
Tuesday, November 29, 2011, to discuss its unaudited third 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 December 7,
2011. Listeners may access the replay by dialing:
US Toll Free: +1-877-344-7529 International:
+1-412-317-0088 Access code: 10007061
A webcast will also be available through the Company's website
at http://ir.globaleducation.cn until December 7, 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 September 30, 2011, the
Company's network comprised 115 directly operated and 327
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.
The Global Education & Technology Group Limited logo is
available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11124
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 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 nine months ended September 30, 2011 were
made at a rate of RMB 6.3780 to USD1.00, the U.S. dollar exchange
rate against the Renminbi on September 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 September 30,
2011 |
As of June 30,
2011 |
As of September 30,
2011 |
|
RMB |
RMB |
USD |
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
872,959 |
853,291 |
136,870 |
Restricted cash |
771 |
771 |
121 |
Term deposits |
-- |
-- |
-- |
Accounts receivable, net of
allowance |
4,480 |
4,574 |
702 |
Prepaid expenses and other current
assets |
27,448 |
28,623 |
4,304 |
Deferred tax assets, current |
9,451 |
6,770 |
1,482 |
Amounts due from a related party |
320 |
320 |
50 |
Total current assets |
915,429 |
894,349 |
143,529 |
|
|
|
|
Property and equipment, net |
85,125 |
85,064 |
13,347 |
Acquired intangible assets, net |
5,756 |
6,168 |
902 |
Goodwill |
36,136 |
36,136 |
5,666 |
Other non-current assets |
4,233 |
5,696 |
664 |
Total Assets |
1,046,679 |
1,027,413 |
164,108 |
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
16,295 |
18,990 |
2,555 |
Deferred revenue |
121,539 |
140,752 |
19,056 |
Accrued expenses and other current
liabilities |
44,268 |
39,856 |
6,941 |
Deferred tax liabilities, current |
875 |
395 |
137 |
Tax payable |
5,490 |
3,273 |
861 |
Amount due to a related party |
86 |
298 |
13 |
Total current
liabilities |
188,553 |
203,564 |
29,563 |
|
|
|
|
Contingent consideration payable |
3,839 |
13,379 |
602 |
Deferred tax liabilities, non-current |
2,455 |
2,900 |
385 |
Other non-current liabilities |
3,938 |
3,868 |
617 |
Total Liabilities |
198,785 |
223,711 |
31,167 |
|
GLOBAL EDUCATION &
TECHNOLOGY GROUP LIMITED |
Unaudited Condensed
Consolidated Balance Sheets |
(In
thousands) |
|
|
|
|
|
As of September 30,
2011 |
As of June 30,
2011 |
As of September 30,
2011 |
|
RMB |
RMB |
USD |
Shareholders' Equity |
|
|
|
Ordinary shares |
76 |
75 |
12 |
Additional paid-in capital |
718,849 |
708,830 |
112,708 |
Treasury stock |
(3,945) |
(3,607) |
(619) |
Statutory reserves |
31,131 |
27,369 |
4,881 |
Retained earnings |
123,885 |
84,609 |
19,424 |
Accumulated other comprehensive
loss |
(22,102) |
(13,574) |
(3,465) |
Total Shareholders'
Equity |
847,894 |
803,702 |
132,941 |
|
|
|
|
Total Liabilities and Shareholders'
Equity |
1,046,679 |
1,027,413 |
164,108 |
|
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 September 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
Revenues |
|
|
|
Educational programs and services |
151,837 |
120,839 |
23,806 |
Franchise fees, study abroad consulting
services and sales of books |
9,513 |
6,916 |
1,492 |
and course materials |
|
|
|
Total revenues |
161,350 |
127,755 |
25,298 |
|
|
|
|
Operating costs and
expenses |
|
|
|
Cost of revenues |
(74,523) |
(55,815) |
(11,685) |
Selling and marketing expenses |
(38,599) |
(25,534) |
(6,052) |
General and administrative expenses |
(16,323) |
(9,692) |
(2,559) |
Total operating costs and
expenses |
(129,445) |
(91,041) |
(20,296) |
Operating income |
31,905 |
36,714 |
5,002 |
|
|
|
|
Interest income |
4,484 |
2,310 |
703 |
Investment income |
2,164 |
-- |
339 |
Foreign exchange gain/(loss), net |
5,163 |
(133) |
809 |
Consideration payable fair value change |
1,234 |
(94) |
193 |
Other income/(expense), net |
338 |
360 |
55 |
Income before income
taxes |
45,288 |
39,157 |
7,101 |
|
|
|
|
Income tax (expense) |
(2,251) |
(4,884) |
(353) |
Net income |
43,037 |
34,273 |
6,748 |
|
|
|
|
Accretion of convertible redeemable preferred
shares |
-- |
2,478 |
-- |
Income allocated to participating preferred
shareholder |
-- |
(12,129) |
-- |
|
|
|
|
Net income attributable to ordinary
shareholders |
43,037 |
24,622 |
6,748 |
|
|
|
|
Net income per share: |
|
|
|
Basic |
0.41 |
0.49 |
0.06 |
Diluted |
0.41 |
0.46 |
0.06 |
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
Basic |
103,939,339 |
49,799,748 |
103,939,339 |
Diluted |
104,081,572 |
75,189,748 |
104,081,572 |
|
|
|
|
|
|
|
|
|
For the three
months ended September 30, |
|
2011 |
2010 |
2011 |
Share-based compensation expense included
in: |
RMB |
RMB |
USD |
Cost of revenues |
119 |
159 |
19 |
Selling and marketing expenses |
256 |
423 |
40 |
General and administrative expenses |
1,262 |
860 |
198 |
|
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 September 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
|
|
|
|
General and administrative expenses |
16,323 |
9,692 |
2,559 |
Share-based compensation expense in general
and administrative expenses |
1,261 |
860 |
198 |
Non-GAAP general and administrative
expenses |
15,062 |
8,832 |
2,361 |
|
|
|
|
Total operating costs and expenses |
129,445 |
91,041 |
20,296 |
Share-based compensation expenses |
1,637 |
1,442 |
257 |
Non-GAAP operating costs and expenses |
127,808 |
89,599 |
20,039 |
|
|
|
|
Operating income |
31,905 |
36,714 |
5,002 |
Share-based compensation expenses |
1,637 |
1,442 |
257 |
Non-GAAP operating income |
33,542 |
38,156 |
5,259 |
|
|
|
|
Operating margin |
19.8% |
28.7% |
36.4% |
Non-GAAP operating margin |
20.8% |
29.9% |
38.3% |
|
|
|
|
Net income |
43,037 |
34,273 |
6,748 |
Share-based compensation expenses |
1,637 |
1,442 |
257 |
Fair value change in contingent consideration
payable |
(1,234) |
94 |
(194) |
Non-GAAP net income |
43,440 |
35,809 |
6,811 |
|
|
|
|
Net income per ADS attributable to ordinary
shareholders |
1.64 |
1.96 |
0.26 |
- Basic (Note 1) |
|
|
|
Net income per ADS attributable to ordinary
shareholders |
1.64 |
1.84 |
0.26 |
- Diluted (Note 1) |
|
|
|
|
|
|
|
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Basic (Note 1) |
1.68 |
2.08 |
0.26 |
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Diluted (Note 1) |
1.68 |
1.92 |
0.26 |
|
|
|
|
Weighted average shares used in calculating
basic net income per ADS (Note 1) |
103,939,339 |
49,799,748 |
103,939,339 |
Weighted average shares used in calculating
diluted net income per ADS (Note 1) |
104,081,572 |
75,189,748 |
104,081,572 |
|
|
|
|
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 nine
months ended September 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
Revenues |
|
|
|
Educational programs and services |
305,607 |
245,092 |
47,916 |
Franchise fees, study abroad consulting
services and sales of books |
|
|
|
and course materials |
21,436 |
15,495 |
3.361 |
Total revenues |
327,043 |
260,587 |
51,277 |
|
|
|
|
Operating costs and
expenses |
|
|
|
Cost of revenues |
(156,706) |
(115,293) |
(24,570) |
Selling and marketing expenses |
(96,223) |
(64,713) |
(15,087) |
General and administrative expenses |
(39,657) |
(25,358) |
(6,217) |
Total operating costs and
expenses |
(292,586) |
(205,364) |
(45,874) |
Operating income |
34,457 |
55,223 |
5,403 |
|
|
|
|
Interest income |
12,553 |
5,534 |
1,968 |
Investment income |
2,164 |
-- |
339 |
Foreign exchange gain/(loss), net |
8,510 |
(233) |
1,334 |
Consideration payable fair value change |
10,959 |
(4,009) |
1,718 |
Other income, net |
821 |
106 |
129 |
Income before income
taxes |
69,464 |
56,621 |
10,891 |
|
|
|
|
Income tax (expense) |
(3,535) |
(7,369) |
(554) |
Net income |
65,929 |
49,252 |
10,337 |
|
|
|
|
Accretion of convertible redeemable preferred
shares |
-- |
1,539 |
-- |
Income allocated to participating preferred
shareholder - 6% cumulative annual dividend |
-- |
(932) |
-- |
Income allocated to participating preferred
shareholder |
-- |
(16,505) |
-- |
|
|
|
|
Net income attributable to ordinary
shareholders |
65,929 |
33,354 |
10,337 |
|
|
|
|
Net income per share: |
|
|
|
Basic |
0.64 |
0.67 |
0.10 |
Diluted |
0.63 |
0.66 |
0.10 |
|
|
|
|
Weighted average number of shares
outstanding: |
|
|
|
Basic |
103,738,436 |
49,572,915 |
103,738,436 |
Diluted |
104,194,286 |
74,814,694 |
104,194,286 |
|
|
|
|
|
For the nine
months ended September 30, |
|
2011 |
2010 |
2011 |
Share-based compensation expense included
in: |
RMB |
RMB |
USD |
Cost of revenues |
415 |
442 |
65 |
Selling and marketing expenses |
793 |
1,140 |
124 |
General and administrative expenses |
4,259 |
2,048 |
668 |
|
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 nine
months ended September 30, |
|
2011 |
2010 |
2011 |
|
RMB |
RMB |
USD |
|
|
|
|
General and administrative expenses |
39,657 |
25,358 |
6,218 |
Share-based compensation expense in general
and administrative expenses |
4,259 |
2,048 |
668 |
Non-GAAP general and administrative
expenses |
35,398 |
23,310 |
5,550 |
|
|
|
|
Total operating costs and expenses |
292,586 |
205,364 |
45,874 |
Share-based compensation expenses |
5,468 |
3,630 |
857 |
Non-GAAP operating costs and expenses |
287,118 |
201,734 |
45,017 |
|
|
|
|
Operating income |
34,457 |
55,223 |
5,402 |
Share-based compensation expenses |
5,468 |
3,630 |
857 |
Non-GAAP operating income |
39,925 |
58,853 |
6,259 |
|
|
|
|
Operating margin |
10.5% |
43.2% |
21.1% |
Non-GAAP operating margin |
12.2% |
46.1% |
24.4% |
|
|
|
|
Net income |
65,929 |
49,252 |
10,337 |
Share-based compensation expenses |
5,468 |
3,630 |
857 |
Fair value change in contingent consideration
payable |
(10,959) |
4,009 |
(1,718) |
Non-GAAP net income |
60,438 |
56,891 |
9,476 |
|
|
|
|
Net income per ADS attributable to ordinary
shareholders |
2.56 |
2.68 |
0.4 |
- Basic (Note 1) |
|
|
|
Net income per ADS attributable to ordinary
shareholders |
2.52 |
2.64 |
0.4 |
- Diluted (Note 1) |
|
|
|
|
|
|
|
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Basic (Note 1) |
2.32 |
3.12 |
0.36 |
Non-GAAP Net income per ADS attributable to
ordinary shareholders - Diluted (Note 1) |
2.32 |
3.08 |
0.36 |
|
|
|
|
Weighted average shares used in calculating
basic net income per ADS (Note 1) |
103,738,436 |
49,572,915 |
103,738,436 |
Weighted average shares used in calculating
diluted net income per ADS (Note 1) |
104,194,286 |
74,814,694 |
104,194,286 |
|
|
|
|
Note 1: Each ADS represents four common
shares |
|
|
|
CONTACT: Global Education & Technology Group Ltd.
Ms. Wang Ke
Investor Relations Supervisor
Phone: +86 10 6212 5800 ext. 671
E-mail: ir@gedu.org
ICR Inc.
Mr. Rob Koepp
Phone: +86-10-6583-7516 or +1-646-328-2550
E-mail: robert.koepp@icrinc.com
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