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, /PRNewswire-Asia-FirstCall/ -- Noah EducationHoldings Ltd. (NYSE: NED) ("Noah" or "the Company"), a leading provider ofsupplemental education products and services in, today announced itsunaudited financial results for the fourth quarter and full fiscal year ended.
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Mr., Noah's chairman and chief executive officer, said, "We arepleased to report solid year-over-year increases in revenue for both thefourth quarter and full fiscal year 2009, as we exceeded previously statedguidance for the fourth quarter. Our margin performance is evidence of ourability to execute our growth strategy while also keeping a vigilant eye oncosts. We continue to improve the efficiency of our distribution channels, andwe will consistently monitor our operations to uncover new ways to streamlineour operations while maintaining strong revenue performance. Our ELP businessdemonstrated steady growth, as we sustained our market leadership in the DLDspace. Noah's KLD products continued to be the key growth driver in thissegment. Introduced just a year ago, these products have gained significanttraction as customers clearly recognize that our industry-leading contenthelps children succeed in a highly competitive educational environment.
"The recent acquisition of Little New Star represents an important firststep for Noah in entering the fast-growing kids' English training market. Weare progressing well with the integration, with most of the administrativefunctions fully operational under the Noah umbrella. We can now begin toleverage cross-selling and marketing opportunities to drive organic growth.
"This is an important entry point which will enable us to expand ourpresence in the kids' education service market. Our solid financial positionwill allow us to take advantage of additional acquisition opportunities tofurther expand our presence in this space, while simultaneously strengtheningour content and the diversity of our delivery platforms. Our goal is toimprove and expand our service lineup, leveraging our extensive sales anddistribution network to drive us toward becoming a more comprehensiveeducation service provider.
"We recently made a very important addition to our management team withthe appointment of as Executive Vice President. Jerry will workclosely with me to advance our strategic expansion and create efficiencies inthe business. He brings a wealth of consulting and financial managementexperience to the table, and I have great confidence that he will play anintegral role in driving these initiatives. Ultimately, by executing ourstrategy and more efficiently deploying our resources, we aim to yield greaterreturns on our investments and further enhance shareholder value," Xuconcluded.
Fourth Quarter and Fiscal Year 2009 Unaudited Financial Results
Net Revenue. Net revenue for the fourth quarter of fiscal 2009 was (), exceeding the Company's guidance of. This represented an increase of 21.6% compared withnet revenue of for the fourth quarter of fiscal 2008. For thefiscal year 2009, net revenue was (),increased 2.9% from in fiscal year 2008.
Cost of revenue. Cost of revenue for the fourth quarter of fiscal 2009 was (), representing an increase of 20.3% from in the fourth quarter 2008. For fiscal year 2009, cost ofrevenue was (), up 2.4% from in fiscal 2008. The increase in costs was proportionate to the increase inrevenue, maintaining cost as a percentage of revenue at approximately 48.4% inthe fourth quarter of fiscal 2009 and 48.6% in fiscal 2009.
Gross Profit and Gross Margin. Gross profit in the fourth quarter offiscal 2009 was (), representing a year-over-yearincrease of 22.9%. Gross margin for the fourth quarter was 51.6%, slightly upfrom 51.1% in the fourth quarter 2008.
Gross profit for fiscal year 2009 increased slightly to (), from in fiscal 2008. The gross margin forfiscal year 2009 was 51.4% as compared with 51.1% in 2008, consistent withCompany's guidance of maintaining a gross margin above 50%.
Operating Expenses. Total operating expenses for the fourth quarter offiscal 2009 were (), representing a decrease of2.5% from in the fourth quarter 2008.
Total operating expenses for fiscal 2009 were (), representing an increase of 9.5% from in fiscal year2008 as the Company expanded its R&D efforts in content development andsoftware applications, increased its national sales and distributionrealignment efforts in conjunction with new product launches and incurredadditional professional expenses related to the Company's status as aUS-listed public company.
Research and development expenses for the fourth quarter of fiscal 2009were (), representing 15.8% decrease from in the fourth quarter of fiscal 2008. The year-over-yeardecrease was primarily due to lower costs associated with 3rd party softwareand content development. For fiscal 2009, the research and developmentexpenses were (), representing a slight increaseof 5.0% from in fiscal 2008.
Sales and marketing expenses for the fourth quarter of fiscal 2009 were (), up 10.9% year over year from.This was primarily due to advertising and promotion efforts in connection withthe rollout of one new KLD model. However, as a percentage of total netrevenue, sales and marketing expenses decreased by 2.8 percentage points to29% from 31.8%. For fiscal year 2009, sales and marketing expenses were (), up 6.7% from in theprevious fiscal year.
General and administrative expenses for the fourth quarter of fiscal 2009were (), up 10.9% from in thefourth quarter of fiscal 2008. The increase in general and administrativeexpenses was mainly due to higher costs related to share based compensation,as well as depreciation expenses in connection with the newly purchased officebuilding in to accommodate the continued expansion of Noah's business.
For fiscal year 2009, general and administrative expenses were (), up 34.5% from in fiscal 2008. Theadditional expenses included an increase of () instaff compensation costs, () in share basedexpenses, and () in legal, consulting, andother professional service fees related to the Company's status as a US-listedpublic company.
Income from Operations. Operating income for the fourth quarter of fiscal2009 increased to (), representing an operatingmargin of 8.2%, compared to an operating loss of and operatingmargin of -2.4% in the fourth quarter of fiscal 2008. For the fiscal yearended, operating income was (),representing an operating margin of 9.6%, as compared to, oran operating margin of 12.2% in the previous fiscal year.
Other Income, net. Interest income was () inthe fourth quarter of fiscal 2009, compared to a loss of infourth quarter of fiscal 2008. Investment income was () in the fourth quarter of fiscal 2009, compared with in year-ago quarter. Other non-operating income was () in the fourth quarter of fiscal 2009, compared with in the fourth quarter of fiscal 2008. The 2008 figure included an foreign exchange gain. Because a warrant issued to a pre-IPOshareholder expired in, the Company did not record any derivativegain or loss in the fourth quarter of fiscal 2009, whereas in the year agoquarter, Noah recorded a derivative gain of.
For fiscal year 2009, interest income was (),compared with in fiscal 2008. Investment income was () in fiscal 2009 compared with infiscal 2008. Other non-operating income was () infiscal 2009, compared with in fiscal 2008. The 2008 figureincludes an foreign exchange gain.
Net Income. The Company reported net income of (), or per basic and diluted share, respectively, forthe fourth quarter of fiscal 2009. This compares with net income of, or per basic and per diluted share for the fourthquarter of fiscal 2008.
Net income excluding share-based compensation expenses and the change inthe fair value of warrants (non-GAAP) for the fourth quarter ended was (), or per basic anddiluted share, respectively.
Net income for the fiscal year ended was (), a 32.7% decrease from in the fiscal yearended.
For fiscal year 2009, basic and diluted earnings per share amounted to and, respectively, compared to and per basic and diluted share, respectively for fiscal year 2008.
Basic and diluted earnings per share, excluding share-based compensationexpenses and the change in the fair value of warrants, (non-GAAP) were and, respectively, compared to and per basic and diluted share, respectively, for fiscal 2008.
Liquidity. As of, Noah had cash, cash equivalents,short-term bank deposits and short-term investments of (). This compares with cash, cash equivalents and short-terminvestments of as of.
Business and Operational Highlights
Since its inception, Noah has aimed to consistently optimize its productmix to drive continually improving financial performance. The Company alsoplaces importance on investing its product pipeline, and focusing on contentdevelopment to enhance the Company's competitive niche in the ELP business.
Kid Learning Device (KLD) products. KLD product sales remained strongdespite the sequential impact of seasonality in Q4 versus Q3. KLDs are theCompany's key growth driver in the ELP segment. Noah maintains a clearcompetitive advantage in the KLD space due to its superior, industry-leadingcontent.
Digital Learning Device (DLD) products. Noah remains industryleader in terms of both DLD sales and volume. DLD products remain the largestcontributor to total revenue, at 45% in Q4.
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E-dictionaries. In general, demand for Noah's e-dictionaries remainsstable. Noah received a one-time, large order of approximately () for its high-end e-dictionary products from an overseascustomer in Q4. The Company is currently focused on renegotiating and renewingexisting contracts.
Kids' Education Service: Integration of Little New Star. The integrationof Little New Star (LNS) is on track, with most of the administrativefunctions fully integrated with Noah's, such as finance, accounting, humanresources and sales and marketing. The Company also completed the design andmanufacture of the first batch of LNS brand Electronic Teaching Devices (ETDs),which can be used in and out of classrooms for enhanced interactive learning.LNS will begin to introduce these devices in their 10 self-owned schools and600 franchised schools in.
An integration team has been set up to focus on the following primaryareas:
After-School Educational Services. Noah is focused on improvingprofitability in this segment of the business, and began the process ofdiscontinuing the operation of some unprofitable Tutoring Centers in.As of, there are two Tutoring Centers remaining, one in and one in. After school education services will eventually beconsolidated under a broader kids' education segment as this business linecontinues to develop.
Content Development. The total number of courseware titles at the endfiscal 2009 increased 10.5% to approximately 47,500, compared with 43,000 asof. Noah continues to make progress in expanding thequantity and the variety of courseware titles available for different agegroups.
Executive Appointment
Appointment of as Executive Vice President. Mr. wasappointed Executive Vice President of Noah Education, effective.Mr. He will play a key role in driving the Company's strategic expansion intoa full service education services provider. Mr. He is responsible forstrategic planning, business development, accounting and finance and investorrelations. He brings over nine years of financial industry and businessdevelopment experience to his role at Noah. He was most recently a portfoliomanager at Morgan Stanley and Bear Stearns. Before his career in the financialindustry, Mr. He worked as a management consultant, and has substantial marketresearch experience. He is also a CFA charter holder.
Share Repurchase Program
Noah has completed its Share Repurchase Plan initiated in. At this time, the Company does not intend to buy back any more shares.
Financial Outlook for First Quarter of Fiscal Year 2010
Based on current estimates and market conditions, Noah expects to generatenet revenue in the range of for the firstquarter of fiscal 2010, which includes in netrevenue from ELP business and approximately from LNS, representing an overall increase of 14% to 17% compared to theprior-year quarter. This forecast reflects Noah's current and preliminary view,which is subject to change.
Beginning in the first quarter of fiscal 2010, the Company intends to giveguidance on both revenue and operating profit for the next sequential quarterand current fiscal year.
Conference Call
Noah has scheduled an investor conference call at (Pacific) / (Eastern) / ( /) on to discuss its fourth quarter and fiscal year 2009 financial results andrecent business activities. Individuals interested in participating in thecall may do so by dialing:
Please dial in 10 minutes before the call is scheduled to begin.
A telephone replay will be available shortly after the call until by dialing the following numbers:
A live webcast of the conference call and replay will be available on theinvestor relations page of Noah's website at http://ir.noahedu.com.cn .
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is subject toadjustments that may be identified when audit work is performed on ouryear-end financial statements, which could result in significant differencesfrom this unaudited financial information.
Currency Convenience Translation
For the convenience of readers, certain RMB amounts have been translatedinto US dollars at the rate of, the noon buying rate forUS dollars in effect on for cable transfers of RMB per US dollaras certified for customs purposes by the Federal Reserve Bank of.
Use of Non-GAAP Financial Measures
In addition to consolidated financial results under GAAP, the Company alsoprovides non-GAAP financial measures, including non-GAAP net income whichexcludes non-cash share-based compensation and change in fair value ofwarrants. The Company believes that the non-GAAP financial measures provideinvestors with another method for assessing the Company's operating results ina manner that is focused on the performance of its ongoing operations. Readersare cautioned not to view non-GAAP results on a stand-alone basis or as asubstitute for results under GAAP, or as being comparable to results reportedor forecasted by other companies. The Company believes that both managementand investors benefit from referring to these non-GAAP financial measures inassessing the performance of the Company's liquidity and when planning andforecasting future periods.
About Noah
Noah Education Holdings Limited is a leading provider of supplementaleducation products and services in. Noah's core offering includes thedevelopment and marketing of electronic learning products (ELPs), interactiveeducational courseware content, software, kids' English training andafter-school education services. Noah combines standardized education contentwith innovative digital and multimedia technologies to create a dynamiclearning experience and improve academic performance for students throughout. Noah has developed a nationwide sales network, powerful brand image,and accessible and diverse delivery platforms to bring its innovative contentto the growing student population. Noah also provides kids' English trainingservice under the brand Little New Star in its direct-owned schools and morethan 600 franchise schools throughout. Noah was founded in 2004 and islisted on the New York Stock Exchange under the ticker symbol NED. For moreinformation about Noah, please visit http://www.noahedu.com.cn .
Safe Harbor Statement
This press release contains forward-looking statements that reflect Noah'scurrent expectations and views of future events that involve known and unknownrisks, uncertainties and other factors that may cause our actual results,performance or achievements to be materially different from any future results,performance or achievements expressed or implied by the forward-lookingstatements. Noah has based these forward-looking statements largely on itscurrent expectations and projections about future events and financial trendsthat it believes may affect its financial condition, results of operations,business strategy and financial needs. You should understand that our actualfuture results may be materially different from and worse than what Noahexpects. Information regarding these risks, uncertainties and other factors isincluded in Noah's most recent Annual Report on Form 20-F and other filingswith the SEC.
SOURCE Noah Education Holdings Ltd.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.