China Distance Education Holdings Limited Reports Financial Results for Second Quarter Fiscal Year 2020

BEIJING, May 21, 2020 /PRNewswire/ -- China Distance Education Holdings Limited 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 second quarter of fiscal year 2020 ended March 31, 2020.

Second Quarter Fiscal 2020 Financial and Operational Highlights

  • Net revenue increased by 8.1% to $41.9 million from $38.8 million in the prior year period.
  • Total course enrollments were 1,276,000, an increase of 98.7% from the second quarter of fiscal 2019.
  • Cash receipts from online course registration were $37.3 million, a 34.5% decrease from the second quarter of fiscal 2019.
  • Gross profit increased by 38.1% to $21.4 million from $15.5 million in the prior year period.
  • Non-GAAP[1] gross profit increased by 38.4% to $21.4 million from $15.5 million in the prior year period.
  • Gross margin was 51.0%, compared with 39.9% in the prior year period. Non-GAAP[1] gross margin was 51.1%, compared with 39.9% in the prior year period.
  • Operating income was $1.3 million, compared with operating loss of $4.1 million in the prior year period.
  • Non-GAAP[1] operating income was $2.0 million, compared with non-GAAP[1] operating loss of $3.6 million in the prior year period.
  • Net income attributable to CDEL was $4.3 million, compared with net loss attributable to CDEL of $3.9 million in the prior year period.
  • Non-GAAP[1] net income attributable to CDEL was $5.0 million, compared with non- GAAP[1] net loss attributable to CDEL of $3.4 million in the prior year period.
  • Basic and diluted net income per American Depositary Share ("ADS") attributable to CDEL were $0.126 and $0.125, respectively, compared with basic and diluted net loss per ADS attributable to CDEL of $0.116 for the second quarter of fiscal 2019. Each ADS represents four ordinary shares.
  • Basic and diluted non-GAAP[1] net income per ADS attributable to CDEL were $0.149 and $0.147, respectively, compared with basic and diluted non-GAAP[1] net loss per ADS attributable to CDEL of $0.101, for the second quarter of fiscal 2019.
  • Cash flow from operations decreased by 28.7% to $11.7 million from $16.5 million in the second quarter of fiscal 2019.

Mr. Zhengdong Zhu, Chairman and CEO of CDEL, said, "In the second quarter of fiscal 2020, we delivered year-over-year revenue growth of 8.1%, within our guidance range. The second quarter revenue growth was driven primarily by the healthy revenue growth of our industry-leading accounting vertical. In concert with our responsive measures to support our students across China during the Coronavirus Disease 2019 or COVID-19 epidemic, we offered free online courses to students in Hubei province, and significant discounts for certain online exam preparation courses to students outside Hubei, providing students with convenient access to high-quality online professional education at a time when offline classes were restricted. This initiative quickly attracted students across China to our online learning platform. As a result, our paid enrollments nearly doubled year-over-year in the second quarter, dramatically expanding our student base. While our efforts to support students during the COVID-19 outbreak negatively impacted our second quarter revenue and cash receipts growth, they underscore our commitment to social responsibility, our vision to cultivate online learning as a lifestyle, and our aim to be our students' life-long education partner of choice."

Mr. Zhu concluded, "In the second quarter of fiscal 2020, we officially commenced the third decade as China's preeminent provider of online professional education. During the past 20 years, CDEL has honed its comprehensive life-long learning ecosystem, as we consistently deliver best-of-breed educational content and integrate new technologies into our learning solutions. Looking ahead, we will remain focused on developing our life-long learning ecosystem, which now spans four key industry verticals – accounting, healthcare, engineering and construction, and legal; and provides students with a diverse portfolio of curricula that accommodates their different learning needs, styles and preferences. As online education continues to evolve and become a more widely accepted learning method, we are ready to leverage our extensive experience and compelling value proposition to serve a broader student audience, helping them achieve positive learning outcomes and realize continued advancement in their chosen careers."

Mr. Mark Marostica, Co-Chief Financial Officer of CDEL, added, "The second quarter of fiscal 2020 marks the fourth consecutive quarter of year-over-year improvement in operating margins. We are particularly pleased to report improved profitability in our second fiscal quarter, given the challenges we faced during the COVID-19 epidemic. Our profitability improvement demonstrates the resilience of our business model, coupled with our effective execution of cost control measures. With the second half of our fiscal year well underway, we will continue to proactively manage expenses while maintaining operating efficiency, with a goal of balancing our growth and profitability."

Second Quarter Fiscal 2020 Financial Results

Net Revenue. Total net revenue increased by 8.1% to $41.9 million in the second quarter of fiscal 2020 from $38.8 million in the second quarter of fiscal 2019. Net revenue from online education services, books and reference materials, and other sources contributed 79.8%, 11.7% and 8.5%, respectively, of total net revenues for the second quarter of fiscal 2020.

Online education services. Net revenue from online education services increased by 19.9% to $33.4 million in the second quarter of fiscal 2020 from $27.9 million in the second quarter of fiscal 2019, mainly due to healthy revenue growth from the accounting vertical.

Books and reference materials. Net revenue from books and reference materials decreased by 9.6% to $4.9 million in the second quarter of fiscal 2020 from $5.4 million in the second quarter of fiscal 2019, primarily attributable to the delay in publication of certain Legal Professional Qualification Examination books, due to the impact of COVID-19.

Others. Net revenue from other sources decreased by 34.6% to $3.6 million in the second quarter of fiscal 2020 from $5.5 million in the second quarter of fiscal 2019, primarily due to a significant decrease in revenue from sale of college-related learning simulation software, resulting from the impact of COVID-19.

Cost of Sales. Cost of sales decreased by 11.9% to $20.5 million in the second quarter of fiscal 2020, from $23.3 million in the second quarter of fiscal 2019. Non-GAAP[1] cost of sales decreased by 12.1% to $20.5 million in the second quarter of fiscal 2020, from $23.3 million in the second quarter of fiscal 2019. The decrease in cost of sales was primarily attributable to a decrease in salaries and related expenses, cost of purchase related to sale of learning simulation software, rental and related expenses, and lecture fees.

Gross Profit and Gross Margin. Gross profit was $21.4 million in the second quarter of fiscal 2020, up 38.1% from $15.5 million in the prior year period. Non-GAAP[1] gross profit was $21.4 million, increasing by 38.4% from $15.5 million in the prior year period. Gross margin was 51.0% in the second quarter of fiscal 2020, compared with 39.9% in the second quarter of fiscal 2019. Non-GAAP[1] gross margin was 51.1% in the second quarter of fiscal 2020, compared with 39.9% in the second quarter of fiscal 2019.

Operating Expenses. Total operating expenses increased by 4.7% to $21.3 million in the second quarter of fiscal 2020, from $20.4 million in the prior year period. Non-GAAP[1] total operating expenses increased by 4.0% to $20.7 million in the second quarter of fiscal 2020, from $19.9 million in the prior year period.

Selling expenses. Selling expenses increased by 10.7% to $15.3 million in the second quarter of fiscal 2020 from $13.8 million in the prior year period. Non-GAAP[1] selling expenses increased by 10.5% to $15.3 million in the second quarter of fiscal 2020, from $13.8 million in the prior year period. The increase was primarily driven by higher advertising and promotional expenses, the increase in commission to agents, and higher rental and related expenses, partially offset by a decrease in salaries and related expenses.

General and administrative expenses. General and administrative expenses decreased by 7.7% to $6.1 million in the second quarter of fiscal 2020 from $6.6 million in the prior year period. Non-GAAP[1] general and administrative expenses decreased by 10.7% to $5.4 million in the second quarter of fiscal 2020, from $6.1 million in the prior year period. The decrease was mainly due to lower salaries and related expenses.

Income Tax (Expenses) Benefit. Income tax expense was $0.7 million in the second quarter of fiscal 2020, compared with income tax benefit of $1.3 million in the prior year period, primarily due to the taxable income in the second quarter of fiscal 2020.

Net Income (Loss) Attributable to CDEL. As a result of the foregoing, net income attributable to CDEL was $4.3 million in the second quarter of fiscal 2020, compared with net loss attributable to CDEL of $3.9 million in the prior year period. Non-GAAP[1] net income attributable to CDEL was $5.0 million in the second quarter of fiscal 2020, compared with non-GAAP[1] net loss attributable to CDEL of $3.4 million in the prior year period.

Operating Cash Flow. Net operating cash inflow decreased by 28.7% to $11.7 million in the second quarter of fiscal 2020 from $16.5 million in the prior year period. The operating cash inflow was mainly attributable to net income before non-cash items generated in the second quarter of fiscal 2020. The decrease in prepayments and other current assets, the increase in accrued expenses and other liabilities, and the decrease/increase in amount due from/to related parties also contributed to the operating cash inflow. The operating cash inflow was partially offset by the increase in inventories and the decrease in deferred tax liabilities.

Cash and Cash Equivalents, Term Deposits, Restricted Cash and Short-term Investments. Cash and cash equivalents, term deposits, restricted cash and short-term investments as of March 31, 2020 decreased by 10.8% to $130.2 million from $145.9 million as of December 31, 2019, mainly due to (i) the repayment of offshore loans of $20.4 million, (ii) the repayment of onshore loan of $1.1 million, (iii) the payment of an investment of $0.7 million and (iv) the capital expenditure of $1.2 million. The decrease was partially offset by the operating cash inflow generated in the second quarter of fiscal 2020.

First Six Months of Fiscal 2020 Financial Results

Net Revenue. Total net revenue increased by 14.6% to $93.3 million in the first six months of fiscal 2020 from $81.4 million in the first six months of fiscal 2019. Net revenue from online education services, books and reference materials, and other sources contributed 72.8%, 9.9% and 17.3%, respectively, of total net revenues for the first six months of fiscal 2020.

Online education services. Net revenue from online education services increased by 28.4% to $67.9 million in the first six months of fiscal 2020 from $52.9 million in the first six months of fiscal 2019. 

Books and reference materials. Net revenue from books and reference materials decreased by 21.7% to $9.2 million in the first six months of fiscal 2020 from $11.8 million in the first six months of fiscal 2019.

Others. Net revenue from other sources decreased by 3.3% to $16.1 million in the first six months of fiscal 2020 from $16.7 million in the first six months of fiscal 2019.

Cost of Sales. Cost of sales decreased by 5.6% to $46.1 million in the first six months of fiscal 2020 from $48.9 million in the first six months of fiscal 2019. Non-GAAP[1] cost of sales decreased by 5.7% to $46.1 million in the first six months of fiscal 2020, from $48.9 million in the first six months of fiscal 2019.

Gross Profit and Gross Margin. Gross profit was $47.2 million in the first six months of fiscal 2020, up 45.2% from $32.5 million in the prior year period. Non-GAAP[1] gross profit was $47.2 million, increasing by 45.2% from $32.5 million in the prior year period. Gross margin was 50.6% in the first six months of fiscal 2020, compared with 39.9% in the first six months of fiscal 2019. Non-GAAP[1] gross margin was 50.6% in the first six months of fiscal 2020, compared with 40.0% in the first six months of fiscal 2019.

Operating Expenses. Total operating expenses increased by 11.9% to $46.1 million in the first six months of fiscal 2020, from $41.2 million in the prior year period. Non-GAAP[1] total operating expenses increased by 11.7% to $44.9 million in the first six months of fiscal 2020, from $40.2 million in the prior year period.

Selling expenses. Selling expenses increased by 21.8% to $34.4 million in the first six months of fiscal 2020 from $28.3 million in the prior year period. Non-GAAP[1] selling expenses increased by 21.8% to $34.4 million in the first six months of fiscal 2020, from $28.3 million in the prior year period.

General and administrative expenses. General and administrative expenses decreased by 9.9% to $11.6 million in the first six months of fiscal 2020 from $12.9 million in the prior year period. Non-GAAP[1] general and administrative expenses decreased by 12.3% to $10.5 million in the first six months of fiscal 2020, from $11.9 million in the prior year period.

Income Tax (Expenses) Benefit. Income tax expense was $0.7 million in the first six months of fiscal 2020, compared with income tax benefit of $0.4 million in the prior year period.

Net Income (Loss) Attributable to CDEL. As a result of the foregoing, net income attributable to CDEL was $2.5 million in the first six months of fiscal 2020, compared with net loss attributable to CDEL of $2.0 million in the prior year period. Non-GAAP[1] net income attributable to CDEL was $3.8 million in the first six months of fiscal 2020, compared with non-GAAP[1] net loss attributable to CDEL of $1.0 million in the prior year period.

Operating Cash Flow. Net operating cash inflow decreased by 15.9% to $34.7 million in the first six months of fiscal 2020 from $41.3 million in the prior year period.

Outlook

For the third quarter of fiscal 2020, the Company expects to generate total net revenue in the range of $50.6 million to $53.7 million, representing year-over-year decline of approximately 18% to 13%, respectively.

For fiscal year 2020, the Company decided to withdraw its previous revenue guidance in consideration of uncertainties related to the impact of COVID-19, including the postponement of certain professional examinations, the schedule of reopening of schools, and the schedule of resumption of provision of offline training courses, among others.

The above guidance reflects the Company's current and preliminary view, which is subject to change, particularly in consideration of uncertainties related to the impact of COVID-19, among others.

Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Friday, May 22, 2020 (8:00 p.m. Beijing Time on Friday, May 22, 2020) to discuss financial results and answer questions from investors and analysts. Details for the conference call are as follows:

Event Title:

 

China Distance Education Holdings Limited Second Quarter of Fiscal

2020 Earnings Conference Call

Conference ID:

9088678

Registration Link:

http://apac.directeventreg.com/registration/event/9088678

All participants must use the link provided above to complete the online registration process at least 20 minutes in advance of the conference call. Upon registering, each participant will receive a participant dial-in number, Direct Event passcode, and a unique registrant ID, which will be used to join the conference call.

A telephone replay will be available two hours after the call until May 29, 2020 by dialing:

US Toll Free:

+1-855-452-5696

International:

+61-2-8199-0299

Mainland China:

400-632-2162

Hong Kong, China:

800-963-117

United Kingdom:

0808-234-0072

Replay Passcode:

9088678

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 online test preparation courses for self-taught learners pursuing higher education diplomas or degrees, and practical accounting training courses for college students and working professionals. 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 third quarter of fiscal year 2020 and quotations from management in this announcement, as well as the Company's strategic and operational plans (in particular, the impact of COVID-19 on our businesses; the solutions we adopt to address such impact of COVID-19; the revision of revenue guidance; balancing growth and profitability; as well as the anticipated benefits of strategic growth initiatives, including the promotion of the Company's life-long learning ecosystem) 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: the impact of the COVID-19 outbreak, 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; anticipated benefits of acquisition or disposal of businesses, 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 attributable to CDEL, operating income, gross profit, cost of sales, selling expenses, general and administrative expenses, net income margin attributable to CDEL, operating margin, gross profit margin, and basic and diluted earnings per ADS and per share attributable to CDEL. 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 by excluding share-based compensation expenses. 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 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:

In China:

China Distance Education Holdings Limited

Jiao Jiao

Tel:  +86-10-8231-9999 ext. 1826

Email: IR@cdeledu.com

The Piacente Group, Inc. 

Xi Zhang 

Tel: +86-10-6508-0677

E-mail: dl@tpg-ir.com

In the United States: 

The Piacente Group, Inc.    

Brandi Piacente

Tel: +1 212-481-2050

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

Unaudited Condensed Consolidated Balance Sheets

(in thousands of US Dollars, except number of shares and per share data)

















September 30, 2019



March 31, 2020



Assets:









Current assets:











Cash and cash equivalents

67,977



84,282





Term deposits

-



7,061





Restricted cash

38,358



13,760





Short-term investments

22,118



25,071





Accounts receivable, net of allowance for doubtful accounts of US$1,570 and

US$1,282 as of March 31, 2020 and September 30, 2019, respectively

7,330



6,741





Inventories

4,232



6,162





Prepayment and other current assets

26,732



30,184





Amounts due from related parties

515



624





Deferred cost

1,427



2,248





   Total current assets

168,689



176,133















Non-current assets:











Property, plant and equipment, net

37,935



41,283





Operating lease right of use asset

-



33,596





Goodwill, net

74,829



75,536





Long term investments

25,379



26,089





Other intangible assets, net

30,113



26,274





Deposit for purchase of non-current assets

4,448



1,671





Deferred tax assets

3,865



3,163





Other non-current assets

10,092



8,208





   Total non-current assets

186,661



215,820

















   Total assets

355,350



391,953















Liabilities and equity:









Current liabilities:











Bank borrowings

38,502



6,016





Accrued expenses and other liabilities (including accrued expenses and other

liabilities of the consolidated VIE without recourse to China Distance Education

Holdings Limited of US$44,058 and US$35,491 as of March 31, 2020 and

September 30, 2019, respectively)

38,267



44,459





Amount due to related parties

600



2,338





Income tax payable (including income tax payable of the consolidated VIE without

recourse to China Distance Education Holdings Limited of US$5,228 and US$8,188

as of March 31, 2020 and September 30, 2019, respectively)

10,899



8,545





Deferred revenue, current portion (including deferred revenue of the consolidated

VIE without recourse to China Distance Education Holdings Limited of US$86,914

and US$93,364 as of March 31, 2020 and September 30, 2019, respectively)

94,202



87,682





Refundable fees - current portion (including refundable fees of the consolidated VIE

without recourse to China Distance Education Holdings Limited of US$174 and

US$435 as of March 31, 2020 and September 30, 2019, respectively)

435



174





Dividend payable

-



19,621





Operating lease liability - current portion (including operating lease liability of the

consolidated VIE without recourse to China Distance Education Holdings Limited

of US$8,876 and nil as of March 31, 2020 and September 30, 2019, respectively)

-



9,521





   Total current liabilities

182,905



178,356















Non-current liabilities:











Deferred revenue, non-current portion (including deferred revenue of the

consolidated VIE without recourse to China Distance Education Holdings Limited

of US$68,292 and US$33,564 as of March 31, 2020 and September 30, 2019,

respectively)

33,564



68,292





Refundable fees - non-current portion (including refundable fees of the consolidated

VIE without recourse to China Distance Education Holdings Limited of US$4,257

and US$2,440 as of March 31, 2020 and September 30, 2019, respectively)

2,440



4,257





Deferred tax liabilities

12,695



7,175





Operating lease liability - non-current portion (including operating lease liability of

the consolidated VIE without recourse to China Distance Education Holdings

Limited of US$22,904 and nil as of March 31, 2020 and September 30, 2019,

respectively)

-



23,357





Total non-current liabilities

48,699



103,081





























   Total liabilities

231,604



281,437















 

Equity:











Ordinary shares (par value of US$0.0001 per share; 500,000,000 shares authorized;

135,320,433 and 134,210,745 shares issued and outstanding at March 31, 2020 and

September 30, 2019, respectively)

13



14





Additional paid-in capital

24,507



25,910





Accumulated other comprehensive loss

(12,357)



(10,087)





Retained earnings

60,668



43,595





   Total China Distance Education Holdings Limited shareholder's equity

72,831



59,432





Noncontrolling interests

50,915



51,084





   Total equity

123,746



110,516





   Total liabilities and equity

355,350



391,953















 

 

China Distance Education Holdings Limited

Unaudited Condensed Consolidated Statements of Operations

 (in thousands of US dollars, except number of shares, per share and per ADS data)





Three Months Ended March 31,



2019



2020









Sales, net of business tax, value-added tax and related surcharges:









Online education services

27,878



33,420



Books and reference materials

5,401



4,881



Others

5,482



3,586



-      Sale of learning simulation software

1,962



143



-    Business start-up training services

692



675



-    Others

2,828



2,768



   Total net revenues

38,761



41,887











Cost of sales









Cost of services and others

(19,453)



(16,764)



Cost of tangible goods sold

(3,826)



(3,746)



   Total cost of sales

(23,279)



(20,510)











Gross profit

15,482



21,377









Operating expenses









Selling expenses

(13,801)



(15,275)



General and administrative expenses

(6,581)



(6,075)



   Total operating expenses

(20,382)



(21,350)

Other operating income

842



1,303











Operating (loss)/income

(4,058)



1,330









Interest income

524



723

Interest expense

(796)



(259)

Exchange (loss)/gain

(2,177)



1,554











(Loss)/income before income taxes

(6,507)



3,348

Income tax benefit/(expense)

1,335



(730)

Loss from equity method investments

(642)



(162)









Net (loss)/ income

(5,814)



2,456

Net loss attributable to noncontrolling interest

1,939



1,803

Net (loss)/income attributable to China Distance Education Holdings

Limited

(3,875)



4,259

 

Net (loss)/income per share attributable to China Distance Education

Holdings Limited:







Net (loss)/income attributable to China Distance Education Holdings

Limited
 shareholders









Basic

(0.029)



0.031



Diluted

(0.029)



0.031

 

Net (loss)/income per ADS attributable to China Distance Education

Holdings Limited:







Net (loss)/income attributable to China Distance Education Holdings

Limited
 shareholders









Basic

(0.116)



0.126



Diluted

(0.116)



0.125









Weighted average shares used in calculating net (loss)/income per share

attributable to
China Distance Education Holdings Limited:









Basic

133,009,706



133,939,623



Diluted

133,009,706



135,468,910

 

 

China Distance Education Holdings Limited

Unaudited Condensed Consolidated Statements of Operations

 (in thousands of US dollars, except number of shares, per share and per ADS data)





Six Months Ended March 31,



2019



2020









Sales, net of business tax, value-added tax and related surcharges:









Online education services

52,921



67,943



Books and reference materials

11,806



9,244



Others

16,657



16,111



-      Sale of learning simulation software

6,965



6,462



-    Business start-up training services

1,372



1,651



-    Others

8,320



7,998



   Total net revenues

81,384



93,298











Cost of sales









Cost of services and others

(41,626)



(38,171)



Cost of tangible goods sold

(7,262)



(7,958)



   Total cost of sales

(48,888)



(46,129)











Gross profit

32,496



47,169









Operating expenses









Selling expenses

(28,285)



(34,446)



General and administrative expenses

(12,907)



(11,633)



Total operating expenses

(41,192)



(46,079)

Other operating income

2,465



2,326











Operating (loss)/income

(6,231)



3,416









Interest income

1,188



1,370

Interest expense

(1,590)



(685)

Gain from deconsolidation of a subsidiary

6,869



-

Exchange loss

(2,101)



(910)











(Loss)/income before income taxes

(1,865)



3,191

Income tax benefit/(expense)

383



(696)

Loss from equity method investments

(363)



(277)









Net (loss)/income

(1,845)



2,218

Net (income)/loss attributable to noncontrolling interest

(117)



330

Net (loss)/income attributable to China Distance Education Holdings

Limited

(1,962)



2,548

 

Net (loss)/income per share attributable to China Distance Education

Holdings Limited:







Net (loss)/income attributable to China Distance Education Holdings

Limited
 shareholders









Basic

(0.015)



0.019



Diluted

(0.015)



0.019

 

Net (loss)/income per ADS attributable to China Distance Education

Holdings Limited:







Net (loss)/income attributable to China Distance Education Holdings

Limited
 shareholders









Basic

(0.059)



0.076



Diluted

(0.059)



0.076









Weighted average shares used in calculating net (loss)/income per share

attributable to
China Distance Education Holdings Limited:









Basic

132,901,311



133,710,889



Diluted

132,901,311



134,953,440

 

 

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 March 31,





2019



2020





(Unaudited)



(Unaudited)











Cost of sales



23,279



20,510

Share-based compensation expense in cost of sales



-



45

Non-GAAP cost of sales



23,279



20,465











Selling expenses



13,801



15,275

Share-based compensation expense in selling expenses



-



18

Non-GAAP selling expenses



13,801



15,257











General and administrative expenses



6,581



6,075

Share-based compensation expense in general and administrative expenses



506



653

Non-GAAP general and administrative expenses



6,075



5,422











Gross profit



15,482



21,377

Share-based compensation expenses



-



45

Non-GAAP gross profit



15,482



21,422











Gross profit margin



39.9%



51.0%

Non-GAAP gross profit margin



39.9%



51.1%











Operating (loss)/income



(4,058)



1,330

Share-based compensation expenses



506



716

Non-GAAP operating (loss)/income



(3,552)



2,046











Operating margin



(10.5%)



3.2%

Non-GAAP operating margin



(9.2%)



4.9%











Net (loss)/income attributable to CDEL



(3,875)



4,259

Share-based compensation expense



506



716

Non-GAAP net (loss)/income attributable to CDEL



(3,369)



4,975











Net (loss)/income margin attributable to CDEL



(10.0%)



10.2%

Non-GAAP net (loss)/income margin attributable to CDEL



(8.7%)



11.9%











Net (loss)/income per share attributable to CDEL—basic



(0.029)



0.031

Net (loss)/income per share attributable to CDEL—diluted



(0.029)



0.031

Non-GAAP net (loss)/income per share attributable to CDEL—basic



(0.025)



0.037

Non-GAAP net (loss)/income per share attributable to CDEL—diluted



(0.025)



0.037











Net (loss)/income per ADS attributable to CDEL shareholders—basic (note 1)



(0.116)



0.126

Net (loss)/income per ADS attributable to CDEL shareholders—diluted (note 1)



(0.116)



0.125

Non-GAAP net (loss)/income per ADS attributable to CDEL shareholders—basic

    (note 1)



 

(0.101)



 

0.149

Non-GAAP net (loss)/income per ADS attributable to CDEL shareholders—diluted

    (note 1)



 

(0.101)



 

0.147











Weighted average shares used in calculating basic net (loss)/income per share

    attributable to CDEL



133,009,706



133,939,623

Weighted average shares used in calculating diluted net (loss)/income per share

    attributable to CDEL



 

133,009,706



135,468,910

Weighted average shares used in calculating basic non-GAAP net (loss)/income per

    share attributable to CDEL



 

133,009,706



133,939,623

Weighted average shares used in calculating diluted non-GAAP net (loss)/income

    per share attributable to CDEL



 

133,009,706



135,468,910





















Note 1: Each ADS represents four ordinary shares









 

 

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)











Six Months Ended March 31,





2019



2020





(Unaudited)



(Unaudited)











Cost of sales



48,888



46,129

Share-based compensation expense in cost of sales



23



50

Non-GAAP cost of sales



48,865



46,079











Selling expenses



28,285



34,446

Share-based compensation expense in selling expenses



10



21

Non-GAAP selling expenses



28,275



34,425











General and administrative expenses



12,907



11,633

Share-based compensation expense in general and administrative expenses



979



1,169

Non-GAAP general and administrative expenses



11,928



10,464











Gross profit



32,496



47,169

Share-based compensation expenses



23



50

Non-GAAP gross profit



32,519



47,219











Gross profit margin



39.9%



50.6%

Non-GAAP gross profit margin



40.0%



50.6%











Operating (loss)/income



(6,231)



3,416

Share-based compensation expenses



1,012



1,240

Non-GAAP operating (loss)/income



(5,219)



4,656











Operating margin



(7.7%)



3.7%

Non-GAAP operating margin



(6.4%)



5.0%











Net (loss)/income attributable to CDEL



(1,962)



2,548

Share-based compensation expense



1,012



1,240

Non-GAAP net (loss)/income attributable to CDEL



(950)



3,788











Net (loss)/income margin attributable to CDEL



(2.4%)



2.7%

Non-GAAP net (loss)/income margin attributable to CDEL



(1.2%)



4.1%











Net (loss)/income per share attributable to CDEL—basic



(0.015)



0.019

Net (loss)/income per share attributable to CDEL—diluted



(0.015)



0.019

Non-GAAP net (loss)/income per share attributable to CDEL—basic



(0.007)



0.028

Non-GAAP net (loss)/income per share attributable to CDEL—diluted



(0.007)



0.028











Net (loss)/income per ADS attributable to CDEL shareholders—basic (note 1)



(0.059)



0.076

Net (loss)/income per ADS attributable to CDEL shareholders—diluted (note 1)



(0.059)



0.076

Non-GAAP net (loss)/income per ADS attributable to CDEL shareholders—basic

    (note 1)



(0.029)



0.113

Non-GAAP net (loss)/income per ADS attributable to CDEL shareholders—diluted

    (note 1)



(0.029)



0.112











Weighted average shares used in calculating basic net (loss)/income per share

    attributable to CDEL



132,901,311



133,710,889

Weighted average shares used in calculating diluted net (loss)/income per share

    attributable to CDEL



132,901,311



134,953,440

Weighted average shares used in calculating basic non-GAAP net (loss)/income per

    share attributable to CDEL



132,901,311



133,710,889

Weighted average shares used in calculating diluted non-GAAP net (loss)/income

    per share attributable to CDEL



132,901,311



134,953,440





















Note 1: Each ADS represents four ordinary shares.









 

 

Cision View original content:http://www.prnewswire.com/news-releases/china-distance-education-holdings-limited-reports-financial-results-for-second-quarter-fiscal-year-2020-301063987.html

SOURCE China Distance Education Holdings Ltd.

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