China Education Alliance Announces Third Quarter 2012 Financial Results

Revenue decreased by $7.5 million, or 78.4% to $2.1 million for the quarter ended September 30, 2012 from $9.6 million during the same period in 2011. The decline in revenue was primarily a result of a decline in revenue across all of our business, most notably within our online education division. We believe revenue was affected by external factors including a slowdown in economic growth within the PRC, untruthful allegations about our businesses, and increased competition. These factors contributed to the continuous decline in interest of existing and new students, which resulted in decrease in student enrollments and led to the decline in revenue as compared to the period ended September 30, 2011 The Company expects to improve the performance of its online education division in the future by providing students with more competitive, up-to-date study materials and easy access The company has engaged professionals and technicians to design a new web based platform providing video based long distance teaching services which includes an online community system and online an teaching management system. Additionally, the Company is seeking to establish more onsite training centers and to optimize the operation of its existing training centers. As such, the Company predicts that revenue from training centers will recover after more training centers have been established and efforts to optimize training center operations take effect.

Revenue from the on-line education division decreased by $4.8 million, or 88.8%, to $0.6 million for the quarter ended September 30, 2012 from $5.4 million for the quarter ended September 30, 2011.  Revenue from the training center division decreased by $2.7 million, or 64.8%, to $1.5 million for the quarter ended September 30, 2012 from $4.1 million for the quarter ended September 30, 2011.

Overall cost of revenue increased by $0.1 million, or 4.1%, to $2.9 million for the quarter ended September 30, 2012 from $2.8 million for the same period in 2011.  

Cost of revenue for the online education division increased by $0.5 million, or 28.5% to $2.1 million for the quarter ended September 30, 2012 from $1.6 million for the same period in 2011. The slight increase was mainly attributable to the purchase of new examination papers, tutorial materials, and amortization associated with the materials. Gross profit margin for the online education division decreased to negative 237.5% for the quarter ended September 30, 2012 from positive 70.5% during the same period in 2011 due to the decrease in revenue and increase in cost of revenue.

Cost of revenue for the training center division decreased $0.3 million, or 29.2% to $0.8 million for the quarter ended September 30, 2012 from $1.2 million for the same period in 2011. The decrease was mainly attributable to the decrease in revenue. Gross profit margin for the training center division decreased to 43.2% for the quarter ended September 30, 2012 from 71.8% during the same period in 2011 as a result of the decrease in revenue and increase in salary paid to reputable teachers.

Gross loss for the third quarter of 2012 was $0.8 million compared to gross profit of $6.8 million for the third quarter 2011.

Selling expenses increased by $0.4 million, or 18.7%, to $2.6 million in the third quarter of 2012 from $2.2 million in the third quarter of 2011. Selling expenses were 126.3% of total sales in the third quarter of 2012 compared with 23.0% in the third quarter of 2011. The increase in selling expenses was a result of the increase in advertising expense, which was incurred to rebuild our public image and gain more market share.

Administrative expenses increased by $1.5 million, or 108.5% to $2.8 million for the quarter ended September 30, 2012 from $1.4 millionfor the quarter ended September 30, 2011. The increase was mainly due to the increase in research and development expenses related to the development of the web based platform. Total administrative expenses were about 137.1% of total revenue for the three months ended September 30, 2012, compared to 14.2% for the same period in 2011.

Interest income decreased by $16,934, or 3.6%, to $0.5 million for the quarter ended September 30, 2012 from $0.5 million for the same period in 2011. The decrease was primarily due to the exchange rate differences between the comparable periods.

Net loss for the third quarter of 2012 was $6.6 million compared to net income of $3.0 million for the third quarter of 2011. Basic and diluted loss per share was $0.62 for the third quarter of 2012 compared to income per share of $0.31 for the third quarter of 2011. The basic weighted average shares outstanding and diluted weighted average shares outstanding were 10,582,530 for the quarter ended September 30, 2012, and 10,582,503 in the same period of 2011.

Financial Position

As of September 30, 2012, the Company had cash and cash equivalents of $66.0 million and working capital of $65.5 million.  The Company had net cash used in operating activities of $6.6 million.

As of September 30, 2012, the Company had no long-term debt.

Conference Call

China Education Alliance will host a conference call and live webcast at 8 a.m. Eastern Standard Time (EST) on November 19, 2012 (9 p.m. in Harbin/Beijing on the same day).

The dial-in details for the live conference call are as follows:

- Participant Dial In (Toll Free USA): 1-866-519-4004
- International Dial In: +65-6723-9381
- China Toll Free:  800-819-0121 
- Hong Kong Toll Free: 8009-30346
  Conference Password: CEU

A live webcast of the conference call will be available in the investor relations section of the Company's website at: http://www.chinaeducationalliance.com/index.jsp

A telephone replay of the call will be available 2 hours after the end of the conference for seven days.

The dial-in details for the replay are as follows:

- US Toll Free:  1-855-452-5696
- International Toll:  +61-2-8199-0299
  Passcode Number: 71487328

About China Education Alliance, Inc.

China Education Alliance, Inc. (http://www.chinaeducationalliance.com) is a leading educational services company offering high-quality instructors and online education materials for students between the ages of 6 to 18 and adults (university students and professionals) aged 18 and over. Divided into two segments, students and graduate professionals, our business model delivers the skills and knowledge necessary to excel in a rapidly growing and highly competitive China. The Company provides students in the first segment with online education materials sourced from top tier schools and famous instructors for download, as well as online training and tutoring services. With teaching centers located across China, the Company also offers hands on training and tutoring to aid Chinese students pass the two most important tests they will face in their educational careers: the senior high school entrance and college entrance exams. In the second segment for graduates and professionals, China Education Alliance provides vocational training courses in subjects including IT, administration, multimedia, as well as several professional training programs.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding our ability to prepare the company for growth, the Company's planned expansion in 2009 and predictions and guidance relating to the Company's future financial performance. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs and are not a guarantee of future performance but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand especially in the education industry, pricing and demand trends for the Company's products, changes to government regulations, risk associated with operation of the Company's new facilities, risk associated with large scale implementation of the company's business plan, the ability to attract new customers, ability to increase its product's applications, cost of raw materials, downturns in the Chinese economy, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. Investors are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release, readers are cautioned not to place undue reliance on any of them and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.

For more information, please contact:

China Education Alliance, Inc.
Ms. Cloris Li
Chief Financial Officer
Email: cloris@edu-chn.com

Christensen
Mr. Christian Arnell
Telephone:  +86 10 5826 4939
Email: carnell@christensenir.com

China Education Alliance, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations and Comprehensive Income (unaudited)
	For the three months ended			Nine months ended
In US dollars	September 30, 2012		September 30, 2011 (Restated)	September 30, 2012		September 30, 2011 (Restated)
Revenue
Online education revenue	$                      608,080		$                   5,411,113	$                   3,919,487		$                 14,664,458
Training center revenue	1,458,946		4,147,880	6,028,033		11,618,155
Total revenue	2,067,026		9,558,993	9,947,520		26,282,613
Cost of revenue
Online education costs	2,052,518		1,596,687	5,487,283		4,917,617
Training center costs	828,969		1,170,677	2,407,085		2,985,553
Total cost of revenue	2,881,487		2,767,364	7,894,368		7,903,170
Gross profit (Loss)
Online education gross profit/(loss)	(1,444,438)		3,814,426	(1,567,796)		9,746,841
Training center gross profit	629,977		2,977,203	3,620,948		8,632,602
Total gross profit/(loss)	(814,461)		6,791,629	2,053,152		18,379,443
Operating expenses
Selling expenses	2,610,144		2,199,186	4,888,530 Werbung Mehr Nachrichten zur China Education Alliance Inc Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 27.04.24 - Boersia.de Salesforce Aktie: Hohe Verkäufe von Firmenanteilen 27.04.24 - Tippchecker Aktientipps für den Mai – aufgeschnappt auf der Invest Messe 27.04.24 - wallstreet:online ... Earnings Preview: Das sind die Top 10 der nächste Woche wichtigsten US-Quartalszahlen – Teil 2