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

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:

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 Werbung Mehr Nachrichten zur China Distance Education Holdings ADR 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 02:00 - PR Newswire FirstGroup Plc - Transaction in Own Shares 02:00 - PR Newswire BlackRock Greater Europe Investment Trust Plc - Total Voting Rights 02:00 - PR Newswire Vesuvius Plc - Transaction in Own Shares Basin Uranium - Es geht los    Der Uran-Superzyklus ist gestartet! weiterlesen» Anzeige wo-site-teaser-box-16791_site-teaser-box_2024-04-29_07%253A00%253A00_2024-04-30_09%253A00%253A59