BEIJING, Aug. 26, 2020 /PRNewswire/ -- China Distance
Education Holdings Limited (NYSE: 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 third quarter of fiscal year 2020 ended
June 30, 2020.
Third Quarter Fiscal 2020 Financial and Operational
Highlights
- Net revenue decreased by 17.9% to $50.7
million from $61.7 million in
the prior year period.
- Total course enrollments were 738,300, an increase of 0.5% from
the third quarter of fiscal 2019.
- Cash receipts from online course registration were $34.6 million, a 31.3% decrease from the third
quarter of fiscal 2019.
- Gross profit decreased by 22.8% to $24.1
million from $31.2 million in
the prior year period.
- Non-GAAP[1] gross profit decreased by 22.7% to
$24.1 million from $31.2 million in the prior year period.
- Gross margin was 47.5%, compared with 50.5% in the prior year
period. Non-GAAP[1] gross margin was 47.5%, compared
with 50.5% in the prior year period.
- Operating income decreased by 75.0% to $2.5 million from $9.9
million in the prior year period.
- Non-GAAP[1] operating income decreased by 69.6% to
$3.2 million from $10.4 million in the prior year period.
- Net income attributable to CDEL was $3.0
million, compared with net income attributable to CDEL of
$9.4 million in the prior year
period.
- Non-GAAP[1] net income attributable to CDEL was
$3.7 million, compared with non-
GAAP[1] net income attributable to CDEL of $10.0 million in the prior year period.
- Basic and diluted net income per American Depositary Share
("ADS") attributable to CDEL were $0.089 and $0.088,
respectively, compared with basic and diluted net income per ADS
attributable to CDEL of $0.282 and
$0.281, respectively, for the third
quarter of fiscal 2019. Each ADS represents four ordinary
shares.
- Basic and diluted non-GAAP[1] net income per ADS
attributable to CDEL were $0.111 and
$0.109, respectively, compared with
basic and diluted non-GAAP[1] net income per ADS
attributable to CDEL of $0.299 and
$0.296, respectively, for the third
quarter of fiscal 2019.
- Cash flow from operations decreased by 59.2% to $7.2 million from $17.6
million in the third quarter of fiscal 2019.
[1] For
more information about the non-GAAP financial measures contained in
this press release, please see "Use of Non-GAAP Financial Measures"
below.
|
Mr. Zhengdong Zhu, Chairman and
CEO of CDEL, said, "In the third quarter of fiscal 2020, we
reported net revenue of $50.7
million, within our guidance range. During the onset of the
COVID-19 pandemic, in order to support our students across
China with high-quality online
professional education at a time when offline classes were
suspended, we provided free online courses to students in
Hubei province and significant
discounts for certain online exam preparation courses to students
outside Hubei. Our socially
responsive actions resulted in a surge in enrollment in our second
fiscal quarter as previously disclosed, effectively pulling forward
the demand for our courses and thus dampening enrollment and cash
receipts growth in our third fiscal quarter."
"We believe in the long-term growth prospects of online
professional education in China,
and expect online education will continue to transform how
knowledge is delivered and how students learn. We remain committed
to serving students with our high-quality courseware and compelling
online educational solutions during this challenging time. We are
confident that our comprehensive lifelong learning ecosystem will
enable us to reach a broad and growing student audience, and extend
convenience, flexibility and engagement to their learning
experience," Mr. Zhu concluded.
Mr. Mark Marostica, Co-Chief
Financial Officer of CDEL, added, "As anticipated, the decrease in
cash receipts for our courses due to our socially responsive
actions, together with the postponement of certain professional
certification examinations, negatively impacted our revenue growth
for the third fiscal quarter. In addition, a delay in the
publication of certain legal exam preparation books further
weakened our third quarter revenue growth. Despite these headwinds,
we maintained a disciplined cost structure and achieved a non-GAAP
operating margin of 6.2% for the quarter. With our fourth fiscal
quarter well underway, we are further impacted by the postponement
of a number of core professional certification examinations held in
Beijing and several other cities.
We remain focused on balancing growth with a keen focus on
profitability."
Third Quarter Fiscal 2020 Financial Results
Net Revenue. Total net revenue decreased by
17.9% to $50.7 million in the third
quarter of fiscal 2020 from $61.7
million in the third quarter of fiscal 2019. Net revenue
from online education services, books and reference materials, and
other sources contributed 78.9%, 12.8% and 8.3%, respectively, of
total net revenues for the third quarter of fiscal 2020.
Online education services. Net revenue from online
education services decreased by 8.1% to $40.0 million in the third quarter of fiscal 2020
from $43.5 million in the third
quarter of fiscal 2019, primarily attributable to the decrease in
revenue from the Company's healthcare and accounting verticals due
to the impact of COVID-19, stemming from the postponement of
certain professional certification examinations across China and the aforementioned socially
responsive actions the Company adopted, which resulted in a
significant decline in cash receipts from online course
registration in both the second and third fiscal quarters of
2020.
Books and reference materials. Net revenue from books and
reference materials decreased by 33.8% to $6.5 million in the third quarter of fiscal 2020
from $9.8 million in the third
quarter of fiscal 2019, primarily attributable to the delay in the
publication of certain Legal Professional Qualification Examination
books, due to the promulgation of new laws.
Others. Net revenue from other sources decreased by 49.8%
to $4.2 million in the third quarter
of fiscal 2020 from $8.4 million in
the third quarter of fiscal 2019, primarily due to a significant
decrease in revenue from the sale of college-related learning
simulation software, and a significant decrease in the provision of
offline training courses, resulting from the impact of
COVID-19.
Cost of Sales. Cost of sales decreased by 12.8% to
$26.6 million in the third quarter of
fiscal 2020, from $30.6 million in
the third quarter of fiscal 2019. Non-GAAP[1] cost of
sales decreased by 13.0% to $26.6
million in the third quarter of fiscal 2020, from
$30.6 million in the third quarter of
fiscal 2019. The decrease in cost of sales was primarily
attributable to a decrease in cost of books and reference materials
and lecture fees.
Gross Profit and Gross Margin. Gross profit
was $24.1 million in the third
quarter of fiscal 2020, down 22.8% from $31.2 million in the prior year period.
Non-GAAP[1] gross profit was $24.1 million, decreasing by 22.7% from
$31.2 million in the prior year
period. Gross margin was 47.5% in the third quarter of fiscal 2020,
compared with 50.5% in the third quarter of fiscal 2019.
Non-GAAP[1] gross margin was 47.5% in the third quarter
of fiscal 2020, compared with 50.5% in the third quarter of fiscal
2019.
Operating Expenses. Total operating expenses
increased by 5.6% to $23.2 million in
the third quarter of fiscal 2020, from $22.0
million in the prior year period. Non-GAAP[1]
total operating expenses increased by 5.0% to $22.6 million in the third quarter of fiscal
2020, from $21.5 million in the prior
year period.
Selling expenses. Selling expenses increased by 4.6% to
$17.8 million in the third quarter of
fiscal 2020 from $17.0 million in the
prior year period. Non-GAAP[1] selling expenses
increased by 4.5% to $17.8 million in
the third quarter of fiscal 2020, from $17.0
million in the prior year period. The increase was primarily
driven by higher advertising and promotional expenses, and the
increase in commission to agents.
General and administrative expenses. General and
administrative expenses increased by 8.8% to $5.4 million in the third quarter of fiscal 2020
from $4.9 million in the prior year
period. Non-GAAP[1] general and administrative expenses
increased by 7.0% to $4.8 million in
the third quarter of fiscal 2020, from $4.4
million in the prior year period. The increase was mainly
due to the increase in share-based compensation expenses.
Income Tax Expenses. Income tax
expense decreased by 77.1% to $0.6
million in the third quarter of fiscal 2020 from
$2.5 million in the prior year
period, primarily due to the decrease in taxable income in the
third quarter of fiscal 2020.
Net Income Attributable to CDEL. As a result of
the foregoing, net income attributable to CDEL was $3.0 million in the third quarter of fiscal 2020,
compared with net income attributable to CDEL of $9.4 million in the prior year period.
Non-GAAP[1] net income attributable to CDEL was
$3.7 million in the third quarter of
fiscal 2020, compared with non-GAAP[1] net income
attributable to CDEL of $10.0 million
in the prior year period.
Operating Cash Flow. Net operating
cash inflow decreased by 59.2% to $7.2
million in the third quarter of fiscal 2020 from
$17.6 million in the prior year
period. The operating cash inflow was mainly attributable to net
income before non-cash items generated in the third quarter of
fiscal 2020. The increase in accrued expenses and other liabilities
also contributed to the operating cash inflow. The operating cash
inflow was partially offset by the decrease in deferred revenue and
the decrease/increase in amount due to/from related parties.
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 June 30, 2020
increased by 2.7% to $133.7 million
from $130.2 million as of
March 31, 2020, mainly due to the
operating cash inflow generated in the third quarter of fiscal 2020
and the drawdown of an offshore loan of $20.0 million. The increase was partially offset
by (i) the dividend distribution of $19.6
million, (ii) the repayment of an onshore loan of
$2.8 million, (iii) the payment of an
investment of $0.7 million and (iv)
the capital expenditure of $0.6
million.
First Nine Months of Fiscal 2020 Financial
Results
Net Revenue. Total net revenue increased by
0.6% to $144.0 million in the first
nine months of fiscal 2020 from $143.1
million in the first nine months of fiscal 2019. Net revenue
from online education services, books and reference materials, and
other sources contributed 75.0%, 10.9% and 14.1%, respectively, of
total net revenues for the first nine months of fiscal 2020.
Online education services. Net revenue from online
education services increased by 11.9% to $107.9 million in the first nine months of fiscal
2020 from $96.5 million in the first
nine months of fiscal 2019.
Books and reference materials. Net revenue from books and
reference materials decreased by 27.2% to $15.8 million in the first nine months of fiscal
2020 from $21.6 million in the first
nine months of fiscal 2019.
Others. Net revenue from other sources decreased by 18.9%
to $20.3 million in the first nine
months of fiscal 2020 from $25.0
million in the first nine months of fiscal 2019.
Cost of Sales. Cost of sales decreased by 8.4% to
$72.8 million in the first nine
months of fiscal 2020 from $79.5
million in the first nine months of fiscal 2019.
Non-GAAP[1] cost of sales decreased by 8.5% to
$72.7 million in the first nine
months of fiscal 2020, from $79.4
million in the first nine months of fiscal 2019.
Gross Profit and Gross Margin. Gross profit
was $71.2 million in the first nine
months of fiscal 2020, up 11.9% from $63.7
million in the prior year period. Non-GAAP[1]
gross profit was $71.3 million,
increasing by 12.0% from $63.7
million in the prior year period. Gross margin was 49.5% in
the first nine months of fiscal 2020, compared with 44.5% in the
first nine months of fiscal 2019. Non-GAAP[1] gross
margin was 49.5% in the first nine months of fiscal 2020, compared
with 44.5% in the first nine months of fiscal 2019.
Operating Expenses. Total operating expenses
increased by 9.7% to $69.3 million in
the first nine months of fiscal 2020, from $63.2 million in the prior year period.
Non-GAAP[1] total operating expenses increased by 9.4%
to $67.5 million in the first nine
months of fiscal 2020, from $61.7
million in the prior year period.
Selling expenses. Selling expenses increased by 15.3% to
$52.3 million in the first nine
months of fiscal 2020 from $45.3
million in the prior year period. Non-GAAP[1]
selling expenses increased by 15.3% to $52.2
million in the first nine months of fiscal 2020, from
$45.3 million in the prior year
period.
General and administrative expenses. General and
administrative expenses decreased by 4.7% to $17.0 million in the first nine months of fiscal
2020 from $17.9 million in the prior
year period. Non-GAAP[1] general and administrative
expenses decreased by 7.0% to $15.2
million in the first nine months of fiscal 2020, from
$16.4 million in the prior year
period.
Income Tax Expenses. Income tax expense was
$1.3 million in the first nine months
of fiscal 2020, compared with income tax expense of $2.1 million in the prior year period.
Net Income Attributable to CDEL. As a result of
the foregoing, net income attributable to CDEL was $5.6 million in the first nine months of fiscal
2020, compared with net income attributable to CDEL of $7.5 million in the prior year period.
Non-GAAP[1] net income attributable to CDEL was
$7.5 million in the first nine months
of fiscal 2020, compared with non-GAAP[1] net income
attributable to CDEL of $9.0 million
in the prior year period.
Operating Cash Flow. Net operating
cash inflow decreased by 33.8% to $41.0
million in the first nine months of fiscal 2020 from
$61.9 million in the prior year
period.
Recent Developments Regarding the Non-binding "Going Private"
Proposal
On June 8, 2020, the board of
directors of the Company (the "Board") received a preliminary
non-binding proposal letter (the "Proposal Letter") from Mr.
Zhengdong Zhu, co-founder, chairman
of the Board and chief executive officer of the Company ("Mr.
Zhu"), Ms. Baohong Yin, co-founder
of the Company, deputy chairman of the Board and the spouse of Mr.
Zhu and their affiliated entity (collectively, the "Buyer Group")
to acquire all of the outstanding ordinary shares of the Company,
including ordinary shares represented by American depositary shares
(the "ADSs", each representing four ordinary shares), for
$2.27 in cash per ordinary share, or
$9.08 in cash per ADS (the
"Proposal"). On June 22, 2020, the
Company announced that the Board had formed a special committee of
independent directors (the "Special Committee") consisting of Ms.
Carol Yu and Ms. Annabelle Yu Long to review and evaluate the
Proposal, and the Special Committee had retained Goulston &
Storrs PC as its United States
legal counsel in connection with its review and evaluation of the
Proposal. On July 29, 2020, the
Company announced that the Special Committee had retained Duff
& Phelps, LLC as its financial advisor in connection with its
review and evaluation of the Proposal.
The Company cautions its shareholders and others considering
trading in its securities that neither the Board nor the Special
Committee has made any decision with respect to the Company's
response to the Proposal. There can be no assurance that any
definitive offer will be made, that any agreement will be executed
or that this or any other transaction will be approved or
consummated. The Company does not undertake any obligation to
provide any updates with respect to this or any other transaction,
except as required under applicable law.
Outlook
For the fourth quarter of fiscal 2020, the Company expects to
generate total net revenue in the range of $58.4 million to $61.8
million, representing year-over-year decline of
approximately 15% to 10%, respectively.
For fiscal year 2020, the Company expects to generate total net
revenue in the range of $202.4
million to $205.8 million,
representing year-over-year decline of approximately 4.4% to 2.8%,
respectively.
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,
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.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, August 27,
2020 (8:00 p.m. Beijing Time on
Thursday, August 27, 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 Third Quarter of Fiscal Year 2020
Earnings Conference Call
|
Conference
ID:
|
9952634
|
Registration
Link:
|
http://apac.directeventreg.com/registration/event/9952634
|
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 September 3, 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:
|
9952634
|
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 fourth quarter and full 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; balancing growth and
profitability; the growth prospects of online professional
education in China; as well as the
anticipated benefits of our 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, the
potential impact of the Proposal and any transaction in connection
with the Proposal, 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. In addition, with
respect to the "going private" Proposal, there can be no assurance
that the Buyer Group will make any definitive offer to the Company,
that any definitive agreement relating to the Proposal will be
entered into between the Company and the Buyer Group or that a
transaction based on the Proposal or any other similar transaction
will be approved or consummated.
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
(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
|
|
June 30,
2020
|
|
Assets:
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
67,977
|
|
83,927
|
|
|
Term
deposits
|
-
|
|
4,954
|
|
|
Restricted
cash
|
38,358
|
|
20,241
|
|
|
Short-term
investments
|
22,118
|
|
24,550
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of US$1,648 and
US$1,282 as of June 30, 2020 and September 30, 2019,
respectively
|
7,330
|
|
6,182
|
|
|
Inventories
|
4,232
|
|
5,713
|
|
|
Prepayment and other
current assets
|
26,732
|
|
30,143
|
|
|
Amounts due from
related parties
|
515
|
|
908
|
|
|
Deferred
cost
|
1,427
|
|
2,104
|
|
|
Total
current assets
|
168,689
|
|
178,722
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property, plant and
equipment, net
|
37,935
|
|
40,732
|
|
|
Operating lease right
of use asset
|
-
|
|
30,074
|
|
|
Goodwill,
net
|
74,829
|
|
75,704
|
|
|
Long term
investments
|
25,379
|
|
25,572
|
|
|
Other intangible
assets, net
|
30,113
|
|
24,318
|
|
|
Deposit for purchase
of non-current assets
|
4,448
|
|
1,552
|
|
|
Deferred tax
assets
|
3,865
|
|
3,713
|
|
|
Other non-current
assets
|
10,092
|
|
7,579
|
|
|
Total
non-current assets
|
186,661
|
|
209,244
|
|
|
|
|
|
|
|
|
Total
assets
|
355,350
|
|
387,966
|
|
|
|
|
|
|
|
Liabilities and
equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank
borrowings
|
38,502
|
|
7,199
|
|
|
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$47,280 and US$35,491 as of June 30, 2020 and
September
30, 2019, respectively)
|
38,267
|
|
49,950
|
|
|
Amount due to related
parties
|
600
|
|
687
|
|
|
Income tax payable
(including income tax payable of the consolidated VIE without
recourse to China Distance Education Holdings Limited of US$6,942
and US$8,188
as of June 30, 2020 and September 30, 2019,
respectively)
|
10,899
|
|
8,579
|
|
|
Deferred revenue,
current portion (including deferred revenue of the consolidated
VIE without recourse to China Distance Education Holdings Limited
of US$71,477
and US$93,364 as of June 30, 2020 and September 30, 2019,
respectively)
|
94,202
|
|
72,253
|
|
|
Refundable fees -
current portion (including refundable fees of the consolidated
VIE
without recourse to China Distance Education Holdings Limited of
US$24 and
US$435 as of June 30, 2020 and September 30, 2019,
respectively)
|
435
|
|
24
|
|
|
Operating lease
liability - current portion (including operating lease liability of
the
consolidated VIE without recourse to China Distance Education
Holdings Limited
of US$3,614 and nil as of June 30, 2020 and September 30, 2019,
respectively)
|
-
|
|
3,967
|
|
|
Total
current liabilities
|
182,905
|
|
142,659
|
|
|
|
|
|
|
|
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$80,430 and US$33,564 as of June 30, 2020 and September 30,
2019,
respectively)
|
33,564
|
|
80,430
|
|
|
Refundable fees -
non-current portion (including refundable fees of the
consolidated
VIE without recourse to China Distance Education Holdings Limited
of US$3,944
and US$2,440 as of June 30, 2020 and September 30, 2019,
respectively)
|
2,440
|
|
3,944
|
|
|
Long-term bank
borrowing
|
-
|
|
16,000
|
|
|
Deferred tax
liabilities
|
12,695
|
|
6,410
|
|
|
Operating lease
liability - non-current portion (including operating lease
liability of
the consolidated VIE without recourse to China Distance Education
Holdings
Limited of US$24,536 and nil as of June 30, 2020 and September 30,
2019,
respectively)
|
-
|
|
24,927
|
|
|
Total
non-current liabilities
|
48,699
|
|
131,711
|
|
|
Total
liabilities
|
231,604
|
|
274,370
|
|
|
|
|
|
|
|
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 June
30, 2020 and
September 30, 2019, respectively)
|
13
|
|
14
|
|
|
Additional paid-in
capital
|
24,507
|
|
26,629
|
|
|
Accumulated other
comprehensive loss
|
(12,357)
|
|
(8,805)
|
|
|
Retained
earnings
|
60,668
|
|
46,612
|
|
|
Total
China Distance Education Holdings Limited shareholder's
equity
|
72,831
|
|
64,450
|
|
Noncontrolling
interests
|
50,915
|
|
49,146
|
|
|
Total
equity
|
123,746
|
|
113,596
|
|
|
Total
liabilities and equity
|
355,350
|
|
387,966
|
|
|
|
|
|
|
|
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 June 30,
|
|
2019
|
|
2020
|
|
|
|
|
Sales, net of
business tax, value-added tax and related
surcharges:
|
|
|
|
|
Online education
services
|
43,529
|
|
39,996
|
|
Books and reference
materials
|
9,826
|
|
6,507
|
|
Others
|
8,392
|
|
4,211
|
|
- Sale of
learning simulation software
|
2,665
|
|
833
|
|
- Business
start-up training services
|
886
|
|
175
|
|
-
Others
|
4,841
|
|
3,203
|
|
Total
net revenues
|
61,747
|
|
50,714
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
Cost of services and
others
|
(20,836)
|
|
(19,767)
|
|
Cost of tangible
goods sold
|
(9,735)
|
|
(6,882)
|
|
Total
cost of sales
|
(30,571)
|
|
(26,649)
|
|
|
|
|
|
Gross
profit
|
31,176
|
|
24,065
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
(17,043)
|
|
(17,828)
|
|
General and
administrative expenses
|
(4,947)
|
|
(5,383)
|
|
Total
operating expenses
|
(21,990)
|
|
(23,211)
|
Other operating
income
|
665
|
|
1,607
|
|
|
|
|
|
Operating
income
|
9,851
|
|
2,461
|
|
|
|
|
Interest
income
|
526
|
|
582
|
Interest
expense
|
(703)
|
|
(216)
|
Gain from disposal of
an investment
|
318
|
|
-
|
Exchange
gain/(loss)
|
1,996
|
|
(243)
|
|
|
|
|
|
Income
before income taxes
|
11,988
|
|
2,584
|
Income tax
expense
|
(2,460)
|
|
(564)
|
Loss from equity
method investments
|
(656)
|
|
(570)
|
|
|
|
|
Net
income
|
8,872
|
|
1,450
|
Net loss
attributable to noncontrolling interest
|
575
|
|
1,566
|
Net
income attributable to China Distance Education
Holdings Limited
|
9,447
|
|
3,016
|
Net income
per share attributable to China Distance Education
Holdings
Limited:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited
shareholders
|
|
|
|
|
Basic
|
0.070
|
|
0.022
|
|
Diluted
|
0.070
|
|
0.022
|
Net income
per ADS attributable to China Distance Education
Holdings
Limited:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited
shareholders
|
|
|
|
|
Basic
|
0.282
|
|
0.089
|
|
Diluted
|
0.281
|
|
0.088
|
|
|
|
|
Weighted average
shares used in calculating net income per
share attributable to China Distance Education Holdings
Limited:
|
|
|
|
|
Basic
|
133,037,866
|
|
134,005,063
|
|
Diluted
|
134,342,150
|
|
135,441,737
|
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)
|
|
|
Nine Months
Ended June 30,
|
|
2019
|
|
2020
|
|
|
|
|
Sales, net of
business tax, value-added tax and related
surcharges:
|
|
|
|
|
Online education
services
|
96,450
|
|
107,939
|
|
Books and reference
materials
|
21,632
|
|
15,751
|
|
Others
|
25,049
|
|
20,322
|
|
- Sale of learning
simulation software
|
9,630
|
|
7,295
|
|
- Business
start-up training services
|
2,258
|
|
1,826
|
|
-
Others
|
13,161
|
|
11,201
|
|
Total
net revenues
|
143,131
|
|
144,012
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
Cost of services and
others
|
(62,461)
|
|
(57,938)
|
|
Cost of tangible
goods sold
|
(16,997)
|
|
(14,840)
|
|
Total
cost of sales
|
(79,458)
|
|
(72,778)
|
|
|
|
|
|
Gross
profit
|
63,673
|
|
71,234
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
(45,327)
|
|
(52,273)
|
|
General and
administrative expenses
|
(17,855)
|
|
(17,016)
|
|
Total operating
expenses
|
(63,182)
|
|
(69,289)
|
Change in fair value
of contingent consideration payable
|
695
|
|
-
|
Other operating
income
|
2,434
|
|
3,932
|
|
|
|
|
|
Operating
income
|
3,620
|
|
5,877
|
|
|
|
|
Interest
income
|
1,714
|
|
1,952
|
Interest
expense
|
(2,294)
|
|
(901)
|
Gain from disposal of
an investment
|
318
|
|
-
|
Gain from
deconsolidation of a subsidiary
|
6,869
|
|
-
|
Exchange
loss
|
(104)
|
|
(1,154)
|
|
|
|
|
|
Income
before income taxes
|
10,123
|
|
5,774
|
Income tax
expense
|
(2,077)
|
|
(1,259)
|
Loss from equity method
investments
|
(1,019)
|
|
(847)
|
|
|
|
|
Net
income
|
7,027
|
|
3,668
|
Net
loss attributable to noncontrolling
interest
|
457
|
|
1,897
|
Net
income attributable to China Distance Education
Holdings Limited
|
7,484
|
|
5,565
|
Net income
per share attributable to China Distance Education
Holdings
Limited:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited
shareholders
|
|
|
|
|
Basic
|
0.056
|
|
0.041
|
|
Diluted
|
0.056
|
|
0.041
|
Net income
per ADS attributable to China Distance Education
Holdings
Limited:
|
|
|
|
Net income
attributable to China Distance Education Holdings
Limited
shareholders
|
|
|
|
|
Basic
|
0.224
|
|
0.165
|
|
Diluted
|
0.223
|
|
0.165
|
|
|
|
|
Weighted average
shares used in calculating net income per
share attributable to China Distance Education Holdings
Limited:
|
|
|
|
|
Basic
|
132,946,829
|
|
133,808,589
|
|
Diluted
|
134,072,148
|
|
135,124,141
|
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 June 30,
|
|
|
2019
|
|
2020
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
Cost of
sales
|
|
30,571
|
|
26,649
|
Share-based
compensation expense in cost of sales
|
|
-
|
|
45
|
Non-GAAP cost of
sales
|
|
30,571
|
|
26,604
|
|
|
|
|
|
Selling
expenses
|
|
17,043
|
|
17,828
|
Share-based
compensation expense in selling expenses
|
|
-
|
|
19
|
Non-GAAP selling
expenses
|
|
17,043
|
|
17,809
|
|
|
|
|
|
General and
administrative expenses
|
|
4,947
|
|
5,383
|
Share-based
compensation expense in general and administrative
expenses
|
|
503
|
|
626
|
Non-GAAP general and
administrative expenses
|
|
4,444
|
|
4,757
|
|
|
|
|
|
Gross
profit
|
|
31,176
|
|
24,065
|
Share-based
compensation expenses
|
|
-
|
|
45
|
Non-GAAP gross
profit
|
|
31,176
|
|
24,110
|
|
|
|
|
|
Gross profit
margin
|
|
50.5%
|
|
47.5%
|
Non-GAAP gross profit
margin
|
|
50.5%
|
|
47.5%
|
|
|
|
|
|
Operating
income
|
|
9,851
|
|
2,461
|
Share-based
compensation expenses
|
|
503
|
|
690
|
Non-GAAP operating
income
|
|
10,354
|
|
3,151
|
|
|
|
|
|
Operating
margin
|
|
16.0%
|
|
4.9%
|
Non-GAAP operating
margin
|
|
16.8%
|
|
6.2%
|
|
|
|
|
|
Net income
attributable to CDEL
|
|
9,447
|
|
3,016
|
Share-based
compensation expense
|
|
503
|
|
690
|
Non-GAAP net income
attributable to CDEL
|
|
9,950
|
|
3,706
|
|
|
|
|
|
Net income margin
attributable to CDEL
|
|
15.3%
|
|
5.9%
|
Non-GAAP net income
margin attributable to CDEL
|
|
16.1%
|
|
7.3%
|
|
|
|
|
|
Net income per share
attributable to CDEL—basic
|
|
0.070
|
|
0.022
|
Net income per share
attributable to CDEL—diluted
|
|
0.070
|
|
0.022
|
Non-GAAP net income
per share attributable to CDEL—basic
|
|
0.075
|
|
0.028
|
Non-GAAP net income
per share attributable to CDEL—diluted
|
|
0.074
|
|
0.027
|
|
|
|
|
|
Net income per ADS
attributable to China Distance Education Holdings Limited
shareholders—basic (note
1)
|
|
0.282
|
|
0.089
|
Net income per ADS
attributable to China Distance Education Holdings Limited
shareholders—diluted (note
1)
|
|
0.281
|
|
0.088
|
Non-GAAP net income
per ADS attributable to China Distance Education Holdings
Limited shareholders—basic (note
1)
|
|
0.299
|
|
0.111
|
Non-GAAP net income
per ADS attributable to China Distance Education Holdings
Limited shareholders—diluted (note
1)
|
|
0.296
|
|
0.109
|
|
|
|
|
|
Weighted average
shares used in calculating basic net income per share
attributable
to China Distance Education Holdings
Limited
|
|
133,037,866
|
|
134,005,063
|
Weighted average
shares used in calculating diluted net income per share
attributable to China Distance
Education Holdings Limited
|
|
134,342,150
|
|
135,441,737
|
Weighted average
shares used in calculating basic non-GAAP net income per share
attributable to China Distance
Education Holdings Limited
|
|
133,037,866
|
|
134,005,063
|
Weighted average
shares used in calculating diluted non-GAAP net income per
share
attributable to China Distance
Education Holdings Limited
|
|
134,342,150
|
|
135,441,737
|
|
|
|
|
|
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)
|
|
|
|
|
|
Nine Months
Ended June 30,
|
|
|
2019
|
|
2020
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
Cost of
sales
|
|
79,458
|
|
72,778
|
Share-based
compensation expense in cost of sales
|
|
23
|
|
95
|
Non-GAAP cost of
sales
|
|
79,435
|
|
72,683
|
|
|
|
|
|
Selling
expenses
|
|
45,327
|
|
52,273
|
Share-based
compensation expense in selling expenses
|
|
10
|
|
39
|
Non-GAAP selling
expenses
|
|
45,317
|
|
52,234
|
|
|
|
|
|
General and
administrative expenses
|
|
17,855
|
|
17,016
|
Share-based
compensation expense in general and administrative
expenses
|
|
1,482
|
|
1,795
|
Non-GAAP general and
administrative expenses
|
|
16,373
|
|
15,221
|
|
|
|
|
|
Gross
profit
|
|
63,673
|
|
71,234
|
Share-based
compensation expenses
|
|
23
|
|
95
|
Non-GAAP gross
profit
|
|
63,696
|
|
71,329
|
|
|
|
|
|
Gross profit
margin
|
|
44.5%
|
|
49.5%
|
Non-GAAP gross profit
margin
|
|
44.5%
|
|
49.5%
|
|
|
|
|
|
Operating
income
|
|
3,620
|
|
5,877
|
Share-based
compensation expenses
|
|
1,515
|
|
1,929
|
Non-GAAP operating
income
|
|
5,135
|
|
7,806
|
|
|
|
|
|
Operating
margin
|
|
2.5%
|
|
4.1%
|
Non-GAAP operating
margin
|
|
3.6%
|
|
5.4%
|
|
|
|
|
|
Net income
attributable to CDEL
|
|
7,484
|
|
5,565
|
Share-based
compensation expense
|
|
1,515
|
|
1,929
|
Non-GAAP net income
attributable to CDEL
|
|
8,999
|
|
7,494
|
|
|
|
|
|
Net income margin
attributable to CDEL
|
|
5.2%
|
|
3.9%
|
Non-GAAP net income
margin attributable to CDEL
|
|
6.3%
|
|
5.2%
|
|
|
|
|
|
Net income per share
attributable to CDEL—basic
|
|
0.056
|
|
0.041
|
Net income per share
attributable to CDEL—diluted
|
|
0.056
|
|
0.041
|
Non-GAAP net income
per share attributable to CDEL—basic
|
|
0.068
|
|
0.056
|
Non-GAAP net income
per share attributable to CDEL—diluted
|
|
0.067
|
|
0.055
|
|
|
|
|
|
Net income per ADS
attributable to China Distance Education Holdings Limited
shareholders—basic (note
1)
|
|
0.224
|
|
0.165
|
Net income per ADS
attributable to China Distance Education Holdings Limited
shareholders—diluted (note
1)
|
|
0.223
|
|
0.165
|
Non-GAAP net income
per ADS attributable to China Distance Education Holdings
Limited shareholders—basic (note
1)
|
|
0.271
|
|
0.224
|
Non-GAAP net income
per ADS attributable to China Distance Education Holdings
Limited shareholders—diluted (note
1)
|
|
0.269
|
|
0.222
|
|
|
|
|
|
Weighted average
shares used in calculating basic net income per share
attributable
to China Distance Education Holdings
Limited
|
|
132,946,829
|
|
133,808,589
|
Weighted average
shares used in calculating diluted net income per share
attributable to China Distance
Education Holdings Limited
|
|
134,072,148
|
|
135,124,141
|
Weighted average
shares used in calculating basic non-GAAP net income per share
attributable to China Distance
Education Holdings Limited
|
|
132,946,829
|
|
133,808,589
|
Weighted average
shares used in calculating diluted non-GAAP net income per
share attributable to China Distance
Education Holdings Limited
|
|
134,072,148
|
|
135,124,141
|
|
|
|
|
|
Note 1: Each ADS represents four ordinary shares
View original
content:http://www.prnewswire.com/news-releases/china-distance-education-holdings-limited-reports-financial-results-for-third-quarter-fiscal-year-2020-301119156.html
SOURCE China Distance Education Holdings Ltd.