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BEIJING, Mar 29, 2010 (GlobeNewswire via COMTEX News Network) --
-- Full Year 2009 Revenues Increased 23% to $51.0 Million -- Full Year 2009 Net Income Increased 116% to $13.5 Million -- Full Year 2009 Diluted EPS Increased 78% to $0.36 -- Full Year 2009 Adjusted EBITDA (non-GAAP) increased 51% to $29.2 million
ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq:CAST), a leading for-profit, post-secondary education and e-Learning services provider in China, today announced its financial results for the fourth quarter and full year ended December 31, 2009.
-- Fourth Quarter 2009 Highlights(1):
-- Total revenues increased 42% to $16.5 million
-- Gross profit increased 29% to $8.0 million; Gross profit margin was 48%
-- Operating income increased 35% to $4.1 million; Operating income margin
was 25%
-- Net income increased 275% to $2.8 million; Net income margin was 17%
-- Diluted EPS increased 234% to $0.07
-- Adjusted net income (non-GAAP) increased 91% to $5.3 million; Adjusted
net income margin (non-GAAP) was 32%
-- Adjusted Diluted EPS (non-GAAP) increased 30% to $0.13
-- Adjusted EBITDA (non-GAAP) increased 57% to $7.8 million; Adjusted
EBITDA margin (non-GAAP) was 47%
-- Full Year 2009 Highlights:
-- Total revenues increased 23% to $51.0 million
-- Gross profit increased 28% to $29.3 million; Gross profit margin was 57%
-- Operating income increased 48% to $19.1 million; Operating income margin
was 38%
-- Net income increased 116% to $13.5 million; Net income margin was 27%
-- Diluted EPS increased 78% to $0.36
-- Adjusted net income (non-GAAP) increased 31% to $18.9 million; Adjusted
net income margin (non-GAAP) was 37%
-- Adjusted Diluted EPS (non-GAAP) increased 8% to $0.51
-- Adjusted EBITDA (non-GAAP) increased 51% to $29.2 million; Adjusted
EBITDA margin (non-GAAP) at 57%
-- Cash and bank balances together with term deposits totaled $122.7
million as of December 31, 2009
-- Joined the Russell 3000 and Russell Global Indexes
-- Completed the acquisition of the remaining 20% interest in the Foreign
Trade and Business College of Chongqing Normal University for $19.9
million
-- Completed the acquisition of Lijiang College of Guangxi Normal
University for $53.7 million
-- Entered into an agreement to establish a joint venture with the China
University of Petroleum to provide online adult continuing education,
vocational training and international education programs
-- As of December 31, 2009, ChinaCast Education provides post-secondary
education and e-Learning services to over 21,200 on-campus and 141,000
online university students in China
-- Financial Outlook for Full Year 2010:
-- Total revenue between $78 million to $80 million (year-on-year increase
of 53% to 57%)
-- Adjusted net income (non-GAAP) between $25 million to $27 million
(year-on-year increase of 34% to 44%)
-- Adjusted EBITDA (non-GAAP) between $45 million to $47 million
(year-on-year increase of 58% to 65%)
Ron Chan, Chairman and CEO said, "We believe that 2009 was the most productive year since the Company's inception as we achieved several key milestones which contributed to robust growth and record profitability. Through proficient operational and fiscal management, we were able to deliver marked improvements on all key financial metrics during the year. We now currently have over 21,200 students enrolled at our university campuses in Chongqing and Guilin focused on career-oriented degree programs, in addition to 141,000 e-learning students in partnership with 15 state-owned universities serviced through our nationwide e-Learning network."
-------------------------------------
(1) See financial tables below and the GAAP to non-GAAP reconciliation table attached to this press release. The U.S. dollar figures presented in this release are derived from the corresponding RMB figures from the Company's Form 10K for the periods ended December 31, 2009 and December 31, 2008, and are based on the historical exchange rate of US$1.0 = 6.8 RMB at December 31, 2009, and US$1.0 = 6.8 RMB at December 31, 2008, respectively.
"Growth in China's education sector is being driven by an insatiable demand for higher education in what is now the world's largest tertiary education market, supported by the government's goal to double post secondary student enrollment to over 40 million by 2020. During 2009, we acquired our second traditional university, Lijiang College of Guanxi University, which further expands our career-oriented degree program offerings, our enrollments by an additional 9,000 students and extends our geographic reach. In addition, we established a joint venture with China University of Petroleum to expand the size and scope of their distance learning platform, which now numbers over 40,000 students. We believe this expansion positions us to capitalize on a significant growth opportunity, the adult online education sector, which will be created as China leverages distance learning to accommodate growth in lifelong learning, very similar to what has transpired in the U.S. adult education sector during the past decade.
"We ended 2009 with over $120 million in cash, which coupled with our strong cash flow provides ultimate flexibility for completing additional accretive acquisitions during 2010, while implementing other facets like distance learning to drive incremental growth. Furthermore, we expect to accelerate our organic growth as we integrate our schools and begin to offer international cooperation and non-degree programs, aimed at optimizing our capacity utilization and margin profile," Mr. Chan concluded.
Fourth Quarter 2009 Financial Results
Total Revenues -- Total revenues for the quarter increased 42% to $16.5 million from $11.6 million in the fourth quarter of 2008. ChinaCast is organized into two business segments: the e-Learning Group ("ELG"), encompassing the Company's e-Learning education service businesses, and the Traditional University Group ("TUG"), offering accredited bachelor and diploma degree programs to students from the Foreign Trade and Business College ("FTBC") campus in Chongqing and the Lijiang College ("LJC") campus in Guilin. ELG revenue for the quarter increased 8% to $7.6 million from $7.0 million in the fourth quarter of 2008. TUG revenue for the quarter increased 94% to $8.9 million from $4.6 million in the fourth quarter of 2008. The Company also reports revenue by service and equipment revenue. Service revenue for the quarter increased 48% to $16.1 million from $10.9 million in the fourth quarter of 2008 while equipment revenue decreased 45% to $0.4 million from $0.7 million in the fourth quarter of 2008.
Cost of Sales -- Cost of sales for the quarter increased 57% to $8.5 million from $5.4 million in the fourth quarter of 2008 primarily due to the increase in amortization of intangibles associated with the acquisition of Lijiang College in October 2009.
Gross Profit and Gross Margin -- Gross profit for the quarter increased 29% to $8.0 million from $6.2 million in the fourth quarter of 2008. Gross profit margin for the quarter was 48% compared to 53% in the fourth quarter of 2008.
Share Based Compensation -- Share based compensation for the quarter increased 48% to $0.5 million from $0.3 million in the fourth quarter of 2008.
Operating Expenses -- Operating expenses for the quarter increased 23% to $3.9 million from $3.2 million in the fourth quarter of 2008 primarily due to the acquisition of Lijiang College in October 2009.
Operating Income, Operating Income Margin -- Operating income for the quarter increased 35% to $4.1 million from $3.0 million in the fourth quarter of 2008. Operating income margin for the quarter was 25% compared to 26% in the fourth quarter of 2008.
Net Income, Net Income Margin -- Net income attributable to the Company for the quarter increased 275% to $2.8 million from a loss of $1.6 million in the fourth quarter of 2008. Net income margin for the quarter was 17%.
Diluted EPS -- Diluted earnings per share for the quarter were $0.07 compared to a loss of $0.05 in the fourth quarter of 2008 primarily due to an increase in net income partially offset by a year-over-year increase in shares used in the computation.
Adjusted Net Income, Adjusted Net Income Margin -- Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) for the quarter increased 91% to $5.26 million from $2.75 million in the fourth quarter of 2008. Adjusted net income margin (non-GAAP) for the quarter was 32% compared to 24% in the fourth quarter of 2008.
Adjusted Diluted EPS -- Adjusted diluted earnings per share excluding share based compensation, amortization of intangibles and impairment expenses (non-GAAP) for the quarter were $0.13 compared to $0.10 in the fourth quarter of 2008.
Adjusted EBITDA and Adjusted EBITDA Margin -- Adjusted EBITDA excluding share based compensation expenses (non-GAAP) for the quarter increased 57% to $7.8 million from $5.0 million in the fourth quarter of 2008. Adjusted EBITDA margin (non-GAAP) for the quarter was 47% compared to 43% in the fourth quarter of 2008.
Full Year 2009 Financial Results
Total Revenues -- Total revenues for the year increased 23% to $51.0 million from $41.6 million in 2008. ELG revenue for the year decreased 2% to $28.9 million from $29.3 million in 2008 primarily due to a decrease in equipment sales. TUG revenue for the year increased 81% to $22.1 million from $12.2 million in 2008, primarily due to the acquisition of Lijiang College in October 2009. Service revenue for the year increased 33% to $49.7 million from $37.3 million in 2008 while equipment revenue decreased 70% to $1.3 million from $4.3 million in 2008.
Cost of Sales -- Cost of sales for the year increased 16% to $21.7 million from $18.7 million in 2008 primarily due to the acquisition of Lijiang College in October 2009.
Gross Profit and Gross Margin -- Gross profit for the year increased 28% to $29.3 million from $22.9 million in 2008. Gross profit margin for the year was 57% compared to 55% in 2008.
Share Based Compensation -- Share based compensation for the year increased 2% to $2.4 million from $2.3 million in 2008.
Operating Expenses -- Operating expenses for the year increased 1% year-over-year to $10.2 million from $10.0 million in 2008.
Operating Income, Operating Income Margin -- Operating income for the year increased 48% to $19.1 million from $12.9 million in 2008. Operating income margin for the year was 38% compared to 31% in 2008.
Net Income, Net Income Margin -- Net income attributable to the Company for the year increased 116% to $13.5 million from $6.3 million in 2008. Net income margin for the year was 27% compared to 15% in 2008.
Diluted EPS -- Diluted earnings per share for the year were $0.36 compared to $0.20 in 2008 primarily due to an increase in net income partially offset by a year-over-year increase in shares used in the computation.
Adjusted Net Income, Adjusted Net Income Margin -- Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) for the year increased 31% to $18.8 million from $14.4 million in 2008. Adjusted net income margin (non-GAAP) for the year was 37% compared to 35% in 2008.
Adjusted Diluted EPS -- Adjusted diluted earnings per share excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) for the year were $0.51 compared to $0.47 in 2008.
Adjusted EBITDA and Adjusted EBITDA Margin -- Adjusted EBITDA excluding share based compensation expenses (non-GAAP) for the year increased 51% to $29.2 million from $19.4 million in 2008. Adjusted EBITDA margin (non-GAAP) for the year was 57% compared to 47% in 2008.
Cash and Bank Balances together with Term Deposits Cash and bank balances together with term deposits totaled $122.7 million as of December 31, 2009, compared to $86.6 million as of December 31, 2008.
Financial Outlook for 2010
For the full year ending December 31, 2010, the Company estimates that total net revenue will be between $78 million to $80 million (year-on-year increase of 53% to 57%); adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) between $25 million to $27 million (year-on-year increase of 34% to 44%); and adjusted EBITDA excluding share based compensation (non-GAAP) between $45 million to $47 million (year-on-year increase of 58% to 65%). This is the Company's current and preliminary view, which is subject to change.
Conference Call Information
ChinaCast's management team will host an earnings conference call at 8:00 am ET, Tuesday, March 30, 2010. The dial-in details for the earnings conference call are as follows:
Earnings Call Telephone Numbers: U.S./Canada Toll Free: +1-877-303-9226 International: +1-760-666-3566
A replay of the earnings conference call will be available at the following numbers:
Replay Telephone Numbers: U.S./Canada Toll Free: +1-800-642-1687 International: +1-706-645-9291 Replay Pass Code: 63155830
The replay will be available starting at 11:00 am ET, Tuesday, March 30, 2010, through 11:59 pm ET, Tuesday, April 13, 2010.
Additionally, a live and archived version of the earnings call will be available at www.chinacasteducation.com. Please access the website approximately 10 minutes prior to the start time in order to download and install any necessary software.
About ChinaCast Education Corporation
Established in 1999, ChinaCast Education Corporation is a leading for-profit, post-secondary education and e-learning services provider in China. The Company provides post-secondary degree and diploma programs through its two universities in China: The Foreign Trade and Business College of Chongqing Normal University and the Lijiang College of Guangxi Normal University. These universities offer fully accredited, career-oriented bachelor's degree and diploma programs in business, economics, law, IT/computer engineering, hospitality and tourism management, advertising, language studies, art and music. The Company provides its e-learning services to post-secondary institutions, K-12 schools, government agencies and corporate enterprises via its nationwide satellite/fiber broadband network. These services include interactive distance learning applications, multimedia education content delivery, English language training and vocational training courses. The company is listed on the NASDAQ with the ticker symbol CAST.
Safe Harbor Statement
This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of future performance, statements of management's plans and objectives, future contracts, and forecasts of trends and other matters. These projections, expectations and trends are dependent on certain risks and uncertainties including such factors, among others, as growth in demand for education services, smooth and timely implementation of new training centers and other risk factors listed in the Company's Annual Report on Form 10K for the fiscal year ended December 31, 2009. Forward-looking statements speak only as of the date of this filing, and we undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as "anticipate", "estimate", "expect", "believe," "will likely result," "outlook," "project" and other words and expressions of similar meaning. No assurance can be given that the results in any forward-looking statements will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: adjusted net income, adjusted net-income margin, adjusted EPS (basic and diluted), EBITDA and EBITDA margin. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses and expenditures that may not be indicative of our "recurring core business operating results." These non-GAAP financial measures exclude from our operating performance not only non-cash charges, such as stock-based compensation, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)
As of December 31,
-----------------------------
2008 2009 2009
--------- --------- -------
RMB RMB US$
Assets
Current assets:
Cash and cash equivalents 220,131 327,628 48,180
Term deposits 369,000 507,000 74,559
Accounts receivable, net of
allowance of RMBnil
in both 2008 and 2009 32,581 53,828 7,916
Inventory 1,419 1,386 204
Prepaid expenses and other
current assets 8,987 19,178 2,820
Amounts due from related
parties 2,488 6,388 939
Deferred tax assets -- 1,010 149
Assets held for sale -- 34 5
Current portion of prepaid
lease payments
for land use right 2,487 3,246 477
--------- --------- -------
Total current assets 637,093 919,698 135,249
Non-current deposits 686 14,550 2,140
Property and equipment, net 283,982 516,938 76,020
Prepaid lease payments for
land use rights - non-current 119,296 144,818 21,297
Acquired intangible assets,
net 31,330 71,286 10,483
Long-term investments 5,224 3,101 456
Non-current advances to
related party 110,217 99,727 14,666
Goodwill 311,331 503,771 74,084
--------- --------- -------
Total assets 1,499,159 2,273,889 334,395
========= ========= =======
Liabilities and equity
Current liabilities:
Accounts payable 11,467 16,061 2,362
Accrued expenses and other
current liabilities 132,807 214,316 31,517
Deferred revenues 84,372 156,645 23,036
Amount due to a related party 1,127 -- --
Income taxes payable 50,594 68,731 10,108
Current portion of long-term
bank borrowings 20,000 104,400 15,353
Current portion of capital
lease obligation 1,191 1,323 195
Other borrowings 1,097 200 29
Liabilities held for sale -- 1,315 193
--------- --------- -------
Total current liabilities 302,655 562,991 82,793
--------- --------- -------
Long-term bank borrowings 58,400 134,000 19,706
Capital lease obligation, net
of current portion 1,323 -- --
Deferred tax liabilities -
non-current 21,030 30,923 4,547
Unrecognized tax benefits -
non-current 44,612 62,457 9,185
--------- --------- -------
Total non-current liabilities 125,365 227,380 33,438
--------- --------- -------
Total liabilities 428,020 790,371 116,231
--------- --------- -------
Commitments and contingencies
Equity:
Ordinary shares (US$0.0001
par value; 100,000,000
shares
authorized; 35,648,251 and
45,170,698 shares issued
and outstanding in 2008 and
2009, respectively) 27 33 5
Additional paid-in capital 948,352 1,290,651 189,801
Statutory reserve 28,117 39,139 5,755
Accumulated other
comprehensive loss (5,462) (6,055) (890)
Retained earnings 55,526 136,583 20,086
--------- --------- -------
Total ChinaCast Education
Corporation shareholders'
equity 1,026,560 1,460,351 214,757
Noncontrolling interest 44,579 23,167 3,407
--------- --------- -------
Total equity 1,071,139 1,483,518 218,164
--------- --------- -------
Total liabilities and equity 1,499,159 2,273,889 334,395
========= ========= =======
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(In thousands, except share-related data)
For the years ended December 31,
----------------------------------------------
2007 2008 2009 2009
---------- ---------- ---------- ----------
RMB RMB RMB US$
Revenues:
Service 144,669 253,702 337,940 49,697
Equipment 38,827 28,912 8,607 1,266
---------- ---------- ---------- ----------
183,496 282,614 346,547 50,963
---------- ---------- ---------- ----------
Cost of revenues:
Service (40,124) (97,730) (139,046) (20,448)
Equipment (39,678) (29,122) (8,455) (1,243)
---------- ---------- ---------- ----------
(79,802) (126,852) (147,501) (21,691)
---------- ---------- ---------- ----------
Gross profit 103,694 155,762 199,046 29,272
---------- ---------- ---------- ----------
Operating (expenses) income:
Selling and marketing expenses
(including share-based
compensation of RMB170, RMB1,626
and RMB1,640
for 2007, 2008 and 2009,
respectively) (3,477) (5,770) (4,649) (684)
General and administrative expenses
(including
share-based compensation of RMB360,
RMB14,225
and RMB14,566 for 2007, 2008 and
2009, respectively) (52,890) (67,704) (69,641) (10,241)
Foreign exchange loss (4,179) (1,162) (87) (13)
Management service fee 18,035 6,463 5,128 754
Other operating income -- 56 210 31
---------- ---------- ---------- ----------
Total operating expenses, net (42,511) (68,117) (69,039) (10,153)
---------- ---------- ---------- ----------
Income from operations 61,183 87,645 130,007 19,119
Impairment loss on cost method
investment -- (8,500) (436) (64)
Gain on disposal of consolidated
entity -- -- 1,228 180
Gain on disposal of cost method
investment 10,270 -- -- --
Interest income 20,154 19,461 8,317 1,223
Interest expense (38) (2,575) (7,988) (1,175)
---------- ---------- ---------- ----------
Income before provision for income
taxes, earnings in
equity investments 91,569 96,031 131,128 19,283
Provision for income taxes (21,263) (24,381) (29,949) (4,404)
---------- ---------- ---------- ----------
Net income before earnings in equity
investments 70,306 71,650 101,179 14,879
Earnings in equity investments (1,155) (441) (1,687) (248)
---------- ---------- ---------- ----------
Income from continuing operations, net
of tax 69,151 71,209 99,492 14,631
---------- ---------- ---------- ----------
Discontinued operations
Loss from discontinued operations,
net of taxes of
RMBnil for 2007, 2008 and 2009
(including impairment
loss on acquired intangible assets
of RMB14,500 for 2008) (7,020) (21,025) (74) (11)
---------- ---------- ---------- ----------
Net income 62,131 50,184 99,418 14,620
Less: Net income attributable to
noncontrolling interest (3,472) (7,517) (7,339) (1,079)
---------- ---------- ---------- ----------
Net income attributable to ChinaCast
Education Corporation 58,659 42,667 92,079 13,541
========== ========== ========== ==========
Net income 62,131 50,184 99,418 14,620
---------- ---------- ---------- ----------
Foreign currency translation
adjustments (2,443) (257) (596) (87)
---------- ---------- ---------- ----------
Comprehensive income 59,688 49,927 98,822 14,533
Comprehensive income attributable to
noncontrolling interest (3,472) (7,517) (7,336) (1,079)
---------- ---------- ---------- ----------
Comprehensive income attributable to
ChinaCast Education Corporation 56,216 42,410 91,486 13,454
========== ========== ========== ==========
Net income per share
Net income attributable to ChinaCast Education
Corporation
per share:
Basic 2.21 1.40 2.49 0.37
========== ========== ========== ==========
Diluted 2.10 1.39 2.48 0.36
========== ========== ========== ==========
Weighted average shares used in
computation:
Basic 26,567,240 30,442,992 36,946,830 36,946,830
========== ========== ========== ==========
Diluted 27,975,731 30,691,742 37,167,694 37,167,694
========== ========== ========== ==========
Amount attributable to ChinaCast
Education Corporation:
Income from continuing operations, net
of tax 65,806 63,377 92,153 13,552
Discontinued operations, net of tax (7,147) (20,710) (74) (11)
---------- ---------- ---------- ----------
Net income attributable to ChinaCast
Education Corporation 58,659 42,667 92,079 13,541
========== ========== ========== ==========
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the years ended December 31,
-----------------------------------------
2007 2008 2009 2009
--------- --------- --------- --------
RMB RMB RMB US$
Cash flows from operating activities:
Net income 62,131 50,184 99,418 14,620
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 4,055 16,565 29,489 4,337
Amortization of acquired intangible
assets 1,198 16,280 20,596 3,029
Amortization of land use rights -- 1,908 2,639 388
Share-based compensation 530 15,851 16,206 2,383
(Gain) loss on disposal of property
and equipment -- (37) 1,364 201
Earnings in equity investments 1,155 441 1,687 248
Write-down of inventory 492 262 276 41
Gain on disposal of acquired
intangible assets -- -- (1,552) (228)
Impairment loss on cost method
investment -- 8,500 436 64
Impairment loss on acquired
intangible assets -- 14,500 -- --
Gain on disposal of subsidiary -- -- (1,228) (181)
Gain on disposal of cost method
investment (10,270) -- -- --
Changes in assets and liabilities:
Accounts receivable 3,117 1,927 (20,298) (2,985)
Inventory 396 334 (243) (36)
Prepaid expenses and other current
assets (3,486) (1,566) (8,910) (1,310)
Non-current deposits (1,968) 1,746 (1,491) (219)
Amounts due from related parties (665) 760 (3,900) (574)
Accounts payable (2,021) (11,163) 4,594 676
Accrued expenses and other current
liabilities 257 22,813 (11,669) (1,716)
Deferred revenues 4,052 51,172 (16,287) (2,395)
Amounts due to related parties (134) 1,127 (1,127) (166)
Income taxes payable 10,089 13,844 18,137 2,667
Deferred tax assets 172 -- (270) (40)
Deferred tax liabilities -- (2,266) (3,463) (508)
Unrecognized tax benefits 4,555 9,883 10,683 1,570
--------- --------- --------- --------
Net cash provided by operating
activities 73,655 213,065 135,087 19,866
--------- --------- --------- --------
Cash flows from investing activities:
Purchase of cost method investment -- (3,000) -- --
Advances to related party (1,443) (26,294) (20,309) (2,987)
Repayment from advances to related
party 11,395 35,991 32,611 4,796
Deposits for business acquisition -- (19,000) -- --
Return of deposit for business
acquisition -- 19,000 -- --
Purchase of property and equipment (2,690) (56,351) (41,280) (6,071)
Purchase of subsidiaries, net of cash
acquired -- (465,507) (221,887) (32,631)
Term deposits (153,847) 227,768 (138,000) (20,294)
Advance from disposal of intangible
assets -- -- 1,000 147
Disposal of intangible assets -- -- 6,000 882
Disposal of cost method investment 12,000 -- -- --
Disposal of property and equipment -- 244 51 8
Deposit for investment -- -- (3,000) (441)
Acquisition of brand name usage right (22,532) -- -- --
Net cash spent on disposal of
consolidated entity (9,113) -- (683) (100)
--------- --------- --------- --------
Net cash used in investing activities (166,230) (287,149) (385,497) (56,691)
--------- --------- --------- --------
Cash flows from financing activities:
Deferred consideration paid for
acquisition of subsidiary -- -- (4,150) (610)
Capital distribution (5,793) -- -- --
Proceeds from share offering, net of
issuance costs -- 64,236 297,351 43,728
Payment of expenses in connection with
Share
Exchange Transaction (34,956) -- -- --
Repayment of capital lease obligation (147) (1,302) (1,191) (175)
Other borrowings raised -- 5,998 10,850 1,596
Bank borrowings raised -- -- 70,000 10,294
Guarantee deposit paid -- -- (3,000) (441)
Repayment of other borrowings -- (11,501) (11,747) (1,728)
Repayment of advances from related
parities (4,251) -- -- --
Exercise of warrants and issuance of
restricted shares
of common stock, net of issuance
costs -- 98,510 -- --
--------- --------- --------- --------
Net cash provided by (used in)
financing activities (45,147) 155,941 358,113 52,664
Effect of foreign exchange rate changes (1,735) (336) (189) (28)
Net (decrease) increase in cash and
cash equivalents (139,457) 81,521 107,514 15,811
Less: cash and cash equivalents in
assets held for sale -- -- (17) (3)
Cash and cash equivalents at beginning
of the year 278,067 138,610 220,131 32,372
--------- --------- --------- --------
Cash and cash equivalents at end of the
year 138,610 220,131 327,628 48,180
========= ========= ========= ========
Non-cash investing and financing
activities:
Payable assumed in purchase of
property and equipment -- 23,189 49,335 7,255
Inception of capital leases -- 3,784 -- --
========= ========= ========= ========
Acquisition of subsidiaries:
Consideration paid -- 475,850 295,000 43,382
Consideration payable -- 4,150 30,482 4,483
--------- --------- --------- --------
Total -- 480,000 325,482 47,865
========= ========= ========= ========
Assets acquired (including cash and
cash equivalent
of RMB10,343 and RMB73,113 for 2008
and 2009) -- 695,462 629,798 92,617
Liabilities assumed -- (198,912) (304,316) (44,752)
Noncontrolling interest -- (16,550) -- --
--------- --------- --------- --------
-- 480,000 325,482 47,865
========= ========= ========= ========
Disposal of subsidiaries/other
consolidated entity:
Consideration:
Receivable -- -- 100 --
Offset against payable 6,300 -- -- --
Addition to cost method investment 8,936 -- -- --
--------- --------- --------- --------
15,236 -- -- --
========= ========= ========= ========
Issuance of restricted shares of common
stock for acquisition
of additional interests in subsidiary -- -- 135,000 19,853
========= ========= ========= ========
Supplemental cash flow information:
Interest paid (net of amount
capitalized of RMB2,376 and
RMB1,421 in 2008 and 2009,
respectively) 38 2,575 7,988 1,393
========= ========= ========= ========
Income taxes paid 7,865 3,846 5,014 737
========= ========= ========= ========
ChinaCast Education Fourth Quarter
and FY 2009
Reconciliations of Non-GAAP Results
of Operations
Measures to the Nearest Comparable
GAAP Measures
Adjusted Net Income (non-GAAP) 4Q09 4Q08 YoY FY09 FY08 YoY
------------------------------------ ------- ------- ----- ------- ------- ----
Net Income (Loss) Attributable to
ChinaCast Education $2.83 ($1.62) 275% $13.54 $6.27 116%
Share-based Compensation $0.49 $0.33 48% $2.38 $2.33 2%
Amortization of Intangibles $2.06 $0.66 211% $3.03 $2.39 27%
Gain on Disposal of Subsidiary ($0.18) $0.00 ($0.18) $0.00
Impairment Loss on Cost Method
Investment $0.06 $1.25 -95% $0.06 $1.25 -95%
Impairment Loss on Intangible
Assets $0.00 $2.13 100% $0.00 $2.13 100%
Adjusted Net Income (non-GAAP) $5.26 $2.75 91% $18.83 $14.37 31%
Adjusted Net Margin (non-GAAP) 32% 24% 37% 35%
Adjusted Diluted EPS (non-GAAP) $0.13 $0.10 31% $0.51 $0.47 9%
Adjusted EBITDA (non-GAAP) 4Q09 4Q08 YoY FY09 FY08 YoY
------------------------------------ ------- ------- ----- ------- ------- ----
Net Income (Loss) Attributable to
ChinaCast Education $2.83 ($1.62) -275% $13.54 $6.27 116%
Depreciation and Amortization of
Land Use Rights $0.97 $1.05 -8% $4.73 $2.72 74%
Share-based Compensation $0.49 $0.33 48% $2.38 $2.33 2%
Amortization of Intangibles $2.06 $0.66 211% $3.03 $2.39 27%
Gain on Disposal of a subsidiary ($0.18) $0.00 ($0.18) $0.00
Impairment Loss on Cost Method
Investment $0.06 $1.25 -95% $0.06 $1.25 -95%
Impairment Loss on Intangible
Assets $0.00 $2.13 100% $0.00 $2.13 100%
Interest Income ($0.21) ($0.54) -62% ($1.22) ($2.86) -57%
Interest Expense $0.35 $0.31 12% $1.17 $0.38 210%
Provision for income taxes $1.30 $1.14 14% $4.40 $3.59 23%
Earnings in equity investments $0.05 ($0.03) 264% $0.25 $0.06 283%
Net income attributable to
non-controlling interest $0.06 $0.27 -79% $1.08 $1.11 -2%
Adjusted EBITDA (non-GAAP) $7.78 $4.95 57% $29.24 $19.37 51%
Adjusted EBITDA Margin (non-GAAP) 47% 43% 57% 47%
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: ChinaCast Education Corporation
CONTACT: ChinaCast Education Michael Santos, President-International +1-347-482-1588 mjsantos@chinacasteducation.com HC International Ted Haberfield, Executive Vice President +1-760-755-2716 thaberfield@hcinternational.net
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