Fourth Quarter Fiscal 2009 Financial Highlights
-- Net revenue for the quarter increased by 21.6% to RMB119.1 million
(US$17.4 million), compared with RMB97.9 million in the fourth quarter
of fiscal 2008, exceeding the Company's previously stated guidance of
RMB114 million to RMB116 million
-- Gross profit increased by 22.9% to RMB61.5 million (US$9.0 million),
representing a gross margin of 51.6%, compared with gross profit of
RMB50.0 million, or a gross margin of 51.1%, in the fourth quarter of
fiscal 2008
-- Operating income increased to RMB9.8 million (US$1.4 million), compared
with a loss of RMB2.3 million in the fourth quarter of fiscal 2008
-- Net income decreased by 41.1% to RMB17.9 million (US$2.6 million),
compared with RMB30.5 million in the fourth quarter of fiscal 2008, as
the 2008 figure included a RMB18.4 million foreign exchange gain
-- Earnings per share was RMB0.50 (US$0.07) basic and diluted, compared
with RMB0.82 basic and RMB0.71 diluted for the fourth quarter of fiscal
2008. Non-GAAP earnings per share, excluding share-based compensation
expense and the change in the fair value of warrants was RMB0.57
(US$0.08) basic and diluted, compared with RMB0.79 basic and RMB0.77
diluted, for the fourth quarter of fiscal 2008
Full Fiscal Year 2009 Financial Highlights
-- Net revenue for the full year 2009 increased by 2.9% to
RMB671.1 million (US$98.3 million), compared with RMB651.9 million in
fiscal 2008
-- Gross profit increased by 3.5% to RMB344.7 million (US$50.5 million),
representing a gross margin of 51.4%, compared with gross profit of
RMB333.1 million, or a gross margin of 51.1%, in fiscal 2008
-- Operating income decreased to RMB64.7 million (US$9.5 million),
compared with RMB79.8 million in fiscal 2008
-- Net income decreased by 32.7% to RMB97.0 million (US$14.2 million),
compared with RMB144.2 million in fiscal 2008, as the 2008 figure
included a RMB41.6 million foreign exchange gain
-- Earnings per share was RMB2.66 (US$0.39) basic and RMB2.64 (US$0.39)
diluted, compared with RMB4.03 basic and RMB3.93 diluted in fiscal 2008.
Non-GAAP earnings per share, excluding share-based compensation expense
and the change in the fair value of warrants was RMB2.73 (US$0.40)
basic and RMB2.71 (US$0.40) diluted share, compared with RMB4.77 basic
and RMB4.57 diluted share in fiscal 2008
Mr.
"The recent acquisition of Little New Star represents an important first step for Noah in entering the fast-growing kids' English training market. We are progressing well with the integration, with most of the administrative functions fully operational under the Noah umbrella. We can now begin to leverage cross-selling and marketing opportunities to drive organic growth.
"This is an important entry point which will enable us to expand our presence in the kids' education service market. Our solid financial position will allow us to take advantage of additional acquisition opportunities to further expand our presence in this space, while simultaneously strengthening our content and the diversity of our delivery platforms. Our goal is to improve and expand our service lineup, leveraging our extensive sales and distribution network to drive us toward becoming a more comprehensive education service provider.
"We recently made a very important addition to our management team with
the appointment of
Fourth Quarter and Fiscal Year 2009 Unaudited Financial Results
Net Revenue. Net revenue for the fourth quarter of fiscal 2009 was
The following tables provide a breakdown of sales volume and net revenue
for DLD, KLD and E-dictionary for the fourth fiscal quarter and full year 2009,
respectively.
Volume Net Revenue (RMB '000)
Q4 09 Q4 08 Inc/(Dec) Q4 09 Q4 08 Inc/(Dec)
DLD 72,965 78,713 (7.3%) 53,646 75,968 (29.4%)
KLD 69,968 -- -- 32,954 -- --
E-dictionary 159,092 105,579 50.7% 31,616 19,292 63.9%
Volume Net Revenue (RMB '000)
FY09 FY08 Inc/(Dec) FY09 FY08 Inc/(Dec)
DLD 506,017 589,016 (14.1%) 380,129 515,314 (26.2%)
KLD 376,324 -- -- 156,422 -- --
E-dictionary 720,119 630,241 14.3% 128,185 129,643 (1.1%)
Cost of revenue. Cost of revenue for the fourth quarter of fiscal 2009 was
Gross Profit and Gross Margin. Gross profit in the fourth quarter of
fiscal 2009 was
Gross profit for fiscal year 2009 increased slightly to
Operating Expenses. Total operating expenses for the fourth quarter of
fiscal 2009 were
Total operating expenses for fiscal 2009 were
Research and development expenses for the fourth quarter of fiscal 2009
were
Sales and marketing expenses for the fourth quarter of fiscal 2009 were
General and administrative expenses for the fourth quarter of fiscal 2009
were
For fiscal year 2009, general and administrative expenses were
Income from Operations. Operating income for the fourth quarter of fiscal
2009 increased to
Other Income, net. Interest income was
For fiscal year 2009, interest income was
Net Income. The Company reported net income of
Net income excluding share-based compensation expenses and the change in
the fair value of warrants (non-GAAP) for the fourth quarter ended
Net income for the fiscal year ended
For fiscal year 2009, basic and diluted earnings per share amounted to
Basic and diluted earnings per share, excluding share-based compensation
expenses and the change in the fair value of warrants, (non-GAAP) were
Liquidity. As of
Business and Operational Highlights
Since its inception, Noah has aimed to consistently optimize its product mix to drive continually improving financial performance. The Company also places importance on investing its product pipeline, and focusing on content development to enhance the Company's competitive niche in the ELP business.
Kid Learning Device (KLD) products. KLD product sales remained strong despite the sequential impact of seasonality in Q4 versus Q3. KLDs are the Company's key growth driver in the ELP segment. Noah maintains a clear competitive advantage in the KLD space due to its superior, industry-leading content.
Digital Learning Device (DLD) products. Noah remains
E-dictionaries. In general, demand for Noah's e-dictionaries remains
stable. Noah received a one-time, large order of approximately
Kids' Education Service: Integration of Little New Star. The integration
of Little New Star (LNS) is on track, with most of the administrative
functions fully integrated with Noah's, such as finance, accounting, human
resources and sales and marketing. The Company also completed the design and
manufacture of the first batch of LNS brand Electronic Teaching Devices (ETDs),
which can be used in and out of classrooms for enhanced interactive learning.
LNS will begin to introduce these devices in their 10 self-owned schools and
600 franchised schools in
An integration team has been set up to focus on the following primary areas:
-- Maximizing cross-selling opportunities between Noah and LNS, leveraging
Noah's existing sales and marketing capabilities to promoting the LNS
brand;
-- Evaluating and improving the current franchise model;
-- Establishing operational metrics to track performance and student
enrollment; and
-- Joining R&D forces on content development, software applications and
product development to enhance the overall LNS learning experience.
After-School Educational Services. Noah is focused on improving
profitability in this segment of the business, and began the process of
discontinuing the operation of some unprofitable Tutoring Centers in
Content Development. The total number of courseware titles at the end
fiscal 2009 increased 10.5% to approximately 47,500, compared with 43,000 as
of
Executive Appointment
Appointment of
Share Repurchase Program
Noah has completed its
Financial Outlook for First Quarter of Fiscal Year 2010
Based on current estimates and market conditions, Noah expects to generate
net revenue in the range of
Beginning in the first quarter of fiscal 2010, the Company intends to give guidance on both revenue and operating profit for the next sequential quarter and current fiscal year.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on our year- end financial statements, which could result in significant differences from this unaudited financial information.
Currency Convenience Translation
For the convenience of readers, certain RMB amounts have been translated
into US dollars at the rate of
Use of Non-GAAP Financial Measures
In addition to consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP net income which excludes non-cash share-based compensation and change in fair value of warrants. The Company believes that the non-GAAP financial measures provide investors with another method for assessing the Company's operating results in a manner that is focused on the performance of its ongoing operations. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of the Company's liquidity and when planning and forecasting future periods.
About Noah
Noah Education Holdings Limited is a leading provider of supplemental
education products and services in
Safe Harbor Statement
This press release contains forward-looking statements that reflect Noah's current expectations and views of future events that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Noah has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. You should understand that our actual future results may be materially different from and worse than what Noah expects. Information regarding these risks, uncertainties and other factors is included in Noah's most recent Annual Report on Form 20-F and other filings with the SEC.
Noah Education Holdings Ltd.
Consolidated Statements of Operations
Three months ended June 30
2008 2009 2009
(Unaudited) (Unaudited) (Unaudited)
RMB RMB USD
Net revenue 97,942,806 119,130,742 17,441,765
Cost of revenue (47,896,921) (57,624,581) (8,436,734)
Gross profit 50,045,885 61,506,160 9,005,031
Research & development expenses (14,687,562) (12,360,530) (1,809,688)
Sales & marketing expenses (31,106,269) (34,504,340) (5,051,732)
General and administrative
expenses (13,133,090) (14,564,968) (2,132,437)
Other expenses (4,075,984) (15,907) (2,329)
Total operating expenses (63,002,905) (61,445,745) (8,996,185)
Other operating income 10,628,918 9,735,007 1,425,289
Operating income (2,328,102) 9,795,422 1,434,134
Derivative gain (loss) 3,370,448 -- --
Interest income (1,075,438) 2,502,650 366,409
Investment income 11,057,176 3,546,450 519,231
Other Non-Operating income 18,772,573 1,925,187 281,864
Income before income taxes 29,796,657 17,769,708 2,601,638
Provision for income taxes 654,654 178,095 26,075
Net income 30,451,311 17,947,803 2,627,713
Deemed dividend -- -- --
Net income attributable to
ordinary shareholders 30,451,311 17,947,803 2,627,713
Net income per share
Basic 0.82 0.50 0.07
Diluted 0.71 0.50 0.07
Weighted average ordinary shares
outstanding
Basic 38,198,045 35,693,062
Diluted 39,172,558 35,947,165
Twelve months ended June 30
2008 2009 2009
(Audited) (Unaudited) (Unaudited)
RMB RMB USD
Net revenue 651,934,602 671,145,679 98,261,497
Cost of revenue (318,787,904) (326,400,700) (47,787,869)
Gross profit 333,146,698 344,744,978 50,473,629
Research & development expenses (52,666,685) (55,286,625) (8,094,437)
Sales & marketing expenses (197,430,136) (210,692,883) (30,847,249)
General and administrative
expenses (44,259,888) (59,514,101) (8,713,376)
Other expenses (3,131,763) (158,466) (23,201)
Total operating expenses (297,488,472) (325,652,074) (47,678,263)
Other operating income 44,100,827 45,575,781 6,672,686
Operating income 79,759,053 64,668,685 9,468,051
Derivative gain (loss) (1,868,238) 5,807,511 850,269
Interest income 13,643,761 5,307,899 777,122
Investment income 11,057,176 15,257,413 2,233,816
Other Non-Operating income 42,708,114 6,203,622 908,264
Income before income taxes 145,299,866 97,245,130 14,237,523
Provision for income taxes (1,101,395) (254,883) (37,317)
Net income 144,198,471 96,990,247 14,200,206
Deemed dividend (379,092) -- --
Net income attributable to
ordinary shareholders 143,819,379 96,990,247 14,200,206
Net income per share
Basic 4.03 2.66 0.39
Diluted 3.93 2.64 0.39
Weighted average ordinary shares
outstanding
Basic 33,153,982 36,446,787
Diluted 34,056,315 36,709,140
Noah Education Holdings Ltd.
Consolidated Balance Sheet
June 30, March 31, June 30,
2008 2009 2009 2009
Audited Unaudited Unaudited Unaudited
RMB RMB RMB USD
Assets:
Current assets
Cash and cash
equivalents 260,222,860 835,814,763 494,111,466 72,342,167
Short-term bank
deposit 0 0 274,000,000 40,115,956
Short-term
investment 759,875,217 5,873,142 7,978,942 1,168,186
Accounts
receivables,
net of
allowance 171,727,724 193,640,600 181,653,128 26,595,580
Related party
receivables 706,088 627,838 627,626 91,890
Inventories 84,893,471 106,604,184 151,872,803 22,235,484
Prepaid
expenses,
deferred tax
assets and
other current
assets 58,005,597 48,377,213 87,621,579 12,828,552
Deferred tax
asset 2,154,472 1,796,797 2,071,387 303,269
Total current
assets 1,337,585,429 1,192,734,538 1,199,936,931 175,681,083
Property, plant
and equipment,
net 17,871,691 117,001,074 119,619,947 17,513,389
Intangible
assets, net 6,504,214 4,913,557 4,461,760 653,240
Deposit for
long-term
investment 910,000 3,000,000 3,000,000 439,226
Total assets 1,362,871,334 1,317,649,170 1,327,018,638 194,286,937
Liabilities and
Shareholders'
Equity
Current
liabilities
Accounts payable 34,827,252 86,552,682 82,560,888 12,087,624
Other payables,
accruals 22,444,789 49,167,623 45,809,823 6,706,952
Advances from
customers 2,825,530 2,241,107 3,308,173 484,345
Income taxes
payable 815,911 436,409 499,471 73,127
Deferred
revenues 11,194,641 8,798,503 7,746,063 1,134,090
Dividend payable 0 0 0 0
Total current
liabilities 72,108,123 147,196,323 139,924,418 20,486,138
Warrants 5,830,023 0 0 0
Total
liabilities 77,938,146 147,196,323 139,924,418 20,486,138
Shareholders'
Equity
Ordinary shares 15,349 14,546 14,504 2,123
Additional paid-
in capital 1,169,618,982 1,116,722,662 1,115,993,259 163,391,007
Accumulated
other
comprehensive
loss (89,949,455) (93,055,456) (93,632,439) (13,708,594)
Retained
earnings 205,248,312 146,771,093 164,718,897 24,116,263
Total
shareholders'
equity 1,284,933,188, 1,170,452,846 1,187,094,220 173,800,799
Total
liabilities and
shareholders'
equity 1,362,871,334 1,317,649,170 1,327,018,638 194,286,937
Noah Education Holdings Ltd.
Reconciliation of Non-GAAP to GAAP
Three months ended June 30
2008 2009
(Unaudited) (Unaudited)
RMB % of Rev RMB USD % of Rev
GAAP net revenue 97,942,806 100.0% 119,130,742 17,441,765 100.0%
GAAP gross profit 50,045,885 51.1% 61,506,160 9,005,031 51.6%
Share-based
compensation 63,941 0.1% 83,553 12,233 0.1%
Non-GAAP gross
profit 50,109,826 51.2% 61,589,714 9,017,264 51.7%
GAAP operating
income (2,328,102) -2.4% 9,795,422 1,434,134 8.2%
Share-based
compensation 2,466,615 2.5% 2,472,762 362,034 2.1%
Non-GAAP operating
income 138,514 0.1% 12,268,183 1,796,167 10.3%
GAAP net income 30,451,311 31.1% 17,947,803 2,627,713 15.1%
Share-based
compensation 2,466,615 2.5% 2,472,762 362,034 2.1%
Change in the fair
value of warrants (3,370,448) -3.4% 0 0 0.0%
Non-GAAP net income 29,547,478 30.2% 20,420,565 2,989,746 17.1%
GAAP net income per
share
Basic 0.82 0.50 0.07
Diluted 0.71 0.50 0.07
Non-GAAP net income
per share
Basic 0.79 0.57 0.08
Diluted 0.77 0.57 0.08
Twelve months ended June 30
2008 2009
(Audited) (Unaudited)
RMB % of Rev RMB USD % of Rev
GAAP net revenue 651,934,604 100.0% 671,145,679 98,261,497 100.0%
GAAP gross profit 333,151,340 51.1% 344,744,978 50,473,629 51.4%
Share-based
compensation 228,400 0.0% 240,079 35,150 0.0%
Non-GAAP gross
profit 333,379,740 51.1% 344,985,057 50,508,778 51.4%
GAAP operating
income 79,759,053 12.2% 64,668,685 9,468,051 9.6%
Share-based
compensation 20,344,641 3.1% 8,173,462 1,196,665 1.2%
Non-GAAP operating
income 100,103,694 15.4% 72,842,147 10,664,717 10.9%
GAAP net income 144,198,471 22.1% 96,990,247 14,200,206 14.5%
Share-based
compensation 20,344,641 3.1% 8,173,462 1,196,665 1.2%
Change in the fair
value of warrants 1,868,238 0.3% (5,807,511) (850,269) -0.9%
Non-GAAP net income 166,411,351 25.5% 99,356,199 14,546,602 14.8%
GAAP net income per
share
Basic 4.03 2.66 0.39
Diluted 3.93 2.64 0.39
Non-GAAP net income
per share
Basic 4.77 2.73 0.40
Diluted 4.57 2.71 0.40
For further information, please contact:
Investor Contact:
Noah Education Holdings Ltd.
Jerry He
Executive Vice President
Tel: +86-755-8204-9263
Email: jerry.he@noahedu.com
Investor Relations (US):
Taylor Rafferty
Jessica McCormick
Tel: +1-212-889-4350
Email: noahedu@taylor-rafferty.com
Investor Relations (HK):
Taylor Rafferty
Ruby Yim
Tel: +852-3196-3712
Email: noahedu@taylor-rafferty.com
SOURCE Noah Education Holdings Ltd.