Noah Education Announces Unaudited Fourth Quarter and Full Fiscal Year 2012 Results FY2012 Net Revenue Exceeds Guidance and Increased 74.4% Year-Over-Year

SHENZHEN, China, Aug. 29, 2012 /PRNewswire-Asia/ -- Noah Education Holdings Ltd. ("Noah" or the "Company") (NYSE: NED), a leading provider of education services in China, today announced its unaudited financial results for the fourth quarter and full fiscal year 2012 ended June 30, 2012.

Fourth Quarter Fiscal 2012 Highlights (compared to fourth quarter fiscal 2011)

  • Net revenue increased 57.8% year-over-year to RMB46.7 million (US$7.3 million)
  • Gross profit increased 47.5% year-over-year to RMB23.1 million (US$3.6 million), and gross profit margin was 49.5%
  • Operating loss was RMB54.4 million (US$8.6 million) as compared to an operating loss of RMB9.6 million
  • Non-GAAP operating income, excluding impairment loss on goodwill and intangible assets and share based compensation expenses, was RMB6.6 million (US$1.0 million), compared to an operating loss of RMB4.3 million
  • Net loss was RMB54.2 million (US$8.5 million) as compared to a net loss of RMB38.7 million
  • Non-GAAP net income, excluding impairment loss on goodwill and intangible assets and share based compensation expenses, was RMB6.9 million (US$1.1 million) as compared to non-GAAP net loss of RMB33.3 million
  • Basic and diluted loss per share was RMB1.57 (US$0.25) as compared to basic and diluted loss per share of RMB1.11
  • Non-GAAP basic and diluted earnings per share were RMB0.10 (US$0.02) as compared to a non-GAAP basic and diluted loss per share of RMB0.97

Full Fiscal 2012 Highlights (compared to full fiscal 2011)

  • Net revenue increased 74.4% year-over-year to RMB163.0 million (US$25.7 million)
  • Gross profit increased 52.8% year-over-year to RMB76.6 million (US$12.1 million), and gross profit margin was 47.0%
  • Operating loss was RMB60.5 million (US$9.5 million) as compared to an operating loss of RMB26.6 million
  • Non-GAAP operating income, excluding impairment loss on goodwill and intangible assets and share based compensation expenses, was RMB2.9 million (US$0.5 million), compared to an operating loss of RMB15.1 million
  • Net loss was RMB47.9 million (US$7.5 million) as compared to a net loss of RMB25.5 million
  • Non-GAAP net income, excluding impairment loss on goodwill and intangible assets and share based compensation expenses, was RMB15.4 million (US$2.4 million) as compared to non-GAAP net loss of RMB14.0 million
  • Basic and diluted loss per share was RMB1.47 (US$0.23) as compared to basic and diluted loss per share of RMB0.78
  • Non-GAAP basic and diluted earnings per share were RMB0.26 (US$0.04), compared to non-GAAP basic and diluted loss per share of RMB0.47
  • Total student enrollments reached approximately 16,900, representing an increase of approximately 33%
  • Total school and kindergarten network was 52, representing an increase of 57.6%

Acquisitions of Kindergarten Operators –DDK Consulting and Xiaoxiao Education

Yuanbo Education, one of the brands operated by Noah, has signed definitive agreements to acquire 100% interest of Dai Dai Kang Enterprise Management Consulting Co., Ltd. ("DDK Consulting"), and Hangzhou Xiaoxiao Kids Art and Education Consulting Co., Ltd. ("Xiaoxiao Education"), for a total consideration of RMB48.1 million (US$7.6 million).

DDK Consulting

DDK Consulting focuses on operating kindergartens and early childhood education in Tongxiang and Jiaxing city, Zhejiang province, currently operates four kindergartens and one early childhood learning center and has a total student enrollment of 1,200 with over 150 staff members. The consideration is RMB14.5 million (US$2.3 million), and will be funded by the Company's cash reserve. The transaction is expected to close by early November 2012, and will be subject to customary closing conditions, including regulatory approvals.  We expect revenue contribution in the second quarter of fiscal 2013.

Xiaoxiao Education

Xiaoxiao Education focuses on operating kindergartens and children's art and music training centers in Hangzhou, Zhejiang province. It operates six kindergartens and one children's arts and music training center in Hangzhou and has a total student enrollment of 1,300 with over 200 staff members. The consideration is RMB33.56 million (US$5.3 million), to be funded by the Company's cash reserve. The transaction is expected to close by early November 2012, and will be subject to customary closing conditions, including regulatory approvals. We expect revenue contribution in the second quarter of fiscal 2013.

Commenting on the results, Dong Xu, Chairman and Chief Executive Officer of Noah, said, "We are pleased to deliver strong results for the quarter with improvements on all fronts, in which we not only exceeded guidance but also continued to improve our margins. Our healthy revenue growth continues to be driven by our kindergartens operations, with over 216% growth year-over-year in fiscal 2012."

Mr. Xu continued, "We have seen a stable improvement in our margins, as a result of the gradual pick up in the utilization rate and operating efficiency of our kindergartens and schools over the past twelve months. While we are approaching the start of another academic year, we are confident that the continuous ramping up of our existing kindergartens and schools, as well as the opening of new kindergartens will further drive organic revenue growth in the coming quarters."

"We have also taken the opportunity to extend our kindergarten network through the acquisitions of DDK Consulting and Xiaoxiao Education. These acquisitions represent a milestone of the continued expansion of our kindergarten operations, which is the vital entry point of our life-long education model, and are a strong testimony of our capabilities to execute our growth strategy. We will continue to pursue acquisition opportunities leveraging our strong cash position to complement our organic growth, delivering long-term value to our shareholders."

Commenting on the financials, Dora Li, Chief Financial Officer, said, "We are very pleased to see a continued improvement in our gross margin this quarter, and this has put us back on track to achieve breakeven for fiscal 2012. Despite the fact that we made an impairment charge on the valuations of Little News Star and Wentai Education to reflect the decline of fair value in the two brands, our business prospects and financials are continuing to go from strength to strength as evidenced by robust revenue growth and improved profitability at operating level."

Ms. Li continued, "While we will continue to expand our network through organic growth and acquisition, we expect gross margin to maintain at its current level on an annual basis, with operating costs starting to stabilize with a more scalable revenue base. We are confident that we will continue to achieve profitable growth through revenue expansion, and maintain a competitive cost base with the execution of our financial discipline."

Fourth Quarter and Full Fiscal Year 2012 Financial Results

Net revenue

Net revenue for the fourth quarter of fiscal 2012 increased 57.8% year-over-year to RMB46.7 million (US$7.3 million) from RMB29.6 million. Net revenue for fiscal 2012 increased 74.4% year-over-year to RMB163.0 million (US$25.7 million) from RMB93.5 million. The increases were driven mainly by the organic and acquisitive growth from kindergartens and incremental revenue from the newly opened school.

In terms of revenue breakdown by business lines for the fourth quarter of fiscal 2012, revenue from kindergartens increased 133.3% year-over-year to RMB23.8 million (US$3.7 million) from RMB10.2 million, driven by incremental revenue contribution from Yuanbo Education's kindergartens and organic growth from existing kindergartens. Revenue from primary and secondary schools increased 29.2% year-over-year to RMB13.7 million (US$2.2 million) from RMB10.6 million. Revenue from supplemental education, which includes English training courses and sale of teaching materials, increased 4.5% year-over-year to RMB9.2 million (US$1.4 million) from RMB8.8 million, as the two learning centers that were closed in the third quarter of fiscal 2012 are in the process of relocation.

In terms of revenue breakdown by business lines for fiscal 2012, revenue from kindergartens increased 215.8% year-over-year to RMB82.1 million (US$12.9 million) from RMB26.0 million. Revenue from primary and secondary schools increased 30.8% year-over-year to RMB 45.0 million (US$7.1 million) from RMB34.4 million. Revenue from supplemental education increased 8.7% year-over-year to RMB35.9 million (US$5.7 million) from RMB33.1 million.

Services

Q4FY2012

Q4FY2011

FY2012

FY2011

Revenue

(RMB million)

Percentage of net revenue

Revenue

(RMB million)

Percentage of net revenue

Revenue

(RMB million)

Percentage of net revenue

Revenue

(RMB million)

Percentage of net revenue

Kindergartens

23.8

51.0%

10.2

34.5%

82.1

50.4%

26.0

27.8%

Primary and secondary schools

13.7

29.3%

10.6

35.8%

45.0

27.6%

34.4

36.8%

Supplemental education

9.2

19.7%

8.8

29.7%

35.9

22.0%

33.1

35.4%

Total

46.7

100.0%

29.6

100.0%

163.0

100.0%

93.5

100.0%

Gross profit and gross profit margin

Gross profit for the fourth quarter of fiscal 2012 increased 47.5% year-over-year to RMB23.1 million (US$3.6 million) from RMB15.7 million. Gross profit for the fiscal 2012 increased 52.8 % year-over-year to RMB76.6 million (US$12.1 million) from RMB50.1 million. The increase in gross profit was primarily driven by the continued strong growth of the kindergarten operations.

Gross profit margin for the fourth quarter of fiscal 2012 was 49.5%, compared to53.0% in the fourth quarter of fiscal 2011. Gross profit margin for fiscal 2012 was 47.0%, compared to 53.7% in fiscal 2011. The contraction in margins were mainly due to an expanded portfolio of revenue contributed by kindergartens, which accounted for 51.0% and 50.3% of total revenue for the fourth quarter and full fiscal 2012, respectively, compared to 34.4% and 27.8% of total revenue for the fourth quarter and full fiscal 2011, respectively.

Operating expenses

Total operating expenses for the fourth quarter of fiscal 2012 was RMB82.6 million (US$13.0 million)as compared to RMB27.5 million in the fourth quarter of fiscal 2011.Operating expenses for fiscal 2012 was RMB154.5 million (US$24.3 million)as compared to RMB82.2 million in fiscal 2011. Excluding a one-time charge of RMB60.6 million (US$9.5 million) on goodwill and intangible assets impairment, total operating expenses was RMB22.0 million (US$3.5 million), a decrease of 20% as compared to RMB27.5 million in the same quarter of fiscal 2011.

Research and development ("R&D") expenses for the fourth quarter of fiscal 2012 was RMB0.8 million (US$0.1 million) as compared to RMB0.6 million in the same period of fiscal 2011. R&D expenses for fiscal 2012 wereRMB3.1 million (US$0.5 million) as compared to RMB2.2 million in fiscal 2011. As a percentage of net revenue, R&D expenses decreased to1.8% in the fourth quarter of fiscal 2012 from 2.1% in the same quarter of fiscal 2011, and 1.9% in fiscal 2012 from 2.4% in fiscal 2011. The R&D investment is focused on the development of teaching materials.

Sales and marketing ("S&M") expenses for the fourth quarter were RMB1.6 million (US$0.2 million) as compared to RMB1.2 million in the same quarter of fiscal 2011. S&M expenses for fiscal 2012 were RMB6.1 million (US$1.0 million) as compared to RMB4.0 million in fiscal 2011. As a percentage of net revenue, S&M expenses decreased to 3.4% in the fourth quarter of fiscal 2012, compared to 3.9% in the same period of fiscal 2011, and 3.7% in fiscal 2012, compared to 4.3% in fiscal 2011. S&M expenses as a percentage of revenue is expected to maintain at a similar level in fiscal 2013 while the Company sustains its initiatives in brand promotion.

General and administrative ("G&A") expenses for the fourth quarter of fiscal 2012 were RMB18.6 million (US$2.9 million)as compared to RMB15.6 million in the same period of fiscal 2011.G&A expenses for fiscal 2012 were RMB83.7 million (US$13.2 million) as compared to RMB65.5 million in fiscal 2011. As a percentage of net revenue, G&A expenses weredecreasedto39.9% in the fourth quarter of fiscal 2012, compared to 52.8% in the same period of fiscal 2011, and 51.4% in fiscal 2012, compared to 70.0% in fiscal 2011. The lower percentage of G&A expenses to net revenue primarily reflected the improvement of the Company's operational leverage with the expansion of revenue scale.

Impairment loss on goodwill and intangible assets

Impairment loss for the fourth quarter of fiscal 2012 and fiscal 2012 was RMB60.6 million (US$9.5 million) respectively, which is a non-cash impairment charge for the Company's intangible assets and goodwill, based on the Company's intangible assets impairment assessment and annual goodwill impairment test in accordance with Accounting Standard Codification 350, Intangibles – Goodwill and Other. The intangible assets and goodwill impairment charge reflects a material decline in fair value of the Company's Little New Star segment and Wentai Education segment as of June 30, 2012 and the possible adverse impact of overall economic uncertainties in China. The Company does not expect the non-cash impairment charge to have an adverse impact on its normal business operations, cash position or cash flows from operating activities. To date, the impairment assessments are in process and have not been finalized. Management believes that the impairment loss of RMB60.6 million is probable and represents management's best estimates.

Other operating income

Other operating income for the fourth quarter of fiscal 2012 increased 126.4% year-over-year to RMB5.0 million (US$0.8 million) from RMB2.2 million in the fourth quarter of fiscal 2011. Other operating income for fiscal 2012 increased 215.4% year-over-year to RMB17.4 million (US$2.7 million) from RMB5.5 million in fiscal 2011. The increases were mainly attributable to rental income and revenue from summer courses.

Operating loss

Operating loss for the fourth quarter of fiscal 2012 was RMB54.4 million (US$8.6 million), compared to an operating loss of RMB9.6 million in the fourth quarter of fiscal 2011. Operating loss for fiscal 2012 was RMB60.5 million (US$9.5 million), compared to an operating loss of RMB26.6 million in fiscal 2011.

Excluding one-time charge of RMB60.6 million (US$9.5 million) on goodwill and intangible assets impairment, and share based compensation expenses, non-GAAP operating income was RMB6.6 million (US$1.0 million), compared to an operating loss of RMB4.3 million in the same quarter of fiscal 2011. Non-GAAP operating income for fiscal 2012 was RMB 2.9 million (US$0.5 million) as compared to an operating loss of RMB15.1 million in fiscal 2011.

Non-operating income

Interest income for the fourth quarter of fiscal 2012 was RMB0.5 million (US$0.07 million), compared to RMB0.3 million in the fourth quarter of fiscal 2011.Investment income for the fourth quarter of fiscal 2012 was RMB4.7 million (US$0.7 million), compared to RMB3.8 million in the fourth quarter of fiscal 2011. Other non-operating income for the fourth quarter of fiscal 2012 was RMB0.7 million (US$0.1 million), compared to a loss of RMB26.2 million in the same period of fiscal 2011, which mainly included de-recognition of accumulative exchange reserve related to the discontinued electronic learning products business.

Interest income for fiscal 2012 was RMB1.4 million (US$0.2 million), compared to RMB1.9 million in fiscal 2011. Investment income for fiscal 2012 was RMB17.9 million (US$2.8 million), compared to RMB11.0 million in fiscal 2011. Other non-operating income for fiscal 2012 was RMB4.1 million (US$0.6 million), compared to an other non-operating loss of RMB1.2 million in fiscal 2011.

Income tax expenses

Income tax expenses for the fourth quarter of fiscal 2012 were RMB5.5 million (US$0.9 million), compared to RMB2.5 million for the same period in fiscal 2011. Income tax expenses for fiscal 2012 were RMB10.5 million (US$1.6 million), compared to RMB6.2 million in fiscal 2011.

Net loss

Net loss for the fourth quarter of fiscal 2012 was RMB54.2 million (US$8.5 million), compared to a net loss ofRMB38.7 million in the same period of fiscal 2011. Basic and diluted loss per share was RMB1.57 (US$0.25), compared to basic and diluted loss per share of RMB1.11 in the fourth quarter of fiscal 2011.

Net loss for fiscal 2012 was RMB47.9 million (US$7.5 million), compared to a net loss of RMB25.5 million in fiscal 2011. Basic and diluted loss per share was RMB1.47 (US$0.23), compared to a basic and diluted loss per share of RMB0.78.

Net income excluding intangible assets and goodwill impairment and share-based compensation expenses (non-GAAP) for the fourth quarter of fiscal 2012 was RMB6.9 million (US$1.1 million), compared to a non-GAAP net loss of RMB33.3 million in the same period of fiscal 2011. Non-GAAP basic and diluted earnings per share for the fourth quarter of fiscal 2012 were RMB0.10 (US$0.02), compared to a non-GAAP basic and diluted loss per share of RMB0.97 in the fourth quarter of fiscal 2011.

Non-GAAP net income for fiscal 2012 was RMB15.4 million (US$2.4 million), compared to a non-GAAP net loss of RMB14.0 million. Non-GAAP basic and diluted earnings per share for fiscal 2012 were RMB0.26 (US$0.04), compared to a non-GAAP basic and diluted loss per share of RMB0.47.

Liquidity

Cash and cash equivalents, and short-term other investments totaled RMB522.1 million (US$82.2 million) on June 30, 2012, compared to RMB526.2 million on March 31, 2012. For the three months ended June 30, 2012, operating cash used in continuing operations was RMB2.3 million (US$0.4 million).

Deferred revenue

Deferred revenue related to tuition fees and franchising fees as of June 30, 2012 was RMB28.5 million (US$4.5 million). This compares to deferred revenue related to tuition fees and franchising fees of RMB44.5 million as of March 31, 2012. Deferred revenue primarily includes the tuition fees and franchising fees collected but has not yet recognized during the quarter. It will be recognized according to course and contract schedule.

Operating Updates

  • Total schools and kindergartens network was 52 at the end of the fiscal 2012, compared to 33 as of June 30, 2011.The network included:
    • 34kindergartens
      • Two of the kindergartens were in the process of finalizing licenses and did not contribute to the revenue during the quarter
      • Seven of them are in a ramp up period
      • Three kindergartens, two to be operated by Yuanbo Education and one by Wentai Education. Two start to contribute revenue from October onwards
    • 5 primary and secondary schools
      • One of them opened in first quarter of fiscal 2012remained in ramp up stage
    • 13 directly owned supplemental training centers
      • Two unprofitable training centers were sold, therefore the number of students enrolled in supplemental training centers may temporarily be impacted as a result
  • Student enrollment totaled approximately 16,900, a year-over-year increase of about 33% due to the expansion of the network, and includes:
    • More than 9,100 for kindergartens
    • Approximately 4,000 for primary and secondary schools
    • Approximately 3,800 for directly owned supplemental training centers

Financial Outlook for the First Quarter of Fiscal 2013 and Full Fiscal 2013

Based on current estimates and market conditions, for the first quarter of fiscal 2013, Noah expects to generate net revenue in the range of RMB38 million (US$6.0 million) to RMB41 million (US$6.5 million). For the full fiscal 2013, the Company expects to generate revenue between RMB184 million (US$29.0 million) and RMB190 million (US$29.9 million). This forecast reflects Noah's current and preliminary view, which is subject to change.

Conference Call

Noah's senior management will host a conference call at 8:00 am (Eastern)/5:00 am (Pacific)/8:00 pm (Beijing) on Thursday, August 30, 2012 to discuss its fourth quarter and full fiscal year 2012 financial results and recent business activities. The conference call may be accessed by calling:

US 

+1-718-354-1231

International (toll) 

+65-6723-9381

China, Domestic mobile 

800-819-0121

China, Domestic  

400-620-8038

Hong Kong 

+852-2475-0994

Please dial in 10 minutes before the scheduled starting time. An operator will answer your call and please use "Noah" as the verbal passcode to access the call. A replay of the conference call will be available from 11:00am US Eastern Time on August 30, 2012 until September 6, 2012 by dialing the following numbers:

US 

+1-866-214-5335

International (toll)  

+61-2-8235-5000

China North 

10-80-0714-0386

China South 

10-80-0140-0386

Hong Kong 

800901596

Passcode 

1433-9335

A live webcast and replay will be available on the investor relations page of Noah's website at http://ir.noaheducation.com.

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 in the statement of operations, balance sheet and cash flow statements have been translated into US dollars at the rate of RMB6.3530, the noon buying rate for US dollars in effect on June 30, 2012 for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York.

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 goodwill and intangible assets impairment and non-cash share-based compensation. 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 Education Holdings Ltd

Noah is a leading provider of education services in China. The Company's brands include Wentai Education, which operates and manages high-end kindergartens, primary and secondary schools, Little New Star, which provides English language training for children aged 3-12 in its directly owned and franchised training centers, and Yuanbo Education, which focuses on early childhood education services in the Yangtze Delta region. Noah was founded in 2004 and is listed on the New York Stock Exchange under the ticker symbol NED. For more information about Noah, please visit http://ir.noaheducation.com.

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.

Investor Contacts
Noah Education Holdings Ltd.
Email: ir@noaheducation.com

 

Noah Education Holdings Ltd.

Consolidated Balance Sheet



March 31


June 30




2012


2012




Unaudited


Unaudited




RMB


RMB

USD

Assets:






Current assets







Cash and cash equivalents


170,425,517


501,627,334

78,959,127


Investments


355,803,441


20,503,441

3,227,364


Accounts receivables, net of allowance of doubtful debts


1,041,545


750,854

118,189


Related party receivables


27,304


-

-


Inventories


5,473,177


5,451,811

858,147


Prepaid expenses and other current assets


20,487,327


19,798,366

3,116,381


Total current assets


553,258,311


548,131,806

86,279,208


Investments


10,649,956


10,929,427

1,720,357


Property, plant and equipment, net


188,229,079


184,477,616

29,037,874


Intangible assets, net


73,015,509


68,615,388

10,800,470


Goodwill


114,132,679


56,746,604

8,932,253


Call option


7,393,000


6,832,000

1,075,397


Deposit for property, plant and equipment


2,804,050


618,519

97,359


Deferred tax assets


398,968


298,831

47,038


Total assets


949,881,552


876,650,191

137,989,956

Liabilities and Shareholders' Equity






Current liabilities







Accountants payable (including account payables of the consolidated VIEs without recourse to Noah of RMB1,876,464, RMB1,704,882 as of March 31, 2012 and June 30, 2012, respectively)


2,057,336


1,778,569

279,957


Other payables and accruals (including other payables, accruals of the consolidated VIEs without recourse to Noah of RMB15,355,145, RMB11,543,149as of March 31, 2012 and June 30, 2012, respectively)


37,215,062


27,925,392

4,395,623


Advances from customers (including advance from customer of the consolidated VIEs without recourse to Noah of RMB208,622, RMB427,071 as of March 31, 2012 and June 30, 2012 respectively)


213,678


431,748

67,960


Income tax payable (including income tax payables of the consolidated VIEs without recourse to Noah of RMB4,841,222, RMB7,031,865 as of March 31, 2012 and June 30, 2012, respectively)


10,176,340


14,217,785

2,237,964


Deferred revenue (including deferred revenues of the consolidated VIEs without recourse to Noah of RMB18,893,092, RMB12,875,343 as of March 31, 2012, and June 30, 2012 respectively)


43,143,663


27,960,672

4,401,176


Contingent Consideration


7,552,000


7,272,337

1,144,709


Total current liabilities


100,358,079


79,586,503

12,527,389

Non-current liabilities







Other liabilities – non current


-


1,102,801

173,588


Deferred revenues - non current


4,730,735


3,864,580

608,308


Deferred tax liabilities


7,753,565


7,635,921

1,201,939


Total non-current liabilities


12,484,300


12,603,302

1,983,835


Total liabilities


112,842,379


92,189,805

14,511,224

Shareholders' Equity







Ordinary shares


14,848


14,843

2,336


Additional paid-in capital


1,046,492,325


1,046,863,605

164,782,560


Accumulated other comprehensive loss


(125,254,271)


(124,039,206)

(19,524,509)


Accumulated losses


(150,617,263)


(208,112,771)

(32,758,188)


Total shareholders' equity


770,635,639


714,726,471

112,502,199


Minority interest


66,403,534


69,733,915

10,976,533

Total liabilities and shareholders' equity


949,881,552


877,650,191

137,989,956


 

Noah Education Holdings Ltd.

Consolidated Statements of Operations



Three months ended


Twelve months ended


June 30


June 30


2011

2012


2011

2012


(Unaudited)

(Unaudited)


(Unaudited)

(Unaudited)


RMB

RMB

USD


RMB

RMB

USD

Net revenue

29,573,879

46,670,533

7,346,220


93,474,859

163,022,321

25,660,683

Cost of revenue

(13,904,517)

(23,560,020)

(3,708,487)


(43,325,518)

(86,377,388)

(13,596,315)

Gross profit

15,669,362

23,110,513

3,637,733


50,149,341

76,644,933

12,064,368

Research & development expenses

(619,331)

(846,283)

(133,210)


(2,212,193)

(3,103,168)

(488,457)

Sales & marketing expenses

(1,155,773)

(1,582,924)

(249,162)


(3,979,909)

(6,096,483)

(959,623)

General and administrative expenses

(15,621,674)

(18,606,416)

(2,928,761)


(65,468,504)

(83,725,310)

(13,178,862)

Impairment loss on goodwill and intangible assets

-

(60,586,075)

(9,536,609)


-

(60,586,075)

(9,536,609)

Other expenses

(10,102,935)

(945,742)

(148,865)


(10,571,986)

(978,054)

(153,951)

Total operating expenses

(27,499,713)

(82,567,440)

(12,996,607)


(82,232,592)

(154,489,090)

(24,317,502)









Other operating income

2,211,990

5,007,503

788,211


5,512,172

17,387,851

2,736,951

Operating loss

(9,618,361)

(54,449,424)

(8,570,663)


(26,571,079)

(60,456,306)

(9,516,182)

Interest income

286,449

470,884

74,120


1,880,147

1,402,253

220,723

Finance cost

-

-

-


-

(349,143)

(54,957)

Investment income

3,848,783

4,671,575

735,334


11,022,226

17,873,646

2,813,418

Impairment loss on investment

(4,409,508)

-

-


(4,409,508)

-

-

Other Non-Operating income

(26,247,706)

689,887

108,592


(1,179,859)

4,089,146

643,656

Loss before income taxes

(36,140,343)

(48,617,078)

(7,652,617)


(19,258,073)

(37,440,404)

(5,893,342)

Income tax expenses

(2,534,539)

(5,548,052)

(873,296)


(6,219,458)

(10,480,402)

(1,649,678)

Net loss

(38,674,882)

(54,165,130)

(8,525,913)


(25,477,531)

(47,920,806)

(7,543,020)

Net loss from discontinued operations

(3,072,646)

-

-


(382,515,241)

-

-

less: Net income attributable to non-controlling interest

1,763,830

3,330,381

524,222


3,344,272

5,879,287

925,435

Net loss attributable to controlling interest

(43,511,358)

(57,495,511)

(9,050,135)


(411,337,044)

(53,800,093)

(8,468,455)

















Net loss per share








Basic

(1.11)

(1.57)

(0.25)


(0.78)

(1.47)

(0.23)

Diluted

(1.11)

(1.57)

(0.25)


(0.78)

(1.47)

(0.23)

















Weighted average ordinary shares outstanding








Basic

36,324,578

36,619,398

36,619,398


36,856,451

36,519,353

36,519,353

Diluted

36,559,316

36,688,122

36,688,122


37,091,473

36,588,077

36,588,077


 

 

Noah Education Holdings Ltd

Reconciliation of Non-GAAP to GAAP














Three months ended


Twelve months ended


June 30


June 30


2011

2012


2011

2012


(Unaudited)

(Unaudited)


(Unaudited)

(Unaudited)


RMB

% of Rev

RMB

USD

% of Rev


RMB

% of Rev

RMB

USD

% of Rev

GAAP net revenue

29,573,879

100.0%

46,670,533

7,346,220

100.0%


93,474,859

100.0%

163,022,321

25,660,683

100.0%













GAAP gross profit

15,669,362

53.0%

23,110,513

3,637,733

49.5%


50,149,341

53.7%

76,644,933

12,064,368

47.0%

Share-based compensation

125,622

0.4%

0

0

0.0%


297,640

0.3%

0

0

0.0%

Non-GAAP gross profit

15,794,984

53.4%

23,110,513

3,637,733

49.5%


50,446,981

54.0%

76,644,933

12,064,368

47.0%













GAAP operating loss

(9,618,361)

-32.5%

(54,449,424)

(8,570,663)

-116.7%


(26,571,079)

-28.4%

(60,456,306)

(9,516,182)

-37.1%

Goodwill and intangible assets impairment

-

0.0%

60,586,075

9,536,609

129.8%


-

0.0%

60,586,075

9,536,609

37.2%

Share-based compensation

5,352,237

18.1%

480,169

75,581

1.0%


11,437,616

12.2%

2,760,006

434,441

1.7%

Non-GAAP operating income

(4,266,124)

-14.4%

6,616,820

1,041,527

14.2%


(15,133,463)

-16.2%

2,889,775

454,868

1.8%













GAAP net income

(38,674,882)

-130.8%

(54,165,130)

(8,525,913)

-116.1%


(25,477,531)

-27.3%

(47,920,806)

(7,543,020)

-29.4%

Goodwill and intangible assets impairment

-

0.0%

60,586,075

9,536,609

129.8%


-

0.0%

60,586,075

9,536,609

37.2%

Share-based compensation

5,352,237

18.1%

480,169

75,581

1.0%


11,437,616

12.2%

2,760,006

434,441

1.7%

Non-GAAP net income

(33,322,645)

-112.7%

6,901,114

1,086,277

14.8%


(14,039,915)

-15.0%

15,425,275

2,428,030

9.5%













GAAP net income (loss) per share












Basic

(1.11)


(1.57)

(0.25)



(0.78)


(1.47)

(0.23)


Diluted

(1.11)


(1.57)

(0.25)



(0.78)


(1.47)

(0.23)














Non-GAAP net income (loss) per share












Basic

(0.97)


0.10

0.02



(0.47)


0.26

0.04


Diluted

(0.97)


0.10

0.02



(0.47)


0.26

0.04


























Note: This reconciliation is for illustration purpose to compare GAAP and Non-GAAP performance for the continuing operations


 

Noah Education Holdings Ltd.

Consolidated Statements of Cash Flow



Three months ended


Twelve months ended


June 30


June 30


2011

2012


2011

2012


(Unaudited)

(Unaudited)


(Unaudited)

(Unaudited)


RMB

RMB

USD


RMB

RMB

USD

Cash flows from operating activities








Net loss

(38,674,882)

(54,165,130)

(8,525,913)


(25,477,531)

(47,920,806)

(7,543,020)

Adjustment to reconcile net loss to net cash provided by (used in) operating activities








Amortization of intangible assets

1,256,677

1,200,121

188,906


4,590,181

4,703,847

740,414

Depreciation of property, plant and equipment

2,955,074

7,289,001

1,147,332


11,556,571

23,222,390

3,655,342

Allowance for doubtful debts (net)

-

583,753

91,886


-

583,753

91,886

Loss on disposal of property, plant and equipment

1,207,986

47,199

7,429


1,079,090

60,395

9,507

Impairment loss on goodwill and intangible assets

150,629

60,586,075

9,536,609


150,629

60,586,075

9,536,609

Share-based compensation expenses

5,352,237

480,169

75,581


11,437,616

2,760,006

434,441

Unrealized exchange difference

20,367,363

620,647

97,694


(2,755,118)

(2,283,919)

(359,502)

Unrealized gain on trading investment

-

-

-


(706,454)

-

-

Realized gain on trading investment

-

-

-


(358,377)

-

-

Impairment loss of Franklin B Share investment

3,727,642

227,696

35,841


4,409,508

809,271

127,384

Change in fair value of call option

-

561,000

88,305


-

1,081,000

170,156

Change in fair value of contingent payable

-

(279,663)

(44,021)


-

(407,808)

(64,191)

Others

6,529,992

-

-


430,421

-

-

Disposal of a subsidiary

-

(302,004)

(47,537)


-

(302,004)

(47,537)

Changes in operating assets & liabilities








Trading investments

-

-

-


6,558,010

-

-

Accounts receivable

997,324

(293,062)

(46,130)


2,184,074

333,400

52,479

Related party receivables

5,916,520

27,304

4,298


-

-

-

Inventories

(1,009,440)

(53,293)

(8,389)


(1,619,438)

671,497

105,698

Prepaid expenses and other current assets

-

540,926

85,145


5,324,173

41,379,706

6,513,412

Deferred tax assets

41,911

100,136

15,762


47,980

195,049

30,702

Accounts payable

(3,676,320)

(278,766)

(43,879)


(4,411,796)

(1,057,024)

(166,382)

Other payables and accruals

(15,502,376)

(7,389,424)

(1,163,139)


(27,549,631)

(10,344,433)

(1,628,275)

Advances from customers

(145,276)

218,070

34,326


(275,735)

204,232

32,147

Deferred revenue

(3,767,328)

(15,940,259)

(2,509,092)


750,753

6,186,267

973,755

Income tax payable

2,316,595

4,041,445

636,147


5,402,141

8,485,705

1,335,700

Deferred tax liabilities

95,753

(111,793)

(17,597)


(167,802)

(1,522,769)

(239,693)

Receipt from disposal of ELP

40,000,000

-

-


40,000,000

-

-

Operating cash from(used in) by continuing operations

28,140,081

(2,289,852)

(360,436)


30,599,265

87,423,830

13,761,032

Operating cash used in discontinued operation

(2,249,513)

-

-


(29,969,784)

-

-

Total operating cash flow

25,890,568

(2,289,852)

(360,436)


629,481

87,423,830

13,761,032









Cash flows from (used in) investing activities








Acquisition of property, plant and equipment

(5,178,973)

(3,891,815)

(612,595)


(22,032,996)

(27,264,467)

(4,291,589)

Acquisition of intangible assets

(171,170)

-

-


(284,310)

-

-

Acquisition of Wentai

-

-

-


(4,380,923)

-

-

Acquisition of Yuanbo

-

-

-


-

(25,097,107)

(3,950,434)

Acquisition of LNS

-

-

-


(6,636,123)

-

-

Decrease/(increase) in prepayment for property, plant and equipment

-

2,185,531

344,016


-

124,724

19,632

Acquisition of WT Changsha Kindergartens

(25,000,000)

-

-


(25,000,000)

-

-

Disposal of subsidiary

-

(80,403)

(12,656)


-

(80,403)

(12,656)

Repayment of deposit for investment

6,000,000

-

-


4,200,000

-

-

Deposits for long-term investment

(4,000,000)

-

-


(4,000,000)

-

-

Decrease/(increase) in HTM investment

13,000,000

335,300,000

52,778,215


(44,000,000)

29,500,000

4,643,476

Decrease in short-term fixed deposits

(32,000,000)

-

-


28,000,000

32,000,000

5,036,990

Investing cash flow from (used in) continuing operations

(47,350,143)

333,513,313

52,496,980


(74,134,352)

9,182,747

1,445,419

Investing cash used in discontinued operations

-

-

-


(5,716,809)

-

-

Total investing cash flow

(47,350,143)

333,513,313

52,496,980


(79,851,161)

9,182,747

1,445,419









Cash flows from (used in) financing activities








Proceeds from issue of shares to employee

49

-

-


49

-

-

Proceeds from exercise of employee share options

28,464

-

-


386,457

1,572,428

247,510

Share repurchase

(586,043)

(108,894)

(17,141)


(18,404,847)

(254,511)

(40,062)

Dividend paid to non-controlling shareholders

-

-

-


(450,000)

(950,000)

(149,536)

Financing cash flow from (used in) continuing operations

(557,530)

(108,894)

(17,141)


(18,468,341)

367,917

57,912

Financing cash flow from discontinued operations

-

-

-


-

-

-

Total financing cash flow

(557,530)

(108,894)

(17,141)


(18,468,341)

367,917

57,912









Effect of exchange rate changes on cash and cash equivalents

(286,988)

87,250

13,734


(3,162,803)

(1,221,861)

(192,329)

Net increase (decrease) in cash and cash equivalents

(22,017,105)

331,114,567

52,119,403


(97,690,020)

96,974,494

15,264,363

Cash and cash equivalents at beginning of period

428,178,794

170,425,517

26,825,990


506,727,524

405,874,701

63,887,093

Cash and cash equivalents at end of period

405,874,701

501,627,334

78,959,127


405,874,701

501,627,334

78,959,127

 

 

SOURCE Noah Education Holdings Ltd.



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