China Bilingual Announces Financial Results for the Second Quarter of Fiscal 2012

Revenues Increased 80.2% to $11.0 Million and EBITDA Increased 119.0% to $5.6 Million for the Second Fiscal Quarter

Earnings Call Scheduled Thursday, April 19, 2012 at 9:00 a.m. Eastern Time

News provided by

China Bilingual Technology & Education Group Inc.

Apr 16, 2012, 03:05 ET

TAIYUAN, China, April 16, 2012 /PRNewswire-Asia-FirstCall/ -- China Bilingual Technology & Education Group Inc. (OTCBB: CBLY) ("China Bilingual" or the "Company"), an education company that owns and operates high-quality, K-12 private boarding schools in China, today announced its financial results for the second quarter ended February 29, 2012.

Second Quarter Fiscal Year 2012 Financial Highlights: (Year-over-Year, Three-Month Results)

Revenues increased 80.2% year-over-year to $11.0 million, compared to $6.1 million for the three months ended February 28, 2011. The increase was primarily attributable to the acquisition of the Shanxi South School (formerly Shanxi Rising School), which increased the Company's total enrollment 50.9% from approximately 9,200 students to 13,881 students for the current school year, as well as a slight tuition increase.

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") increased 119.0% year-over-year to $5.6 million, compared to $2.5 million for the three months ended February 28, 2011. The additional enrollment allowed the schools to better absorb fixed overhead costs, and the second fiscal quarter had fewer one-time costs compared to the start of the school year in the first fiscal quarter ended November 30, 2011.

Net income increased 11.4% year-over-year to $2.5 million, compared to $2.2 million for the three months ended February 28, 2011. Interest, depreciation and amortization, primarily associated with the acquisition of the third facility, was $3.1 million for the quarter ended February 29, 2012.

The schools owned by the Company are exempt from paying corporate income taxes because of its classification in China's primary education sector.

Net property, equipment, and land use rights were $127.6 million at historical book value as of February 29, 2012.

Stockholders' equity was $46.3 million as of February 29, 2012.

Six Months Fiscal Year 2012 Financial Highlights: (Year-over-Year, Six-Month Results)

Revenues increased 77.1% year-over-year to $21.4 million, compared to $9.3 million for the six months ended February 28, 2011. The increase was primarily attributable to the acquisition of the Shanxi South School.

EBITDA increased 67.6% year-over-year to $9.3 million, compared to $5.5 million for the six months ended February 28, 2011.

Net income decreased 37.1% year-over-year to $3.1 million, compared to $4.9 million for the six months ended February 28, 2011. Interest, depreciation and amortization, primarily associated with the acquisition of the third facility, was $6.3 million for the six months ended February 29, 2012.

"Increasing enrollment at our schools continues to improve margins as we are able to better absorb our fixed operating costs," stated Dr. Ren Zhiqing, Chairman and CEO of China Bilingual. "With our schools currently at approximately 70% capacity, our focus remains on ramping up our total enrollment to 20,000 students over time without compromising our academic standards. Driven by China's growing middle class, the demand for private education is accelerating, and our reputation for academic excellence strongly positions us for long-term revenue and earnings growth."

Conference Call and Webcast

Management will host a conference call to discuss these financial results Thursday, April 19, 2012 at 9:00 a.m. Eastern time (6:00 a.m. Pacific).

To participate in the call, please dial (877) 941-2068, or (480) 629-9712 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found at http://ViaVid.net.

A replay of the call will be available for two weeks from 12:00 p.m. Eastern time on April 19, 2012, until 11:59 p.m. Eastern time on May 3, 2012. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the pin number for the replay is 4533045. In addition, a recording of the call will be available at http://www.RedChip.com for one year.

About China Bilingual Technology & Education Group Inc.

China Bilingual Technology and Education Group Inc. is an education company that owns and operates high-quality, K-12 private boarding schools in China. Founded in 1998, the Company currently operates three schools encompassing the kindergarten, elementary, middle and high school levels with approximately 13,881 students and 1,876 faculty and staff.

The Company's schools are located in Shanxi and Sichuan Provinces and provide students with an innovative and high-quality education with a focus on fluency and cultural skills in both Chinese and English. The schools regularly rank among the top schools in their respective regions for college entrance rates and national college entrance exam scores. The Company's schools have earned excellent teaching reputations and are recognized for the success of their students and strong faculty.

As China experiences rapid industrialization and economic growth, the government is focused on education as a means to increase worker productivity and raise the standard of living. Parents in China's new middle class are sending their children to receive private school education to give them an advantage in China's increasingly competitive workforce. The Company's sector in education is not subject to corporate income tax, and the Company anticipates its growth will come from both organic growth through increased enrollment and expansion of its business model and teaching methods into new schools to be acquired by the Company.

Forward-Looking Statements

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. For additional information, readers should carefully review reports or documents the Company files periodically with the Securities and Exchange Commission.

China Bilingual Technology & Education Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

	February 29, 2012			August 31, 2011
ASSETS	(unaudited)
CURRENT ASSETS:
Cash and cash equivalents		$	6,493,478		$	15,090,521
Inventory			58,439			3,489
Prepayment and other current assets			4,989,990			9,606,682
Total Current Assets			11,541,907			24,700,692

LONG-TERM ASSETS:
Property, plant and equipment, net			81,804,563			81,958,342
Land use rights, net			45,815,541			45,783,579
Deposit paid for long-term assets			-			18,778

Total Long-Term Assets			127,620,104			127,760,699

TOTAL ASSETS		$	139,162,011		$	152,461,391

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable		$	166,800		$	48,824
Short-term payable-acquisition			18,409,929			21,177,319
Due to related parties			8,089,694			7,842,522
Other payables			353,191			333,202
Refundable deposits			880,276			795,848
Prepaid school fees			22,313,926			39,498,972
Home purchase down payment			912,268			878,668
Short-term bank loan			15,872,260			15,685,044
Accrued expenses and other current liabilities			1,361,089			908,268

Total Current Liabilities			68,359,433			87,168,667

Long-term payable-acquisition			24,531,213			22,656,106

TOTAL LIABILITIES		$	92,890,646		$	109,824,773

STOCKHOLDERS' EQUITY:
Common Stock, $0.001par value; 75,000,000 shares authorized; 30,014,528 issued and outstanding as of February 29, 2012 and August 31, 2011			30,015			30,015
Additional paid-in capital			67,421			67,421
Retained earnings			43,208,346			40,100,740
Accumulated other comprehensive income			2,965,583			2,438,442

TOTAL STOCKHOLDERS' EQUITY			46,271,365			42,636,618

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	139,162,011		$	152,461,391

China Bilingual Technology & Education Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Other Comprehensive Income
(Unaudited)

		For the Three Months Ended
		February 29, 2012		February 28, 2011

REVENUES	$	10,953,811	$	6,079,354
COST OF REVENUES		5,793,920		3,516,802
GROSS PROFIT		5,159,891		2,562,552
OPERATING EXPENSES
General and Administrative Expenses		625,971		366,712
TOTAL OPERATING EXPENSES		625,971		366,712
INCOME FROM OPERATIONS		4,533,920		2,195,840
OTHER INCOME (EXPENSE)
Interest Income		2,283		7,754
Interest Expense		(2,081,035)		-
NET INCOME BEFORE INCOME TAXES	$	2,455,168	$	2,203,594
INCOME TAX EXPENSE		-		-
NET INCOME	$	2,455,168	$	2,203,594
Foreign currency translation, net of tax		507,532		440,123
COMPREHENSIVE INCOME	$	2,962,700	$	2,643,717

Earnings per Common Share:
Basic	$	0.08	$	0.07
Diluted	$	0.08	$	0.07

Weighted Average Common Shares Outstanding:
Basic		30,076,288		30,003,280
Diluted		30,076,288		30,003,280

China Bilingual Technology & Education Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Other Comprehensive Income
(Unaudited)

		For the Six Months Ended
		February 29, 2012		February 28, 2011

REVENUES	$	21,379,797	$	12,070,703
COST OF REVENUES		13,026,950		6,450,399
GROSS PROFIT		8,352,847		5,620,304
OPERATING EXPENSES
General and Administrative Expenses		1,130,493		700,628
TOTAL OPERATING EXPENSES		1,130,493		700,628
INCOME FROM OPERATIONS		7,222,354		4,919,676
OTHER INCOME (EXPENSE)
Interest Income		30,899		19,394
Interest Expense		(4,145,647)		-
NET INCOME BEFORE INCOME TAXES	$	3,107,606	$	4,939,070
INCOME TAX EXPENSE		-		-
NET INCOME	$	3,107,606	$	4,939,070
Foreign currency translation, net of tax		527,141		1,056,621
COMPREHENSIVE INCOME	$	3,634,747	$	5,995,691

Earnings per Common Share:
Basic	$	0.10	$	0.16
Diluted	$	0.10	$	0.16

Weighted Average Common Shares Outstanding:
Basic		30,072,464		30,001,642
Diluted		30,072,464		30,001,642

China Bilingual Technology & Education Group Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	For The Six Months Ended
	February 29, 2012		February 28, 2011

Cash Flows From Operating Activities:
Net income	$	3,107,606	$	4,939,070
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		1,653,333		551,276
Amortization		510,545		75,207
Accretion of interest payable – acquisition		3,042,982		-
Stock-based compensation		60,200		40,500
(Increases) Decreases in Assets:
Inventories		(54,485)		(13,156)
Prepayment and other current assets		4,713,772		1,780,621
Increases (Decreases) in Liabilities:
Accounts payable		116,489		62,163
Other payables		15,889		(856,581)
Refundable deposits		74,351		(718,380)
Prepaid school fees		(17,520,517)		(8,328,412)
Home purchase down payment		22,935		111,543
Accrued expenses and other current liabilities		379,741		(111,615)
Net Cash Provided By (Used In) Operating Activities		(3,877,159)		(2,467,764)

Cash Flows From Investing Activities:
Deposits - long term assets		-		(7,065,497)
Fixed asset additions		(530,023)		(291,150)
Receipts - related parties receivables		-		3,517,854
Net Cash Provided By (Used In) Investing Activities		(530,023)		(3,838,793)

Cash Flows From Financing Activities: Proceeds from related party loan		153,593		-
Payments made on acquisition - payable		(4,482,076)		-
Net Cash Provided By (Used In) Financing Activities		(4,328,483)		-

Effect of Exchange Rate Changes on Cash		138,622		292,123

Net Increase (Decrease) in Cash and Cash Equivalents		(8,597,043)		(6,014,434)

Cash and Cash Equivalents, Beginning of Period		15,090,521		10,888,988

Cash and Cash Equivalents, End of Period	$	6,493,478	$	4,874,554

Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	773,091	$	-
Cash paid for taxes	$	-	$	-

Contact:

At the Company:
Michael Toups, Chief Financial Officer
U.S. Office +1 727-641-1357
Email: [email protected]
Web: http://www.ChinaBilingualEdu.com

Investor Relations:
Mike Bowdoin
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 110
Email: [email protected]
Web: http://www.RedChip.com

Scott Powell, Sr. VP
MZ Group
Tel: +1-212-301-7130
Email: [email protected]
Web: http://www.mz-ir.com