China Bilingual Announces Second Quarter Financial Results

- Six-Month Revenue and Net Income Increase to $12.4 Million and $6.0 Million, Respectively -

- Earnings Call Scheduled Thursday, August 18 at 9:00 a.m. EDT -

Aug 16, 2011, 07:00 ET from China Bilingual Technology & Education Group Inc.

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TAIYUAN CITY, China, Aug. 16, 2011 /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 and six months ended June 30, 2011.

Second Quarter Fiscal Year 2011 Financial Highlights: (Three-Month Results)

  • Revenues increased 4.8% year-over-year to $6.3 million, compared with $6.0 million for the three months ended June 30, 2010.
  • Gross Profit increased 24.9% to $3.3 million, compared to $2.6 million in the same period a year ago. Gross Margin was 52.0%, compared with 43.7% for the three months ended June 30, 2010.
  • Net Income increased 25.0% year-over-year to $3.2 million (or 51.1% of revenues), compared to $2.6 million (or 42.9% of revenues) for the same period last year, primarily due to the allocation of costs associated with the Company's recapitalization on June 30, 2010 and subsequent public listing.
  • The Company is exempt from paying corporate income taxes because of its classification in China's primary education sector.
  • Basic and Diluted EPS increased to $0.11 per share, compared to Basic and Diluted EPS of $0.10 per share for the three months ended June 30, 2010.

Mid-Year 2011 Financial Highlights: (Six-Month Results)

  • Revenues increased 3.7% year-over-year to $12.4 million, compared with $12.0 million for the six months ended June 30, 2010.
  • Gross Profit increased 3.4% to $6.2 million, compared to $6.0 million in the same period a year ago. Gross Margin was 49.9%, compared with 50.1% for the six months ended June 30, 2010.
  • Net Income increased 1.7% year-over-year to $6.0 million (or 48.6% of revenues), compared to $5.9 million (or 49.6% of revenues) for the same period in 2010.
  • Basic and Diluted EPS decreased to $0.20 per share, compared to Basic and Diluted EPS of $0.23 per share in the same period a year ago, primarily due to the additional common shares issued in the Company's recapitalization on June 30, 2010.
  • Net property, equipment, and land use rights were $32.1 million at historical book value as of June 30, 2011, and the Company has no long-term debt.
  • Stockholders' Equity increased 21.9%, or $6.9 million, to $38.6 million as of June 30, 2011.

"We are pleased with our second quarter performance, highlighted by significant margin and profitability improvements," stated Mr. Ren Zhiqing, Chairman and CEO of China Bilingual. "For the remainder of 2011, we will focus on increasing enrollment at our existing facilities while we continue to seek suitable opportunities to expand our business model into additional schools. We are working to complete the acquisition of a private K-12 boarding school by the end of August, which could over time double our enrollment capacity to approximately 20,000 students. Education is China's third largest consumer spending category, and our strong academic reputation provides us with a major competitive advantage in the fast-growing private education sector. We remain dedicated to becoming an education leader in China and increasing long-term value for our shareholders."

Conference Call and Webcast

Management will host a conference call to discuss these financial results Thursday, August 18, 2011 at 9:00 a.m. Eastern time (6:00 a.m. Pacific).

To participate in the call, please dial (888) 846-5003, or (480) 629-9808 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 noon EDT on August 18, 2011, until 11:59 p.m. EDT on September 1, 2011. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the pin number for the replay is 4466687. 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 two schools encompassing the kindergarten, elementary, middle and high school levels with over 9,300 students and 1,500 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, as well as a strong core curriculum. The schools regularly rank among the top schools in their respective regions for national college entrance exam scores and college entrance rates. 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 and upper classes 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. 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, which may 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









June 30, 2011


December 31, 2010



(Unaudited)




ASSETS







CURRENT ASSETS:









Cash and cash equivalents


$

12,392,138



$

8,377,527


Inventory



79,468




109,945


Other current assets



1,481,952




241,067


Total Current Assets



13,953,558




8,728,539











LONG-TERM ASSETS:









Property, plant and equipment, net



26,766,934




26,462,897


Land use rights, net



5,317,657




5,265,351


Deposit paid for long-term assets



10,214,930




8,782,894


Total Long-Term Assets



42,299,521




40,511,142











TOTAL ASSETS


$

56,253,079



$

49,239,681


LIABILITIES AND STOCKHOLDERS' EQUITY









CURRENT LIABILITIES:









Accounts Payable


$

165,532



$

135,994


Other Payables



319,450




337,353


Refundable deposits



1,054,507




1,107,533


Prepaid Tuition



14,706,670




14,563,979


Home purchase down payment



861,594




823,095


Accrued expenses and other current liabilities



501,817




559,228


Total Current Liabilities



17,609,570




17,527,182











TOTAL LIABILITIES



17,609,570




17,527,182











STOCKHOLDERS' EQUITY:









Common Stock, $0.001par value; 75,000,000 shares authorized; 30,014,528 and 30,000,005 issued and outstanding as of June 30, 2011 and December 31, 2010



30,015




30,000


Additional paid in capital



67,421




20,000


Retained earnings



36,686,492




30,656,680


Accumulated other comprehensive income



1,859,581




1,005,819











TOTAL STOCKHOLDERS' EQUITY



38,643,509




31,712,499











TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

56,253,079



$

49,239,681





China Bilingual Technology & Education Group Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Other Comprehensive Income

(Unaudited)




For The Three Months Ended June 30,





2011




2010







REVENUES









Tuition fee


$

4,398,772



$

4,195,712


Room and board



1,885,188




1,798,163


TOTAL REVENUES



6,283,960




5,993,875











COST OF REVENUES









Tuition costs



2,110,281




2,362,904


Room and board



904,407




1,012,673


TOTAL COST OF REVENUES



3,014,688




3,375,577











GROSS PROFIT



3,269,272




2,618,298











OPERATING EXPENSES









General and Administrative Expenses



65,947




53,977


TOTAL OPERATING EXPENSES



65,947




53,977











INCOME FROM OPERATIONS



3,203,325




2,564,321











OTHER INCOME (EXPENSE)









Interest Income



7,918




4,810











NET INCOME BEFORE INCOME TAXES


$

3,211,243



$

2,569,131











INCOME TAX EXPENSE



-




-











NET INCOME


$

3,211,243



$

2,569,131











Foreign currency translation, net of tax



542,225




116,906











COMPREHENSIVE INCOME 


$

3,753,468



$

2,686,037




















Earnings per Common Share:  (June 30, 2010 Restated)









Basic


$

0.11



$

0.10











Diluted


$

0.11



$

0.10











Weighted Average Common Shares Outstanding: (June 30, 2010 Restated)









Basic



30,005,862




26,121,623











Diluted



30,005,862




26,121,623














China Bilingual Technology & Education Group Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Other Comprehensive Income

(Unaudited)




For The Six Months Ended June 30,





2011




2010







REVENUES









Tuition fee


$

8,681,294



$

8,368,146


Room and board



3,720,554




3,586,348


TOTAL REVENUES



12,401,848




11,954,494











COST OF REVENUES









Tuition costs



4,348,445




4,176,879


Room and board



1,863,620




1,790,091


TOTAL COST OF REVENUES



6,212,065




5,966,970











GROSS PROFIT



6,189,783




5,987,524











OPERATING EXPENSES









General and Administrative Expenses



174,283




71,308


TOTAL OPERATING EXPENSES



174,283




71,308











INCOME FROM OPERATIONS



6,015,500




5,916,216











OTHER INCOME (EXPENSE)









Interest Income



14,312




9,938











NET INCOME BEFORE INCOME TAXES


$

6,029,812



$

5,926,154











INCOME TAX EXPENSE



-




-











NET INCOME


$

6,029,812



$

5,926,154











Foreign currency translation, net of tax



853,762




156,355











COMPREHENSIVE INCOME 


$

6,883,574



$

6,082,509




















Earnings per Common Share: (June 30, 2010 Restated)









Basic


$

0.20



$

0.23











Diluted


$

0.20



$

0.23











Weighted Average Common Shares Outstanding: (June 30, 2010 Restated)









Basic



30,005,862




26,121,623











Diluted



30,005,862




26,121,623














China Bilingual Technology & Education Group Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)








For The Six Months Ended June 30,




2011



2010


Cash flows from operating activities:







Net income


$

6,029,812



$

5,926,154


Adjustments to reconcile net income to net cash









provided by (used in) operating activities:









Depreciation



550,104




540,918


Amortization



76,478




73,463


Loss on disposal of property and equipment



-




1,766


Stock-based compensation



83,250




-


Other current assets



(1,217,644)




(147,751)


Inventories



32,796




(12,588)


Accounts payable



25,881




(24,546)


Other payables



(25,906)




(37,145)


Accrued expenses



(105,311)




(343,396)


Refundable deposits



(79,367)




(253,568)


Prepaid tuition



(213,505)




2,617,752


Home purchase



18,013




3,438











Net cash provided by (used in) operating activities



5,174,601




8,344,497











Cash flows from investing activities:









Deposits - long term assets



(1,197,805)




(103,182)


Fixed asset additions



(212,984)




-


Advances to related parties receivable



-




(366,488)


Proceeds from related parties receivables



61




-











Net cash used in investing activities



(1,410,728)




(469,670)











Cash flows from financing activities:


















Repayments of related party



-




(1,173,073)











Net cash provided by (used in) financing activities



-




(1,173,073)











Effect of exchange rate changes on cash



250,738




(74,636)











Net increase (decrease) in cash and cash equivalents



4,014,611




6,701,754











Cash and cash equivalents, beginning of year



8,377,527




5,099,860











Cash and cash equivalents, end of year


$

12,392,138



$

11,726,978











Supplemental disclosures of cash flow information:









Cash paid for interest


$

-



$

-


Cash paid for taxes



-




-














Contact:

At the Company:

Michael Toups, Chief Financial Officer

U.S. Office +1 727-641-1357

Email: miketoups@gmail.com


Investor Relations:

Mike Bowdoin

RedChip Companies, Inc.

Tel: +1-800-733-2447, Ext. 110

Email: info@redchip.com

Web: http://www.RedChip.com



SOURCE China Bilingual Technology & Education Group Inc.



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