Xueda Education Group Announces First Quarter 2012 Financial Results
Net Revenue Increased by 32.2% Year-Over-Year
Total Cash Collections Increased by 50.1% Year-Over-Year
Total Number of Learning Centers Increased by 124 Year-Over-Year to 342
Average Hourly Course Fee Increased by 11.7% Year-Over-Year
BEIJING, May 23, 2012 /PRNewswire-Asia/ -- Xueda Education Group (NYSE: XUE) ("Xueda" or the "Company"), a leading national provider of tutoring services for primary and secondary school students in China with a focus on offering personalized tutoring services, today announced its unaudited financial results for the first quarter of 2012.
First Quarter 2012 Quick View
- Total net revenue for the first quarter of 2012 increased by 32.2% year-over-year to $67.2 million from $50.8 million for the first quarter of 2011.
- Gross profit for the first quarter of 2012 decreased by 2.3% year-over-year to $16.8 million from $17.2 million for the first quarter of 2011.
- Loss from operations for the first quarter of 2012 was $0.6 million compared to income from operations of $5.8 million for the first quarter of 2011.
- Net income for the first quarter of 2012 was $0.6 million compared to net income of $5.9 million for the first quarter of 2011.
- Total number of learning centers increased to 342 as of the end of the first quarter of 2012, up from 295 learning centers as of the end of the previous quarter.
- Course hours delivered in the first quarter of 2012 increased by 15.4% year-over-year to 2.52 million hours from 2.18 million hours in the first quarter of 2011.
- Total number of students served in the first quarter of 2012 increased by 20.6% year-over-year to 68,336 students from 56,664 students in the first quarter of 2011.
- Average hourly course fee in the first quarter of 2012 increased by 11.7% year-over-year to $27.6 from $24.7 in the first quarter of 2011.
- Total cash collections in the first quarter of 2012 increased by 50.1% year-over-year to $99.0 million from $66.0 million in the first quarter of 2011.
Commenting on the results, Mr. Xin Jin, co-founder and Chief Executive Officer of Xueda, stated, "Our first quarter net revenue exceeded our previously-provided guidance, as our recovery plan is taking hold and beginning to yield positive momentum. We continue to invest into our people and our operating platform while developing new products and services. With visible progress in our key metrics, we are confident that we are once again on track to position the company for solid growth in the upcoming quarters."
Mr. Jeffery Gao, Chief Financial Officer of Xueda, added, "Our first quarter gross margin improved noticeably to 25.0% from 14.5% a quarter ago, and we are quite pleased with the strong total cash collections. While we opened 47 new learning centers in the quarter to meet the strong demand for our leading tutoring services, we remain focused on improving the overall efficiency at all of our learning centers. This disciplined growth should further strengthen our market leadership and drive greater profitability in the future."
First Quarter 2012 Financial and Operating Results
Total net revenue in the first quarter of 2012 increased by 32.2% year-over-year to $67.2 million from $50.8 million in the first quarter of 2011. $8.7 million, or 53.2%, of the increase in net revenue was contributed by the increase in course hours delivered and the other $7.7 million, or 46.8%, of the increase was contributed by the increase in the average hourly course fee from the same period of last year to the first quarter of 2012.
Cost of revenue in the first quarter of 2012 increased by 49.9% year-over-year to $50.4 million from $33.6 million in the first quarter of 2011. This increase was due to the increase in teaching staff costs, rental costs, depreciation costs, and the opening of 47 new learning centers in the first quarter of 2012, compared to opening 11 new learning centers during the same period in 2011.
Gross profit in the first quarter of 2012 decreased by 2.3% year-over-year to $16.8 million from $17.2 million in the first quarter of 2011. Gross margin in the first quarter of 2012 decreased to 25.0% from 33.9% in the first quarter of 2011.
Total operating expenses in the first quarter of 2012 increased by 53.3% year-over-year to $17.4 million from $11.4 million in the first quarter of 2011.
General and administrative expenses in the first quarter of 2012 increased by 52.4% year-over-year to $10.5 million from $6.9 million in the first quarter of 2011. The increase was primarily due to expanded staff to support the Company's expanded operations.
Selling and marketing expenses in the first quarter of 2012 increased by 54.5% year-over-year to $6.9 million from $4.5 million for the first quarter of 2011. This increase was primarily attributable to the increase in expenses relating to advertising, marketing and brand promotion activities.
Loss from operations in the first quarter of 2012 was $0.6 million, compared to income from operations of $5.8 million for the first quarter of 2011.
Interest income for the first quarter of 2012 increased by 83.5% year-over-year to $1.5 million from $0.8 million in the first quarter of 2011.
Net income for the first quarter of 2012 was $0.6 million, compared to net income of $5.9 million in the first quarter of 2011.
Non-GAAP(1)net income for the first quarter of 2012 was $1.5 million, compared to non-GAAP net income of $6.5 million for the first quarter of 2011.
Basic net income per ADS for the first quarter of 2012 was $0.01, compared to basic net income per ADS of $0.09 for the first quarter of 2011. Non-GAAP basic net income per ADS for the first quarter of 2012 was $0.02, compared to non-GAAP net income per ADS of $0.09 for the first quarter of 2011.
Diluted net income per ADS for the first quarter of 2012 was $0.01, compared to diluted net income per ADS of $0.08 for the first quarter of 2011. Non-GAAP diluted net income per ADS for the first quarter of 2012 was $0.02, compared to non-GAAP diluted net income per ADS of $0.09 for the first quarter of 2011. Each ADS represents two ordinary shares of the Company.
As of March 31, 2012, the Company had cash and cash equivalents plus short-term investments totaling $245.4 million.
Deferred revenues increased to $125.6 million as of March 31, 2012, compared to $101.4 million as of December 31, 2011.
| (1) All non-GAAP measures exclude share-based compensation expenses. For further details on non-GAAP measures, please refer to the reconciliation tables and a detailed discussion of the Company's use of non-GAAP information set forth elsewhere in this press release. |
ADS Repurchases
As of May 22, 2012, under the Company's authorized plan to repurchase up to $30 million worth of the Company's outstanding ADSs, the Company has repurchased an aggregate of approximately 3.6 million ADSs at an average price of $3.50 per ADS for a total of $12.7 million.
Business Outlook
The Company currently expects its net revenue for the second quarter of 2012 to be in the estimated range of $87.8 million to $91.3 million, an increase of approximately 22.5% to 27.5% from the same quarter of the previous year.
The Company reiterates its expectation that its net revenue for the full year 2012 will be in the estimated range of $272 million to $282 million, an increase of approximately 22.5% to 27.0% from the full year 2011.
This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.
Non-GAAP Financial Measures
To supplement the financial measures calculated in accordance with U.S. GAAP, this press release includes certain non-GAAP financial measures of adjusted net income and adjusted diluted earnings per ADS, each of which is adjusted to exclude share-based compensation expenses. The Company believes excluding such expenses from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expenses are not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company also believes that these non-GAAP financial measures are important to help investors understand the Company's current financial performance and future prospects and compare business trends among different reporting periods on a consistent basis. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with U.S. GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with U.S. GAAP. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, please see the financial information included elsewhere in this press release.
Conference Call
Xueda will hold a corresponding conference call and live webcast at 8:00 a.m. ET (8:00 p.m. Beijing Time) on Wednesday, May 23, 2012 to discuss the first quarter results and answer questions from investors. Listeners may access the call by dialing:
| US Toll Free: |
1-866-519-4004 |
| US Toll/International: |
1-718-354-1231 |
| Hong Kong Toll Free: |
800-930-346 |
| Hong Kong Toll: |
852-2475-0994 |
| China Toll Free |
800-819-0121 |
| China Toll Free (Mobile) |
400-620-8038 |
| Conference ID: |
76259791 |
A replay of the webcast will be accessible through May 30, 2012 on http://ir.xueda.com or by dialing:
| United States toll free: |
1-866-214-5335 |
| US Toll/International: |
1-718-354-1232 |
| Conference ID: |
76259791 |
About Xueda Education Group
Xueda Education Group ("Xueda") is a leading national provider of tutoring services for primary and secondary school students in China with a focus on offering personalized tutoring services. Since opening its first learning center in 2004, Xueda has organically built an extensive tutoring service network comprised of 342 learning centers and over 13,000 full-time service professionals, serving customers located in 66 economically developed cities across 28 provinces and municipalities as of March 31, 2012.
Forward-looking Statements
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, market and operating conditions, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," "targets" and similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks and uncertainties beyond our control, which could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Further information regarding these and other risks, uncertainties or factors is included in our filings with the U.S. Securities and Exchange Commission. We do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Contact:
Xueda Education Group
Sophia Zhou
Tel: +86-10-6427-8899 ext. 6619
Email: [email protected]
Three Part Advisors
John Palizza
Tel: +1-888-550-8392
Email: [email protected]
| Xueda Education Group |
||
| As of |
||
| March 31, 2012 |
December 31, 2011 |
|
| (Unaudited) |
(Note) |
|
| Current assets: |
||
| Cash and cash equivalents |
202,558 |
217,746 |
| Short-term investments |
42,874 |
7,944 |
| Prepaid expenses and other current assets |
15,467 |
18,645 |
| Amounts due from related party |
43 |
43 |
| Deferred tax assets-current |
3,764 |
3,618 |
| Total current assets |
264,706 |
247,996 |
| Property and equipment, net |
41,258 |
35,613 |
| Rental deposits |
4,154 |
3,787 |
| Goodwill |
862 |
863 |
| Other non-current assets |
2,303 |
1,576 |
| Total assets |
313,283 |
289,835 |
| Liabilities and shareholders' equity |
||
| Current liabilities: |
||
| Deferred revenues-current (including deferred revenues |
99,188 |
79,095 |
| Accrued expenses and other current liabilities (including |
19,548 |
19,753 |
| Income taxes payable (including income taxes payable of |
4,800 |
4,047 |
| Other taxes payable (including other taxes payable of the |
2,674 |
1,980 |
| Deferred income-current (including deferred income of |
347 |
371 |
| Amounts due to related party (including amounts due to December 31, 2011, respectively) |
44 |
- |
| Total current liabilities |
126,601 |
105,246 |
| Deferred revenues-noncurrent (including deferred |
26,367 |
22,309 |
| Deferred income-noncurrent (including deferred income |
867 |
929 |
| Total liabilities |
153,835 |
128,484 |
| Total Shareholders' equity |
159,448 |
161,351 |
| Total liabilities and shareholders' equity |
313,283 |
289,835 |
| Note: The above financial information as of and for the year ended December 31, 2011 is derived from Xueda Education Group's audited financial statements for the year ended December 31, 2011. |
| Xueda Education Group
|
||
| Three Months Ended March 31, |
||
| 2012 |
2011 |
|
| Net revenues |
67,166 |
50,794 |
| Cost of revenues |
(50,369) |
(33,599) |
| Gross profit |
16,797 |
17,195 |
| Operating expenses: |
||
| General and administrative |
(10,536) |
(6,912) |
| Selling and marketing |
(6,909) |
(4,471) |
| Total operating expenses |
(17,445) |
(11,383) |
| Government subsidies |
27 |
- |
| (Loss) Income from operations |
(621) |
5,812 |
| Interest income |
1,521 |
829 |
| Income before income tax expenses |
900 |
6,641 |
| Income tax expense |
(284) |
(757) |
| Net income |
616 |
5,884 |
| Net income per ADS: |
||
| Net income attributable to Xueda Education |
||
| Basic |
0.01 |
0.09 |
| Diluted |
0.01 |
0.08 |
| Weighted average ADS numbers used |
||
| Basic |
66,289,929 |
69,164,320 |
| Diluted |
66,702,505 |
71,820,195 |
| Xueda Education Group |
||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||
| (In U.S. dollars in thousands) |
||
| Three Months Ended March 31, |
||
| 2012 |
2011 |
|
| Net income |
616 |
5,884 |
| Other comprehensive income (loss)* |
62 |
(21) |
| Comprehensive income |
678 |
5,863 |
| * Other comprehensive income (loss) in the first quarter of 2012 and the first quarter of 2011 is the |
||
| Three Months Ended March 31, |
||
| 2012 |
2011 |
|
| Share-based compensation expense included in: |
||
| Cost of revenues |
2 |
1 |
| Selling and marketing expenses |
1 |
2 |
| General and administrative expenses |
892 |
624 |
| Total |
895 |
627 |
| Xueda Education Group
|
|||
| Three Months Ended March 31, |
|||
| 2012 |
2011 |
||
| Cost of revenue |
(50,369) |
(33,599) |
|
| Share-based compensation expense included in |
2 |
1 |
|
| Non-GAAP cost of revenue |
(50,367) |
(33,598) |
|
| General and administrative expenses |
(10,536) |
(6,912) |
|
| Share-based compensation expense included in |
892 |
624 |
|
| Non-GAAP general and administrative expenses |
(9,644) |
(6,288) |
|
| Selling and marketing expenses |
(6,909) |
(4,471) |
|
| Share-based compensation expense included in |
1 |
2 |
|
| Non-GAAP selling and marketing expenses |
(6,908) |
(4,469) |
|
| Total operating costs and expenses |
(67,814) |
(44,982) |
|
| Share-based compensation expenses |
895 |
627 |
|
| Non-GAAP operating costs and expenses |
(66,919) |
(44,355) |
|
| Gross profit |
16,797 |
17,195 |
|
| Share-based compensation expenses |
2 |
1 |
|
| Non-GAAP gross profit |
16,799 |
17,196 |
|
| (Loss) Income from operations |
(621) |
5,812 |
|
| Share-based compensation expenses |
895 |
627 |
|
| Non-GAAP income from operations |
274 |
6,439 |
|
| Net income: |
616 |
5,884 |
|
| Share-based compensation expenses |
895 |
627 |
|
| Non-GAAP net income |
1,511 |
6,511 |
|
| Non-GAAP net income per ADS: |
|||
| Non-GAAP net income attributable to Xueda Education |
|||
| Basic |
0.02 |
0.09 |
|
| Diluted |
0.02 |
0.09 |
|
| Weighted average ADS numbers used in calculating |
|||
| Basic |
66,289,929 |
69,164,320 |
|
| Diluted |
66,702,505 |
71,820,195 |
|
SOURCE Xueda Education Group
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