ATA Reports Fiscal 2013 Third Quarter Financial Results

           ATA Reports Fiscal 2013 Third Quarter Financial Results

Company to Hold Conference Call on February 5, 2013, at 8 a.m. ET

PR Newswire

BEIJING, Feb. 4, 2013

BEIJING, Feb. 4, 2013 /PRNewswire-FirstCall/ -- ATA Inc. ("ATA" or the
"Company", Nasdaq: ATAI), a leading provider of computer-based testing and
testing-related services in China, today announced preliminary unaudited
financial results for its fiscal third quarter ended December 31, 2012 ("Third
Quarter 2013").

Third  Quarter 2013  Financial and Operating Highlights (percentage changes
and comparisons are year  over  year)

  oNet revenues of RMB179.4 million (US$28.8 million), up 24.9%
  oGross profit of RMB79.7 million (US$12.8 million), up 5.7%
  oIncome from operations of RMB39.6 million (US$6.4 million), compared to
    RMB44.0 million
  oNet income of RMB33.2 million (US$5.3 million), compared to RMB38.1
    million
  oAdjusted net income excluding share-based compensation expense and foreign
    currency exchange gain (non-GAAP) of RMB35.8 million (US$5.7 million),
    compared to RMB40.8 million
  oBasic and diluted earnings per ADS excluding share-based compensation
    expense and foreign currency exchange gain (non-GAAP) for Third Quarter
    2013 were both RMB1.56 (US$0.26)
  oDelivered approximately 4.2 million billable tests, up 34.4%
  oRMB294.9 million (US$47.3 million) in cash and no long-term debt as of
    December 31, 2012

Fiscal Year 2013 Outlook

  oFor the fiscal year ending March 31, 2013 ("Fiscal Year 2013"), the
    Company is revising its net revenue guidance to between RMB352.0 million
    and RMB362.0 million, from between RMB390.0 million and RMB410.0 million,
    and its non-GAAP net income (net income excluding share-based compensation
    expense and foreign currency exchange gain/loss) guidance to between
    RMB18.0 million and RMB23.0 million, from between RMB40.0 million and
    RMB50.0 million. The revisions to the Company's guidance primarily result
    from lower-than-expected results from the TOEIC and HR Select businesses
    and weaker demand for the Securities Association of China ("SAC") exam.

Mr. Kevin Ma, ATA's Chairman and Chief Executive Officer, stated, "We are
pleased to report that in October we successfully administered the first
computer-based National Unified Certified Public Accountants exam ("China CPA
exam"), with approximately 1.4 million exams taken across China and the Hong
Kong and Macau Special Administrative Regions, which we believe makes this
particular exam one of the world's largest computer-based exams ever deployed.
We delivered a total of 4.2 million billable exams in Third Quarter 2013. In
addition to the China CPA exam, we administered large-scale exams as a part of
recruitment efforts by various well-known corporations, including the Bank of
China, Carlsberg, Shanghai Volkswagen, and Procter & Gamble. While we achieved
double-digit growth on the top line, our gross margin was adversely affected
by a year-over-year decrease in SAC exam volumes, which resulted in lower
contributions as a percentage of total revenues, and implementation expenses
incurred to ensure client satisfaction and the smooth delivery of the China
CPA exam."

Mr. Ma continued, "We continued with our sales and marketing efforts in our
TOEIC and HR Select businesses during Third Quarter 2013, which we believe is
key to diversifying our sources of revenue from government-sponsored exams.
The productivity from these new business initiatives, however, has not met our
expectations despite our proactive sales and marketing efforts, and we are
implementing changes in this area to optimize our use of resources."

Operating Review

In Third Quarter 2013, ATA delivered a total of 4.2 million billable tests, an
increase of 34.4% from the prior-year period. ATA had a network of 2,798
authorized test centers throughout China as of December 31, 2012, which the
Company believes to be the largest test center network of any commercial
testing service provider in China. ATA has delivered more than 46.8 million
billable tests since it began operations in 1999.

GAAP Results

For Third Quarter 2013, ATA's total net revenues increased 24.9% to RMB179.4
million (US$28.8 million) from RMB143.6 million in the prior-year period,
primarily due to increased revenues from testing services provided for the
China CPA exam and recruitment projects for various corporations. Net revenues
from TOEIC and HR Select for Third Quarter 2013 increased 4.3% to RMB44.0
million (US$7.1 million).

Gross profit for Third Quarter 2013 increased 5.7% to RMB79.7 million (US$12.8
million) from RMB75.4 million in the same period last fiscal year.Gross margin
was 44.4% in Third Quarter 2013, compared to 52.5% in the prior-year period.
The decrease is primarily due to a year-over-year decrease in SAC exam
volumes, which resulted in lower contributions as a percentage of revenue, and
implementation expenses to ensure client satisfaction and smooth delivery of
the new China CPA exam. In addition, ATA incurred costs to deliver several
exams in Third Quarter 2013 for which the corresponding revenue will be
recognized in Fourth Quarter 2013.

Income from operations in Third Quarter 2013 was RMB39.6 million (US$6.4
million), compared to RMB44.0 million in the prior-year period.

Net income for Third Quarter 2013 was RMB33.2 million (US$5.3 million),
compared to RMB38.1 million in the prior-year period. For Third Quarter 2013,
basic and diluted earnings per common share were both RMB0.72 (US$0.12),
compared to RMB0.83 and RMB0.81, respectively, in the same period last fiscal
year. Basic and diluted earnings per ADS were both RMB1.44 (US$0.24) in Third
Quarter 2013, compared to RMB1.66 and RMB 1.62, respectively, in the
prior-year period.

Non-GAAP Measures

Adjusted net income for Third Quarter 2013, which excludes share-based
compensation expense and foreign currency exchange gain (non-GAAP), totaled
RMB35.8 million (US$5.7 million), compared to RMB40.8 million in the
prior-year period. Basic and diluted earnings per common share excluding
share-based compensation expense and foreign currency exchange gain (non-GAAP)
for Third Quarter 2013 were both RMB0.78 (US$0.13).

Basic and diluted earnings per ADS excluding share-based compensation expense
and foreign currency exchange gain (non-GAAP) for Third Quarter 2013 were both
RMB1.56 (US$0.26), compared to RMB1.80 and RMB1.74 in the same period last
fiscal year.

Please see the note about non-GAAP measures and the reconciliation table at
the end of this press release.

Other Data

The number of weighted average ADSs used to calculate basic and diluted
earnings per ADS for Third Quarter 2013 was 22.5 million. Each ADS represents
two common shares. The numbers of weighted average common shares used to
calculate basic and diluted earnings per common share were 44.9 million and
45.1 million, respectively, for the period ended December 31, 2012, and 44.7
million and 45.9 million, respectively, for the period ended December 31,
2011.

Share Repurchase Plan

On November 1, 2012, ATA's Board of Directors approved a share repurchase plan
authorizing the Company to repurchase up to US$5.0 million worth of its issued
and outstanding ADSs in both open-market and privately negotiated
transactions, through block trades, pursuant to a 10b5-1 plan (which if
adopted, will allow ATA to repurchase its ADSs during periods in which it may
be in possession of material non-public information), or through other means.
By the end of Third Quarter 2013, the Company had repurchased 8,036 ADSs at an
average stock price of US$3.95. This share repurchase plan continues through
May 31, 2013.

Guidance  for Fiscal Year  2013 and for Fourth Quarter 2013

For Fourth Quarter 2013, ATA expects net revenues to be between RMB38.0
million and RMB48.0 million.

For Fiscal Year 2013, ATA expects net revenues to be between RMB352.0 million
and RMB362.0 million and non-GAAP net income to be between RMB18.0 million and
RMB23.0 million.

Estimated Financial Results

(unaudited) (RMB in millions)

                    Estimated for the year ending    Actual for the year ended
                    March 31, 2013                   March 31, 2012
Net Revenues        352.0-362.0                      352.1
Non-GAAP Net Income 18.0-23.0                        64.5
                    Estimated for the quarter ending Actual for the quarter
                    March 31, 2013                   ended
                                                     March 31, 2012
Net Revenues        38.0-48.0                        60.5

Mr. Ma concluded, "While we continue to make progress on our initiatives in
the private sector, we are lowering our net revenue and non-GAAP net income
guidance for Fiscal Year 2013 as we anticipate weaker demand for the SAC exam
in the coming quarter. At the same time, our efforts in the TOEIC and HR
Select businesses and security guard exams continue to show signs of promise
but are ramping up at a slower-than-expected rate. We are also working to
streamline our operations through a corporate restructuring, which will
include a consolidation of responsibilities among department heads and
management and a new reporting structure for improved accountability. We
believe these changes will drive greater efficiencies throughout the
organization in the coming years and will better enable us to achieve results
as we continue to push forward with our new business initiatives. Our goal is
to create greater visibility and flexibility by diversifying our revenue
streams away from government-sponsored exams, thereby setting the Company on a
firmer foundation for long-term growth."

These are ATA's current projections, which are subject to change. You are
cautioned that operating results in Third Quarter 2013 are not necessarily
indicative of operating results for any future periods.

Conference Call and Webcast Information (With Accompanying Presentation)

ATA will host a conference call at 8 a.m. Eastern Time on Tuesday, February 5,
2013, during which ATA Chairman and CEO Kevin Ma and Chief Financial Officer
and Chief Accounting Officer Benson Tsang will discuss the results of Third
Quarter 2013 and the nine months ended December 31, 2012. To participate in
the conference call, please use the following dial-in numbers about 10 minutes
prior to the scheduled conference call time:

United States: +1 (877) 407-6914
International: +1 (201) 493-6709

A live webcast of the conference call can be accessed at the investor
relations section of ATA's website at www.ata.net.cn or by clicking the
following link: www.atai.equisolvewebcast.com.

An accompanying slide presentation in PDF format will also be made available
30 minutes prior to the conference call on the same investor relations section
of ATA's website. To listen to the webcast, please visit ATA's website a few
minutes prior to the start of the call to register, download, and install any
necessary audio software.

For those unable to listen during the live webcast, a replay will be available
shortly after the call on the investor relations section of ATA's website and
will remain available for 90 days.

About ATA Inc.

ATA is a leading provider of computer-based testing services in China. The
Company offers comprehensive services for the creation and delivery of
computer-based tests based on its proprietary testing technologies and test
delivery platform. ATA's computer-based testing services are used for
professional licensure and certification tests in various industries,
including information technology services, banking, teaching, securities,
insurance, and accounting. As of December 31, 2012, ATA's test center network
comprised 2,798 authorized test centers located throughout China. The Company
believes that it has the largest test center network of any commercial
computer-based testing service provider in China.

ATA has delivered more than 46.8 million billable tests since ATA started
operations in 1999.

For more information, please visit ATA's website at www.ata.net.cn.

Cautionary Note Regarding Forward-looking Statements

This announcement contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined in the Private
Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terms such as
"anticipate," "believe," "could," "estimate," "expect," "forecast," "future,"
"intend," "look forward to," "outlook," "plan," "should," "will," and similar
terms and include, among other things, the Company's guidance relating to
anticipated financial and operating results for the Fourth Quarter 2013 and
Fiscal Year 2013 and statements regarding market demand and trends, the SAC
exam, the potential growth and success of the Company's security guard exams
and other businesses, including its TOEIC and HR Select businesses, and the
Company's future results of operations, cost structure, cash flow, financial
position and corporate structuring.

The factors that could cause the Company's actual financial and operating
results to differ from what the Company currently anticipates can include its
ability to meet challenges associated with its rapid expansion, its ability to
meet the expectations of current and future clients, its ability to deploy new
test titles, its ability to win new enterprise contracts, its ability to
convert its existing contracts into actual revenues, the economy of China,
uncertainties with respect to the China's legal and regulatory environments,
and other factors stated in the Company's filings with the U.S. Securities and
Exchange Commission ("SEC").

The financial information contained in this release should be read in
conjunction with the consolidated financial statements and related notes
included in the Company's annual report on Form 20-F for its fiscal year ended
March 31, 2012, and other filings that ATA has made with the SEC. The filings
are available on the SEC's website at www.sec.gov and at ATA's website at
www.ata.net.cn. For additional information on the risk factors that could
adversely affect the Company's business, financial condition, results of
operations, and prospects, please see the "Risk Factors" section of the
Company's Form 20-F for the fiscal year ended March 31, 2012.

The forward-looking statements in this release involve known and unknown risks
and uncertainties and are based on current expectations, assumptions,
estimates, and projections about ATA and the markets in which it operates. The
Company undertakes no obligation to update forward-looking statements, which
speak only of the Company's views as of the date of this release, to reflect
subsequent events or circumstances, or to changes in its expectations, except
as may be required by law. Although the Company believes that the expectations
expressed in these forward-looking statements are reasonable, the Company
cannot assure you that its expectations and assumptions will turn out to be
correct, and investors are cautioned that actual results may differ materially
from the anticipated results.

Currency Convenience Translation

The Company's financial information is stated in Renminbi ("RMB"), the
currency of the People's Republic of China. The translation of RMB amounts for
Third Quarter 2013 ended December 31, 2012, into U.S. dollars are included
solely for the convenience of readers and have been made at the rate of
RMB6.2301 to US$1.00, the noon buying rate as of December 31, 2012, in New
York for cable transfers in RMB per U.S. dollar as set forth in the H.10
weekly statistical release of the Federal Reserve Board. Such translations
should not be construed as representations that RMB amounts could be converted
into U.S. dollars at that rate or any other rate, or to be the amounts that
would have been reported under U.S. GAAP.

About Non-GAAP Financial Measures

To supplement ATA's consolidated financial information presented in accordance
with U.S. generally accepted accounting principles ("GAAP"), ATA uses the
following non-GAAP financial measures: net income (loss) excluding share-based
compensation expense and foreign currency exchange gain or loss, and basic and
diluted earnings (losses) per common share and ADS excluding share-based
compensation expense and foreign currency exchange gain or loss.

The presentation of these non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP. ATA believes these non-GAAP
financial measures provide meaningful supplemental information about its
performance by excluding share-based compensation expense and foreign currency
exchange gains or losses, which may not be indicative of its operating
performance from a cash perspective.

ATA believes that both management and investors benefit from these non-GAAP
financial measures in assessing its performance and when planning and
forecasting future periods. These non-GAAP financial measures also facilitate
management's internal comparisons to ATA's historical performance. ATA
computes its non-GAAP financial measures using a consistent method from period
to period. ATA believes these non-GAAP financial measures are useful to
investors in allowing for greater transparency with respect to supplemental
information used by management in its financial and operational decision
making. A limitation of using non-GAAP net income (loss) excluding share-based
compensation expense and foreign currency exchange gains or losses and basic
and diluted earnings (losses) per common share and per ADS excluding
share-based compensation expense and foreign currency exchange gain or loss is
that share-based compensation charges and foreign currency exchange gains or
losses have been, and are expected to continue to be for the foreseeable
future, a significant recurring expense in ATA's business.

Management compensates for these limitations by providing specific information
regarding the GAAP amounts excluded from each non-GAAP measure. The table
captioned "Unaudited Reconciliations of Non-GAAP Measures to the Most
Comparable GAAP Measures" shown at the end this news release has more details
on the reconciliations between GAAP financial measures that are most directly
comparable to the non-GAAP financial measures used by ATA.

For more information on our company, please contact the following individuals:

At the Company         Investor Relations
ATA, Inc.              The Equity Group Inc.
Benson Tsang, CFO      Carolyne Yu, Senior Associate
+86 10 6518 1122 x5107 212-836-9610
bensontsang@ata.net.cn +86 10 6587 6435
                       cyu@equityny.com
                       Adam Prior, Vice President
                       212-836-9606
                       aprior@equityny.com



ATA INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                                       March 31,      December 31,   December 31,
                                                       2012           2012           2012
                                                       RMB            RMB            USD
ASSETS
Current assets:
 Cash                                                257,167,696    294,933,613    47,340,109
 Accounts receivable, net                            81,844,571     69,218,152     11,110,279
 Inventories                                         374,382        582,237        93,455
Prepaidexpensesandothercurrentassets  15,682,735     7,442,046      1,194,531
 Total current assets                             355,069,384    372,176,048    59,738,374
 Property and equipment, net                         59,890,306     63,219,070     10,147,360
 Goodwill                                            23,422,850     23,422,850     3,759,627
 Intangible assets, net                              17,597,266     15,711,472     2,521,865
Other assets                                        4,740,321      4,342,938      697,090
 Total assets                                    460,720,127    478,872,378    76,864,316
Current liabilities:
Accrued expenses and other payables        63,732,421     88,787,916     14,251,442
Deferred revenues                                   27,333,088     8,825,542      1,416,597
 Total current liabilities                       91,065,509     97,613,458     15,668,039
 Deferred revenues                                   3,100,116      2,377,244      381,574
 Deferred tax liabilities                            139,931        139,931        22,460
 Total liabilities                               94,305,556     100,130,633    16,072,073
Shareholders' equity:
 Common shares                                       3,442,803      3,452,317      554,135
 Treasury shares                                     -              (199,401)      (32,006)
 Additional paid-in capital                          440,832,695    424,283,151    68,102,141
 Accumulated other comprehensive loss                (26,004,399)   (26,267,883)   (4,216,286)
 Accumulated deficit                                 (51,856,528)   (22,526,439)   (3,615,741)
 Total shareholders' equity                       366,414,571    378,741,745    60,792,243
 Total liabilities and shareholders' equity      460,720,127    478,872,378    76,864,316



ATA INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                      Three-month Period Ended
                                      December 31,  December 31,  December 31,
                                      2011          2012          2012
                                      RMB           RMB           USD
Net revenues:
 Testing services                  127,147,496   169,296,094   27,173,897
 Test preparation and training     8,236,523     4,603,983     738,990
solutions
 Other revenue                     8,220,320     5,532,213     887,981
 Total net revenues                143,604,339   179,432,290   28,800,868
Cost of revenues                      68,191,081    99,694,283    16,002,036
 Gross profit                      75,413,258    79,738,007    12,798,832
Operating expenses:
Research and development              4,286,517     5,746,192     922,327
Sales and marketing                   12,319,201    13,430,506    2,155,745
General and administrative            14,780,333    20,921,582    3,358,145
 Total operating expenses          31,386,051    40,098,280    6,436,217
Income from operations                44,027,207    39,639,727    6,362,615
Other income:
Interest income                       481,075       743,505       119,341
Foreign currency exchange gain, net   876,637       157,397       25,264
 Total other income                1,357,712     900,902       144,605
Income before income taxes            45,384,919    40,540,629    6,507,220
Income tax expense                    (7,326,622)   (7,387,355)   (1,185,752)
Net income                            38,058,297    33,153,274    5,321,468
Other comprehensive loss:
Foreign currency translation
adjustment, net
of nil income taxes                   (589,813)     (383,292)     (61,523)
Comprehensive income                  37,468,484    32,769,982    5,259,945
Basic earnings per common share       0.83          0.72          0.12
Diluted earnings per common share     0.81          0.72          0.12
Basic earnings per ADS                1.66          1.44          0.24
Diluted earnings per ADS              1.62          1.44          0.24



ATA INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                      Nine-month Period Ended
                                      December 31,  December 31,  December 31,
                                      2011          2012          2012
                                      RMB           RMB           USD
Net revenues:
 Testing services                  245,601,332   291,071,151   46,720,141
 Test preparation and training     23,907,500    8,918,678     1,431,547
solutions
 Other revenue                     22,105,256    14,457,673    2,320,616
 Total net revenues                291,614,088   314,447,502   50,472,304
Cost of revenues                      131,159,567   166,394,939   26,708,229
 Gross profit                      160,454,521   148,052,563   23,764,075
Operating expenses:
Research and development              14,833,097    16,237,985    2,606,376
Sales and marketing                   34,916,540    41,286,625    6,626,960
General and administrative            50,353,818    56,090,910    9,003,212
 Total operating expenses          100,103,455   113,615,520   18,236,548
Income from operations                60,351,066    34,437,043    5,527,527
Other income:
Interest income                       1,582,898     2,387,338     383,194
Foreign currency exchange gain, net   3,681,185     39,983        6,418
 Total other income                5,264,083     2,427,321     389,612
Income before income taxes            65,615,149    36,864,364    5,917,139
Income tax expense                    (13,069,409)  (7,534,275)   (1,209,335)
Net income                            52,545,740    29,330,089    4,707,804
Other comprehensive loss:
Foreign currency translation
adjustment, net
of nil income taxes                   (3,717,906)   (263,484)     (42,292)
Comprehensive income                  48,827,834    29,066,605    4,665,512
Basic earnings per common share       1.14          0.64          0.10
Diluted earnings per common share     1.11          0.64          0.10
Basic earnings per ADS                2.28          1.28          0.20
Diluted earnings per ADS              2.22          1.28          0.20



UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
TO THE MOST COMPARABLE GAAP MEASURES
                                                     Three-month Period Ended  Nine-month Period Ended
                                                     December     December     December 31,  December
                                                     31,          31,                        31,
                                                     2011         2012         2011          2012
                                                     RMB          RMB          RMB           RMB
GAAPnetincome  38,058,297   33,153,274   52,545,740    29,330,089
Share-based compensation expenses                     3,635,098    2,794,477    9,668,402     9,548,872
Foreign currency exchange gain, net                   (876,637)    (157,397)    (3,681,185)   (39,983)
Non-GAAP net income                                  40,816,758   35,790,354   58,532,957    38,838,978
GAAP earnings per common share
 Basic                                            0.83         0.72         1.14          0.64
Basic
Diluted                                               0.81             0.72     1.11          0.64
Non-GAAP earnings per common share
Basic                                                 0.90             0.78     1.28          0.85
Diluted                                               0.87             0.78     1.24          0.84



SOURCE ATA Inc.

Website: http://www.ata.net.cn
 
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