ChinaEdu Reports First Quarter 2013 Results

                 ChinaEdu Reports First Quarter 2013 Results

Net Revenue Increases 4.9 Percent Year-Over-Year to $19.2 Million

Net Income Attributable to ChinaEdu per Diluted ADS Reaches US14.4 Cents

PR Newswire

BEIJING, June 19, 2013

BEIJING, June 19, 2013 /PRNewswire/ -- ChinaEdu Corporation (NASDAQ: CEDU)
("ChinaEdu" or the "Company"), a leading online educational services provider
in China, today announced its unaudited financial results for the first
quarter ended March 31, 2013.[1]

First Quarter 2013 Highlights 

  oTotal net revenue for the first quarter of 2013 was $19.2 million, a 4.9
    percent increase from $18.3 million in the corresponding period in 2012.
    Total net revenue was within the Company's guidance range for the
    quarter.
  oNet revenue from online degree programs was $15.2 million, an increase of
    2.6 percent from $14.8 million in the corresponding period of 2012.
  oNet income attributable to ChinaEdu was $1.9 million, an increase of 11.6
    percent from $1.7 million in the corresponding period of 2012.
  oAdjusted net income attributable to ChinaEdu[2] was $2.4 million, an
    increase of 10.6 percent from $2.2 million in the corresponding period of
    2012.
  oNet income attributable to ChinaEdu per diluted ADS[3] was $0.144, an
    increase of 43.6 percent from $0.100 in the corresponding period of 2012.
  oAdjusted net income attributable to ChinaEdu per diluted ADS[4] was
    $0.186, an increase of 43.2 percent from $0.130 in the corresponding
    period of 2012.
  oThe number of revenue students[5] enrolled in online degree programs
    during the Fall 2012 semester increased by 5.1 percent year-over-year to
    approximately 207,000 students.

    The reporting currency of the Company is RMB, but for the convenience of
    the reader, the amounts for the three months ended on March 31, 2013 are
    presented in U.S. dollars. Unless otherwise stated, all translations from
    RMB to U.S. dollars were made at the rate of RMB6.2108 to $1.00, the noon
    buying rate in effect on March 31, 2013 in the H.10 statistical release of
    the Federal Reserve Board. The Company makes no representation that the
[1] RMB or U.S. dollar amounts referred could be converted into U.S. dollars
    or RMB, as the case may be, at any particular rate or at all. For
    analytical presentation, all percentages are calculated using the numbers
    presented in the financial statements contained in this earnings release.
    An explanation of the Company's non-GAAP financial measures is included in
    the section entitled "Non-GAAP Financial Measures" below, and the related
    reconciliations to GAAP financial measures are presented in the
    accompanying financial statements.
    "Adjusted net income attributable to ChinaEdu" is a non-GAAP measure
[2] defined as net income attributable to ChinaEdu excluding share-based
    compensation net of non-controlling interests' portion, amortization of
    intangible assets and land use rights, and intangible assets impairment.
[3] "ADS" is American Depositary Share. Each ADS represents three ordinary
    shares.
    "Adjusted net income attributable to ChinaEdu per diluted ADS" is a
[4] non-GAAP measure which is computed using adjusted net income attributable
    to ChinaEdu over the number of ADSs used in net income attributable to
    ChinaEdu per diluted ADS calculation.
    "Revenue students" refers to students of university online degree programs
[5] who have paid tuitions. The numbers for the three months ended March 31,
    2013 and 2012 are revenue students in Fall 2012 and Fall 2011,
    respectively.

Julia Huang, executive chairman of ChinaEdu commented, "We are pleased with
the start of 2013. During the year, we will remain dedicated to technological
innovation, continually increasing ways in which emerging technology can be
applied to our teaching and learning methods. We will continue to focus
investment on the areas of our business that provide steady returns and
demonstrate consistent cost control with ever-improving efficiency in
spending."

Financial Results for the First Quarter Ended March 31, 2013

Net Revenue

Total net revenue for the first quarter of 2013 was $19.2 million, a 4.9
percent increase from $18.3 million in the corresponding period in 2012.

Net revenue from online degree programs for the first quarter of 2013 was
$15.2 million, a 2.6 percent increase over $14.8 million in the corresponding
period in 2012. The increase in net revenue from online degree programs was
primarily related to organic growth in revenue students enrolled in online
degree programs, and continued expansion and optimization of the Company's
learning centers network. Enrollment for the 2012 Fall semester online degree
programs was approximately 207,000 revenue students, a 5.1 percent increase
from approximately 197,000 revenue students enrolled in the Fall semester in
2011.

By the end of the first quarter of 2013, ChinaEdu's learning centers network
was providing recruiting services for 23 universities with 122 operational
learning centers, of which 54 were proprietary centers[6] and 68 were
contracted centers[7]. This compares to 105 operational learning centers as of
March 31, 2012, of which 55 were proprietary and 50 were contracted centers.

Net revenue from non-degree programs, including online tutoring programs,
private primary and secondary schools and international curriculum programs in
the first quarter of 2013 was $4.0 million, a 14.3 percent increase from $3.5
million in the first quarter of 2012. Of that, approximately $0.3 million was
attributable to increased enrollment and increased tuition at our private
school in the city of Anqing.

    Proprietary centers refer to self-owned learning centers operated either
[6] under the Company's own brand name or the brand name of a university
    pursuant to a licensing arrangement with that university.
    Contracted centers refer to agreement with third party learning centers
    pursuant to which the Company only provides assistance applying for
[7] approval from provincial level education authorities as well as securing
    additional university online degree programs. In return, the Company
    receives a percentage of the tuition earned by these third party learning
    centers.

Cost of Revenue

Total cost of revenue for the first quarter of 2013 was $7.5 million, an
increase of 2.3 percent, from $7.3 million in the corresponding period of
2012.

Cost of revenue for online degree programs in the first quarter of 2013 was
$5.2 million, an increase of 6.1 percent compared to $4.9 million in the
corresponding period of 2012. The increase in cost of revenue was primarily
related to staff costs increasing by $0.1 million and service station fees
increasing by $0.2 million.

Cost of revenue for non-degree programs in the first quarter of 2013 was $2.3
million, a decrease of 5.4 percent from $2.4 million in the first quarter of
2012. The decrease in cost of revenue for non-degree programs was primarily
related to the decrease of depreciation and amortization costs associated with
our international curriculum programs.

Gross Profit and Gross Margin

Gross profit for the first quarter of 2013 was $11.7 million, compared to
$11.0 million in the corresponding period of 2012. Gross margin increased
slightly to 61.0 percent, compared to 60.1 percent for the corresponding
period in 2012.

Gross margin for online degree programs was 65.9 percent, a slight decrease
from 67.0 percent in the first quarter of 2012. The slight decrease was
primarily due to an overall increase in the percentage of total net revenue
contributed by the Company's learning centers network. The learning centers
network's sales and service based model results in a slightly higher cost of
sales, whereas the joint venture model is more operationally driven. In
general, more revenue generated from our learning centers network results in
lower gross margin for our overall online degree programs.

Gross margin for online tutoring programs increased to 64.3 percent from 54.7
percent in the first quarter of 2012, mainly due to increased net revenue as
well as decreased lease and service costs.

Gross margin for private schools in the first quarter of 2013 increased to
32.7 percent, compared to 27.6 percent in the corresponding period in 2012.
The increase of gross margin was primarily due to increased net revenue at our
private school in Anqing.

Operating Expenses

Total operating expenses were $7.5 million in the first quarter of 2013, an
increase of 1.5 percent, from $7.4 million in the corresponding period in
2012. As a percentage of net revenue, total operating expenses decreased to
39.1 percent, compared to 40.4 percent in the corresponding period in 2012.
The increase in total operating expense was the result of the following:

  oGeneral and administrative expenses for the first quarter of 2013 were
    $4.1 million, a decrease of 1.3 percent from $4.2 million in the
    corresponding period in 2012. As a percentage of net revenue, general and
    administrative expenses decreased to 21.3 percent from 22.7 percent in the
    same period in 2012. The decrease in general and administrative expenses
    was primarily the result of a one-time early lease termination fee in the
    first quarter of 2012 that was related to a leased property used by our
    international curriculum programs.
  oSelling and marketing expenses were $1.6 million in the first quarter of
    2013, a decrease of 2.4 percent compared to $1.7 million in the
    corresponding period in 2012. As a percentage of net revenue, selling and
    marketing expenses decreased to 8.5 percent from 9.2 percent in the same
    period in 2012.
  oResearch and development expenses for the first quarter of 2013 were $1.8
    million, an increase of 13.0 percent compared to $1.6 million in the
    corresponding period in 2012. As a percentage of net revenue, the research
    and development expense was 9.2 percent in the first quarter of 2013,
    increasing from 8.6 percent in the same period of 2012. The increase in
    research and development expenses relative to net revenue was primarily
    due to increased staff costs associated with the company's investment in
    technology upgrades.

Income from Operations

Income from operations in the first quarter of 2013 was $4.2 million, an
increase of 17.1 percent compared to $3.6 million in the corresponding period
of 2012. Operating margin increased to 21.9 percent in the first quarter of
2013, compared to 19.6 percent in the corresponding period of 2012.

Adjusted income from operations, a non-GAAP measure defined as income from
operations excluding share-based compensation, amortization of intangible
assets, land use rights and intangible assets impairment, was $4.8 million in
the first quarter of 2013, an increase of 15.1 percent compared to $4.1
million in the corresponding period of 2012.

Adjusted operating margin, a non-GAAP measure defined as the ratio of adjusted
income from operations (non-GAAP) over net revenue, for the first quarter of
2013 increased to 24.8 percent, compared to 22.6 percent for the corresponding
period of 2012.

Interest expense

Interest expense for the first quarter of 2013 was $0.3 million, and is
primarily related to our loans with The Bank of East Asia, Limited.

Income Tax Expense

In the first quarter of 2013, income tax expense was $1.0 million and the
effective income tax rate was 21.2 percent.

Net Income Attributable to ChinaEdu

Net income attributable to ChinaEdu, which is net income, excluding net income
attributable to non-controlling interests, was $1.9 million in the first
quarter of 2013, representing an increase of 11.6 percent from $1.7 million in
the corresponding period of 2012. The increase was primarily due to an
increase in gross profit across online tutoring programs and private primary
and secondary schools, as well as effective expense control.

Net income attributable to ChinaEdu per basic and diluted ADS was $0.156 and
$0.144, respectively, for the first quarter of 2013, compared to $0.106 and
$0.100, respectively, for the corresponding period in 2012.

Adjusted net income attributable to ChinaEdu (non-GAAP) was $2.4 million in
the first quarter of 2013, compared to $2.2 million in the corresponding
period of 2012. Adjusted net margin, a non-GAAP measure defined as the ratio
of adjusted net income attributable to ChinaEdu (non-GAAP) over net revenue,
was 12.5 percent in the first quarter of 2013, compared to 11.9 percent in the
corresponding period of 2012.

Adjusted net income attributable to ChinaEdu per basic and diluted ADS
(non-GAAP) was $0.203 and $0.186 respectively, for the first quarter of 2013,
compared to $0.138 and $0.130, respectively, for the corresponding period of
2012.

Deferred Revenue

As of March 31, 2013, deferred revenue was $10.6 million, consisting of
current deferred revenue in the amount of $9.1 million and non-current
deferred revenue in the amount of $1.5 million.

In general, Fall semester tuition for online degree programs is received
during the fourth quarter but is recognized both in the fourth quarter of the
current year and the first quarter of the following year.

Private school revenue is received in September, but amortized over 6 or 12
months while online tutoring program revenue can be received at program
enrollment and is mostly amortized within 12 months.

Cash and Cash Equivalents and Term Deposits

As of March 31, 2013, the Company reported cash and cash equivalents and term
deposits of $53.4 million, which primarily consisted of cash and cash
equivalents, and term deposits with original maturity terms of greater than
three months but less than one year.

Amounts Due from Related Parties

Amounts due from related parties, which represents cash owed to the Company by
collaborative alliance partners, were $47.7 million as of March 31, 2013
compared to $48.7 million as of December 31, 2012.

Share repurchase

On December 31, 2012, the board of directors of ChinaEdu approved a plan to
repurchase up to US$40.0 million worth of outstanding ChinaEdu ADSs. In the
first quarter of 2013, the Company repurchased an aggregate of 19,724,739
ordinary shares equivalent for a total cash consideration and cancellation fee
of RMB231.4 million (equivalent to US$37.3 million). The repurchased shares
were all cancelled. Thus net income attributable to ChinaEdu per diluted ADS
increased accordingly.

Second Quarter 2013 Guidance

ChinaEdu management expects total net revenue in the second quarter of 2013 to
range from RMB124 million to RMB130 million or $20.0 million to $20.9 million,
representing an 8 percent to 13 percent increase from RMB115 million or $18.1
million compared to the corresponding period in 2012.

Conference Call

ChinaEdu's management will hold an earnings conference call at 8:00 a.m. U.S.
Eastern Time on June 20, 2013 (8:00 p.m. Beijing/Hong Kong Time on June 20,
2013).

Dial-in details for the earnings conference call are as follows:

International:           +65 67239381
Hong Kong:               +852 24750994
United States:           +1 (718) 354-1231
Toll-free China, Mobile: 4006208038
Toll-free China:         8008190121
Toll-free United States: +1 (866) 519-4004
Conference ID:           83731444
Conference Password:     ChinaEdu

A live and archived webcast of the conference call will be available on the
investor relations page of ChinaEdu's website at http://ir.chinaedu.net and a
replay of the conference call may be accessed by phone until June 28, 2013.

Dial-in numbers for the replay are as follows:

Toll Free United States: +1 (855) 452-5696
International:           +61 2 8199 0299
Conference ID:           83731444
Conference Password:     ChinaEdu

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial information
presented in accordance with Generally Accepted Accounting Principles in the
United States of America ("GAAP"), the Company uses non-GAAP measures of
income from operations and net income attributable to ChinaEdu, which are
adjusted from results based on GAAP to exclude certain non-cash items of
share-based compensation, amortization of intangible assets and land use
rights and intangible assets impairment. Adjusted operating margin defined as
the ratio of adjusted operating income from operation over net revenue.
Adjusted net income attributable to ChinaEdu per basic and diluted ADS are a
non-GAAP measure which are computed using adjusted net income attributable to
ChinaEdu over the number of ADSs used in net income attributable to ChinaEdu
per basic and diluted ADS calculation.

These non-GAAP financial measures are provided to enhance the investors'
overall understanding of the Company's current and past financial performance
in on-going core operations as well as prospects for the future. These
measures should be considered in addition to results prepared and presented in
accordance with GAAP, but should not be considered a substitute for or
superior to GAAP results. Management considers the non-GAAP information as
important measures internally and therefore deems it important to provide all
of this information to investors.

About ChinaEdu

ChinaEdu Corporation is an educational services provider in China,
incorporated as an exempted limited liability company in the Cayman Islands.
Established in 1999, the Company's primary business is to provide
comprehensive services to the online degree programs of leading Chinese
universities. These services include academic program development, technology
services, enrollment marketing, student support services and finance
operations. The Company's other lines of businesses include the operation of
private primary and secondary schools, online interactive tutoring services
and providing marketing, support for international curriculum programs and
online learning community for adult students.

The Company believes it is the largest service provider to online degree
programs in China in terms of the number of higher education institutions that
are served and the number of student enrollments supported. The Company
currently provides technical, recruiting and other services to 27 universities
with online degree programs and provides services and support to 11 additional
universities that are awaiting regulatory approval to launch their online
programs. Of these 38 universities, 13 of them have entered into collaborative
alliances with ChinaEdu, ranging from 15 to 50 years in length. Eight of them
have entered into technology service agreements, ranging from 3 to 20 years in
length. ChinaEdu also performs recruiting services through its nationwide
learning center network for 23 universities, including 6 with which the
Company has either established collaborative alliances or entered into
technology service agreements.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including certain plans,
expectations, goals, and projections, which are subject to numerous
assumptions, risks, and uncertainties. Forward-looking statements involve
known and unknown risks, uncertainties and contingencies, many of which are
beyond our control which may cause actual results, levels of activity,
performance or achievements to differ materially from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. The Company's actual results could differ
materially from those contained in the forward-looking statements due to a
number of factors, including those described under the heading "Risk Factors"
in the Company's Annual Report on Form20-F for the year ended December31,
2012, and in documents subsequently filed by the Company from time to time
with the Securities and Exchange Commission. Unless required by law, the
Company undertakes no obligation to (and expressly disclaim any such
obligation to) update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

For investor and media inquiries, please contact:

Helen Plummer
Senior Investor Relations Coordinator
ChinaEdu Corporation
Phone: +1 908-442-9395
E-mail: helen@chinaedu.net

Simon Mei
Chief Financial Officer
ChinaEdu Corporation
Phone: +86 (10) 84187301
E-mail: simon@chinaedu.net



ChinaEdu Corporation
Unaudited Condensed Consolidated Balance Sheets
                                                                                                                                                                 December31, March31, March31,
                                                                                                                                                                  2012         2013      2013
                             (in thousands, unaudited)
                                                                                                                                                                  RMB          RMB       US$
Current assets:
                             Cash and cash equivalents                                                                                                            385,922      207,448   33,401
                             Term deposits                                                                                                                       92,028       124,289   20,011
                             Short-term investments                                                                                                               23,575       18,085    2,912
                             Accounts receivable, net                                                                                                            34,917       16,209    2,610
                             Prepaid expenses and other current assets                                                                                           23,455       19,445    3,132
                             Amounts due from related parties-current                                                                                             260,184      254,088   40,911
                             Deferred tax assets-current                                                                                                          9,571        3,213     517
Total current assets                                                                                                                                             829,652      642,777   103,494
                             Term deposits -non current                                                                                                           -            95,850    15,433
                             Property and equipment, net                                                                                                         238,563      234,143   37,699
                             Amounts due from related party-non-current                                                                                           41,979       41,979    6,759
                             Land use rights                                                                                                                      26,049       25,897    4,170
                             Deposits paid for acquisition of property and equipment                                                                              3,873        3,873     624
                             Deferred tax assets-non-current                                                                                                      2,085        2,368     381
                             Long-term investments                                                                                                                801          758       122
                             Rental deposits                                                                                                                      1,497        1,366     220
                             Acquired intangible assets, net                                                                                                     54,499       53,700    8,646
                             Goodwill                                                                                                                            43,255       43,255    6,964
Total assets                                                                                                                                                     1,242,253    1,145,966 184,512
Liabilitiesandequity
Current liabilities:
                             Short term loan (including short term loan of theconsolidatedVIE without recourse to the                                          -            68,120    10,968
                              Group of niland nil as of December31, 2012 and March 31, 2013,respectively)
                             Accounts payable (including accounts payable of theconsolidated VIE without recourseto the                                         2,401        5,680     915
                              Group of2,007 and 5,311 as of December 31, 2012 and March 31, 2013, respectively)
                             Deferred revenues-current (including deferred revenuesof the consolidated VIE without recourse to                                  134,175      56,220    9,052
                              theGroup of23,518 and 25,376 as of December 31, 2012 and March31, 2013, respectively)
                             Accrued expenses and other current liabilities (includingaccrued expenses and other current
                              liabilities of theconsolidated VIE without recourse to the Group of22,113 and 25,349                                            113,558      114,055   18,364
                              as of December 31, 2012 and March31, 2013, respectively)
                             Amounts due to related parties-current (including amountsdue to related parties of the consolidated
                              VIE without recourse to the Group of 1,926 and 1,960 as of December 31, 2012 and March 31,                                       35,507       28,577    4,601
                              2013,respectively)
                             Income taxes payable (including income taxes payable of the consolidated VIE without recourse tothe                               49,294       32,421    5,220
                              Group of10,004 and 8,504 as of December 31, 2012 and March31, 2013, respectively)
                             Other taxes payable (including other taxes payable of theconsolidated VIE without recourse to the                                  27,294       18,663    3,005
                              Group of 4,442and 3,819 as of December 31, 2012 and March 31, 2013,respectively)
Total current liabilities                                                                                                                                        362,229      323,736   52,125
                             Long term loan(including long term loan of the consolidatedVIE without recourse to the                                             -            156,433   25,187
                              Group of nil and nil as ofDecember 31, 2012 and March 31, 2013, respectively)
                             Deferred revenues-non-current (including deferred revenuesof the consolidated VIE withoutrecourse                                 10,654       9,785     1,575
                              to the Group of29 and 29 as of December 31, 2012 and March 31, 2013,respectively)
                             Deferred tax liabilities-non-current (including deferred taxliabilities of the consolidated VIE without                            13,473       13,418    2,160
                              recourse to theGroup of 978 and 968 as of December 31, 2012 and March31, 2013, respectively)
                             Unrecognized tax benefit (including unrecognized tax benefitof the consolidated VIE without                                        8,795        9,383     1,511
                              recourseto the Group of3,555 and 3,851 as of December 31, 2012 and March 31,2013, respectively)
Total liabilities                                                                                                                                                395,151      512,755   82,558
 ChinaEdu shareholders' equity                                                                                                                                 650,191      432,660   69,663
 Noncontrolling interests                                                                                                                                      196,911      200,551   32,291
Total equity                                                                                                                                                    847,102      633,211   101,954
Total liabilities and equity                                                                                                                                     1,242,253    1,145,966 184,512



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Operations
                                 Three Months Ended
(in thousands,except for
percentage, share, and per       March 31, 2012 March 31, 2013  March 31, 2013
share information)
                                 RMB            RMB             US$
Gross Revenue ^*                 119,632        122,173         19,670
Business Tax                     5,705          2,714           437
Net Revenue:
Online degree programs           91,927         94,315          15,186
Online tutoring programs         6,009          6,731           1,083
Private primary and secondary    13,536         15,855          2,553
schools
International curriculum         2,455          2,558           411
programs
Total net revenue                113,927        119,459         19,233
Cost of revenue:
Online degree programs           30,319         32,162          5,178
Online tutoring programs         2,721          2,400           386
Private primary and secondary    9,806          10,664          1,717
schools
International curriculum         2,663          1,309           211
programs
Total cost of revenue            45,509         46,535          7,492
Gross profit:
Online degree programs           61,608         62,153          10,008
Online tutoring programs         3,288          4,331           697
Private primary and secondary    3,730          5,191           836
schools
International curriculum         (208)          1,249           200
programs
Total gross profit               68,418         72,924          11,741
Online degree programs           67.0%          65.9%           65.9%
Online tutoring programs         54.7%          64.3%           64.3%
Private primary and secondary    27.6%          32.7%           32.7%
schools
International curriculum         (8.5%)         48.8%           48.8%
programs
Gross margin                     60.1%          61.0%           61.0%
Operating expenses:
General and administrative       25,810         25,476          4,102
Selling and marketing            10,463         10,211          1,644
Research and development         9,777          11,046          1,779
Total operating expenses         46,050         46,733          7,525
Income from operations           22,368         26,191          4,216
Operating margin                 19.6%          21.9%           21.9%
Interest income                 2,988          2,906           468
Interest expense                 -              (1,767)         (285)
Investment income                674            368             59
Other income                     247            423             68
Income before income tax and     26,277         28,121          4,526
equity method investments
Income tax expense               (5,483)        (5,953)         (958)
Net income before income from    20,794         22,168          3,568
equity method investments
Income from equity method        -              (43)            (7)
investments, net of taxes
Net income                       20,794         22,125          3,561
Net income attributable to the   (10,469)       (10,606)        (1,708)
noncontrolling interests
Net income attributable to       10,325         11,519          1,853
ChinaEdu
Net margin                       9.1%           9.6%            9.6%
Net income attributable to
ChinaEdu per ADS:
 Basic                     0.66           0.97            0.156
 Diluted                   0.62           0.89            0.144
Weighted average aggregate
number of ADSs outstanding:
 Basic                     15,746,005     11,847,105      11,847,105
 Diluted                   16,761,137     12,892,555      12,892,555
* Gross revenue are detailed as
follows
Online degree programs           97,318         96,795          15,585
Online tutoring programs         6,157          6,872           1,106
Private primary and secondary    13,558         15,882          2,557
schools
International curriculum         2,599          2,624           422
programs



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Cash Flow
                                                                                                            Three Months Ended
(in thousands, unaudited)                                                                                   March31,  March31,  March31,
                                                                                                            2012       2013       2013
                                                                                                            RMB      RMB      US$
Operatingactivities:
 Net income                                                                                          20,794     22,125     3,561
 Adjustments to reconcile net income to net cash provided by operating
 activities:
 Share-based compensation                                                                       2,219      2,463      397
 Depreciation and amortization of property and equipment                                        6,304      6,373      1,026
 Amortization of land use rights                                                                152        152        24
 Amortization of acquired intangible assets                                                     985        799        129
  Investment income                                                                              (69)       (368)      (59)
 Amortization of debt discount                                                                  -          234        38
  Earnings from equity method investment                                                         -          43         7
  Provision for Accounts Receivable                                                              340        144        23
  Loss from disposal of property and equipment                                                  812        9          1
 Changes in assets and liabilities
 Accounts receivable                                                                            8,839      18,564     2,989
 Prepaid expenses and other current assets                                                      (2,213)    4,144      668
 Amounts due from related parties                                                               1,838      6,096      983
 Rental deposits                                                                                471        131        21
 Accounts payable                                                                               2,514      3,279      528
 Deferred revenues                                                                              (78,991)   (78,821)   (12,691)
 Accrued expenses and other current liabilities                                                 5,974      368        59
  Amounts due to related parties                                                                 9,952      (14,453)   (2,327)
 Income tax payable                                                                            (10,602)   (16,873)   (2,717)
 Other taxes payable                                                                             (4,960)    (8,631)    (1,390)
  Deferred income taxes                                                                          2,356      6,020      969
 Unrecognized tax benefit                                                                       640        588        95
Net cash used in operating activities                                                                       (32,645)   (47,614)   (7,666)
Investing activities:
 Purchase of property and equipment                                                             (803)      (1,961)    (316)
  Maturity/(purchase) of term deposits, net                                                      24,135     (128,119)  (20,628)
 Proceeds from the sale of investments                                                          10,318     5,482      883
Net cash provided by (used in) investing activities                                                         33,650     (124,598)  (20,061)
Financing activities:
 Proceeds from exercise of share options                                                        945        -          -
 Financing cost related to loans                                                                -          (3,751)    (604)
 Proceeds from borrowings of short-term debt                                                    -          68,410     11,015
 Proceeds from borrowings of long-term debt                                                     -          159,750    25,721
 Repurchase and cancellation of ordinary shares                                                 -          (231,358)  (37,251)
Net cash provided by (used in) financing activities                                                         945        (6,949)    (1,119)
Effect of foreign exchange rate changes                                                                     (5)        687        110
CASH AND CASH EQUIVALENTS, beginning of period                                                              273,746    385,922    62,137
CASH AND CASH EQUIVALENTS, end of period                                                                    275,691    207,448    33,401
Net increase (decrease) in cash and cash equivalents                                                       1,945      (178,474)  (28,736)



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Income
                                                                                                                   Three Months Ended
(in thousands, unaudited)                                                                                          March31,  March31,  March31,
                                                                                                                   2012       2013       2013
                                                                                                                   RMB        RMB        US$
Netincome  20,794     22,125     3,561
Other comprehensive income, net of taxes
 Foreign currency translation adjustments                                                                         7          749        121
 Change in fair value of available for sale investments                                                           237        (337)      (54)
Comprehensive income                                                                                               21,038     22,537     3,628
Less: comprehensive income attributable to noncontrollng interests                                                 10,446     11,173     1,799
Comprehensive income attributable to Chinaedu                                                                     10,592     11,364     1,829



ChinaEdu Corporation
Unaudited reconciliations from income from operations to adjusted income from
operations (non-GAAP) and
adjusted operating margin (non-GAAP)
                        Three Months Ended
(in thousands,          March31,     March31,   March31,
unaudited)              2012          2013        2013
                        RMB         RMB       US$
Net revenue             113,927       119,459     19,233
Income from             22,368        26,191      4,216
operations
Adjustments:
 Share-based           2,219         2,463       397
compensation
 Amortization of
intangible assets and   1,137         951         153
land use rights
Adjusted income from    25,724        29,605      4,766
operations (non-GAAP)
Adjusted operating      22.6%         24.8%       24.8%
margin (non-GAAP)
ChinaEdu Corporation
Unaudited reconciliations from net income attributable to
ChinaEdu to adjusted net income attributable to ChinaEdu
(non-GAAP),
adjusted net margin (non-GAAP) and adjusted net income per
ADS (non-GAAP)
                        Three Months Ended
(in thousands,          March 31,     March 31,   March31,
unaudited)              2012          2013        2013
                        RMB         RMB       US$
Net revenue             113,927       119,459     19,233
Net income
attributable to         10,325        11,519      1,853
ChinaEdu
Adjustments:
 Share-based           2,219         2,463       397
compensation
 Share-based
compensation
attributable to         (177)         -           -
noncontrolling
interests
 Amortization of
intangible assets and   1,137         951         153
land use rights
Adjusted net income
attributable to         13,504        14,933      2,403
ChinaEdu (non-GAAP)
Adjusted net margin     11.9%         12.5%       12.5%
(non-GAAP)
Adjusted net income
attributable to
ChinaEdu per ADS
(non-GAAP):
 Basic            0.86          1.26        0.203
 Diluted          0.81          1.16        0.186
Weighted average
aggregate number of
ADSs outstanding:
 Basic            15,746,005    11,847,105  11,847,105
 Diluted          16,761,137    12,892,555  12,892,555

SOURCE ChinaEdu Corporation

Website: http://ir.chinaedu.net/index.html
 
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