ChinaEdu Reports Third Quarter 2013 Results

                 ChinaEdu Reports Third Quarter 2013 Results

Net Revenue Increases 13.6 Percent Year-Over-Year to $23.0 Million

Net Income Attributable to ChinaEdu per Diluted ADS Reaches 16.7 Cents

PR Newswire

BEIJING, Dec. 16, 2013

BEIJING, Dec. 16, 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 third
quarter ended September 30, 2013.[1]

Third Quarter 2013 Highlights

  oTotal net revenue was $23.0 million for the third quarter of 2013,
    exceeding the Company's guidance range for the quarter and representing a
    13.6 percent increase from $20.2 million in the corresponding period of
    2012.
  oNet revenue from online degree programs was $18.4 million, an increase of
    13.6 percent from $16.2 million in the corresponding period of 2012.
  oNet income attributable to ChinaEdu was $1.6 million, an increase of 207.3
    percent from $0.5 million in the corresponding period of 2012.
  oAdjusted net income attributable to ChinaEdu[2] was $2.1 million, an
    increase of 7.2 percent from $2.0 million in the corresponding period of
    2012.
  oNet income attributable to ChinaEdu per diluted ADS[3] was $0.167, an
    increase of 436.8 percent from $0.031 million in the corresponding period
    of 2012.
  oAdjusted net income attributable to ChinaEdu per diluted ADS[4] was
    $0.224, an increase of 90.3 percent from $0.118 in the corresponding
    period of 2012.
  oThe number of revenue students[5] enrolled in online degree programs
    during the Spring 2013 semester increased by 14.5 percent year-over-year
    to approximately 221,000 students.

[1] The reporting currency of the Company is RMB, but for the convenience of
the reader, the amounts for the three months ended September 30, 2013 are
presented in U.S. dollars. Unless otherwise stated, all translations from RMB
to U.S. dollars were made at the rate of RMB6.1200 to $1.00, the noon buying
rate in effect on September 30, 2013 in the H.10 statistical release of the
Federal Reserve Board. The Company makes no representation that the 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.
[2] "Adjusted net income attributable to ChinaEdu" is a non-GAAP measure
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.
[4] "Adjusted net income attributable to ChinaEdu per diluted ADS" is a
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.
[5] "Revenue students" refers to students of university online degree programs
who have paid tuitions. The numbers for the three months ended September 30,
2013 and 2012 are revenue students in Spring 2013 and Spring 2012,
respectively.

Julia Huang, executive chairman of ChinaEdu commented, "We are pleased with
our financial performance in the third quarter of 2013, particularly our
ability to increase gross margin to 61.9 percent. We continue to see healthy
growth in our core online degree programs as well as our K-12 offerings.
Following execution of technological upgrade plans laid out at the beginning
of 2013, we have developed a trial version of our next generation technology
platform and associated interactive and mobile learning applications. Once
rolled out, these should enable us to penetrate the market further. At the
same time, we continue to closely monitor and control costs across our
businesses. As we look towards the close of 2013, we are confident in our full
year results while we maintain a conservative outlook on the upcoming Fall
enrollment."

Financial Results for the Third Quarter Ended September 30, 2013

Net Revenue

Total net revenue for the third quarter of 2013 was $23.0 million, a 13.6
percent increase from $20.2 million in the corresponding period of 2012.

Net revenue from online degree programs for the third quarter of 2013 was
$18.4 million, a 13.6 percent increase over $16.2 million in the corresponding
period of 2012. The increase in net revenue from online degree programs was
primarily due 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 2013 Spring semester online degree programs
was approximately 221,000 revenue students, a 14.5 percent increase from
approximately 193,000 revenue students enrolled in the Spring semester in
2012.

By the end of the third quarter of 2013, ChinaEdu's learning centers network
was providing recruiting services for 23 universities with 131 operational
learning centers, of which 59 were proprietary centers[6] and 72 were
contracted centers[7]. This compares to 118 operational learning centers as of
September 30, 2012, of which 57 were proprietary and 61 were contracted
centers.

Net revenue from non-degree programs, including online tutoring programs,
private primary and secondary schools and international curriculum programs in
the third quarter of 2013 was $4.6 million, a 13.5 percent increase from $4.0
million in the third quarter of 2012. Of that, approximately $0.4 million was
attributable to enrollment growth and increased tuition at our private school
in Anqing.

[6] Proprietary centers refer to self-owned learning centers operated either
under the Company's own brand name or the brand name of a university pursuant
to a licensing arrangement with that university.
[7] Contracted centers refer to agreement with third party learning centers
pursuant to which the Company only provides assistance applying for 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 third quarter of 2013 was $8.8 million, an
increase of 10.8 percent, from $7.9 million in the corresponding period of
2012.

Cost of revenue for online degree programs in the third quarter of 2013 was
$6.3 million, an increase of 13.8 percent compared to $5.6 million in the
corresponding period of 2012. The increase in cost of revenue was primarily
related to staff costs increasing by $0.2 million, service station fees
increasing by $0.1 million and conference costs increasing by $0.3 million.

Cost of revenue for non-degree programs in the third quarter of 2013 was $2.4
million, a slight increase of 3.7 percent from $2.3 million in the third
quarter of 2012. The increase in cost of revenue for non-degree programs was
primarily related to increased maintenance costs associated with our private
primary and secondary schools programs.

Gross Profit and Gross Margin

Gross profit for the third quarter of 2013 was $14.2 million, compared to
$12.3 million in the corresponding period of 2012. Gross margin increased to
61.9 percent, compared to 61.0 percent for the corresponding period of 2012.

Gross margin for online degree programs was 65.7 percent, flat with the
corresponding period of 2012.

Gross margin for online tutoring programs increased to 64.7 percent from 63.9
percent in the third quarter of 2012.

Gross margin for private schools in the third quarter of 2013 increased to
41.8 percent, compared to 40.3 percent in the corresponding period of 2012.
The increase in gross margin was primarily the result of increased net revenue
at our Anqing school.

Operating Expenses

Total operating expenses were $8.8 million in the third quarter of 2013, a
decrease of 3.9 percent from $9.2 million in the corresponding period of 2012.
As a percentage of net revenue, total operating expenses decreased to 38.5
percent, compared to 45.5 percent in the corresponding period in 2012. The
decrease in total operating expense was the result of the following:

  oGeneral and administrative expenses for the third quarter of 2013 were
    $4.7 million, an increase of 6.0 percent from $4.4 million in the
    corresponding period of 2012. As a percentage of net revenue, general and
    administrative expenses decreased to 20.5 percent from 22.0 percent in the
    same period in 2012. The increase in general and administrative expenses
    was primarily related to an early repayment charge related to a bank loan.
  oSelling and marketing expenses were $1.9 million in the third quarter of
    2013, a decrease of 4.9 percent compared to $2.0 million in the
    corresponding period of 2012. As a percentage of net revenue, selling and
    marketing expenses decreased to 8.3 percent from 9.9 percent in the same
    period in 2012. The decrease in selling and marketing expense was
    primarily related to decreased advertising expenses associated with our
    online tutoring programs.
  oResearch and development expenses for the third quarter of 2013 were $2.2
    million, an increase of 24.2 percent compared to $1.8 million in the
    corresponding period of 2012. As a percentage of net revenue, the research
    and development expense increased to 9.6 percent in the third quarter of
    2013, compared to 8.8 percent in the corresponding period of 2012. The
    increase in the research and development expenses was primarily the result
    of increased staff costs associated with the company's investment in
    technology upgrades.

Income from Operations

Income from operations in the third quarter of 2013 was $5.4 million, an
increase of 72.2 percent compared to $3.1 million in the corresponding period
of 2012. Operating margin increased to 23.5 percent in the third quarter of
2013, compared to 15.5 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, increased 29.0
percent in the third quarter of 2013 compared to $4.6 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 third quarter of
2013 increased to 25.8 percent, compared to 22.7 percent in the corresponding
period of 2012.

Interest expense

Interest expense for the third quarter of 2013 was $0.9 million, which was
primarily related to loans of $36.0 million with The Bank of East Asia,
Limited.

Income Tax Expense

In the third quarter of 2013, the 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 $1.6 million in the third
quarter of 2013, representing an increase of 207.3 percent from $0.5 million
in the corresponding period of 2012. The increase was primarily the result of
a significant increase in gross profit, as well as effective cost and expense
control.

Net income attributable to ChinaEdu per basic and diluted ADS was $0.187 and
$0.167, respectively, for the third quarter of 2013, compared to $0.033 and
$0.031, respectively, for the corresponding period of 2012. The increase was
the result of a significant increase in net income attributable to ChinaEdu as
well as a significant decrease in the number of diluted ADS after a share
repurchase of 23,624,376 ordinary shares in aggregate between January and July
2013.

Adjusted net income attributable to ChinaEdu (non-GAAP) was $2.1 million in
the third quarter of 2013, compared to $2.0 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 9.2 percent in the third quarter of 2013, compared to 9.7 percent in the
corresponding period of 2012.

Adjusted net income attributable to ChinaEdu per basic and diluted ADS
(non-GAAP) was $0.251 and $0.224 respectively, for the third quarter of 2013,
compared to $0.124 and $0.118, respectively, for the corresponding period of
2012.

Deferred Revenue

As of September 30, 2013, deferred revenue was $10.1 million, consisting of
current deferred revenue in the amount of $8.4 million and non-current
deferred revenue in the amount of $1.7 million.

In general, Spring semester tuition for online degree programs is received
during the second quarter but is recognized both in the second quarter and the
third quarter of the fiscal year. Private school revenue is received in
September, but amortized over 6 or 12 months while online tutoring program
revenue is mostly received at program enrollment and is amortized within 12
months.

Cash and Cash Equivalents and Term Deposits

As of September 30, 2013, the Company reported cash and cash equivalents and
term deposits of $59.0 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 $51.4 million as of September 30, 2013
compared to $49.4 million as of December 31, 2012.

2013 Year-to-Date Financial Results

Net Revenue

For the nine months ended September 30, 2013, total net revenue was $65.4
million, representing an increase of 13.5 percent over $57.6 million in the
corresponding period of 2012. Net revenue from online degree programs for the
firstnine months of 2013 was $52.4 million, representing a 13.3 percent
increase from $46.3 million in the corresponding period of 2012. Net revenue
from non-online degree programs for the firstnine months of 2013 was $13.0
million, compared to $11.4 million in 2012, a 14.3 percent increase. Growth in
total net revenue in the first nine months of 2013 was the result of strong
enrollment in online degree programs in the Fall semester of 2012 as well as
the Spring semester of 2013. Net revenue at the Anqing School increased by
$1.1 million compared to the corresponding period in 2012, while the Company
saw a continued decrease in revenue contributed by international and elite
curriculum programs.

Cost of Revenue

For the nine months ended September 30, 2013, total cost of revenue was $24.7
million, an increase of 7.4 percent compared to $23.0 million in the
corresponding period of 2012. Cost of revenue for online degree programs in
the firstnine months of 2013 was $17.4 million, an increase of 11.9 percent
compared to $15.6 million in the corresponding period of 2012. The increase in
cost of revenue in the first nine months of 2013 was primarily the result of
cost increases associated with a larger headcount and the expansion of the
Company's learning centers network.

Cost of revenue for non-online degree programs in the first nine months of
2013 was $7.3 million, a slight decrease of 2.0 percent compared to $7.4
million in the corresponding period of 2012. The decrease in cost of revenue
was primarily related to the decrease in leasing costs and the decrease in
depreciation and amortization costs associated with international curriculum
programs.

Gross Profit

Gross profit for the nine months ended September 30, 2013 was $40.7 million,
an increase of 17.5 percent compared with $34.6 million for the corresponding
period in 2012.

Income from Operations

Income from operations was $16.5 million for the nine months ended September
30, 2013, representing an increase of 57.5 percent from $10.5 million for the
corresponding period of 2012. Operating margin was 25.2 percent for the nine
months ended September 30, 2013 compared to 18.2 percent for the corresponding
period of 2012. The increase was primary due to increase in total net revenue
as well as the intangible assets impairment in the third quarter of 2012.

Adjusted income from operations (non-GAAP) was $18.2 million for the first
nine months of 2013, representing an increase of 39.6 percent, compared to
$13.0 million in the corresponding period of 2012. Adjusted operating margin
(non-GAAP) for the nine months ended September 30, 2013 was 27.7 percent,
compared to 22.6 percent for the corresponding period in 2012.

Interest expense

Interest expense for the first nine months of 2013 was $1.6 million, which was
primarily related to loans with The Bank of East Asia, Limited.

Income Tax Expense

Income tax expense for the first nine months of 2013 was $3.6 million, as
compared with $3.4 million for the corresponding period of in 2012.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests was $6.3 million in the
first nine months of 2013, an increase of 12.0 percent compared to $5.6
million in the same period of 2012. The increase was primarily attributable to
the non-controlling interest impact related to the increase in net income from
online degree programs in the first nine months of 2013.

Net Income attributable to ChinaEdu

Net income attributable to ChinaEdu was $6.2 million for the nine months ended
September 30, 2013. This represents an increase of 68.2 percent from $3.7
million for the corresponding period of 2012. Net margin was 9.6 percent for
the nine months ended September 30, 2013, compared to 6.4 percent for the
corresponding period of 2012.

Adjusted net margin was 12.1 percent for the nine months ended September 30,
2013, compared to 10.7 percent for the corresponding period of 2012. The
increase was primarily due to increased net income in the first nine months of
2013.

Fourth Quarter 2013 Guidance

ChinaEdu management expects total net revenue in the fourth quarter of 2013 to
range from RMB145 million to RMB150 million or $23.7 million to $24.5 million,
representing a 7 to 10 percent increase from RMB136 million or $22.1 million
recorded in the fourth quarter of 2012.

Conference Call

ChinaEdu's management will hold an earnings conference call at 8:00 a.m. U.S.
Eastern Time on December 17, 2013 (9:00 p.m. Beijing/Hong Kong Time on
December 17, 2013).

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

China                400 120 0539
Hong Kong            800 905 927
United Kingdom       0800 015 9725
United States        1 855 298 3404
New York City (Toll) 1 631 514 2526
Conference Title:    ChinaEdu Q3 2013 Earnings Conference Call
Conference Passcode: 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 December 24,
2013.

Dial-in numbers for the replay are as follows:

China             4001842240
Hong Kong         800 966 697
United Kingdom    0800 169 7301
United States    1 866 846 0868
Conference Title: ChinaEdu Q3 2013 Earnings Conference Call
Replay Passcode:  3208385

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 is defined
as the ratio of adjusted income from operations over net revenue. Adjust net
margin is defined as the ratio of adjusted net income attributable to ChinaEdu
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
(in thousands, unaudited)                        December  September September
                                                 31, 2012  30, 2013  30, 2013
                                                 RMB       RMB       US$
Current assets:
Cash and cash equivalents                        385,922   234,976   38,395
Term deposits                                    92,028    126,373   20,649
Short-term investments                           23,575    9,498     1,552
Accounts receivable                              34,917    30,340    4,958
Prepaid expenses and other current assets        23,455    24,998    4,085
Amounts due from related parties-current         260,184   272,431   44,515
Deferred tax assets-current                      9,571     2,479     405
Total current assets                             829,652   701,095   114,559
Term deposits -non current                       -         95,850    15,662
Property and equipment, net                      238,563   235,409   38,466
Amounts due from a related party-non-current     41,979    41,979    6,859
Land use rights                                  26,049    25,593    4,182
Deposits paid for acquisition of property and    3,873     -         -
equipment
Deferred tax assets-non-current                  2,085     2,607     426
Long-term investments                            801       731       119
Rental deposits                                  1,497     1,483     242
Acquired intangible assets, net                  54,499    52,148    8,521
Goodwill                                         43,255    43,255    7,068
Total assets                                     1,242,253 1,200,150 196,104
Liabilities and equity
Current liabilities:
Short-term loan                                  -         4,578     748
Accounts payable (including accounts payable of
the consolidated VIE without recourse to the     2,401     11,611    1,897
Group of RMB2,007 and RMB11,093 as of December
31, 2012 and September 30, 2013, respectively)
Deferred revenues-current (including deferred
revenues of the consolidated VIE without
recourse to                                      134,175   51,659    8,441
the Group of RMB23,518 and RMB26,725 as of
December 31, 2012 and September 30, 2013,
respectively)
Accrued expenses and other current liabilities
(including accrued expenses and other current
liabilities of the consolidated VIE without      113,558   131,669   21,515
recourse to the Group of RMB22,113 and RMB26,161
as of December 31, 2012 and September 30, 2013,
respectively)
Amounts due to related parties-current
(including amounts due to related parties of the
consolidated
VIE without recourse to the Group of RMB1,926    35,507    41,678    6,810
and RMB1,892 as of December 31, 2012 and
September 30, 2013,
respectively)
Income taxes payable (including income taxes
payable of the consolidated VIE without recourse
to the                                           49,294    43,237    7,066
Group of RMB10,004 and RMB11,256 as of December
31, 2012 and September 30, 2013, respectively)
Other taxes payable (including other taxes
payable of the consolidated VIE without recourse
to the                                           27,294    24,285    3,968
Group of RMB4,442 and RMB3,964 as of December
31, 2012 and September 30, 2013, respectively)
Total current liabilities                        362,229   308,717   50,445
Long-term loan                                   -         215,516   35,215
Deferred revenues-non-current (including
deferred revenues of the consolidated VIE
without recourse                                 10,654    10,342    1,690
to the Group of RMB29 and RMB29 as of December
31, 2012 and September 30, 2013, respectively)
Deferred tax liabilities-non-current (including
deferred tax liabilities of the consolidated VIE
without                                          13,473    13,319    2,176
recourse to the Group of RMB978 and RMB949 as of
December 31, 2012 and September 30, 2013,
respectively)
Unrecognized tax benefit (including unrecognized
tax benefit of the consolidated VIE without
recourse to the Group of RMB3,555 and RMB4,591   8,795     10,666    1,743
as of December 31, 2012 and September 30, 2013,
respectively)
Total liabilities                                395,151   558,560   91,269
Total ChinaEdu Corporation shareholders' equity  650,191   418,089   68,315
Noncontrolling interests                         196,911   223,501   36,520
Total equity                                     847,102   641,590   104,835
Total liabilities and equity                     1,242,253 1,200,150 196,104



ChinaEdu
Corporation
Unaudited
Condensed
Consolidated
Statements of
Operations
                  Three Months Ended               Nine Months Ended
(in
thousands,except
for percentage,   September   September  September  September   September   September
share, and per    30, 2012    30, 2013   30, 2013   30, 2012    30, 2013    30, 2013
share
information)
                  RMB         RMB        US$        RMB         RMB         US$
Gross Revenue ^*  129,012     143,116    23,385     368,163     408,880     66,811
Business Tax      5,192       2,440      399        15,383      8,507       1,391
Net Revenue:
Online degree     99,097      112,620    18,402     283,113     320,751     52,410
programs
Online tutoring   6,025       7,160      1,170      18,423      21,538      3,519
programs
Private primary
and secondary     16,311      18,776     3,068      43,662      51,205      8,367
schools
International
curriculum        2,387       2,120      346        7,582       6,879       1,124
programs
Total net         123,820     140,676    22,986     352,780     400,373     65,420
revenue
Cost of revenue:
Online degree     33,982      38,676     6,320      95,336      106,666     17,429
programs
Online tutoring   2,178       2,529      413        7,599       7,452       1,218
programs
Private primary
and secondary     9,740       10,930     1,786      29,751      33,132      5,414
schools
International
curriculum        2,422       1,417      232        8,105       3,967       648
programs
Total cost of     48,322      53,552     8,751      140,791     151,217     24,709
revenue
Gross profit:
Online degree     65,115      73,944     12,082     187,777     214,085     34,981
programs
Online tutoring   3,847       4,631      757        10,824      14,086      2,301
programs
Private primary
and secondary     6,571       7,846      1,282      13,911      18,073      2,953
schools
International
curriculum        (35)        703        114        (523)       2,912       476
programs
Total gross       75,498      87,124     14,235     211,989     249,156     40,711
profit
Online degree     65.7%       65.7%      65.7%      66.3%       66.7%       66.7%
programs
Online tutoring   63.9%       64.7%      64.7%      58.8%       65.4%       65.4%
programs
Private primary
and secondary     40.3%       41.8%      41.8%      31.9%       35.3%       35.3%
schools
International
curriculum        (1.5%)      33.2%      33.2%      (6.9%)      42.3%       42.3%
programs
Gross margin      61.0%       61.9%      61.9%      60.1%       62.2%       62.2%
Operating
expenses:
General and       27,182      28,825     4,710      77,243      77,927      12,733
administrative
Selling and       12,315      11,711     1,914      34,094      33,668      5,501
marketing
Research and      10,914      13,554     2,215      30,585      36,494      5,963
development
Intangible
assets            5,901       -          -          5,901       -           -
impairment
Total operating   56,312      54,090     8,839      147,823     148,089     24,197
expenses
Income(loss)      19,186      33,034     5,396      64,166      101,067     16,514
from operations
Operating margin  15.5%       23.5%      23.5%      18.2%       25.2%       25.2%
Interest income  3,352       1,600      261        9,923       8,191       1,338
Interest expense  -           (5,403)    (883)      -           (10,082)    (1,647)
Gain on disposal  1,303       -          -          1,303       -           -
of assets
Investment        -           -          -          1,460       368         60
income
Other income      404         487        80         917         1,350       221
Foreign exchange  -           (592)      (97)       -           (2,728)     (446)
loss
Income before
income tax and    24,245      29,126     4,757      77,769      98,166      16,040
equity method
investments
Income tax        (9,510)     (6,172)    (1,008)    (20,824)    (22,015)    (3,597)
expense
Net income
before income
from equity       14,735      22,954     3,749      56,945      76,151      12,443
method
investments
Income from
equity method     -           (93)       (15)       -           410         67
investments, net
of taxes
Net income        14,735      22,861     3,734      56,945      76,561      12,510
Net income
attributable to
the               (11,611)    (13,262)   (2,167)    (34,204)    (38,315)    (6,261)
noncontrolling
interests
Net income
attributable to   3,124       9,599      1,567      22,741      38,246      6,249
ChinaEdu
Net margin        2.5%        6.8%       6.8%       6.4%        9.6%        9.6%
Net income
attributable to
ChinaEdu per
ADS:
 Basic          0.20        1.15       0.187      1.44        3.93        0.642
 Diluted        0.19        1.02       0.167      1.36        3.56        0.582
Weighted average
aggregate number
of ADSs
outstanding:
 Basic          15,884,264  8,373,355  8,373,355  15,827,795  9,730,559   9,730,559
 Diluted        16,625,395  9,374,564  9,374,564  16,771,477  10,745,260  10,745,260
* Gross revenue
are detailed as
follows
Online degree     103,920     114,723    18,746     297,506     328,482     53,674
programs
Online tutoring   6,181       7,398      1,209      18,849      22,046      3,602
programs
Private primary
and secondary     16,382      18,839     3,078      43,777      51,329      8,387
schools
International
curriculum        2,529       2,156      352        8,031       7,023       1,148
programs



ChinaEdu
Corporation
Unaudited
Condensed
Consolidated
Statements of
Cash Flow
                Three Months Ended              Nine Months Ended
(in thousands,  September  September  September  September  September  September
unaudited)      30, 2012   30, 2013   30, 2013   30, 2012   30, 2013   30, 2013
                RMB        RMB        US$        RMB        RMB        US$
Operating
activities:
 Net income   14,735     22,861     3,734      56,945     76,561     12,510
 Adjustments
to reconcile
net income to
net cash
provided by
operating
activities:
 Share-based   1,885      2,371      387        5,996      7,217      1,179
compensation
 Depreciation
and
amortization    6,355      6,370      1,041      18,963     19,126     3,125
of property
and equipment
 Amortization
of land use     152        152        25         456        456        75
rights
 Amortization
of acquired     1,035      758        124        3,056      2,351      384
intangible
assets
 Intangible
assets          5,901      -          -          5,901      -          -
impairment
 Investment    -          -          -          (227)      (368)      (60)
income
 Amortization
of debt         -          3,014      492        -          3,601      588
discount
 Exchange      -          592        97         -          2,728      446
loss
 Gain on
disposal of     (1,303)    -          -          (1,303)    -          -
assets
 Loss from
equity method   -          93         15         -          70         11
investment
 Provision
for accounts    -          -          -          340        261        43
receivables
 Loss(gain)
from disposal   586        15         2          1,414      (29)       (5)
of property
and equipment
 Changes in
assets and
liabilities
 Accounts      8,242      8,125      1,328      (7,851)    4,316      705
receivable
 Prepaid
expenses and    1,239      6,662      1,090      (1,351)    3,584      586
other current
assets
 Amounts due
from related    40,792     79,645     13,015     (23,351)   (12,290)   (2,008)
parties
 Rental        296        (99)       (16)       733        14         2
deposits
 Accounts      2,951      3,118      509        7,789      9,210      1,505
payable
 Deferred      (74,887)   (86,903)   (14,200)   (74,508)   (82,787)   (13,527)
revenues
 Accrued
expenses and    17,532     20,872     3,410      26,673     18,619     3,041
other current
liabilities
 Amounts due
to related      8,265      7,944      1,298      11,621     (13,728)   (2,243)
parties
 Income taxes  3,462      2,121      347        (3,119)    (6,056)    (990)
payable
 Other taxes   5,559      (5,119)    (836)      2,157      (3,009)    (492)
payable
 Deferred      2,909      870        142        5,873      6,416      1,048
income taxes
 Unrecognized  637        680        111        1,863      1,871      306
tax benefit
Net cash
provided by     46,343     74,142     12,115     38,070     38,134     6,229
operating
activities
Investing
activities:
 Purchase of
property and    (6,283)    (4,810)    (786)      (9,157)    (12,209)   (1,995)
equipment
 Proceeds
from            4,000      -          -          4,000      -          -
discontiued
operations
 Purchase of   (3,000)    (6,635)    (1,084)    (100,865)  (130,254)  (21,283)
term deposits
 Purchase of   -          -          -          (12,571)   -          -
investments
 Proceeds
from sale of    -          -          -          24,952     5,482      896
investments
 Proceeds
from disposal
of exclusive    -          -          -          (980)      -          -
partnership
with
universities
 Proceeds
from disposal   94         2          -          95         140        23
of property
and equipment
 Proceeds
from disposal
of equity       -          -          -          -          8,000      1,307
method
investments
Net cash used
in investing    (5,189)    (11,443)   (1,870)    (94,526)   (128,841)  (21,052)
activities
Financing
activities:
 Cash
dividends paid
to              (16,799)   (7,533)    (1,231)    (21,441)   (7,533)    (1,231)
noncontrolling
shareholders
 Capital
contributions
by              -          -          -          980        -          -
noncontrolling
shareholders
 Proceeds
from exercise   16         2,524      412        3,738      2,790      456
of share
options
 Financing
cost in         -          (4,806)    (785)      -          (8,557)    (1,398)
connection
with loans
 Prepayment
for shares      -          -          -          (886)      -          -
repurchase
 Proceeds
from
borrowings of   -          -          -          -          68,410     11,178
short-term
debt
 Proceeds
from
borrowings of   -          220,511    36,031     -          380,261    62,134
long-term
debt
 Repurchase
and
cancellation    (2,343)    (32,316)   (5,280)    (2,728)    (285,603)  (46,667)
of ordinary
shares
 Repayment of
borrowings of   -          (62,815)   (10,264)   -          (62,815)   (10,264)
short-term
debt
 Repayment of
borrowings of   -          (159,750)  (26,103)   -          (159,750)  (26,103)
long-term
debt
 Repayment of
loan from       (5,500)    (68,900)   (11,258)   (5,500)    (68,900)   (11,258)
related party
 Loan from     -          55,200     9,020      5,500      81,200     13,268
related party
Net cash used
in financing    (24,626)   (57,885)   (9,458)    (20,337)   (60,497)   (9,885)
activities
Effect of
foreign         9          (179)      (29)       (2)        258        44
exchange rate
changes
Cash and cash
equivalents,    180,414    230,341    37,637     273,746    385,922    63,059
beginning of
period
Cash and cash
equivalents,    196,951    234,976    38,395     196,951    234,976    38,395
end of period
Net decrease
(increase) in   16,537     4,635      758        (76,795)   (150,946)  (24,664)
cash and cash
equivalents



ChinaEdu
Corporation
Unaudited
Condensed
Consolidated
Statements of
Comprehensive
Income
               Three Months Ended               Nine Months Ended
(in            September  September  September  September  September  September
thousands,     30, 2012   30, 2013   30, 2013   30, 2012   30, 2013   30, 2013
unaudited)
               RMB        RMB        US$        RMB        RMB        US$
Net income     14,735     22,861     3,734      56,945     76,561     12,510
(loss)
Other
comprehensive
income, net
of taxes
Foreign
currency       (121)      504        82         6          3,834      626
translation
adjustments
Change in
fair value of
available for  515        215        35         957        (787)      (129)
sale
investments
Comprehensive  15,129     23,580     3,851      57,908     79,608     13,007
income
Less:
comprehensive
income
attributable   13,591     13,842     2,262      35,143     41,923     6,850
to the
noncontrollng
interest
Comprehensive
income         1,538      9,738      1,589      22,765     37,685     6,157
attributable
to ChinaEdu





ChinaEdu
Corporation
Unaudited reconciliations from income from operations to adjusted income from operations
(non-GAAP) and adjusted operating margin (non-GAAP)
                Three Months Ended               Nine Months Ended
(in thousands,  September   September  September  September   September   September
unaudited)      30, 2012    30, 2013   30, 2013   30, 2012    30, 2013    30, 2013
                RMB         RMB        US$        RMB         RMB         US$
Net revenue     123,820     140,676    22,986     352,780     400,373     65,420
Income(loss)
from            19,186      33,034     5,396      64,166      101,067     16,514
operations
Adjustments:
Share-based    1,885       2,371      387        5,996       7,217       1,179
compensation
Amortization
of intangible
assets and      1,187       910        149        3,512       2,807       459
land use
rights
Intangible
assets          5,901       -          -          5,901       -           -
impairment
Adjusted
income from     28,159      36,315     5,932      79,575      111,091     18,152
operations
(non-GAAP)
Adjusted
operating       22.7%       25.8%      25.8%      22.6%       27.7%       27.7%
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               Nine Months Ended
(in thousands,  September   September  September  September   September   September
unaudited)      30, 2012    30, 2013   30, 2013   30, 2012    30, 2013    30, 2013
                RMB         RMB        US$        RMB         RMB         US$
Net revenue     123,820     140,676    22,986     352,780     400,373     65,420
Net
income(loss)    3,124       9,599      1,567      22,741      38,246      6,249
attributable
to ChinaEdu
Adjustments:
Share-based    1,885       2,371      387        5,996       7,217       1,179
compensation
Share-based
compensation
attributable    (82)        -          -          (369)       -           -
to the
noncontrolling
interest
Amortization
of intangible
assets and      1,187       910        149        3,512       2,807       459
land use
rights
Intangible
assets          5,901       -          -          5,901       -           -
impairment
Adjusted net
income
attributable    12,015      12,880     2,103      37,781      48,270      7,887
to ChinaEdu
(non-GAAP)
Adjusted net
margin          9.7%        9.2%       9.2%       10.7%       12.1%       12.1%
(non-GAAP)
Adjusted net
income
attributable
to ChinaEdu
per ADS
(non-GAAP):
 Basic        0.76        1.54       0.251      2.39        4.96        0.811
 Diluted      0.72        1.37       0.224      2.25        4.49        0.734
Weighted
average
aggregate
number of ADSs
outstanding:
 Basic        15,884,264  8,373,355  8,373,355  15,827,795  9,730,559   9,730,559
 Diluted      16,625,395  9,374,564  9,374,564  16,771,477  10,745,260  10,745,260



SOURCE ChinaEdu Corporation

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