BEIJING, Aug. Thirteen, 2019 /PRNewswire/ — China Distance Education Holdings Limited (NYSE: DL) (“CDEL,” or the “Company”), a main issuer of online training and price-added offerings for experts and corporate clients in China, today announced unaudited financial outcomes for the 0.33 zone of the monetary year 2019 ended June 30, 2019.
Third Quarter Fiscal 2019 Financial and Operational Highlights
Net sales increased with the aid of 30.2% to $61.7 million from $47—four million inside the previous year’s length.
Total route enrollments have been 734,800, increasing 29.2% from the 1/3 quarter of fiscal 2018. Cash receipts from online direction registration had been $50.4 million, a 30.7% boom from the 0.33 region of economic 2018. Gross earnings expanded through 36.5% to $31.2 million from $22.8 million in the previous 12 months length. Non-GAAP[1] gross income elevated by using 36.Three% to $31.2 million from $22.9 million within the previous year duration. The gross margin changed to 50.5%, as compared with 48.2% in the prior yr length. Non-GAAP[1] gross margin was 50.5%, compared with forty-eight. 2% in the previous 12 months period.
Operating profits elevated with the aid of 527.2% to $nine.9 million from $1.6 million within the previous 12 months length. Non-GAAP[1] running profits expanded by way of 371.7% to $10.Four million from $2.2 million within the earlier year length. Net earnings accelerated with the aid of eighty-four—1% to $9—four million from $5.1 million inside the previous year duration. Non-GAAP[1] internet income elevated through 72.Nine% to $10.Zero million from $five.Eight million inside the prior yr period. According to American Depositary Share (“ADS”), basic and diluted net earnings had been $zero.282 and $0.281, compared with simple and diluted internet income consistent with ADS of $zero.154 the 0.33 region of monetary 2018. Each ad represents 4 everyday stocks.
Basic and diluted non-GAAP[1] net income per ADS have been $0.299 and $0.296, compared with basic and diluted non-GAAP[1] internet earnings in line with ADS of $0.174 $zero.173 for the third quarter of monetary 2018. Cash flow from operations improved with the aid of 41.7% to $17.6 million from $12—four million inside the third quarter of economic 2018.
Mr. Zhengdong Zhu, Chairman and CEO of CDEL, stated, “The 2d half of financial 12 months 2019 started with a strong 1/3 region overall performance, with 0.33 quarter sales and net income increase of 30.2% and 84.1% yr-over-12 months, respectively. Third sector sales boom turned into driven by and large through our enterprise-main accounting vertical, a vast boom in sales from gaining knowledge of simulation software, and revenue from the legal vertical generated via Beijing Ruida. Total enrollment boom became 29.2% year-over-year within the 0.33 region, usually due to good-sized enrollment increase in accounting and engineering & creation (E&C) persevering with training guides. Cash receipts from online direction registration grew 30.7% 12 months-over-yr in the 1/3 zone, or 39.8% yr-over-12 months on a consistent currency foundation, due to the continuing recognition of our longer duration top rate and elite classes.”
Mr. Zhu concluded, “Our 1/3 sector outcomes show that our multi-pronged increase approach is bearing fruit. All three middle verticals of accounting, healthcare, and E&C, published sturdy year-over-year coins receipt increase within the third quarter, demonstrating the extensive attraction of our path services across enterprise verticals. Underpinning the growth of our enterprise verticals is the comprehensive life-lengthy gaining knowledge of surroundings we’ve got built and retain to beautify. Our accounting vertical, for instance, now encompasses a full supplement of services, which includes expert certification examination instruction and continuing schooling services; practical accounting training and employment steering offerings; accounting and associated advisory offerings to company clients; and books and reference materials. We are targeted on developing comparable ecosystems across our different enterprise verticals, such as healthcare, E&C, and prison, which will create extra avenues of increase and increase our normal boom possibilities.”
Mr. Mark Marostica, Co-Chief Financial Officer of CDEL, delivered, “We lower back to profitability in the third zone as anticipated, and recorded non-GAAP operating margin of sixteen.8%, a sizeable year-over-yr development because of sturdy 1/3 quarter sales boom, coupled with the successful implementation of sure expense control measures and leverage of our cost shape.” Mr. Marostica endured, “With our fourth monetary area well underway, we stay steadfast in persevering with to stability growth with a eager awareness on profitability and prudent cost control.”
Third Quarter Fiscal 2019 Financial Results
Net Revenue. Online schooling offerings. Total internet sales improved with the aid of 30.2% to $sixty one.7 million inside the third region of monetary 2019 from $47.4 million inside the third region of monetary 2018. Net sales from online schooling offerings, books, reference materials, and other sources contributed 70.5%, 15.9%, and thirteen.6%, respectively, of overall net sales for the 1/3 zone of monetary 2019. Net revenue from online schooling services accelerated by way of 25.6% to $43.5 million within the 1/3 area of monetary 2019 from $34.7 million in the 0.33 region of financial 2018, in particular, due to revenue boom from the accounting and healthcare verticals. Revenue from the prison vertical generated through Beijing Ruida also contributed to the growth.
Books and reference substances. Net sales from books and reference materials extended via 84.7% to $nine.Eight million within the third sector of financial 2019 from $five.3 million within the 1/3 region of financial 2018, especially due to e-book sale sales from the Legal Professional Qualification Examination,n, contributed with Beijing Ruida. Others. Net sales from different resources increased by 12.8% to $8.4 million in the third zone of financial 2019 from $7IIn most cases, first cases, four million inside the 0.33 sector f monetary 201s due to offline education revenue from the Legal Professional Qualification Examination contributed with the aid of Beijing Ruida. A giant growth in sales from gaining knowledge of simulation software also contributed to the increase. This increase turned into partially offset by the lower in revenue from the “Tax School Program,” which the Company disposed of in the first fiscal year area of fiscal 2019.
Cost of Sales. Cost of income elevated by using 24.Four% to $30.6 million in the 1/3 area of financial 2019 from $24.6 million inside the 1/3 region of financial 2018. Non-GAAP[1] value of sales accelerated via 24.6% to $30.6 million in the third zone of monetary 2019 from $24.5 million inside the third sector of financial 2018. The boom became especially due to expenses associated with Beijing Ruida, including amortization fees of intangibles bobbing up from its acquisition of $1.7 million, price of books and reference substances, and lecture costs. This boom is in part offset by the lower salaries and associated expenses and apartment and associated charges.
Gross Profit and Gross Margin. Gross earnings were $31.2 million in the 1/3 sector of financial 2019, up 36.5% from $22.8 million within the earlier yr duration. Non-GAAP[1] gross profit turned into $31.2 million, increasing by way of 36.Three% from $22.9 million within the earlier year duration. The gross margin became 50.5% within the third economic 2019, compared with forty-eight—2% within the 0.33 sector of monetary 2018. Non-GAAP[1] gross margin turned into 50.Five% in the 1/3 zone of economic 2019, compared with forty-eight. 2% inside the third region of financial 2018. Operating Expenses. Total operating prices elevated with the aid of 24.Five% to $22.0 million in the 0.33 region of monetary 2019, from $17.7 million within the prior year length. Non-GAAP[1] overall working expenses expanded via 25.Eight% to $21.Five million within the third area of fiscal 2019, from $17.1 million in the earlier 12 months length.
Selling fees. Selling prices extended by way of 31.4% to $17.Zero million within the 0.33 sector of monetary 2019 from $thirteen.Zero million in the prior 12 months period. Non-GAAP[1] selling costs elevated via 31.6% to $17.Zero million within the 0.33 zone of fiscal 2019 from $12.9 million inside the previous yr duration. The increase changed, by and large, driven by better advertising and promotional prices, expenses related to Beijing Ruida, the growth in the apartment and related fees, and other miscellaneous promoting costs. This increase was in part offset using the decrease in fees to dealers.
General and administrative charges. General and administrative costs extended through five.3% to $four.9 million in the 1/3 region of financial 2019 from $4.7 million in the earlier yr length. Non-GAAP[1] popular and administrative costs multiplied using 7.Four% to $four.Four million in the 1/3 fiscal 2019 from $four.1 million in the previous year period. The boom became specifically because of the fees related to Beijing Ruida. Income Tax Expense. Income tax fee multiplied by eighty-two—6% to $2.5 million within the 1/3 fiscal year of fiscal 2019 from $1.Three million in the earlier yr length, in most cases because of a growth in taxable earnings.
Net Income. As a result of the foregoing, internet profits become $nine.4 million in the third quarter of financial 2019, compared to $5.1 million within the prior year length. Non-GAAP[1] internet earnings changed into $10.0 million inside the 0.33 region of monetary 2019 compared with $five.Eight million inside the previous yr duration. Operating Cash Flow. Networking coins inflow multiplied through forty one.7% to $17.6 million within the third region of monetary 2019 from $12—four million within the earlier yr length. The operating coins inflow changed especially on account of internet income before non-coins items generated inside the 0.33 quarter of financial 2019. The increase in amassed expenses and other liabilities, income tax payable, and deferred revenue generated from the Company’s expert training services segment also contributed to the operating cash inflow. The operating coins inflow become partly offset by the growth in debts receivable, inventories, prepayments and other present-day belongings, and other non-contemporary assets.
Cash and Cash Equivalents, Restricted Cash, and Short-term Investments. Cash and coins equivalents, confined coins, and short-term investments as of June 30, 2019, were reduced with the aid of 4.0% to $124. The lower turned into partly offset via the working coins inflow generated inside the 1/3 area of financial 2019 and the proceeds from the disposal of funding, Beijing Yousician Technology Co., Ltd, of $three.6 million. The lower turned into partly offset via the working coins inflow generated inside the 1/3 area of financial 2019 and the proceeds from the disposal of funding, Beijing Yousician Technology Co., Ltd, of $three.6 million. ine million from $one hundred thirty.1 million as of March 31, 2019, specifically due to (i) the charge of contingent consideration for the acquisition of 11% equity hobby, and buy attention for in addition acquisition of nine% equity interest in Beijing Ruida for a total of $6.6 million, (ii) the repayment of loans of $13.1 million and (iii) the capital expenditure of $1.7 million. the first Nine Months of Fiscal 2019 Financial Results
Net Revenue. Total net sales increased by 26.6% to $143.1 million inside the first nine months of financial 2019 from $113.0 million within the first nine months of financial 2018. Net revenue from online education services, books, and reference materials, and different sources contributed sixty-seven.Four%, 15.1%, and 17.5%, respectively, of general net sales for the first 9 months of financial 2019. Online schooling offerings. Net revenue from online training services accelerated from 19.8% to $ ninety-six.Five million in the first nine months of economic 2019 from $eighty.5 million inside the first nine months of economic 2018.
Books and reference materials. Net revenue from books and reference substances elevated by using 138.Zero% to $21.6 million inside the first nine months of fiscal 2019 from $9.1 million within the first nine months of financial 2018. Others. Net sales from different assets increased by using 6.7% to $25.0 million in the first 9 months of economic 2019 from $23.5 million within the first 9 months of economic 2018—the Cost of Sales. The cost of income increased from 28.9% to $ seventy-nine.Five million in the first 9 months of economic 2019 from $61.6 million inside the first nine months of fiscal 2018. Non-GAAP[1] cost of sales multiplied with the aid of 29.1% to $ seventy-nine.Four million in the first 9 months of monetary 2019 from $ sixty-one. 5 million in the first 9 months of financial 2018.
Gross Profit and Gross Margin. Gross profit was $63.7 million within the first 9 months of economic 2019, up 23—Nine% from $51.4 million in the prior-year length. Non-GAAP[1] gross earnings turned into $63.7 million, growing by 23.6% from $fifty one.5 million within the earlier 12 months duration. The gross margin turned into forty-four.5% inside the first 9 months of financial 2019, compared with 45.5% within the first nine months of fiscal 2018. Non-GAAP[1] gross margin became forty-four.Five% in the first 9 months of fiscal 2019, in comparison with forty-five. 6% in the first nine months of economic 2018.
Operating Expenses. Total running costs improved using 37.7% to $ sixty-three. 2 million inside the first 9 months of monetary 2019 from $ forty-five. 9 million in the previous year’s length. Non-GAAP[1] total working fees multiplied by way of 39.2% to $sixty one.7 million inside the first nine months of monetary 2019 from $forty four.3 million in the previous year duration. Selling expenses. Selling fees extended by way of 49.0% to $ forty-five.Three million in the first 9 months of economic 2019 from $30.4 million inside the prior yr length. Non-GAAP[1] promoting fees increased via forty-nine. 2% to $ forty-five. 3 million in the first nine months of fiscal 2019 from $30.4 million inside the previous yr length.
General and administrative fees. General and administrative prices expanded via 15.Five% to $17.Nine million in the first nine months of financial 2019 from $15.Five million within the prior 12 months’ length. Non-GAAP[1] preferred and administrative prices multiplied by way of 17.3% to $sixteen.Four million inside the first nine months of economic 2019 from $14.0 million inside the earlier year length.
Change in fair fee of contingent consideration payable. Change in fair fee of contingent attention payable turned into resulting from the increase or lower in truthful value of contingent consideration with appreciate to the Company’s equity interest investment in Beijing Ruida. Gain from Deconsolidation of a Subsidiary. Gain from deconsolidation of a subsidiary of $6.9 million related to the gain on the disposal of 60% fairness interest, and honest price trade of ultimate forty% equity hobby, in Champion Tax Advisory or “Tax School Program.””
Income Tax Expense. Income tax price increased through 253.5% to $2.1 million inside the first nine months of economic 2019 from $0.6 million within the prior yr duration—net Income. As a result of the foregoing, internet income was $7.5 million within the first nine months of economic 2019 compared with net profits of $2.0 million in the prior yr period. Non-GAAP[1] net profits changed into $9.0 million within the first 9 months of economic 2019, in comparison with non-GAAP[1] internet earnings of $three.6 million within the previous yr length. Operating Cash Flow. Net running cash inflow multiplied using seventy-six.Five% to $sixty one.Nine million inside the first nine months of fiscal 2019 from $35.1 million in the prior-year duration.
