Chinacast Education (CAST) research, news, and more from GeoInvesting

Company description

Fri, 06 Feb 2009 05:00:00 GMT

Established in 1999, ChinaCast is one of the PRC's leading publicly listed for-profit, post-secondary education and e-learning services providers. With over 1,200 employees, ChinaCast serves 121,000 students over its e-learning network and more than 10,400 students in traditional education settings. The Company provides undergraduate degree programs through its 80% ownership in the Foreign Trade and Business College (FTBC) of Chongqing Normal University. FTBC offers career-oriented 4-year bachelor's degree and 2-year diploma programs in finance, economics, trade, tourism management, advertising, language, IT and music. These degree and diploma programs are fully accredited by the PRC Ministry of Education. The Company provides its e-learning education services via its nationwide satellite broadband network to leading post-secondary educational institutions, K-12 schools, government agencies and corporate enterprises. These services include interactive distance learning applications, multimedia education content delivery, English language training and vocational/career training courses.

Merger Filing

Shareholder Letters

Tue, 17 Jan 2012 05:00:00 GMT

January 17, 2012

Dear Fellow Stockholders,

I would like to take this opportunity to thank our stockholders for taking the time to meet with me over the last two weeks. Now that the election has concluded and you, the stockholders, have spoken, ChinaCast will honor the results of this election and the will of our stockholders, notwithstanding the reservations asserted by the Company at the Annual Meeting with respect to Mr. Sherwood's compliance with the Company's bylaws and notwithstanding certain disclosures made by Mr. Sherwood in the course of this proxy contest that we believe were misleading and in some cases plainly wrong.

I take great pride in what the Company has accomplished in our twelve year operating history and four year history as a publicly traded company on the NASADAQ. We have successfully grown the Company to one of the largest post-secondary education companies in China with now over 35,000 on-campus students and 145,000 distance learning students and have grown revenue and income spectacularly over the past four years.

I credit some of the Company's success to the fact that, until mid-2011, management was fortunate to have had the privilege of working with a well functioning, constructive Board that consisted of a majority of independent directors that was supportive and respectful of management. I also credit our success to the cooperation, dedication and support we received from our employees, management and academic teams at all our business operations in China and the excellent working relationships we' have developed with the Chinese regulatory authorities and the state-owned parent universities of our schools. We have been successful in maintaining a delicate balance between the interests of all of these parties thus building a very stable business for the benefit of all our stockholders. Although we believe that our future is bright, we also believe that our best performance can only be achieved in the spirit of continued cooperation and respect, which includes recognition of the fact that ChinaCast is operating in a very different cultural and legal environment than that in the United States.

It is no secret that Mr. Sherwood has disagreed with me on many important matters concerning the Company. Because of the disclosures made by both sides in the proxy contest, most of these disagreements are now a matter of public record both in the United States and China. This election has now put Mr. Sherwood in a position to control all board committees, or at a minimum outright block any management initiatives through a deadlock vote of the Board. In the event that the Board is expanded to include an additional Fir Tree designee, Mr. Sherwood would take absolute control of the Board. Although I can assure you that I will always seek to do whatever I can to work to enhance the business operations, business relationships and success of the Company, this circumstance may result in situations where actions or proposals that management deems appropriate or important for the growth and prosperity of our operations or for the maintenance of important business and governmental relationships in China will not be supported. From this point forward, the future success of this Company may very well be dependent upon the decisions of Mr. Sherwood and the directors beholden to him while I continue to do whatever I can do to help this Company with the authority that I am able to assert.

I would like to assure you that it is my intention and hope to continue to serve as Chairman and Chief Executive Officer of ChinaCast and that I will always endeavor to work to nurture important relationships and to continue the growth and prosperity of the Company to the best of my ability and judgment. I would also like to assure you that management will fully support the new reconstituted Special Committee in its efforts to create value for all stockholders.

I thank you for your continued support of ChinaCast.

Sincerely,
Ron Chan Tze Ngon

Company Rebuttal

Tue, 10 Jan 2012 05:00:00 GMT

NEW YORK, January 10, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (Nasdaq: CAST) today responded to statements made by Ned Sherwood, followed shortly and predictably by Fir Tree, in press releases regarding Ned Sherwood's status as the Fir Tree designee to the Chinacast Board of Directors. In his press release, Ned Sherwood stated that he is not the designee of Fir Tree. Shortly thereafter, Fir Tree issued its own release saying the same thing. It is hard to avoid seeing what is clearly going on.

The Company disagrees with the Sherwood/ Fir Tree position and has made clear to Fir Tree that despite the Nominating Committee's belief that Mr. Sherwood is unsuitable, management will let the shareholders speak for the Company. If the shareholders vote for Mr. Sherwood, then the Company has found him to be suitable. The coordinated efforts of the Sherwood/Fir Tree team, however, highlight a much more important, and time-sensitive, issue.

Over the last few months, as information regarding Mr. Sherwood began to emerge, Fir Tree has continued to support Mr. Sherwood as its designee. Fir Tree disputed the right of our Board to evaluate his suitability. It declined even to entertain making an alternative designation and even advised the Company that it would not engage in negotiations with respect to its designee to the Board unless Mr. Sherwood was a party to such negotiations. The brief negotiations that did occur were conducted through Mr. Sherwood's attorneys, but involved the interests of both Mr. Sherwood and Fir Tree.

Now the true scheme becomes apparent. Now the Sherwood/Fir Tree position, announced for the first time in virtually simultaneous public statements, is that Mr. Sherwood is NOT the Fir Tree designee and that Fir Tree has the contractual right to designate someone else. So, as they say, do the math: the Sherwood/Fir Tree slate consists of FOUR DIRECTORS - the Sherwood Slate and the Fir Tree Designee to be named later. On a seven person Board, four is a majority and takes control.

Full Release

Financials

Thu, 05 Jan 2012 05:00:00 GMT

BEIJING, January 5, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS: CAST), a leading post-secondary education and e-learning services provider in China, announced that the Company will be amending its Annual Report for the year ended December 31, 2010 to restate the financial statements for the year ended December 31, 2010 to reverse a write-off of certain prepayments.

The elimination of the write-off of the prepayment will result in the increase of the Company's net income for such period to approximately RMB132 million from RMB72 million. Accordingly, net income for the year ended December 31, 2010 will have increased by 43.0%, as compared to the net income for the year ended December 31, 2009. The restated financial statements are expected to result in a non-cash charge of approximately RMB2.0 million per quarter for the 29.6 quarters subsequent to December 31, 2010. Basic and diluted net income attributable to ChinaCast per share for the year ended December 31, 2010 will be increased to approximately RMB2.73 per share and RMB2.70 per share from approximately RMB1.49 per share and RMB1.47 per share, respectively. Prepaid expenses and other current assets as at December 31, 2010 will be increased to RMB56.3 million from RMB48.2 million and non-current deposits and prepayments as at December 31, 2010 will be increased to RMB59.1 million from RMB7.4 million. The Company determined that the effect on the quarterly reports in 2011 would be insignificant, i.e., the effect on the earnings will be less than approximately 5% and approximately 2% on total assets.

The Company took the write-off in 2010 after it determined to use the RMB59.8 million balance of non-current advances as a prepayment for services which were being provided by ChinaCast Company Ltd to help the Company in its renewal of the inter-provincial value-added telecommunication service license ("VSAT license"). The license is critical to the Company's ability to provide its E-learning and training services. The prepayment was sufficient to cover approximately seven years of such services. Such a prepayment, in the absence of impairment or other changes that may apply, is usually amortized as a cost over the relevant service period. However, since the annual renewal of VSAT license needs to be approved by a government agency and the result is not under the control of neither CCL nor CCLX, and CCLX undertakes to CCL that it will not take back nor to recover any amount of the prepayment even though it subsequently does not require the service of CCL during the entire service term, the Company did not believe that it could reliably determine the future cash flows specifically to be obtained from the prepayment, the Company decided to write off the RMB59.8 million prepayment. The Company has now determined that such prepayment should be amortized over a period of 7.4 years. In the event that CCLX can renew the license without the assistance from CCL in the future, the remaining prepaid amount will be expensed then.

As a result of the significant change in the results of operations of the Company for the year ended December 31, 2010 due to the change in the accounting treatment of the non-current advance used as prepayment for services, the Company will be filing a Form 8-K under Item 4.02, Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

Shareholder Letters

Wed, 04 Jan 2012 05:00:00 GMT

January 4, 2012

Dear Shareholders of ChinaCast Education:

By now you should have received our proxy supplement announcing that the Company's annual meeting has been adjourned to January 10, 2012 at 9:00 a.m. Beijing Standard Time (local time), which is equivalent to 8:00 p.m. EST on Monday, January 9, 2012.

DO NOT RETURN ANY PROXY CARD SENT BY NED SHERWOOD

Ned Sherwood, a current director that the Nominating Committee of your Board of Directors determined was unsuitable to continue serving on the Board, is now sending out his own proxy material and green proxy card in an attempt to get you to reinstate him to his position on your Board of Directors, as well as elect his two hand-picked nominees. We urge you to discard any proxy materials sent to you by Ned Sherwood. Show your support for your Board and management and vote the BLUE proxy card today by telephone or Internet.

A Reality Check

It is the current management team and the Board members on the Company's slate of nominees that have created all value for all CAST shareholders so far, including:

Securing the necessary education and telecom licenses with the appropriate PRC government regulatory authorities;
Building one of the largest private, post-secondary companies in China with over 35,000 on-campus students at our 3 universities and 145,000 distance learning students using our nationwide broadband satellite network;
Growing revenue at an annual compound rate of 40% to $97 million to $99 million in FY2011;
Growing adjusted net income at an annual compound rate of 52% to $30 million to $32 million in FY2011; and
Growing total assets to over $471 million (including over 200 acres of real estate) and shareholder equity to $292 million or $5.90 book value per share.

Full Letter

Shareholder Letters

Tue, 27 Dec 2011 05:00:00 GMT

Ned Sherwood, Major Stockholder of ChinaCast Education Corporation, Issues Open Letter to Stockholders

-Urges ChinaCast Stockholders To Vote For His Three Highly Qualified Nominees On The Green Proxy Card Today

NEW YORK-- Dec 27, 2011. (BUSINESS WIRE)--Ned Sherwood, a major stockholder of ChinaCast Education Corporation (Nasdaq GS: CAST), today issued the following letter to all stockholders of the Company:

Dear Fellow ChinaCast Stockholders:

As you may be aware, the Delaware Court of Chancery1 has forced ChinaCast to delay the Annual Stockholders Meeting until January 9, 2012, at 8:00 p.m. EST in order for all stockholders to have adequate time to make a fair and reasoned determination of who should be elected to the Board of CAST. You deserve to have independent voices in the boardroom looking out for your best interests. I urge you to vote FOR my highly qualified independent nominees—Ned Sherwood, Derek Feng and Daniel Tseung—on the GREEN proxy card today.

As a significant stockholder and current member of CAST’s Board of Directors, I wish to state that my major goal is to assure that CAST undergoes, under the direction of a truly independent Special Committee, a full and complete, unbiased process to maximize stockholder value.

I continue to be convinced that CAST has an excellent business model operated by superior Mainland Chinese management and employees. Let me be clear, I do not wish to interfere with the Company’s day-to-day operations in any way. I do, however, have serious concerns with the actions and strategic decisions made by certain of the current Board members.

I am not seeking control of the Company’s Board. Rather, I am seeking to elect three (including myself) of the six Board members at the Annual Stockholders Meeting on January 9th to assure that Board actions are executed in the proper manner at this critical time in CAST’s history. I believe that my three nominees will ensure that the interests of the stockholders, the true owners of ChinaCast, are vigorously represented in the boardroom by truly independent representatives.

Obviously, as a major stockholder, I want the process currently begun by the Special Committee to be run by the most experienced, independent, and professional individuals on our Board (or our Board as constituted after January 9th). I question the current composition of the Special Committee. While both Paul Weiss and Credit Suisse, the outside advisors to the Special Committee, are excellent firms, it is ultimately the Special Committee, and not its advisors, that will determine the best course of action for CAST. This is not a process that can simply be outsourced to a law firm and investment bank.

The Special Committee currently consists of Justin Tang, Stephen Markscheid, and Hope Ni, and it excludes the Board’s two most experienced directors in investment and mergers and acquisition matters—Tseung and me. Mr. Tang, who has been a Director of CAST since 2007 and, to my knowledge, has never voted against any Board resolution, is, in my opinion, a proxy for Ron Chan. The other two committee members, Markscheid and Ni, were never elected to the Company’s Board by stockholders. Ask yourself whether these are the committee members you would select to explore and evaluate strategic alternatives?

I believe that the nominees on the GREEN proxy card are more qualified and will represent your interests better than any of the current members of the Special Committee.

I am sure you will agree once you compare the backgrounds of the three members of the Special Committee with those of Tseung and me, the Board members who were not chosen for the Special Committee.

Tseung has been affiliated with CAST since its founding in 1999. He has over 16 years of experience as a professional investor. From 2000 until 2010, Tseung served as Managing Director of Sun Hung Kai Properties Direct Investments Ltd., the private equity division Sun Hung Kai Properties, one of the largest market-capitalization, publicly-traded companies in Hong Kong. He is an experienced investment professional who knows ChinaCast well.

I have more than 26 years of mergers and acquisitions and private equity experience as the founder of ZS FUND L.P. (“ZS”). Prior to the founding of ZS, I had 11 years of experience in divestitures for W.R. Grace and as a partner of AEA Investors, Inc., an early private equity firm.

If our slate of three directors is elected to the Board, and if certain members of our slate are selected to be on the Special Committee, we plan to do the following:

1) Review the Company’s official projections that have been submitted to the Special Committee. As a director, I have been requesting two to three-year rolling projections at our regularly scheduled Board meetings, to no avail. Since future projections are a key determinant of value, I would like the Special Committee to review the Company’s projections carefully, and with the assistance of its financial advisor, come up with an independent “unbiased projections” for CAST’s future prospects.

2) I want to confirm that the advisors to the Special Committee have been instructed to conduct the broadest and widest process possible (encompassing both strategic and financial buyers). I have been very concerned about references in the Company’s recent open letters to “the deal” as opposed to “the process.”

3) I have also been troubled by Chan’s statement that threatened an exodus of management if our slate were elected. As you know, this threat, which I believe constitutes a breach of fiduciary duty, resulted in our decision to reduce our slate of director nominees from six candidates to three candidates. As such, it is certain that three nominees from the Company’s slate will be re-elected whether you vote for us or not.

As a further precaution, and as an encouragement to strategic buyers to bid for CAST, I plan to suggest, as Chairman of the Compensation Committee, that CAST immediately adopt a generous “Retention Bonus Plan” for the excellent Mainland Chinese management team, including, but not limited to, Li Wei, Xy Jiang, Jim Ma, Donald Gardner, and others. My proposal will include a significant one-time extra bonus payment to each key Mainland Chinese employee who, if a change of control transaction occurs, agrees to remain in the employ of the acquiring company for at least two years post-closing.

Additionally, by including Feng on our slate, I believe that we are further protecting value for all stockholders. Feng was born and educated in Mainland China, advanced his career in the United States at blue-chip companies such as GE, and spent five years as a senior executive at Knowledge Universe, one of the largest education holding companies with more than 40,000 employees globally. In my opinion, his leadership experience and education industry expertise will prove to be a very valuable resource to both management and the CAST Board.

Now is the time for ChinaCast stockholders to protect their best interests by electing three highly-qualified, independent nominees who are committed to maximizing the value of your investment. Please vote your GREEN proxy card today.

If you have any questions or need assistance in voting your GREEN proxy card, please call the firm assisting in the solicitation of proxies, Innisfree M&A Incorporated, toll-free at (888) 750-5834 (banks and brokers call collect at (212) 750-5833)).

Thank you for your support,

Ned Sherwood

Comments & Business Outlook

Tue, 27 Dec 2011 05:00:00 GMT

BEIJING, February 9, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education ("ChinaCast" or the "Company", Nasdaq GS: CAST), a leading post-secondary education and e-learning services provider in China, today announced that the Board of Directors of ChinaCast has authorized the termination of the Stockholder Rights Plan (the "Rights Plan") effective immediately. The Rights Plan would have expired on September 26, 2012, had the Board not authorized the termination.

In addition, at its first meeting of the newly reconstituted Board, the following members were appointed to each of the independent committees:

Audit Committee - Daniel Tseung, Doug Woodrum, Ned Sherwood
Compensation Committee - Ned Sherwood, Derek Feng, Doug Woodrum
Nominating Committee - Stephen Markscheid, Ned Sherwood, Daniel Tseung
Special Committee - Doug Woodrum, Daniel Tseung, Stephen Markscheid, Derek Feng

Ron Chan, Chairman and CEO, comments, "The Board and the management team remain focused on ultimately realizing the intrinsic value of the Company and fully support the ongoing efforts of the Special Committee strategic evaluation process. We remain committed to maintain ChinaCast's position as a leading education company focused in China."

Resolution of Legal Issues

Mon, 19 Dec 2011 05:00:00 GMT

BEIJING, Dec. 19, 2011 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS:CAST), a leading post-secondary education and e-learning services provider in China, today announced that the Audit Committee of its Board of Directors (the "Audit Committee") retained FTI Consulting, Inc., ("FTI"), an independent global advisory firm with extensive expertise in forensic accounting and due diligence, to conduct an independent review of the Company's cash balances as of June 30, 2011.

For no reason other than to counter the bad press a number of Chinese companies has received, the Company voluntarily retained FTI to perform an independent cash confirmation. No question or concern has been raised by the Company's auditors, audit committee or any other relevant professional related to the Company's cash balances.

FTI independently obtained and reviewed documents which state that as of June 30, 2011, ChinaCast had cash, cash equivalents and term deposits totaling US$132.1 million (RMB 845,674,247) held with 29 PRC financial institutions. This total represents 98.5% of the total cash, cash equivalents and term deposit balances reported in the Company's form 10-Q for the second quarter ended June 30, 2011. The remaining 1.5% discrepancy is attributable to the termination of the Company's University of Petroleum e-learning joint venture.

Daniel Tseung, Chairman of the Audit Committee, stated, "We believe the findings contained in the FTI report should provide some comfort to shareholders as to the integrity of the Company's financial reporting and should serve to distinguish the Company from other Chinese companies that have received adverse publicity after failing to provide adequate verifications with respect to their financial statements."

Shareholder Letters

Thu, 15 Dec 2011 05:00:00 GMT

Dear Fellow Stockholders:

On behalf of myself and my affiliated funds, we write to respond to Mr. Chan’s December 14, 2011 open letter to stockholders. To begin with, I want to address the Mainland China management team. All of you are doing an excellent job operating and growing CAST on a day-to-day basis. As a Board member of CAST for the past two years, I have witnessed first-hand the outstanding work you do, and I have particularly enjoyed attending the past two educational conferences in Guilin and Wuhan. I am committed to working with our other Board members to keep our excellent operating management teams in place and helping them grow our Company. My own firm, ZS Fund L.P., prides itself on being associated with excellent operating management teams and helping them grow their companies. Our goal is to expand and continue to develop CAST’s existing universities to continue to develop them into “world class” educational institutions. We support your efforts wholeheartedly.

With regard to the actions of certain members of the current top management and the Board’s actions over the past year, we have different concerns, questions and comments. Many of these questions and concerns were addressed in my previous open letters to stockholders, especially my December 12, 2011 letter, which has resulted in stockholders representing a significant percentage of shares outstanding sending requests to the Company for a short four-week postponement of the Annual Stockholders Meeting, so that all stockholders have adequate time to consider the issues before them. In our view, Mr. Chan has ignored these issues and has failed to adequately explain why he will not allow CAST stockholders an opportunity to fully consider both slates of Board nominees. We strongly believe that the short postponement that many stockholders seek would have no significant adverse effect on the Company.

With respect to more of Mr. Chan’s continued wholly unsubstantiated litany of personal attacks against my character, I have complete confidence that our stockholders will fairly judge me based on facts, not meritless charges, and my unblemished 42-year business career. On issues of substance that are important to you, I will respond.

The most important revelation in the updated letter is Mr. Chan’s statement that “On August 1, 2011, the Board received an unsolicited buyout offer in writing for 100% of the company in an all cash deal at a premium of over 46% to the then current market price of our common stock.” Doing the math is easy, and it is unclear why Mr. Chan was not more forthcoming; the price when calculated per the above description is $7 per share. While Mr. Chan gives you the price, why does he not reveal other terms that are important to CAST stockholders? Did management have involvement in soliciting the so-called “unsolicited” offer, and what would management’s equity position be in the Company post-closing? Why selectively disclose portions of the “offer” including the price but not tell stockholders of other important terms?

Since the Company has approximately 49 million shares outstanding, a $7 price per share translates to a total market value for CAST of approximately $346 million. Focusing only on what Mr. Chan did tell you, I am attaching a simple chart showing what a $7 per share price translates to based on certain objective parameters.

Shareholder Letters

Wed, 14 Dec 2011 05:00:00 GMT

December 14, 2011

Dear Fellow Shareholders,

The ChinaCast Annual Meeting will be held on December 21, 2011, in Beijing at 9:00 a.m. Beijing Standard Time (local time), which is equivalent to December 20, 2011, at 8:00 p.m. U.S. Eastern Time. How you vote at this meeting will be critical to your investment and the future of your Company. You have the opportunity to support ChinaCast and our talented, experienced and proven Board nominees, each of whom is committed to building value for all our shareholders and are the most qualified to lead the Company forward.

Voting for the 6 ChinaCast Education Nominees Maximizes Shareholder Value

I am pleased to report that the Company's growth continues to be robust due to the high demand for post-secondary education in China and our consistent operating execution. We have grown revenues and net income over 250% since listing on the NASDAQ in 2007, generated consistent cash flow (over $50 million in EBITDA in FY2011) and maintain a strong balance sheet (total shareholder equity of $292 million or book value of $5.90 per share), which positions us well for continued earnings growth in this uncertain global economic climate. Our strategic plan going forward to maximize shareholder value is to: full letter

Shareholder Letters

Mon, 12 Dec 2011 05:00:00 GMT

NEW YORK--(BUSINESS WIRE)--Ned Sherwood, a major stockholder of ChinaCast Education Corporation (Nasdaq GS: CAST), today issued the following letter to all stockholders of the Company:

Dear Fellow Stockholders:

On behalf of myself and my affiliated funds, we thank the Company for recently issuing an open letter reiterating its outstanding operating results and accomplishments. As we stated in our December 9 letter to the Board, we take no issue with the management’s operating achievements and we hope that all managers continue to produce stellar results.

We just take issue with the Board’s governance and decisions. I have asked at numerous Board meetings and I ask publicly now: See full letter

Shareholder Letters

Fri, 09 Dec 2011 05:00:00 GMT

Dear Fellow Shareholders,

The ChinaCast Annual Meeting will be held on December 21, 2011 in Beijing at 9:00 am. How you vote at this meeting will be critical to your investment and the future of your Company. You have the opportunity to support ChinaCast and our talented and extremely experienced Board nominees, each of whom is committed to building value for all our shareholders and are the most qualified to lead the company forward. We are asking for your support - which you can deliver by voting for all six of the ChinaCast Education Corporation nominees. Full letter

Going Private News

Thu, 08 Dec 2011 05:00:00 GMT

BEIJING, December 8, 2011 /PRNewswire-Asia-FirstCall/ -- As previously announced on November 15, 2011, the Board of Directors of ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS:CAST), a leading post-secondary education and e-learning services provider in China, formed a special committee of independent directors (the "Special Committee") to consider all strategic alternatives that would enhance shareholder value after receiving an unsolicited bid for the Company made by a qualified institutional investor at a significant premium to the current market price of the Company's common stock.

Today, the Company announced that the Special Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP to act as its independent legal counsel and Credit Suisse Securities (USA) LLC to act as its financial advisor in connection with the Special Committee's evaluation of strategic alternatives. The Special Committee, working with its advisors, intends to proceed in a timely and orderly manner, but has not set a definitive timetable for completion of its evaluation, and does not currently intend to announce developments unless and until a definitive transaction or strategic option has been approved. The Company cautions that there are no guarantees that the strategic alternative review process will result in a transaction or, if a transaction is undertaken, the terms or timing of such a transaction.

Going Private News

Tue, 15 Nov 2011 05:00:00 GMT

ChinaCast Education Corporation Forms Special Committee

BEIJING , Nov. 15, 2011 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS: CAST), a leading post-secondary education and e-learning services provider in China , today announced that its Board of Directors has formed a special committee of independent directors to consider all strategic alternatives which would enhance shareholder value after receiving an unsolicited bid for the Company made by a qualified institutional investor at a significant premium to the current market price of the Company's common stock.

The special committee may retain independent advisors, including an independent financial advisor and legal counsel, to assist it in its work. No decisions have been made by the special committee with respect to the Company's response to this unsolicited bid. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated.

Comments & Business Outlook

Thu, 10 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

Total revenues in the third quarter of 2011 increased 37% to $25.6 million from $18.7 million in the third quarter of 2010 partly due to the acquisition of HIUBC in the third quarter of 2010.
Adjusted diluted earnings per share excluding share-based compensation expenses, non-cash impairment charges and amortization of acquired intangible assets (non-GAAP) in the third quarter of 2011 were $0.20 compared to $0.16 in the third quarter of 2010.

Ron Chan, Chairman and Chief Executive Officer commented, "Our outstanding third quarter results were driven by another strong start to the 2011-2012 academic school year which commenced in September. Total average enrollment at our universities increased approximately 9% year-on-year while our average tuition rates increased 5%. We continue to reinvest in the expansion of our universities, adding faculty members, new courses, and new facilities to accommodate this growth. We believe that these improvements, which will further enhance our academic rankings, will drive sustained growth in our education business for many years to come."

Added Antonio Sena, Chief Financial Officer, "The key operating metrics that we focus on, enrollment and tuition growth, are trending well in line with our annual guidance. We will continue to carefully evaluate our investment options and deploy capital to areas where we see the greatest potential returns to shareholders."

Financial Outlook for Fiscal Year 2011

For the fiscal year ending December 31, 2011, the Company reiterates its guidance as follows:

Total net revenue is expected to be between $97 million to $99 million representing a year-on-year increase of 24% to 27%.
Adjusted net income excluding share-based compensation, amortization of acquired intangibles, gain on disposal of property and equipment and impairment expenses (non-GAAP) is expected to be at the higher end of $32 million to $34 million representing a year-on-year increase of at least 25%.
Based on the current weighted average shares and the higher tax rate accrual used in computation, adjusted diluted EPS (non-GAAP) is expected to be at the higher end of $0.64 to $0.68.
Adjusted EBITDA excluding share-based compensation (non-GAAP) is expected to be at the higher end of $50 million to $52 million representing a year-on-year increase of at least 25%.

Comments & Business Outlook

Mon, 10 Oct 2011 04:00:00 GMT

BEIJING, Oct. 10, 2011 /PRNewswire-Asia/ -- ChinaCast Education ("ChinaCast" or the "Company", Nasdaq GS: CAST), a leading post-secondary education and e-learning services provider in China, today provided a summary of relevant information provided on its shareholder update conference call with investors last Thursday, October 6, 2011, in order to maintain full disclosure practices.

For the 2011-2012 academic year starting September 2011, post-secondary student enrollment for its Traditional University Group ("TUG") business segment increased 9% year-over-year to over 35,000 total students. Average tuition rates are expected to increase by approximately 5% year-over-year.
ChinaCast expects to invest approximately 200 million RMB (US$31.3 million) over the next 12 to 18 months to expand the capacity of the Foreign Trade and Business College ("FTBC") campus from 15,000 to 20,000 students and the Lijiang College ("LJC") campus from 10,000 to 15,000 students.
The Company received the official renewal licenses from the PRC Ministry of Information Industry for its VSAT satellite and internet content provider telecom/IT services. The licenses are required for ChinaCast to operate its nationwide distance learning services which are part of the E-Learning Group business segment ("ELG"). The renewal of the licenses had no effect on the ELG service operations.

For the fiscal year ending December 31, 2011, the Company reiterates its guidance as follows:

Total net revenue will be between $97 million to $99 million representing a year-on-year increase of at least 24%.
Adjusted net income excluding share-based compensation, amortization of acquired intangibles, gain on disposal of property and equipment and impairment expenses (non-GAAP) is expected to be at the higher end of $32 million to $34 million representing a year-on-year increase of at least 25%.
Based on the current weighted average shares and the higher tax rate accrual used in computation, adjusted diluted EPS (non-GAAP) is expected to be at the higher end of $0.64 to $0.68.
Adjusted EBITDA excluding share-based compensation (non-GAAP) is expected to be at the higher end of $50 million to $52 million representing a year-on-year increase of at least 25%.

Ron Chan, Chairman and CEO of ChinaCast Education explained, "It is our intention to always maintain full transparency with our shareholders. Since we know not everyone was able to participate in the call last Thursday, we took the proactive approach to publicly disclose the material information discussed. Our business remains strong and we look forward to providing our shareholders further updates to our business when we report our third quarter earnings in early November.

Shareholder Letters

Tue, 04 Oct 2011 04:00:00 GMT

BEIJING, October 4, 2011 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education ("ChinaCast" or the "Company", Nasdaq: CAST), a leading post-secondary education and e-learning services provider in China, today issued a statement clarifying two issues which may have arisen as a result of its letter to shareholders issued yesterday.

First, no question or concern has been raised by the Company's auditors, audit committee or any other relevant professional related to the Company's cash balances. As a result of several incidents that have been reported by auditors of other publicly held Chinese operating companies that have been unable to properly confirm cash balances, the Company will be engaging a third party service provider on a voluntary and proactive basis to conduct an independent confirmation in order to provide greater comfort to the marketplace on this issue and to differentiate the Company from those cases.

Secondly, this effort bears no relation to the Company's stock repurchase program. Although the Company does not believe it will be able to accelerate repurchases under current price levels due to the constraints outlined in yesterday's shareholder letter, the Company does intend to continue repurchasing its shares subject to applicable blackout periods.

Video Presentations

Mon, 03 Oct 2011 04:00:00 GMT

October 3, 2011

Dear Fellow Shareholders,

Earlier this year, the Company’s Board of Directors adopted a share buyback program through which it authorized the Company to buy up to $50 million worth of Company stock over a 12 month period commencing on March 16, 2011. Since implementing the program, the Company has re-purchased approximately $5 million worth of stock or over 1 million shares. Yet the price of the Company’s stock has declined and, given the Company’s cash position, some shareholders have expressed concern and confusion because the Company has not bought back more stock at these levels. Viewed as a simple function of stock price and cash on the balance sheet, I understand why some may have concerns. The decision to expedite the buyback, however, is far more complex. Full letter

Comments & Business Outlook

Tue, 09 Aug 2011 04:00:00 GMT

Financ ial Highlights for the Second Quarter of Fiscal Year 2011

Total revenues increased 60% year-over-year to $26.0 million
Net income attributable to the Company increased 34% year-over-year to $6.5 million
Diluted EPS of $0.13
Adjusted net income (non-GAAP) increased 42% year-over-year to $9.0 million
Adjusted diluted EPS (non-GAAP) of $0.18
Adjusted EBITDA (non-GAAP) increased 26% year-over-year to $12.0 million
Cash, cash equivalents and term deposits were $132.1 million
Total shareholder equity was $282.3 million or $5.76 per share
Company repurchased over 1 million shares with an average purchase price of $4.69 per share

Ron Chan, Chairman and Chief Executive Officer commented, "I am pleased to report we had a record first half and have raised our annual guidance which reflects the continued strong demand in China for our postsecondary education services. During the second quarter, we experienced further financial and operational benefits from the integration of our third university partner and had strong enrollment growth in our summer programs. We've also recently established CAST International College to address the high demand for global education in China and plan to launch additional international degree programs in partnership with four US universities on all our campuses this fall to further augment growth. Our E-Learning business continues to perform as planned and we anticipate a ramp-up in revenues associated with the increased utilization of our nationwide distance learning network in the second half of the year. In summary, we continue to invest in expanding our existing education services and to seek accretive acquisition opportunities in the PRC tertiary education sector to further accelerate growth. We have ambitious goals for our growth businesses and I remain confident in our ability to execute our strategy," commented Ron Chan, Chairman and Chief Executive Officer.

Added Antonio Sena, Chief Financial Officer, "We continue to generate healthy top and bottom line growth while our strong cash flows allow us to re-invest in expanding our existing businesses, make new acquisitions and return excess capital to shareholders. In the second quarter, the Company repurchased over 1 million shares with an average purchase price of $4.69 per share. We believe this balanced and disciplined capital allocation strategy maximizes returns for our shareholders."

Financial Outlook for Fiscal Year 2011

For the fiscal year ending December 31, 2011, the Company revises its guidance as follows:

Total net revenue will be between $97 million to $99 million representing a year-on-year increase of 24% to 27%. Adjusted net income excluding share-based compensation, amortization of acquired intangibles, gain on disposal of property and equipment and impairment expenses (non-GAAP) is expected to be at the higher end of $32 million to $34 million representing a year-on-year increase of at least 25%.
Based on the current weighted average shares and the higher tax rate accrual used in computation, adjusted diluted EPS (non-GAAP) is expected to be at the higher end of $0.64 to $0.68
Adjusted EBITDA excluding share-based compensation (non-GAAP) is expected to be at the higher end of $50 million to $52 million representing a year-on-year increase of at least 25%

Notable Share Transactions

Thu, 16 Jun 2011 04:00:00 GMT

BEIJING, June 16, 2011 /PRNewswire-Asia/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS: CAST), a leading post-secondary and e-learning services provider in China, today is providing an update to shareholders.

From May 12, 2011, through June 15, 2011, the Company has repurchased approximately 915,503 shares of stock at an average price of $4.747 under its $50 million corporate share buyback plan

For the full year ending December 31, 2011, the Company reiterates the following financial guidance:

Total net revenue of $94 million and $96 million, a year-on-year increase of 21% to 23%
Adjusted net income(1) (non-GAAP) between $32 million to $34 million, a year-on-year increase of 18%-25%
Based on the weighted average shares used in computation at the end of FY2010 and a higher tax accrual rate for FY2011, an adjusted diluted EPS (non-GAAP) between $0.64 and $0.68, a year-on-year increase of 14%-21%
Adjusted EBITDA excluding share based compensation (non-GAAP) between $50 million and $52 million, a year-on-year increase of 20% to 25%

Comments & Business Outlook

Wed, 11 May 2011 04:00:00 GMT

First Quarter Results:

Total revenues increased 43% to $22.8 million
Adjusted net income (non-GAAP) increased 24% to $7.8 million
Adjusted diluted EPS (non-GAAP) of $0.16
Adjusted EBITDA (non-GAAP) increased 40% to $13.3 million
Share buy-back to commence on May

GeoTeam® Note: 2011 First quarter analyst EPS estimates were $0.15.

"We continue to execute according to plan as both our universities and e-learning services are driving growth across our platform. We believe that the acquisition of Hubei Industrial University Business College ("HIUBC"), the launching of our China University of Petroleum e-learning joint venture, along with enrollment and tuition increases across our existing universities are providing positive momentum," commented Ron Chan, Chairman and Chief Executive Officer.

For the full year ending December 31, 2011, the Company provides the following guidance:

Total net revenue will be between $94 million to $96 million (a year-on-year increase of 21% to 23%)
Adjusted net income excluding share-based compensation, amortization of acquired intangibles, gain on disposal of property and equipment and impairment expenses (non-GAAP) will be between $32 million to $34 million (a year-on-year increase of 18% to 25%)
Based on the current weighted average shares and the higher tax rate accrual used in computation, adjusted diluted EPS of between $0.64 to $0.68
Adjusted EBITDA excluding share-based compensation (non-GAAP) will be between $50 million to $52 million (a year-on-year increase of 20% to 25%)

Comments & Business Outlook

Thu, 17 Mar 2011 04:00:00 GMT

Fourth Quarter Highlights:

Total revenues increased 56% to $25.7 million
Gross profit increased 28% to $10.2 million; Gross profit margin was 40%
Net income decreased 279% to ($5.1) million
Adjusted net income (non-GAAP) increased 31% to $6.1 million; Adjusted net income (non-GAAP) margin was 23.5%
Adjusted diluted EPS (non-GAAP) of $0.12

"I am pleased to report another successful year of robust growth while achieving key strategic objectives which we believe pave a clear path for future growth," commented Ron Chan, Chairman and Chief Executive Officer. "First and foremost, we acquired our third accredited university, Hubei Industrial University Business College ("HIUBC"), bringing our total university enrollment to over 32,000 students and adding degree programs in computer engineering, industrial design and law to our curriculum. This expands our geographic presence to central China and further solidifies our position as a leading nationwide operator of accredited universities in China. We also launched our international degree programs by signing inaugural partnerships with two renowned U.S. universities, Seton Hall and The University of North Carolina at Greensboro."

For the full year ending December 31, 2011, the Company provides the following guidance:

Total net revenue will be between $94 million to $96 million (a year-on-year increase of 21% to 23%)
Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) will be between $32 million to $34 million (a year-on-year increase of 18% to 25%)

Shareholder Letters

Wed, 16 Feb 2011 05:00:00 GMT

Please see the latest letter to shareholders from the CEO of ChinaCast regarding analysts' questions

Shareholder Letters

Wed, 09 Feb 2011 05:00:00 GMT

February 8, 2011

Dear Shareholders:

Happy Chinese New Year of the Rabbit! After a successful 2010, a year in which we made significant progress toward our long-term growth objectives, I would like to update you on the large share trading volume of CAST last week.

One factor that may have caused this increase is that our third largest shareholder, DirecTV, recently sold approximately 1.3 million of the 3.0 million shares of our stock they hold (please see the SEC 13G filing dated 2/2/2011, http://cchyy.client.shareholder.com/sec.cfm). As a non-core investment in their portfolio of assets, we view their stock sales as a long-term positive in further expanding our shareholder base and free float. Our management team strongly believes that our Company’s best days are ahead of us, as evidenced by the management team and board of director’s purchase of 1.34 million shares of common stock during the past twelve months, with a total value of $9.54 million.

In addition, there is continued volatility in the Chinese small cap market caused by short sellers making allegations against a few U.S.-listed Chinese companies. We have a simple, transparent corporate structure and a straightforward business model. I would highlight the following attributes as reasons why ChinaCast Education Corporation is an easy investment that investors should be confident in:

    1. Recurring, service cash business with significant excess demand
    2. Physical assets that grow in value over time
    3. Post-secondary education has high barriers to entry
    4. Management has consistently communicated with investors and hold similar interests as shareholders.

As always, we welcome the opportunity to answer any questions you may have regarding our company. We look forward to seeing many of you at the upcoming conferences in March. Thank you again for your continued support.

Regards,

Ron Chan Tze Ngon, Chairman and Chief Executive Officer
ChinaCast Education Corporation

Notable Share Transactions

Sun, 26 Dec 2010 05:00:00 GMT

Director buys 400,000 shares of stock @ $7.10 for his trust, increasing holdings by 81.6%.

Comments & Business Outlook

Tue, 09 Nov 2010 05:00:00 GMT

Third Quarter 2010 Highlights:

Total revenues increased 55% to $18.7 million

Gross profit increased 19% to $9.1 million; Gross profit margin was 49%

Operating income increased 32% to $7.5 million; Operating income margin was 40%

Net income increased 54% to $6.2 million; Net income margin was 33%

Diluted EPS of $0.12

Adjusted net income (non-GAAP) increased 59% to $8.0 million; Adjusted net income (non-GAAP) margin was 43%

Adjusted diluted EPS (non-GAAP) of $0.16 compard to $0.14

Adjusted EBITDA (non-GAAP) increased 51% to $11.7 million; Adjusted EBITDA margin (non-GAAP) was 62%

Cash, cash equivalents and term deposits was $150.0 million.

Total equity was $276.1 million

Financial Outlook for 2010

For the full year ending December 31, 2010, the Company reaffirmed the following previously provided guidance:

Total net revenue will be between $78 million to $80 million (a year-on-year increase of 53% to 57%)

Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) will be between $25 million to $27 million (a year-on-year increase of 34% to 44%)

Adjusted EBITDA excluding share based compensation (non-GAAP) will be between $45 million to $47 million (a year-on-year increase of 58% to 65%)

This is the Company's current and preliminary view, which is subject to change.

Liquidity Requirements

Tue, 09 Nov 2010 05:00:00 GMT

The Company believes that its cash and cash equivalents balances, together with its access to financing sources, will continue to be sufficient to meet the working capital needs associated with its current operations on an ongoing basis, although that cannot be assured. Also, it is possible that the Company’s cash flow requirements could increase as a result of a number of factors, including unfavorable timing of cash flow events, the decision to increase investment in marketing and development activities or the use of cash for acquisitions to accelerate its growth.

Comments & Business Outlook

Tue, 10 Aug 2010 04:00:00 GMT

Second Quarter 2010 Highlights:

Total revenues increased 46% to $16.3 million
Gross profit increased 25% to $8.6 million; Gross profit margin was 53%
Operating income increased 22% to $6.3 million; Operating income margin was 39%
Net income increased 26% to $4.8 million; Net income margin was 29%
Diluted EPS of $0.10
Adjusted net income (non-GAAP) increased 30% to $6.3 million; Adjusted net income (non-GAAP) margin was 39%
Adjusted diluted EPS (non-GAAP) of $0.13
Adjusted EBITDA (non-GAAP) increased 33% to $9.5 million; Adjusted EBITDA margin (non-GAAP) was 58%
Cash and bank balances together with term deposits was $156.9 million. Total equity was $262.8 million.

"We are pleased to report another profitable quarter of strong performance," commented Ron Chan, Chairman and Chief Executive Officer. "We believe our team's performance reflects the strength of our position as a leader in the PRC for-profit, post-secondary education sector and the continued strong demand and favorable market dynamics for post-secondary education services in China. We believe our momentum going into the third quarter 2010 is strong as we expect to make additional investments to further strengthen and extend our market opportunities such as our summer and international education programs on our campuses in Chongqing and Guilin, the launching of our e-learning joint venture with China University of Petroleum and the acquisition of our third accredited university, Hubei Industrial University Business College."

Added Antonio Sena, Chief Financial Officer, "Our operating and profit margins remained quite robust as we continue to expand our business and integrate acquisitions while exercising efficient fiscal management. We've now reached a major milestone in the Company where the percentage of our total revenue from our traditional university business exceeds that of our e-learning business. While we had a substantial increase in share count primarily due to our capital raise in December 2009, we were able to offset this by a 26% increase in net income. Our cash and bank balances increased to $157 million at the end of the second quarter of 2010 and we intend to deploy $66 million of capital for our third university acquisition which we anticipate to close soon."

Financial Outlook for 2010

For the full year ending December 31, 2010, the Company reaffirmed the following previously provided guidance:

Total net revenue will be between $78 million to $80 million (a year-on-year increase of 53% to 57%)
Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP), will be between $25 million to $27 million (a year-on-year increase of 34% to 44%)
Adjusted EBITDA excluding share based compensation (non-GAAP) will be between $45 million to $47 million (a year-on-year increase of 58% to 65%)

GeoSpecial Notes

Thu, 03 Jun 2010 04:00:00 GMT

Added to the GeoSpecial list on October 14, 2009 @ $8.48

Catalyst: Appeared that EPS was about to go into second gear. Hot Sector.
Peak performance: Reached a high of $8.61 on October 14, 2009.
Current Price: $6.28

Current road block: 2010 eps growth is expected to be lack luster, while 2011 is expected to grow 19%.

Removing from the GeoSpecial list until a catalyst leads EPS growth to accelerate. Long-term, we believe it is plausible that investors may bid the stock to $10.00

Comments & Business Outlook

Tue, 25 Aug 2009 04:00:00 GMT

Chinacast Education has reaffirmed its previous guidance.

Comments & Business Outlook

Sat, 20 Jun 2009 04:00:00 GMT

"ChinaCast delivered another strong quarter of revenue growth and improved profitability as we are now providing post-secondary education services to over 11,000 on-campus and 135,000 distance learning students throughout China," said Ron Chan, Chairman and Chief Executive Officer. "As in the USA and other countries, we continue to see healthy growth in the higher education sector in China as students continue to improve their job skills to compete in a tight labor market. The investments we have made in our business are yielding solid improvements in all of our financial operating metrics and we expect this momentum to accelerate with our recently announced MOU to acquire an additional accredited university in China which will further expand our degree offerings while driving future growth. We remain optimistic on the long term growth of the industry and our position as a leading for-profit, post-secondary education service provider."

Chinacast Education has reaffirmed its previous guidance.

Full Year Fiscal 2009 Guidance Ending December

	2009 Guidance	2008 Reported	Period Change
GAAP Revenue	$49 to $51 million	$42	16.67% to 21%
^a Non-GAAP Adjusted Net Income	$14 million to $16 million	$12.0 million	16.67% to 33.33%
^b Non-GAAP EPS	$0.39 to $0.45	$0.39	00.00% to 15.38%

^a Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to their financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.

^bThe company did not provide EPS guidance. The GeoTeam calculated an implied EPS guidance figure using the first quarter 2009 diluted outstanding share count. The omission of company issued EPS guidance could cause some investors to infer that the company may plan to issue shares during the coming year. However, commentary in the company's first quarter SEC does not imply a need:

Source: GlobeNewswire (May 11, 2009)

Comments & Business Outlook

Mon, 16 Mar 2009 04:00:00 GMT

Guidance Report:

"We remain confident about our business and the growth of the education industry in China. Our strategy going forward will be to focus on further expanding our post-secondary degree programs and e-learning services and reducing our operating costs to improve margins while looking for strategic acquisitions that will further expand our footprint in China. While the global economy is experiencing a sharp downturn, we believe the post-secondary education sector in China continues to grow at a healthy pace and we look forward to increasing our market position in 2009," concluded Mr. Chan.

Full Year Fiscal 2009 Guidance Ending December

	2009 Guidance	2008 Reported	Period Change
GAAP Revenue	$49 to $51 million	$42	16.67% to 21%
*Non-GAAP Adjusted Net Income	$14 million to $16 million	$12.0 million	16.67% to 33.33%
**Non-GAAP EPS	$0.46 to $0.52	$0.39	17.95% to 33.33%

*EPS Figures exclude non-operating gains and losses. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information. For a more complete explanation of the company's definition of non-GAAP please refer to their Fourth Quarter financial press release.

**The company did not provide EPS guidance. The GeoTeam calculated an implied EPS guidance figure using the 2008 outstanding share count. However, the omission of company issued EPS guidance could infer that the company may plan to issue shares during the coming year.

Source: GlobeNewswire (March 16, 2009)