Noah Education Holdings (NYSE:NED)

Third Quarter 2013 Financial Results

• Net revenue increased 24.6% to RMB46.4 million (US$7.5 million)
• Gross profit decreased 0.9% to RMB17.2 million (US$2.8 million), and gross profit margin was 37.0%
• Basic and diluted earnings per share were nil as compared to basic and diluted earnings per share of RMB0.04
• Non-GAAP basic and diluted earnings per share were nil as compared to non-GAAP basic and diluted earnings per share of RMB0.05

Commenting on the results, Dong Xu, Chairman and Chief Executive Officer of Noah, said, "We are pleased to report that Noah recorded another strong quarter of top line growth in a traditionally slow quarter during which the month-long Chinese New Yearholidays and winter break fell. Nevertheless, our revenue increased 24.6% year-over-year, driven by contributions from our newly acquired DDK Consulting and Xiaoxiao Consulting, as well as organic growth from our existing schools and kindergartens."

Mr. Xu continued, "Looking ahead, while staff costs has increased across the education services sector, we are confident of maintaining our margins at the current level through our two-pronged strategy of growing organically and by strategic acquisitions in the longer term. We strongly believe that business sustainability and delivering consistent results are essential in creating value for our shareholders."

Dora Li, Chief Financial Officer, added, "We are optimistic in meeting our fiscal year 2013 guidance as we progress to the final quarter. The fourth quarter is traditionally one of our strongest in terms of revenue, as we anticipate a full three months of revenue recognition across all our operations. Our cash inflows from operations also provide us important financial resources for future business expansion. Last but not least, we remain on course in achieving breakeven at the operating level for fiscal year 2013."

Financial Outlook for the Fourth Quarter of Fiscal 2013 and Full Fiscal 2013

Based on current estimates and market conditions, for the fourth quarter of fiscal 2013, Noah expects to generate net revenue in the range of RMB58 million (US$9.3 million) to RMB67 million (US$10.8 million). For the full fiscal 2013, the Company maintains the revenue outlook in the range of RMB206 million (US$33.0 million) to RMB215 million (US$34.6 million). This forecast reflects Noah's current and preliminary view, which is subject to change.

Second Quarter Fiscal 2013 Financial Highlights (compared to second quarter fiscal 2012)

• Net revenue increased 39.7% year-over-year to RMB62.7 million (US$ 10.0 million)
• Gross profit increase 43.0% year-over-year to RMB28.5 million (US$4.6 million), and gross profit margin was 45.5%
• Operating income was RMB9.6 million (US$1.5 million) as compared to an operating loss of RMB2.3 million
• Net income increased 212.6% year-over-year to RMB7.1 million (US$1.1 million). Non-GAAP net income, excluding share based compensation expenses, was RMB7.6 million (US$1.2 million), up 139.3% year-over-year
• Basic and diluted earnings per share were RMB0.13 (US$0.02) as compared to basic and diluted earnings per share of RMB0.03
• Non-GAAP basic and diluted earnings per share were RMB0.14 (US$0.02) as compared to non-GAAP basic and diluted earnings per share of RMB0.06

Commenting on the results, Dong Xu, Chairman and Chief Executive Officer of Noah, said, "We are pleased to report that Noah exceeded our revenue guidance in the second quarter of the fiscal year 2013. Noah is committed to providing first-class kindergarten education services, and our offering has become appreciably enhanced following the acquisitions of DDK Consulting and Xiaoxiao Consulting."

Mr. Xu continued, "While our focus in the short-term is to achieve breakeven at operating level for the fiscal year 2013, we will continue to focus on driving the growth of the Company organically and through strategic acquisitions in the long-term, delivering long-term value to our shareholders. We will continue to ramp up utilization rate of existing schools and increase operating efficiency."

Dora Li, Chief Financial Officer, added, "While the second quarter of a fiscal year is typically a strong quarter for Noah, our revenue expansion was also boosted by the contribution of DDK Consulting and Xiaoxiao Consulting, which we acquired in October 2012. We are also glad to report that our operating costs are well under control, which has further helped the Company to achieve an operating profit this quarter."

Financial Outlook for the Third Quarter of Fiscal 2013 and Full Fiscal 2013

Based on current estimates and market conditions, for the third quarter of fiscal 2013, Noah expects to generate net revenue in the range of RMB46 million (US$7.4 million) to RMB51 million (US$8.2 million). For the full fiscal 2013, the Company maintains the revenue outlook in the range of RMB206 million (US$33.0 million) to RMB215 million(US$34.5 million). This forecast reflects Noah's current and preliminary view, which is subject to change.

First Quarter Fiscal 2013 

• Net revenue increased 13.5% year-over-year to RMB38.8 million (US$6.2 million)
• Gross profit decreased by 7.1% year-over-year to RMB15.1 million (US$2.4 million), and gross profit margin was 38.9%
• Operating loss was RMB5.2 million (US$0.8 million) as compared to an operating loss of RMB1.9 million
• Net loss was RMB0.07 million (US$0.01 million) as compared to a net income of RMB1.8 million
• Basic and diluted earnings per share were RMB0.01(US$0.002) as compared to basic and diluted earnings per share of RMB0.02 
• Non-GAAP basic and diluted earnings per share were RMB0.03 (US$0.004) as compared to a non-GAAP basic and diluted loss per share of RMB0.05.

Commenting on the results, Dong Xu, Chairman and Chief Executive Officer of Noah, said, "We are pleased to deliver another quarter of solid performance driven by our primary and secondary school segment with increasing revenue contribution from the ramp up of new schools and expanded capacities from mature schools.

Mr. Xu continued, "I am also very excited to announce the successful acquisition of the kindergartens from DKK Consulting and the acquisition of XiaoXiao Consulting in this quarter. Following on from this we plan on opening another 4 new kindergartens next quarter, reinforcing the continued success of our core strategy to expand the kindergarten portfolio. With the anticipated new additions, we are pleased to be able to revise our guidance upward to reflect the contribution from these new schools."

"Our strategy remains firmly focused on driving our growth organically and through acquisitions, with the ultimate goal of delivering long-term value to our shareholders."

Dora Li, Chief Financial Officer, added, "The first quarter is usually the low season for schools and kindergartens because of the summer break. In the first quarter of fiscal 2013, we incurred a full month of cost from Yuanbo in July, which was consolidated into the group starting August last year. As a result, this drags down our overall gross margin for the first quarter of fiscal 2013. While we continue our focus on organic and acquisitive growth and ramping up existing schools, we are confident that we will achieve a healthy gross margin and breakeven at operating level for full year fiscal 2013."

Financial Outlook for the Second Quarter of Fiscal 2013 and Upward Revision of Full Fiscal 2013

Based on current estimates, market conditions and the anticipation of revenue contribution from DKK Consulting and Xiaoxiao Consulting, as well as new kindergarten openings, for the second quarter of fiscal 2013, Noah expects to generate net revenue in the range of RMB 54 million (US$8.6 million) to RMB58 million (US$9.2 million). For the full fiscal 2013, the Company expects to generate revenue between RMB 206 million (US$32.8 million) and RMB215 million (US$34.2 million). The upward revision of Full Fiscal 2013 represents an increase of 26% to 32%. This forecast reflects Noah's current and preliminary view, which is subject to change.

Fourth Quarter Fiscal 2012 Highlights

• Net revenue increased 57.8% year-over-year to RMB46.7 million (US$7.3 million)
• Gross profit increased 47.5% year-over-year to RMB23.1 million (US$3.6 million), and gross profit margin was 49.5%
• Operating loss was RMB54.4 million (US$8.6 million) as compared to an operating loss of RMB9.6 million
• Non-GAAP operating income, excluding impairment loss on goodwill and intangible assets and share based compensation expenses, was RMB6.6 million (US$1.0 million), compared to an operating loss of RMB4.3 million
• Net loss was RMB54.2 million (US$8.5 million) as compared to a net loss of RMB38.7 million
• Non-GAAP net income, excluding impairment loss on goodwill and intangible assets and share based compensation expenses, was RMB6.9 million (US$1.1 million) as compared to non-GAAP net loss of RMB33.3 million
• Basic and diluted loss per share was RMB1.57 (US$0.25) as compared to basic and diluted loss per share of RMB1.11
• Non-GAAP basic and diluted earnings per share were RMB0.10 (US$0.02) as compared to a non-GAAP basic and diluted loss per share of RMB0.97

Commenting on the financials, Dora Li, Chief Financial Officer, said, "We are very pleased to see a continued improvement in our gross margin this quarter, and this has put us back on track to achieve breakeven for fiscal 2012. Despite the fact that we made an impairment charge on the valuations of Little News Star and Wentai Education to reflect the decline of fair value in the two brands, our business prospects and financials are continuing to go from strength to strength as evidenced by robust revenue growth and improved profitability at operating level."

Ms. Li continued, "While we will continue to expand our network through organic growth and acquisition, we expect gross margin to maintain at its current level on an annual basis, with operating costs starting to stabilize with a more scalable revenue base. We are confident that we will continue to achieve profitable growth through revenue expansion, and maintain a competitive cost base with the execution of our financial discipline."

Financial Outlook for the First Quarter of Fiscal 2013 and Full Fiscal 2013

Based on current estimates and market conditions, for the first quarter of fiscal 2013, Noah expects to generate net revenue in the range of RMB38 million (US$6.0 million) to RMB41 million(US$6.5 million). For the full fiscal 2013, the Company expects to generate revenue between RMB184 million (US$29.0 million) and RMB190 million (US$29.9 million). This forecast reflects Noah's current and preliminary view, which is subject to change.

Second Quarter Fiscal 2012 Financial Highlights

• Net revenue increased 112.9% year-over-year to RMB44.9 million (US$7.1 million)
• Gross profit increased 95.4% year-over-year to RMB20.0 million (US$3.2 million), and gross profit margin was 44.5%
• Operating loss was RMB2.3 million (US$0.4 million), compared to operating loss of RMB7.1 million in the second quarter of fiscal 2011; excluding one-off compensation expenses relating to management resignation amounting to RMB2.8 million, operating income for the second quarter of fiscal 2012 would have been RMB0.5 million.
• Net income was RMB2.3 million (US$0.4 million), compared to net income of RMB3.1 million in the second quarter of fiscal 2011; excluding one-off compensation expenses relating to management resignation amounting to RMB2.8 million, net income for the second quarter of fiscal 2012 would have been RMB5.1 million
• Basic and diluted earnings per share were RMB0.03 (US$0.005), compared to basic and diluted earnings per share of RMB0.08 in the second quarter of fiscal 2011 from continuing operations
• Non-GAAP basic and diluted earnings per share were RMB0.06 (US$0.009) from continuing operations, compared to non-GAAP basic and diluted earnings per share of RMB0.12 in the second quarter of fiscal 2011

Financial Outlook for Full Fiscal 2012 and for the Third Quarter of Fiscal 2012

Based on current estimates and market conditions, for the third quarter of fiscal 2012, Noah expects to generate net revenue in the range of RMB30 million (US$4.8 million) to RMB32 million (US$5.4 million). For the full fiscal 2012, the Company continues to expect to generate revenue between RMB145 million (US$23.4 million) andRMB155 million (US$24.9 million). This forecast reflects Noah's current and preliminary view, which is subject to change.

First Quarter 2012 Results

Fourth Quarter 2011 Results

• Net revenue from the education services business (continuing business) increased 186.4% year-over-year to RMB29.6million (US$4.6 million), exceeding guidance.
• Non-GAAP basic and diluted losses per share were RMB0.97 (US$0.15), compared to non-GAPP basic and diluted losses per share of RMB0.01 in the fourth quarter of fiscal 2010.

SHENZHEN, China, August 2, 2011 /PRNewswire-Asia-FirstCall/ -- Noah Education Holdings Ltd. (NYSE: NED) ("Noah" or the "Company"), a leading provider of education services in China, today announced the completion on July 31, 2011 of its acquisition of an 80% interest in Shanghai Yuanbo Education Information and Consulting Corporation Ltd. ("Yuanbo Education"), a company focused on early childhood education services in the Yangtze Delta region, for a total consideration of RMB94.866 million, pursuant to the terms of a definitive agreement entered into on April 13, 2011, and a supplemental agreement signed on July 22, 2011. The supplemental agreement contained an adjustment to reflect the fact that Yuanbo was unable to secure local government approval for the transfer of one of the 16 kindergartens mentioned in the definitive agreement. The acquisition is funded by Noah's current cash reserve, and is expected to be accretive to the Company's earnings in the fiscal year ending June 30, 2012.

Of Noah's RMB94.866 million investment in Yuanbo Education, RMB46.276 million is to be used to extend its reach by opening new kindergartens and making acquisitions across the Yangtze Delta region. Its management team, which has successfully grown the company since its establishment in 2001, will retain a 20% stake in Yuanbo Education. The kindergarten operator achieved revenue of approximately RMB32 million in 2010.

Yuanbo Education operates 15 kindergartens in the economically developed and prosperous Yangtze Delta region under the brand name Qingan. Yuanbo Education targets children aged 0-6, and has the competitive advantage of offering world-class courses from Taiwan, Germany, Italy and Canada. The kindergarten operator has a total student enrollment of approximately 4,300 and over 600 staff members.

Mr. Jerry He, Noah's Chief Executive Officer, said, "The acquisition of Yuanbo Education is testament to the successful execution of Noah's strategy of accelerating its profitable expansion within China's education services space via selective acquisitions. Yuanbo Education's focus on China's premium pre-school segment makes it an ideal complement to Wentai Education's portfolio of high-end kindergartens, primary and secondary schools, as well as to Little New Star's English language training centers catering to the 3-12 age group. The RMB46.276 million in fresh capital that we've injected into Yuanbo Education as part of the acquisition will serve to facilitate the opening of additional kindergartens, and our experience within education management equips us with the knowledge to enhance the operational efficiency of the kindergarten operator.

"China's high-growth, fragmented and underpenetrated education services market continues to offer a wealth of opportunities to generate healthy margins, high visibility and recurring cashflow. As such, we will continue to leverage our extensive industry experience and strong cash balance to pursue organic and acquisitive growth within this space."

SHENZHEN, China, June 15, 2011 /PRNewswire-Asia/ -- Noah Education Holdings Ltd. (NYSE: NED) ("Noah" or the "Company"), a leading provider of education services in China, today announced that the board of directors of the Company has authorized a new program to repurchase up to US$15 million American Depositary Shares ("ADSs"), each representing one Noah ordinary share, on or before June 30, 2013.

Second Quarter Highlights:

• Net revenue for the quarter decreased by 58.6% to RMB64.2 million (US$9.7 million), compared with RMB154.9 million in the second quarter of fiscal 2010
• Gross profit was RMB17.0 million (US$2.6 million), a 76.9% decrease compared with RMB73.5 million in the second quarter of fiscal 2010
• Net loss was RMB53.4 million (US$8.1 million), compared with net income of RMB15.4 million in the second quarter of fiscal 2010
• Non-GAAP basic and diluted losses per share, excluding share-based compensation expenses, were RMB1.38 (US$0.21) respectively, compared with basic and diluted earnings per share of RMB0.47 and RMB0.46 respectively for the second quarter of fiscal 2010

Commenting on the results, Mr. Xu Dong, Noah's Chairman and Chief Executive Officer, said, "In the second quarter of fiscal 2011, we witnessed a very strong performance within our education services business, as revenue for this segment grew 264% year-over-year and exceeded our guidance.

Based on current estimates and market conditions, Noah expects to generate in the range of RMB22 million (US$3.3 million) to RMB23 million (US$3.5 million) in revenue from education services for the third quarter of fiscal 2011.

Fourth Quarter Fiscal 2010 Financial Highlights:

• Net revenue for the quarter decreased by 71.9% to RMB33.5 million (US$4.9 million), compared with RMB119.1 million in the fourth quarter of fiscal 2009.
  
• Net loss was RMB83.5 million (US$12.3 million), compared with net income of RMB17.9 million in the fourth quarter of fiscal 2009.
  
• Basic and diluted loss per share were RMB2.19 (US$0.32) and RMB2.15 (US$0.32) respectively, compared with basic and diluted earnings per share of RMB0.50 for the fourth quarter of fiscal 2009.
  
• Non-GAAP basic and diluted loss per share, excluding share-based compensation expense, were RMB2.13 (US$0.31) and RMB2.09 (US$0.31) respectively, compared with basic and diluted earnings per share of RMB0.57 (US$0.08) for the fourth quarter of fiscal 2009

Financial Outlook for First Quarter of Fiscal Year 2011:

• Net revenue in the range of RMB123 million (US$18.1 million) to RMB129 million (US$19.0 million) for the first quarter of fiscal 2011, which includes RMB102.5 million to RMB106.5 million from the traditional ELP business, RMB12.5 million to RMB13.5 million from the LNS business and RMB 8 million to 9 million from Wentai Education (August 30 - September 30, 2010).
  
• Basic loss per share in the first quarter of fiscal 2011 is expected to be in the range of RMB0.32 (US$0.05) to RMB0.38 (US$0.06)

Net loss for the second quarter of 2010 was RMB13 million (US$2 million). This compares to net income of RMB30 million for the same period in 2009. The total number of outstanding ordinary shares of the Company as of June 30, 2010 was 211 million. The weighted average number of ADSs for the second quarter of 2010 was 105.5 million. One ADS represents two ordinary shares.

 Mr. Jason Wu commented, "We believe our strategic transition will not only help us improve the status quo of weak per store output and hence upgrade store profitability, but will also serve as a defensive mechanism to mitigate the negative impact of government policies on drug prices."  

    "Industry data is projecting attractive potential growth rates for sales of household consumables, as inflation of food prices and urban expansion continues throughout China. We believe that our established store footprint, proven central procurement program, advanced computer inventory replenishment systems and well-developed logistics network will enable us to develop a successful non-pharmaceutical line of business and provide the maximum level of convenience and value to our customers."

Mr. Dong Xu, Noah's chairman and chief executive officer, said, 'We are pleased to report solid year-over-year increases in revenue for both the fourth quarter and full fiscal year 2009, as we exceeded previously stated guidance for the fourth quarter. Our margin performance is evidence of our ability to execute our growth strategy while also keeping a vigilant eye on costs. We continue to improve the efficiency of our distribution channels, and we will consistently monitor our operations to uncover new ways to streamline our operations while maintaining strong revenue performance.

^aThe above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

''Our continued focus on executing our business strategy has enabled us to deliver another quarter of solid results, as we once again exceeded our top line guidance,' said Rick Chen, Noah's executive vice president. 'The 16.5% net revenue growth was primarily attributable to the strong momentum in our KLD products. We anticipate KLD margins will continue to improve and expect KLD to remain one of our primary near-term growth drivers.''

^a Company forecasts reflects the Company's current and preliminary view, which is subject to change.

GeoInvesting Third Quarter Guidance Report

Financial Outlook for Second Quarter of Fiscal Year 2009:

 Based on current estimates and market conditions, Noah expects net revenue to be in the range of RMB132 million to RMB134 million, and net income to be in the range of RMB9 million and RMB10 million for the second quarter of fiscal 2009. This forecast reflects Noah's current and preliminary view, which is subject to change.

Converting this guidance into Dollars based on the Yen to Dollar exchange rate(6.84 YEN:$1 USD) as of 12/23/2008 yields:

Revenue:  $19.30 Million to $19.59 Million

Net Income:  $1.32 Million to $1.46 Million

 Source: PR Newswire (November 20, 2008)