closeATA Announces Preliminary Results for Fourth Quarter and Fiscal Year Ended March 31, 2008
BEIJING, May 16 /Xinhua-PRNewswire-FirstCall/ -- ATA Inc. ("ATA" or the
"Company") (Nasdaq: ATAI), the leading provider of computer-based testing
and testing-related services in China, today announced its preliminary
unaudited financial results for its fiscal fourth quarter ended March 31,
2008 ("Fourth Quarter 2008") and fiscal year ended March 31, 2008 ("Fiscal
Year 2008").
The following is an estimate of our preliminary unaudited financial
results for the fourth quarter and fiscal year ended March 31, 2008 and
these estimates remain subject to change. These results may, for example,
become subject to adjustment based upon, among other things, completion of
our full year reporting processes, and our audited results could differ
materially from the estimates provided below. For additional information
regarding the various risks and uncertainties inherent in estimates of this
type, see the section entitled "Cautionary Note Regarding Forward Looking
Statements" at the end of this press release.
Fourth Quarter 2008 Highlights (Preliminary)
-- Net revenues increased by 84.0% year-over-year to approximately RMB29.8
million (US$4.3 million).
-- Gross profit increased by 290.3% year-over-year to approximately
RMB16.7 million (US$2.4 million).
-- Loss from operations decreased to approximately RMB4.6 million (US$ 0.7
million) from RMB12.6 million in the same period last year.
-- Net loss was approximately RMB10.8 million (US$1.5 million) compared to
a net loss of RMB11.8 million in the same period last year.
-- Net loss excluding share-based compensation expense and foreign
currency exchange losses (non-GAAP) was approximately RMB1.3 million
(US$0.2 million) compared to RMB11.1 million in the same period last
year.
-- Basic and diluted loss per ADS were expected to be RMB0.60 (US$0.09).
Basic and diluted loss per ADS excluding share-based compensation
expense and foreign currency exchange losses (non-GAAP) were expected
to be RMB0.07 (US$0.01). Each ADS represents two common shares of the
Company.
-- For the quarter, ATA delivered approximately 597,000 tests, an increase
of 89.0% year-over-year. In addition, average revenue per test
increased to RMB19.1 from RMB9.9 in the same period last year.
Fiscal Year 2008 Highlights (Preliminary)
-- Net revenue increased approximately by 103.6% year-over-year to
RMB172.8 million (US$24.6 million).
-- Gross profit increased approximately by 141.9% year-over-year to
RMB105.9 million (US$15.1 million).
-- Income from operations increased to approximately RMB25.6 million
(US$3.7 million) compared to a loss from operations of RMB19.6 million
in the previous year.
-- Net income was approximately RMB15.1 million (US$2.2 million), compared
to a loss of RMB16.8 million in the previous year.
-- Net income excluding share-based compensation expense and foreign
currency exchange losses, net (non-GAAP) was approximately RMB30.5
million (US$4.4 million), compared to a loss of RMB13.4 million in the
previous year.
-- Basic and diluted earnings per ADS were expected to be RMB1.19 (US$0.17)
and RMB0.80 (US$0.11), respectively. Basic and diluted earnings per
ADS excluding share-based compensation expense and foreign currency
exchange losses (non-GAAP) were RMB2.40 (US$0.34) and RMB1.62 (US$0.23),
respectively.
-- For the full year, ATA delivered approximately 3.6 million tests, an
increase of 8.9% year-over-year while average revenue per test
increased to RMB21.5 from RMB7.4 in the same period last year.
"We are happy with our performance for 2008 and are very excited about
what we can achieve for 2009," said Kevin Ma, ATA's Chairman and Chief
Executive Officer. "We believe we remain the leading player in China's
computer-based testing services market and are well positioned for further
growth."
ATA's Chief Financial Officer, Carl Yeung, stated, "Our revenue and
operating profitability for the full year has reached new milestones. For
the quarter, despite a continuing slow down in growth of our test-based
educational services and a delay in the launch of nationwide internet cafe
licensure testing, we have continued to meet our revenue and profitability
expectations as we experienced an increase in volume of test takers from
Ministry of Labor and Securities Association of China."
Preliminary Financial Results for the Fourth Quarter 2008
For Fourth Quarter 2008, ATA estimates net revenues to be approximately
RMB29.8 million (US$4.3 million), representing an 84.0% increase
year-over-year. This increase was mainly driven by an estimated 263.7%
increase in net revenues from testing services, and an estimated 31.2%
increase in net revenues from test-based educational programs.
The overall number of tests delivered increased by 89.0% year-over-year
to approximately 597,000 in Fourth Quarter 2008, while the average revenue
per test delivered rose to RMB19.1 from RMB9.9 in the same period of fiscal
year 2007. This increase in average revenue per test was due, in part, to a
significant increase in the number of tests delivered for the Securities
Association of China and Ministry of Labor.
Gross profit estimated to increase by 290.3% year-over-year to
approximately RMB16.7 million (US$2.4 million) from RMB4.3 million in the
same period last year. Gross margin estimated to increase to 56.1% in the
Fourth Quarter 2008 from 26.4% in the same period last year, driven by
higher contribution from the Company's more profitable testing services as
a percentage of total net revenue.
Operating expenses estimated to increase by 26.4% year-over-year to
approximately RMB21.4 million (USS$3.0 million) from RMB16.9 million in the
same period last year, primarily due to the increase in general and
administrative expenses related to share-based compensation, an increase in
our research and development staff, and incremental expenses related to
being a public company.
Loss from operations estimated to decrease to approximately RMB4.6
million (US$0.7 million) from RMB12.6 million in the same period last year.
Operating margin expected to be negative 15.4% in Fourth Quarter 2008
compared to negative 77.7% in the same period last year. Operating margin
improved due to stable operating expenses and a fast-growing revenue base.
For the quarter, ATA estimates to have incurred a foreign currency loss
of RMB7.6 million (US$1.1 million) primarily due to a high US dollar cash
balance from the January IPO proceeds and RMB appreciated against the US
dollar during the quarter.
Net loss for Fourth Quarter 2008 was approximately RMB10.8 million
(US$1.5 million), compared to net loss of RMB11.8 million in the same
period last year. Basic and diluted loss per common share expected to be
RMB0.30 (US$0.04), and basic and diluted loss per ADS were RMB0.60
(US$0.09).
Net loss excluding share-based compensation expense and foreign
currency exchange losses (non-GAAP) expected to be RMB1.3 million (US$0.2
million) for Fourth Quarter 2008 compared to loss of RMB11.1 million in the
same period last year. Basic and diluted loss per ADS excluding share-based
compensation expense and foreign currency exchange losses (non-GAAP) were
expected to be RMB0.07 (US$0.01).
Preliminary Financial Results for the Fiscal Year Ended March 31, 2008
For the fiscal year ended March 31, 2008 ATA reported net revenues of
approximately RMB172.8 million (US$24.6 million), representing a 103.6%
increase over the fiscal year ended March 31, 2007.
Total number of tests delivered was approximately 3.6 million, an
increase of 8.9% over the fiscal year ended March 31, 2007, while average
revenue per test increased to approximately RMB21.5 from RMB7.4 the prior
year.
Gross profit margin for the full year expected to expand to
approximately 61.3% compared to 51.6% for the fiscal year ended March 31,
2007.
Operating margin expected to improve to approximately 14.8% compared to
negative 23.1% for the fiscal year ended March 31, 2007.
Net income was approximately RMB15.1 million (US$2.2 million), and net
income excluding share-based compensation expense and foreign currency
exchange losses (non-GAAP) was approximately RMB30.5 million (US$4.4
million).
Basic and diluted earnings per ADS were approximately RMB1.19 (US$0.17)
and RMB0.80 (US$0.11), respectively. Basic and diluted earnings per ADS
excluding share-based compensation expense and foreign currency exchange
losses (non-GAAP) were RMB2.40 (US$0.34) and RMB1.62 (US$0.23),
respectively.
Other Operating Data
As of March 31, 2008, ATA had 342 staff, 134 of which were in client
service and support, 72 in sales and marketing, 73 in research and
development and 63 in general and administrative functions.
As of March 31, 2008, ATA had 1,854 authorized test centers located
throughout China.
The number of weighted average ADSs used to calculate basic and diluted
earnings per ADS for the quarter ended March 31, 2008 were 18.0 million and
21.4 million respectively.
ATA had 43.6 million common shares outstanding as of March 31, 2008.
First Quarter 2009 and Full Year Fiscal Year 2009 Guidance
For the fiscal first quarter 2009, ATA forecasts net revenues will be
in the range of RMB66 million to RMB69 million, representing year-over-year
growth in the range of 149% to 161%. ATA re-iterates the expectation that
net revenues for the fiscal year ended March 31, 2009 will be in the range
of RMB340 million to RMB350 million, which is expected to represent a 97%
to 103% growth over fiscal year 2008. This is ATA's current and preliminary
view, which is subject to change. Our results of operations for Fourth
Quarter 2008 and the fiscal year ended March 31, 2008 are not necessarily
indicative of our operating results for any future periods.
Conference Call
The Company will host a conference call at 6:00 p.m. ET on May 15,
2008, to discuss the results for the Fourth Quarter 2008. Joining Kevin Ma,
CEO of ATA Inc., will be Walter Wang, Director and President, and Carl
Yeung, Chief Financial Officer. To participate in the conference call,
please dial +1(800)901-5248 five to ten minutes prior to the scheduled
conference call time and ask to join the ATA Inc call. International
callers should dial +1(617)786-4512. Callers from Hong Kong should dial
+852-3002-1672.
If you are unable to participate in the call at this time, a replay
will be available on May 15 at 9:00 p.m. ET, for seven days. To access the
replay, dial +1(888)286-8010, international callers should dial
+1(617)801-6888, and enter the pass code 64528046.
This conference call will be broadcast live over the Internet and can
be accessed by all interested parties on ATA Inc.'s website at
http://www.ata.net.cn. To listen to the live webcast, please go to ATA
Inc.'s website at least fifteen minutes prior to the start of the call to
register, download, and install any necessary audio software. For those
unable to participate during the live broadcast, a replay will be available
shortly after the call on ATA Inc.'s website for 90 days.
Other Announcements:
On May 13, 2008, ATA has completed the domestic PRC approvals required
for acquisition of Beijing Jindixin Software Technology Company Limited, or
Beijing Jindixin, and its parent company, JDX Holdings Limited. This
acquisition is expected to expand ATA's business by allowing ATA to market
test delivery services to test sponsors that are using software developed
by Beijing Jindixin. This will expand ATA's scope of services to test
sponsors that wish to outsource their test management systems, and leverage
the relationships developed by the management of Beijing Jindixin with test
sponsors.
ATA recorded registration of 470,000 test takers for the China Banking
Association test scheduled to take place between May 31, 2008 and June 1,
2008. ATA expects its revenue per test taker for this client to decrease
from RMB74 per test taker in fiscal year 2008 to RMB64 per test taker in
fiscal year 2009. This is due to the China Banking Association lowering the
test fee paid by candidates from RMB150 to RMB100. Although the test fee
has been reduced, ATA will receive an effective higher revenue split of
64%, up from 49%. ATA will also reduce certain services in order to protect
its profit per test taker. ATA believes that lower fees paid by test
candidates will further support the high growth momentum for China Banking
Association test takers. In addition, the new arrangement demonstrates
ATA's strong position as an established test delivery provider in China.
About ATA Inc.:
ATA is the leading provider of computer-based testing services in
China. The Company offers comprehensive services for the creation and
delivery of computer-based tests based on its proprietary testing
technologies and test delivery platform. The Company's computer-based
testing services are used for professional licensure and certification
tests in various industries, including information technology, or IT,
services, banking, teaching, securities, insurance and accounting. ATA's
test center network comprised 1,854 authorized test centers located
throughout China as of March 31, 2008, which the Company believes is the
largest test center network of any commercial testing service provider in
China. Combined with its test delivery technologies, this network allows
ATA's clients to administer large-scale nationwide tests in a consistent,
secure and cost-effective manner. ATA has delivered over 24 million tests
since it commenced operations in 1999, and in July 2007 delivered tests to
more than 200,000 test takers in a single day for the China Banking
Association, through its test delivery platform. For further information,
please visit: http://www.ata.net.cn .
Cautionary Note Regarding Forward-looking Statements
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and as
defined in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as "look
forward to," "outlook," "forecast," "will," "expect," "anticipate,"
"future," "intend," "plan," "believe," "estimate" and similar terminology
and include, among other things, the Company's anticipated financial and
operating results for the fiscal quarter ending June 30, 2008 and the
fiscal year ending March 31, 2009. Among the factors that could cause the
Company's actual financial and operating results to differ from what the
Company currently anticipate may include the Company's ability to meet
challenges associated with its rapid expansion, the Company's ability to
meet the expectations of current and future clients, the Company's ability
to implement and maintain effective internal controls over financial
reporting, the health of the PRC economy, and uncertainties with respect to
the PRC legal and regulatory environments. The financial information
contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's prospectus dated January 28, 2008, which was filed with the U.S.
Securities and Exchange Commission and is available on the Securities and
Exchange Commission's website at www.sec.gov. For additional information on
these and other important factors that could adversely affect our business,
financial condition, results of operations and prospects, se "Risk Factors"
beginning on page 9 of our prospectus.
The forward-looking statements in this release involve known and
unknown risks and uncertainties and are based on current expectations,
assumptions, estimates and projections about the Company and the markets in
which it operates. The Company undertakes no obligation to update
forward-looking statements, which speak only of the Company's views as of
the date of this release, to reflect subsequent events or circumstances, or
to changes in its expectations, except as may be required by law. Although
the Company believes that the expectations expressed in these
forward-looking statements are reasonable, the Company cannot assure you
that its expectations will turn out to be correct, and investors are
cautioned that actual results may differ materially from the anticipated
results.
About Non-GAAP Financial Measures
To supplement ATA's consolidated financial results presented in
accordance with U.S. generally accepted accounting principles ("GAAP"), ATA
uses the following measures defined as non-GAAP financial measures by the
U.S. Securities and Exchange Commission: net income excluding share-based
compensation expenses and foreign currency exchange losses and basic and
diluted earnings per ADS excluding share-based compensation expenses and
foreign currency exchange losses. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP. For more information on these non-GAAP financial
measures, please see the table captioned "Reconciliations of non-GAAP
measures to the most comparable GAAP measures" set forth at the end of this
release.
ATA believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance and liquidity by
excluding share-based compensation expenses and foreign currency exchange
losses, which may not be indicative of its operating performance from a
cash perspective. ATA believes that both management and investors benefit
from these non-GAAP financial measures in assessing its performance and
when planning and forecasting future periods. These non-GAAP financial
measures also facilitate management's internal comparisons to ATA's
historical performance and liquidity. ATA computes its non-GAAP financial
measures using the consistent method from quarter to quarter. ATA believes
these non-GAAP financial measures are useful to investors in allowing for
greater transparency with respect to supplemental information used by
management in its financial and operational decision making. A limitation
of using non-GAAP net income excluding share- based compensation expenses
and basic and diluted earnings per share and per ADS excluding share-based
compensation expenses is that share-based compensation charges have been
and are expected to continue to be for the foreseeable future a significant
recurring expense in ATA's business. Management compensates for these
limitations by providing specific information regarding the GAAP amounts
excluded from each non-GAAP measure. The accompanying table captioned
"Reconciliations of Non-GAAP measures to the most comparable GAAP measures"
set forth at the end this release, has more details on the reconciliations
between GAAP financial measures that are most directly comparable to the
non-GAAP financial measures used by ATA.
Currency Convenience Translation
The Company's financial information is stated in RMB. The translation
of RMB amounts for the Fourth Quarter 2008 into United States dollars is
included solely for the convenience of readers and has been made at the
rate of RMB7.0120 to US$1.00, the noon buying rate as of March 31, 2008 in
the City of New York for cable transfers in RMB per US dollar as certified
for customs purposes by the Federal Reserve Bank of New York. Such
translations should not be construed as representations that RMB amounts
could be converted into US dollar at that rate or any other rate, or to be
the amounts that would have been reported under US GAAP.
For more information, please contact:
ATA Inc.
Carl Yeung, CFO
Tel: +86-10-6518-1122 x5107
Email: ir@ata.net.cn
CCG Elite Investor Relations
Crocker Coulson, President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Ed Job, CFA
Tel: +1-646-213-1914
Email: ed.job@ccgir.com
SOURCE ATA Inc.
Released May 15, 2008