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Xueda Education Group Announces Third Quarter 2010 Financial Results

Xueda Education Group (NYSE: XUE) (“Xueda” or the “Company”), the leading national provider of tutoring services for primary and secondary school students in China with a focus on offering personalized tutoring services, today announced its unaudited financial results for the third quarter of 2010.

Third Quarter 2010 Highlights

  • Total net revenue for the third quarter 2010 increased by 110.0% year-over-year to $39.0 million from $18.6 million for the third quarter of 2009.
  • Gross profit for the third quarter 2010 increased by 219.5% to $11.3 million from $3.5 million for the third quarter of 2009.
  • Gross margin for the third quarter of 2010 increased significantly to 28.8% from 19.0% for the third quarter of 2009.
  • Net loss for the third quarter of 2010 was $2.4 million, compared to net loss of $4.5 million for the third quarter of 2009.
  • Non-GAAP 1 net loss for the third quarter of 2010 was $1.8 million, compared to net loss of $4.5 million for the third quarter of 2009.
  • Total number of learning centers increased to 178, covering 51 cities, as of the end of the third quarter of 2010, up from 157 centers covering 44 cities as of the end of the previous quarter.
  • Course hours delivered in the third quarter of 2010 increased by 91.5% year-over-year to 1.8 million hours.
  • Total number of students served in the third quarter of 2010 increased by 78.8% year-over-year to approximately 40,000.
  • Average hourly course fee increased to $21.6 in the third quarter of 2010 from $19.7 in the third quarter of 2009.

First Nine Months 2010 Highlights

  • Total net revenue for the nine months ended September 30, 2010 increased by 103.2% to $116.9 million from $57.5 million for the nine months ended September 30, 2009.
  • Gross profit for the nine months ended September 30, 2010 increased by 181.7% to $41.3 million from $14.7 million for the nine months ended September 30, 2009.
  • Net income for the nine months ended September 30, 2010 was $9.4 million, compared to net loss of $2.1 million for the nine months ended September 30, 2009.
  • Non-GAAP net income for the nine months ended September 30, 2010 was $10.7 million, compared to net loss of $2.1 million for the nine months ended September 30, 2009.

Mr. Xin Jin, co-founder and Chief Executive Officer of Xueda, commented, “We are very pleased to announce our first quarterly results as a public company. We achieved an important milestone in our corporate history with our successful initial public offering on the New York Stock Exchange in early November, which we believe will significantly contribute to our branding initiatives and help us enhance our corporate governance. As highlighted by our robust operating metrics above, we had an impressive third quarter, even though the third quarter is seasonally our slowest quarter because fewer students use our tutoring services during September due to the mandatory military training at the beginning of school year in September. We believe our strong operational performance once again demonstrates our solid business model and execution capability. We are convinced that the combination of Xueda’s established nationwide network, highly recognized brand, scalable operating platform and unmatched expertise in the tutoring market continues to solidify our leading market position and provides us with sustainable competitive advantages. With the additional cash raised from our recent IPO and private placement transaction, we are well positioned to further expand our market share in China’s large, fast-growing and fragmented private educational services industry.”

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