China Distance Education Holdings Limited ( DL) Q4 2011 Earnings Call November 17, 2011 8:00 AM ET Executives Zhengdong Zhu – Chairman and CEO Ping Wei – Chief Financial Officer Analysts Mark Marostica – Piper Jaffray Isabella Zhao – Oppenheimer Presentation Operator
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As a reminder, this conference call is being recorded. A summarized presentation can be downloaded from the company's IR website and which we will refer to during the course on the conference call. In addition, a webcast of this conference call is available on the company's Investor Relations website at ir.cdeledu.com.I’ll now like to turn the call over to Mr. Zhu to discuss the operational highlights. Mr. Zhu, please go ahead. Zhengdong Zhu Thank you, everyone for joining us on our fourth quarter and fiscal 2011 results conference call. Our operating results were released earlier and available on the company’s website, as well as our new slide services. We delivered better than expected revenue growth in the quarter and ended the year with a very strong cash position. Revenue for the fourth quarter before adjusting for revenue from a business segment that will be discontinued within a year stood at over US$7.3 million, exceeding our guidance range for the full year before adjusting for revenue from discounted operation revenue would have come at US$43.3 million. After adjusting for the discontinued operation net revenue from continued operation increased by 18.2% for the fourth quarter to US$13.1 million and increase a solid 27.6% year-over-year to US$41.6 million on a full year basis. Our performance throughout the year has been supported by steady enrollment growth in most of our online courses and healthy ASP growth across our core test-preparation courses. Our performance in the fourth quarter indicates that the underlying demand for our course -- online courses will remain strong in the year ahead. We have also made significant progress throughout fiscal 2011 on a number of key strategic initiatives, namely our effort to maximize a long-term growth potential of our business model and operating platform. Fundamentally, our business model has not changed, CDEL has always been first and foremost educational content provider, delivering our high quality [through attracting] test-preparation courses, continued education courses and professional development courses and related services through our internet base online learning platform.
We also build centralized marketing distribution network, powerful content development and student service processes to ensure the quality of our courses and learning results of our student.We will focus primarily on professional education, but we have recently expanding our service in such areas as K-12 after-school training to provide a broader offering of educational services to reach more students that seek high quality, comprehensive and lifelong learning programs. As we have invested and grow our content delivery platform, we’ve also gained greater insight into how our unique platform can better directed to build sustainable long-term growth. As such we plan to direct more internal resources in this area going forward. At the same time to focus our effort on our key businesses, we have decided to discontinue a certain segment of our business, more information on this decision will be publicized in due time. Well, our GAAP financial results were negatively impacted in the fourth quarter and fiscal 2011 due to the strategic decision. We believe this realignment of our service offerings and resources will allow us to better focus on our key growth initiatives and on building shareholders value over the long-term. We believe that our people exceed to the successful executing of our growth strategy and retaining and motivating our lecturers and staff is of high important. As such, we have decided to again modify the terms of our existing share options granted under the share initiative plan that we have adopted on 18 April, 2008, and grant additional options to our employees and lecturers as announced in our earnings release. We are confident in our prospects and remain committed to increasing value for our shareholders over the long-term. Let me know walk you through our operational development for the quarter in more detail. Starting on slide five. Net revenue from continued operations increased 18.2% to US$13.1 million. Total cost enrollments from continued operations increased 33.7% year-over-year to 536,000. Read the rest of this transcript for free on seekingalpha.com