China Distance Education Holdings LTD

CIK:0001438644|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Sales, net of value-added tax and related surcharges
Total net revenues	$ 209,558	$ 211,822	$ 166,668
Cost of sales
Total cost of sales	(101,598)	(104,741)	(87,883)
Gross profit	107,960	107,081	78,785
Operating expenses
Selling expenses	(69,848)	(61,460)	(44,717)
General and administrative expenses	(25,478)	(24,919)	(21,253)
Impairment of goodwill		(1,517)
Total operating expenses	(95,326)	(87,896)	(65,970)
Change in fair value in connection with business combination		695	84
Other operating income	6,155	2,968	3,051
Operating income (loss)	18,789	22,848	15,950
Interest income	2,555	2,207	2,522
Interest expenses	(1,021)	(2,819)	(3,331)
Gain from deconsolidation of a subsidiary		6,869
Impairment loss from long-term investments	(910)	(6,920)	(2,835)
Other income		318
Exchange gain (loss)	(5,261)	3,296	2,476
Income before income taxes and loss from equity method investments	14,152	25,799	14,782
Income tax expenses	(5,460)	(8,121)	(2,307)
Loss from equity method investments	(555)	(1,484)	(172)
Net income	8,137	16,194	12,303
Less: Net income (loss) attributable to noncontrolling interests	(2,293)	(5,060)	677
Net income attributable to China Distance Education Holdings Limited	$ 10,430	$ 21,254	$ 11,626
Net income attributable to ordinary shareholders
Basic	$ 0.08	$ 0.16	$ 0.09
Diluted	$ 0.08	$ 0.16	$ 0.09
Weighted average shares used in calculating net income per share
Basic	133,984,929	133,060,900	132,363,620
Diluted	135,232,224	134,138,117	133,117,155
Service [Member]
Sales, net of value-added tax and related surcharges
Total net revenues	$ 159,338	$ 145,917	$ 117,026
Cost of sales
Total cost of sales	(81,976)	(85,252)	(78,936)
Product [Member]
Sales, net of value-added tax and related surcharges
Total net revenues	22,061	27,372	10,213
Cost of sales
Total cost of sales	(19,622)	(19,489)	(8,947)
Others [Member]
Sales, net of value-added tax and related surcharges
Total net revenues	$ 28,159	$ 38,533	$ 39,429

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 8,137	$ 16,194	$ 12,303
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	2,618	2,005	2,306
Depreciation of property, plant and equipment	4,649	3,958	3,069
Amortization of other intangible assets	8,566	8,765	3,230
Non-cash operating lease cost	4,716
Provision of inventories	1,069	1,090	15
Change in allowance for doubtful accounts	499	(8)	199
Impairment loss on goodwill		1,517
Losses on disposition of property, plant and equipment	354	344	21
Loss from equity method investments	555	1,484	172
Impairment loss from long-term investments	910	6,920	2,835
Gain from disposal of an investment		(318)
Change in fair value in connection with a business combination		(695)	(84)
Gain from deconsolidation of a subsidiary		(6,869)
Changes in operating assets and liabilities:
Accounts receivable	1,012	(631)	(1,921)
Inventories	(1,467)	(2,712)	(1,769)
Prepayments and other current assets	(6,926)	(7,568)	(2,710)
Amounts due from related parties	(2,453)	(535)	7
Deferred costs	(151)	(359)	(458)
Operating lease right-of-use assets	3,389
Deferred tax assets	(1,571)	1,154	(3,050)
Other non-current assets	3,038	(1,306)	(1,328)
Accrued expenses and other liabilities	15,435	(179)	357
Amounts due to related parties	165	623
Income tax payable	6,456	1,112	582
Deferred revenue	5,210	68,368	23,243
Operating lease liabilities	(7,384)
Refundable fees	1,264	(10,836)	13,444
Deferred tax liabilities	(7,129)	277	(369)
Net cash provided by operating activities	40,961	81,795	50,094
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of businesses, net of cash acquired of US$565, nil and nil as of September 30, 2018, 2019 and 2020, respectively			(15,488)
Disposal of a consolidated subsidiary, net of cash disposed of nil, US$4,787 and nil as of September 30, 2018, 2019 and 2020, respectively		(2,769)
Purchase of term deposits	(25,158)
Maturity of term deposits	12,133
Purchase of short-term investments	(5,500)	(20,660)	(21,905)
Maturity of short-term investments	8,350	14,714	28,211
Acquisition of property, plant and equipment	(4,417)	(9,601)	(15,462)
Purchase of additional equity interests of a consolidated subsidiary		(5,571)
Settlement of contingent consideration related to previously acquired equity interests of a consolidated subsidiary		(1,048)
Proceeds from disposition of property, plant and equipment			49
Proceeds from disposal of equity securities without readily determinable fair value	762	3,589
Acquisition of other intangible assets	(290)	(663)	(736)
Payment of deposit for the acquisition of non-current assets	(488)	(2,744)	(8,359)
Payment of deposit for the purchase of investments		(218)
Purchase of equity method investments	(114)	(87)	(2,600)
Purchase of equity securities without readily determinable fair value	(1,427)		(18,136)
Purchase of available-for-sale investments			(1,071)
Net cash used in investing activities	(16,149)	(25,058)	(55,497)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution from noncontrolling interests	367	29	89
Loan repayments	(38,646)	(24,092)	(22,190)
Bank borrowings			35,300
Short-term loan acquired from a related party	20,000
Repayment of short-term loan to a related party			(1,677)
Proceeds from share options exercised by employees			1,489
Loan to optionees in connection with exercise of options			(1,557)
Repayment of loan to optionees in connection with exercise of options	192	135	193
Dividends paid to shareholders	(19,621)		(14,949)
Dividends paid by a subsidiary to its noncontrolling interests shareholders	(2,546)	(291)
Net cash used in financing activities	(40,254)	(24,219)	(3,302)
Exchange rate effect on cash and cash equivalents and restricted cash	10,224	(8,745)	(4,114)
Net (decrease) increase in cash and cash equivalents and restricted cash	(5,218)	23,773	(12,819)
Cash and cash equivalents and restricted cash at beginning of the year	106,335	82,562	95,381
Cash and cash equivalents and restricted cash at end of the year	101,117	106,335	82,562
Supplemental schedule of cash flow information
Income tax paid	(6,922)	(5,898)	(5,942)
Supplemental schedule of non-cash activities
Acquisition of property, plant and equipment and other intangible assets through utilization of deposits	2,909	6,238	474
Income tax reversal	$ 627	$ 79	$ 299

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Current assets
Cash and cash equivalents	$ 80,056	$ 67,977
Term deposits	13,440
Restricted cash - current	4,212	38,358
Short-term investments	20,343	22,118
Accounts receivable, net of allowance for doubtful accounts of US$1,282 and US$1,864 as of September 30, 2019 and 2020, respectively	6,154	7,330
Inventories	4,863	4,232
Prepayment and other current assets	31,315	26,732
Amounts due from related parties	3,074	515
Deferred costs	1,657	1,427
Total current assets	165,114	168,689
Non-current assets
Restricted cash – non-current	16,849
Property, plant and equipment, net	42,331	37,935
Operating lease right-of-use assets	30,029
Goodwill, net	78,966	74,829
Other intangible assets, net	23,161	30,113
Deposit for purchases of non-current assets	2,186	4,448
Long-term investments	26,324	25,379
Deferred tax assets	5,690	3,865
Other non-current assets	7,489	10,092
Total non-current assets	233,025	186,661
Total assets	398,139	355,350
Current liabilities
Bank borrowings	4,012	38,502
Accrued expenses and other liabilities (including accrued expenses and other liabilities of the consolidated variable interest entities or VIEs without recourse to China Distance Education Holdings Limited of US$35,491 and US$49,232 as of September 30, 2019 and 2020, respectively)	55,454	38,267
Amounts due to related parties	802	600
Income tax payable (including income tax payable of the consolidated VIEs without recourse to China Distance Education Holdings Limited of US$8,188 and US$14,451 as of September 30, 2019 and 2020, respectively)	17,378	10,899
Deferred revenue – current (including deferred revenue – current of the consolidated VIEs without recourse to China Distance Education Holdings Limited of US$93,364 and US$104,929 as of September 30, 2019 and 2020, respectively)	105,953	94,202
Operating lease liabilities, current (including operating lease liabilities, current of the consolidated VIEs without recourse to China Distance Education Holdings Limited of nil and US$3,835 as of September 30, 2019 and 2020, respectively)	4,160
Refundable fees – current (including refundable fees – current of the consolidated VIEs without recourse to China Distance Education Holdings Limited of US$435 and US$1,729 as of September 30, 2019 and 2020, respectively)	1,729	435
Total current liabilities	189,488	182,905
Non-current liabilities
Deferred revenue – non-current (including deferred revenue – non-current of the consolidated VIEs without recourse to China Distance Education Holdings Limited of US$33,564 and US$33,928 as of September 30, 2019 and 2020, respectively)	33,928	33,564
Refundable fees – non-current (including refundable fees– non-current of the consolidated VIEs without recourse to China Distance Education Holdings Limited of US$2,440 and US$2,602 as of September 30, 2019 and 2020, respectively)	2,602	2,440
Deferred tax liabilities	6,088	12,695
Long-term bank borrowing	16,000
Operating lease liabilities, non-current (including operating lease liabilities, non-current of the consolidated VIEs without recourse to China Distance Education Holdings Limited of nil and US$22,749 as of September 30, 2019 and 2020, respectively)	23,089
Total non-current liabilities	81,707	48,699
Total liabilities	271,195	231,604
Commitments and contingencies (Note 22)
Equity
Ordinary shares (par value of US$0.0001 per share; 500,000,000 shares authorized; 134,210,745 and 135,320,433 shares issued and outstanding as of September 30, 2019 and 2020, respectively)	14	13
Additional paid-in capital	27,316	24,507
Accumulated other comprehensive loss	(832)	(12,357)
Retained earnings	51,477	60,668
Total China Distance Education Holdings Limited shareholder's equity	77,975	72,831
Noncontrolling interests	48,969	50,915
Total equity	126,944	123,746
Total liabilities and equity	$ 398,139	$ 355,350