ZHONGSHAN CITY, China,
Second Quarter 2010 Financial Highlights -- Revenues increased 221% quarter over quarter to $11.4 million -- Gross profit increased 26% quarter over quarter to $3.2 million, representing a 28% gross margin -- Operating income increased 24% quarter over quarter to $2.5 million, with a 22% operating profit margin -- Net income increased 28% to $2.2 million, or $0.03 earnings per basic and diluted share Six months 2010 Financial Highlights -- Revenues increased 123% period over period to $14.9 million -- Gross profit decreased 3% period over period to $4.4 million, representing a 29% gross margin -- Operating income decreased 60% period over period to $1.5 million, with a 10% operating profit margin -- Net income decreased 63% to $1.1 million, or $0.02 earnings per basic and diluted share
"During the quarter, we were successful in introducing the Interactive
Classroom Solutions products (ICSPs) to our target customers and have created
a strong demand for our products. We believe that this result was derived from
a competitive product strengthened by our investment in marketing commencing
in the first quarter," commented Mr.
Mr. Chen further remarked, "With new orders received and in the process of
being delivered in the second half of the year, we remain confident that we
can achieve our 2010 guidance of
Second Quarter 2010 Financial Results
Revenue. Our sales revenue increased to
Cost of Sales. Our cost of sales increased by
Gross Profit and Gross Margin. Our gross profit increased by
Selling Expenses. In the three months ended
General and Administrative Expenses. In the three months ended
Research and Development Expenses. In the three months ended
Income Before Income Taxes. Our income before income taxes increased by
Net Income. In the three months ended
Six Months 2010 Financial Results
Revenue. During the six-month period ended
Cost of Sales. Cost of sales, consisting of raw materials, direct labor
and manufacturing overhead, was
Gross Profit and Gross Margin. Our gross profit decreased by
Selling Expenses. In the six months ended
General and Administrative Expenses. In the six months ended
Research and Development Expenses. In the six months ended
Income Before Income Taxes. Our income before income taxes decreased by
Net Income. In the six months ended
SEGMENT DATA
The following table sets out the analysis of the Company's revenue by products and services. Three months ended Six months ended June 30, June 30, 2010 2009 2010 2009 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue from external customers: Interactive classroom solutions products $7,859,789 $ -- $7,859,789 $ -- Electronic learning products 3,505,195 -- 7,078,184 -- Licensing of patent and related technology development services -- 3,423,155 -- 6,300,457 Other electronic products -- 111,909 -- 397,011 Total $11,364,984 $ 3,535,064 $ 14,937,973 $ 6,697,468
About China Interactive Education
China Interactive Education, Inc., headquartered in Zhongshan, China, is a pioneer in providing interactive teaching and learning solutions to China's educational institutions, professional training schools, and individuals. The Company's proprietary educational materials, co-developed with one of China's leading universities and groups of educational professionals, are embedded in its self-developed interactive hardware and software solutions. China Interactive Education sells its interactive classroom solutions (ICS) directly to educational institutions, as well as through area distributors, and its electronic learning products (ELPs) are sold under its own "Five-Best Student" consumer brand as well as other licensed brands through retail points of sale throughout China. To learn more about the Company, please visit http://www.menq.com.cn .
Safe Harbor Statement
This press release may contain certain 'forward-looking statements' relating to the business of China Interactive Education, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are forward-looking statements, including statements regarding: the ability of the Company to fulfill its obligations under its ICS and ELP contracts and realize revenues in the second half of the year and meet its fiscal year 2010 guidance; the general ability of the Company to achieve its commercial objectives, including the expansion of its market presence to other geographic regions; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as 'believes,' 'expects' or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
--FINANCIAL TABLES FOLLOW-- CHINA INTERACTIVE EDUCATION, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS EXPRESSED IN US DOLLARS) ASSETS June 30, December 31, 2010 2009 (Unaudited) Current assets Cash and cash equivalents $ 320,496 $ 351,544 Accounts receivable, net of allowance of $720,112 and $nil as of June 30, 2010 and December 31, 2009 respectively 14,200,857 11,006,809 Inventories 3,880,367 1,152,365 Deposits, prepayments and other receivables 343,642 656,236 Total current assets 18,745,362 13,166,954 Property, plant and equipment, net 427,633 402,897 Intangible assets, net 477,769 581,604 Total assets $ 19,650,764 $ 14,151,455 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts and notes payable $ 6,017,316 $ 4,687,232 Other payables and accrued expenses 395,280 160,449 Advances from customers 672,768 255,852 Value added and other taxes payable 4,059,947 1,737,623 Income tax payable 959,418 742,937 Due to related parties 1,162,939 1,357,954 Total current liabilities 13,267,668 8,942,047 Total liabilities 13,267,668 8,942,047 Commitments and Contingencies Shareholders' Equity Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding -- -- Common stock, $0.001 par value, 200,000,000 shares authorized, 65,000,000 shares issued and outstanding 65,000 65,000 Additional paid-in capital 1,128,000 1,128,000 Statutory reserves 87,884 87,884 Retained earnings 4,672,383 3,540,507 Accumulated other comprehensive income 429,829 388,017 Total shareholders' equity 6,383,096 5,209,408 Total liabilities and shareholders' equity $ 19,650,764 $ 14,151,455 CHINA INTERACTIVE EDUCATION, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) (AMOUNTS EXPRESSED IN US DOLLARS) Three months ended Six months ended June 30, June 30, 2010 2009 2010 2009 Revenue $11,364,984 $3,535,064 $14,937,973 $6,697,468 Cost of sales (8,197,087) (1,016,281) (10,562,739) (2,204,541) Gross profit 3,167,897 2,518,783 4,375,234 4,492,927 Operating expenses: Selling expenses (289,459) (17,232) (2,297,360) (56,131) General and administrative expenses (304,189) (89,902) (544,566) (181,512) Research and development expenses (73,451) (394,275) (73,451) (602,848) (667,099) (501,409) (2,915,377) (840,491) Income from operation 2,500,798 2,017,374 1,459,857 3,652,436 Bank interest income 30 10 88 196 Income before provision for income tax 2,500,828 2,017,384 1,459,945 3,652,632 Provision for income taxes (328,069) (323,730) (328,069) (611,460) Net income 2,172,759 1,693,654 1,131,876 3,041,172 Other compre- hensive income: Foreign currency translation adjustment (101,298) (382,432) 41,812 (216,193) Total compre- hensive income $2,071,461 $1,311,222 $1,173,688 $2,824,979 Weighted average number of shares: - Basic and diluted 65,000,000 60,400,000 65,000,000 60,400,000 Earnings per common share - Basic and diluted $0.03 $0.03 $0.02 $0.05 CHINA INTERACTIVE EDUCATION, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (AMOUNTS EXPRESSED IN US DOLLARS) Six months ended June 30, 2010 2009 Cash flows from operating activities: Net income $1,131,876 $3,041,172 Adjustments to reconcile net income to cash provided by operating activities: Depreciation of property, plant and equipment 48,994 611 Amortization of intangible assets 110,165 109,840 Allowance for doubtful debts 718,145 -- (Increase) decrease in assets: Accounts receivable (3,817,185) 129,198 Inventories (2,713,928) (217,933) Deposits, prepayments and other receivables 315,312 (302,675) Increase (decrease) in liabilities: Accounts and notes payable 1,300,188 212,971 Other payables and accrued expenses 233,670 97,388 Advance from customers 415,447 282,944 Value added and other taxes payable 2,305,870 2,550 Income tax payable 211,525 (20,433) Net cash provided by operating activities 260,079 3,335,633 Cash flows from investing activities: Purchase of property, plant and equipment (71,411) (176,240) Purchase of intangible assets (3,232) -- Advance to related company -- (163,809) Net cash used in investing activities (74,643) (340,049) Cash flows from financing activities: Advance from related parties 842,824 -- Repayment to related parties (1,044,477) (3,005,749) Net cash used in financing activities (201,653) (3,005,749) Effect of foreign currency translation (14,831) (226) Net decrease in cash and cash equivalents (31,048) (10,391) Cash and cash equivalents, beginning of period 351,544 440,000 Cash and cash equivalents, end of period $320,496 $429,609 Supplemental disclosure information Income taxes paid $116,546 $-- For more information, please contact: Company Contact: Mr. Michael Lin Vice President, Investor Relations China Interactive Education, Inc. Phone: +1-949-743-0868 Email: ir@menq.com.cn
SOURCE China Interactive Education, Inc.