SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2014

 

Commission File Number: 001-34914

 

Xueda Education Group

 

A-4 Xibahe Beili

Chaoyang District

Beijing 100028

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F     x  Form 40-F     o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):     o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):     o

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes    o No    x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 


 

TABLE OF CONTENTS

 

Exhibit 99.1 – Press release

 

2


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

XUEDA EDUCATION GROUP

 

 

 

By:

/s/ Xin Jin

 

Name:

Xin Jin

 

Title:

Chief Executive Officer

 

 

Date: August 26, 2014

 

3

Exhibit 99.1

 

Xueda Education Group Reports Second Quarter 2014 Financial Results

Quarterly Net Revenues increased 5.4% Year-over-Year to $120.8 million

Effective Student Count(1) increased 17.6% Year-over-Year to 58,895 students

New Student Sign-ups increased 5.3% Year-over-Year to 27,049 students

Student Retention increased 30.5% Year-over-Year to 31,846 students

 

BEIJING, August 26, 2014 — Xueda Education Group (NYSE: XUE) (“Xueda” or the “Company”), a leading national provider of personalized tutoring services for primary and secondary school students in China, today announced its unaudited financial results for the second quarter ended June 30, 2014.

 

Financial Highlights for Second Quarter 2014 Compared to Second Quarter 2013

 

·                  Total net revenues increased 5.4% to $120.8 million from $114.6 million.

·                  Gross margin was 34.5%, compared to 39.1%.

·                  Net income attributable to Xueda Education Group was $15.3 million, compared to $17.2 million.

·                  Non-GAAP diluted net income(2) per ADS attributable to Xueda Education Group was $0.27, compared to $0.28.

 

Operational Highlights for the Second Quarter 2014

 

·                  Effective student count increased 17.6% to 58,895 students from 50,087 for the second quarter 2013.

·                  New student sign-ups increased 5.3% to 27,049 students from 25,688 for the second quarter 2013.

·                  Student retention increased 30.5% to 31,846 students from 24,399 for the second quarter 2013.

·                  New learning centers increased net 32 compared to the first quarter 2014. The total number of learning centers at the end of the second quarter was 462.

 

Mr. Xin Jin, co-founder and Chief Executive Officer of Xueda, stated, “A key strategy in 2014 is to increase our student base.  In the second quarter, we enrolled 27,000 new students and retained approximately 7,000 more students compared to the second quarter 2013.  Our effort to attract and retain students is working, and along with our small group tutoring and eXueda initiatives, we are cementing a broad-based foundation for the future.

 

Our enlarged student base is embracing our expanded service offerings and promotions at a much faster pace than we had initially anticipated, causing an unexpected year-over-year decline in average revenue per student and ultimately flat year-over-year 2014 revenue growth. As we roll into 2015, the good news is that we will adjust our pricing and small group sizing, and therefore, normalize average revenue per student.  As such, we are confident about our ability to drive meaningful revenue and profit growth in 2015.”

 

Ms. Christine Lu-Wong, Chief Financial Officer of Xueda, added, “In addition to growing our student base, this quarter we aggressively invested in further expanding our learning center network and implementing eXueda. We added net 32 new learning centers and accelerated our investments in eXueda by seeding ownership of Internet-enabled tablets for our newly enrolled students and recruits.  We believe these investments, although significantly increasing our cost of sales during the quarter, will build on the momentum and further accelerate the expansion of the tutoring platform.”

 

(1)  Effective student count is the number of students whose contract amounts are at least 200RMB as of the last day of the period and have attended at least one tutoring session within the last 180 days.

 

(2)  All non-GAAP measures exclude share-based compensation expenses. For further details on non-GAAP measures, please refer to the reconciliation tables and a detailed discussion of the Company’s use of non-GAAP information set forth elsewhere in this press release.

 

1


 

Second Quarter 2014 Financial and Operating Results

 

Total Net Revenues

 

Total net revenues for the second quarter 2014 increased 5.4% year-over-year to $120.8 million, from $114.6.million for the second quarter 2013. Included in total net revenues for the quarter is $9.9 million from 24,000 Internet-enabled tablet devices provided as part of the implementation of eXueda, the Company’s cloud-based tutoring platform.  Average total revenue per student was $1,881 for the second quarter 2014 compared to $1,973 for the second quarter 2013.

 

Cost of Revenues

 

Cost of revenues for the second quarter 2014 increased 13.5% year-over-year to $79.2 million, from $69.8 million for the second quarter 2013. The increase was primarily due to the Company’s investment of $11.9 million in Internet-enabled tablet devices provided to students and potential customers as part of the implementation of eXueda.

 

Gross Profit and Gross Margin

 

Gross profit for the second quarter 2014 decreased 7.1% year-over-year to $41.7 million from $44.9 million for the second quarter 2013. Gross margin for the second quarter 2014 was 34.5%, compared to 39.1% for the second quarter 2013.  The decrease was largely due to investments in the implementation of eXueda.

 

·                  Teaching staff cost for the second quarter 2014 decreased to 42.8% of total net revenues, from 47.4% for the second quarter 2013.

·                  Rental cost for the second quarter 2014 decreased to 8.8% of total net revenues, from 8.9% for the second quarter 2013, despite adding net 32 new learning centers compared to a net decrease of two learning centers for the second quarter 2013.

·                  Depreciation costs for the second quarter 2014 decreased to 2.6% of total net revenues, from 3.0% for the second quarter 2013.

·                  Investments in the implementation of eXueda was $11.9 million in Internet-enabled tablet devices for the second quarter 2014 compared to $nil for the second quarter 2013.

 

Operating Expenses

 

Total operating expenses for the second quarter 2014 were $23.3 million unchanged from the second quarter 2013.  Total operating expenses for the second quarter 2014 comprised 19.3% of total net revenues, compared to 20.3% for the second quarter 2013. Total non-GAAP operating expenses for the second quarter 2014 were $21.8 million, compared to $22.2 million the same period in 2013.  Total non-GAAP operating expenses for the second quarter 2014 comprised 18.1% of total net revenues, compared to 19.4% for the second quarter 2013.

 

General and administrative expenses for the second quarter 2014 were $13.2 million, compared to $13.8 million for the same period in 2013.  General and administrative expenses for the second quarter 2014 accounted for 10.9% of total net revenues, compared to 12.0% for the second quarter 2013. Non-GAAP general and administrative expenses for the second quarter 2014 were $11.7 million, compared to $12.7 million for the same period in 2013.  Non-GAAP general and administrative expenses for the second quarter 2014 accounted for 9.7% of total net revenues, compared to 11.0% for the second quarter 2013.  The decrease in general and administrative expenses was due to a decrease in office expenses and bonuses accrued.

 

Sales and marketing expenses for the second quarter 2014 were $10.1 million, compared to $9.5 million for the same period in 2013. Sales and marketing expenses for the second quarter 2014 represented 8.4% of total net revenues, compared to 8.3% for the second quarter 2013. Sales and marketing expenses were approximately in line with the year-ago quarter.

 

Operating Income

 

Operating income for the second quarter 2014 was $18.3 million, compared to $21.5 million for the second quarter 2013. Non-GAAP operating income for the second quarter 2014 was $19.8 million, compared to $22.7 million for the second quarter 2013. The decrease was primarily due to lower gross profit.

 


 

Net Income and Net Income per ADS

 

Net income attributable to Xueda Education Group for the second quarter 2014 was $15.3 million, compared to $17.2 million for the same period in 2013. Diluted net income attributable to Xueda Education Group per ADS for the second quarter 2014 was $0.24 per ADS, compared to $0.26 per ADS for the second quarter 2013.

 

Non-GAAP net income attributable to Xueda Education Group for the second quarter 2014 was $16.7 million, compared to $18.3 million for the second quarter 2013. Non-GAAP diluted net income attributable to Xueda Education Group per ADS for the second quarter 2014 was $0.27 per ADS, compared to $0.28 for the second quarter 2013.

 

Cash Flow

 

Net operating cash outflow for the second quarter 2014 was $19.7 million, compared to $5.3 million cash outflow for the second quarter 2013. The increase in net operating cash outflow was mainly due to lower cash collections from enrollment and renewals. Capital expenditures for the second quarter 2014 were $3.7 million, compared to $1.7 million for the second quarter 2013.  The increase in capital expenditures was attributed to the increase in new learning centers in the second quarter 2014, compared to the net decrease of 2 learning centers in the second quarter 2013.

 

First Half 2014 Financial Results and Operating Results

 

Total Net Revenues

 

Total net revenues were $206.1 million for the first half 2014, an increase of 3.8% year-over-year from $198.5 million for the corresponding period in 2013.

 

·                  Total new student sign-ups were 54,793 for the first half 2014, an increase of 7.3% year-over-year from 51,071, for the corresponding period in 2013.

·                  Average total revenue per student was $3,197 for the first half 2014, compared to $3,305 for the corresponding period in 2013

 

Cost of Revenues

 

Total cost of revenues were $140.3 million for the first half 2014, an increase of 8.0% year-over-year from $130.0 million for the corresponding period in 2013.

 

Gross Profit and Gross Margin

 

Gross profit was $65.7 million for the first half 2014, a decrease of 4.1% year-over-year from $68.6 million for the corresponding period in 2013.  For the first half 2014, gross margin was 31.9%, compared to 34.5% for the corresponding period in 2013. The decrease was largely attributed to the Company’s investment in Internet-enable tablet devices in the second quarter to support the implementation of eXueda.

 

·                  Teaching staff cost was 46.2% of total net revenues for the first half 2014, compared to 48.8% for the corresponding period in 2013.

·                  Rental cost was 10.2% of total net revenues for the first half 2014, unchanged from the corresponding period in 2013, despite adding net 54 new learning centers in the first half of 2014, compared to net 4 additional learning centers for the corresponding period in 2013

 

Operating Expenses

 

Total operating expenses were $47.1 million for the first half 2014, an increase of 3.9% year-over-year from $45.4 million for the corresponding period in 2013.  Total operating expenses accounted for 22.9% of total net revenues for the first half 2014, nearly flat year-over-year from 22.8% for the corresponding period in 2013.

 

General and administrative expenses were $28.5 million for the first half 2014, an increase of 5.0% year-over-year from $27.2 million for the corresponding period in 2013.  Selling and marketing expenses were $18.6 million for the first half 2014, compared to $18.2 million for the corresponding period in 2013.

 


 

Operating Income

 

Income from operations for the first half 2014 was $18.6 million, a decrease of 19.7% year-over-year from $23.2 million for the corresponding period in 2013.  Non-GAAP income from operations for the first half 2014 was $22.9 million, a decrease of 9.5% from $25.4 million for the corresponding period in 2013.  The decrease was primarily attributed to lower gross profit.

 

Net Income and Net Income per ADS

 

Net income attributable to Xueda Education Group for the first half 2014 was $16.4 million, a decrease of 14.5% year-over-year from $19.2 million for the corresponding period in 2013. Diluted net income attributable to Xueda Education Group per ADS for the first half 2014 was $0.25, compared to $0.29 for the corresponding period in 2013.

 

Non-GAAP net income attributable to Xueda Education Group for the first half 2014 was $20.7 million, a decrease of 2.9% year-over-year from $21.3 million for the corresponding period in 2013.  Non-GAAP diluted income attributable to Xueda Education Group per ADS for the first half 2014 was $0.31, nearly flat year-over-year from $0.32 for the corresponding period in 2013.

 

Cash and Cash Flow

 

Net operating cash outflow for the first half 2014 was $2.6 million, compared to an $18.5 million cash inflow for the corresponding period in 2013.  The increase in net operating cash outflow was mainly due to lower cash collection from new enrollment and renewals. Capital expenditures for the first half 2014 were $7.1 million, compared to $4.1 million for the corresponding period in 2013.

 

Cash and Short-term Investment

 

As of June 30, 2014, the Company had cash, cash equivalents and short-term investments totaling $198.7 million compared to $246.7 million as of December 31, 2013. The decrease was mainly due to a $9.9 million dividend payment, $29.6 million for repurchased shares and $7.1 million in capital expenditures.

 

Business Outlook

 

For the third quarter 2014, the Company currently expects:

 

·                  Net revenues to be at least $73.0 million, a decrease of approximately 8% from the same quarter of the previous year.

·                  Non-GAAP net loss attributable to Xueda Education Group per ADS to be approximately $0.08, compared to non-GAAP diluted net income attributable to Xueda Education Group per ADS of $0.04 for the same quarter of the previous year.  This estimate assumes a full-year effective income tax rate of 27% on non-GAAP income before income tax and weighted average basic ADSs of 62.2 million.

 

For the full-year 2014, the Company currently expects:

 

·                  Net revenues to be at least $347.5 million, flat from the previous year.

·                  Non-GAAP diluted net income attributable to Xueda Education Group per ADS to be at least $0.16, compared to $0.32 from the previous year, representing a 50% year-over-year decrease.  This estimate assumes an effective income tax rate of 27% on non-GAAP income before income tax and weighted average diluted ADSs of 65.1 million.

 

The above guidance is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

 


 

Non-GAAP Financial Measures

 

To supplement the financial measures calculated in accordance with U.S. GAAP, this press release includes certain non-GAAP financial measures of adjusted net income and adjusted diluted earnings per ADS, each of which is adjusted to exclude share-based compensation expenses. The Company believes excluding such expenses from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company’s core operating results as such expenses are not directly attributable to the underlying performance of the Company’s business operations and do not impact its cash earnings. The Company also believes that these non-GAAP financial measures are important to help investors understand the Company’s current financial performance and future prospects and compare business trends among different reporting periods on a consistent basis. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with U.S. GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with U.S. GAAP. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, please see the financial information included elsewhere in this press release.

 

Conference Call

 

Xueda will hold a corresponding conference call and live webcast at 8:00 p.m. EDT on Monday, August 25, 2014 (which corresponds to 5:00 p.m. PDT on Monday, August 25, 2014 and 8:00 a.m. Beijing/Hong Kong Time on Tuesday, August 26, 2014) to discuss the results and answer questions from investors. Listeners may access the call by dialing:

 

US Toll Free:

1-866-519-4004

International Toll:

65-6723-9381

Hong Kong Toll Free:

800-930-346

Hong Kong Toll:

852-2475-0994

China Toll:

800-819-0121

China Toll (Mobile):

400-620-8038

Conference ID:

76510171

 

The conference call will be available live via webcast on the Investors section of Xueda’s website at http://ir.xueda.com. The archive replay will be available on Xueda’s website shortly after the call.

 

A replay of the conference call may be accessed through September 2, 2014 by dialing:

 

US Toll Free:

1-855-452-5696

International Toll:

61-2-8199-0299

Conference ID:

76510171

 

About Xueda Education Group

 

Xueda Education Group (“Xueda”) is a leading national provider of personalized tutoring services for primary and secondary school students in China. For more information about Xueda, please visit http://ir.xueda.com.

 

Forward-looking Statements

 

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, market and operating conditions, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of

 


 

which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” “targets” and similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks and uncertainties beyond our control, which could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Further information regarding these and other risks, uncertainties or factors is included in our filings with the U.S. Securities and Exchange Commission. We do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

 

Contact:

 

Xueda Education Group
Ross Warner

Tel: +86-10-6427-8899 ext. 6619

Email: investor_relations@xueda.com

 

Asia Bridge Capital Limited

Wendy Sun

Tel: +86-10-8556-9033 (China)

+1-888-550-8392 (U.S.)

Email: wendy.sun@asiabridgegroup.com

 


 

Xueda Education Group

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of US Dollars)

 

 

 

As of

 

 

 

June 30, 2014

 

December 31, 2013

 

 

 

(Unaudited)

 

(Note)

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

96,394

 

$

117,063

 

Short-term investments

 

102,354

 

129,619

 

Prepaid expenses and other current assets

 

23,156

 

16,642

 

Amounts due from related parties

 

—

 

2,631

 

Deferred tax assets-current

 

5,416

 

6,139

 

Total current assets

 

227,320

 

272,094

 

Property and equipment, net

 

33,848

 

34,826

 

Rental deposits

 

4,898

 

4,807

 

Goodwill

 

875

 

897

 

Long-term investments

 

14,751

 

15,197

 

Other non-current assets

 

5,294

 

3,797

 

Total assets

 

$

286,986

 

$

331,618

 

 

 

 

 

 

 

Liabilities and shareholders’ equity Current liabilities:

 

 

 

 

 

Deferred revenues-current (including deferred revenues of the consolidated VIE without recourse to the Company of $82,321 and $103,871 as of June 30, 2014 and December 31, 2013, respectively)

 

82,321

 

103,871

 

Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to the Company of $27,125 and $29,993 as of June 30, 2014 and December 31, 2013, respectively)

 

37,438

 

35,275

 

Income taxes payable (including income taxes payable of the consolidated VIE without recourse to the Company of $9,770 and $8,675 as of June 30, 2014 and December 31, 2013, respectively)

 

11,183

 

9,383

 

Deferred income-current (including deferred income of the consolidated VIE without recourse to the Company of $nil and $nil as of June 30, 2014 and December 31, 2013, respectively)

 

347

 

347

 

Amount due to a related party (including amount due to a related party of the consolidated VIE without recourse to the Company of $nil and $nil as of June 30, 2014 and December 31, 2013, respectively)

 

11

 

—

 

Total current liabilities

 

131,300

 

148,876

 

Deferred revenues-noncurrent (including deferred revenues of the consolidated VIE without recourse to the Company of $21,620 and $29,983 as of June 30, 2014 and December 31, 2013, respectively)

 

21,620

 

29,983

 

Deferred income-noncurrent (including deferred income of the consolidated VIE without recourse to the Company of $nil and $nil as of June 30, 2014 and December 31, 2013, respectively)

 

87

 

260

 

 

 

 

 

 

 

Total liabilities

 

153,007

 

179,119

 

 

 

 

 

 

 

Total Xueda Education Group’s equity

 

133,943

 

152,387

 

Non-controlling interests

 

36

 

112

 

Total equity

 

133,979

 

152,499

 

 

 

 

 

 

 

Total liabilities and equity

 

$

286,986

 

$

331,618

 

 

Note: The above financial information as of December 31, 2013 is derived from Xueda Education Group’s audited financial statements for the year ended December 31, 2013.

 


 

Xueda Education Group

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands of US Dollars, except number of ADSs and per ADS data)

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

$

120,810

 

$

114,627

 

$

206,064

 

$

198,528

 

Cost of revenues(1)

 

(79,160

)

(69,772

)

(140,319

)

(129,953

)

Gross profit

 

41,650

 

44,855

 

65,745

 

68,575

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

General and administrative(1)

 

(13,202

)

(13,768

)

(28,507

)

(27,155

)

Selling and marketing(1)

 

(10,117

)

(9,543

)

(18,605

)

(18,202

)

Total operating expenses

 

(23,319

)

(23,311

)

(47,112

)

(45,357

)

Income from operations

 

18,331

 

21,544

 

18,633

 

23,218

 

Interest income

 

1,592

 

2,017

 

3,058

 

3,576

 

Income before income tax expenses

 

19,923

 

23,561

 

21,691

 

26,794

 

Income tax expenses

 

(4,939

)

(6,347

)

(5,372

)

(7,393

)

 

 

 

 

 

 

 

 

 

 

Net income

 

14,984

 

17,214

 

16,319

 

19,401

 

Net loss (income) attributable to non-controlling interests

 

272

 

(44

)

93

 

(214

)

Net income attributable to Xueda Education Group

 

15,256

 

17,170

 

16,412

 

19,187

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Xueda Education Group per ADS:

 

 

 

 

 

 

 

 

 

Net income attributable to Xueda Education Group

 

 

 

 

 

 

 

 

 

Basic

 

0.25

 

0.26

 

0.26

 

0.29

 

Diluted

 

0.24

 

0.26

 

0.25

 

0.29

 

 

 

 

 

 

 

 

 

 

 

Weighted average ADS numbers used in calculating net income attributable to Xueda Education Group per ADS:

 

 

 

 

 

 

 

 

 

Basic

 

61,919,516

 

65,560,089

 

64,350,949

 

65,409,790

 

Diluted

 

63,161,208

 

66,123,546

 

65,864,497

 

65,766,756

 

 

(1) Includes the following amounts of share-based compensation expenses for the periods indicated:

 

 

 

Three Months Ended
June 30,

 

Six Months Ended June
30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Share-based compensation expenses included in:

 

 

 

 

 

 

 

 

 

Cost of revenues

 

$

15

 

$

1

 

$

19

 

$

2

 

Selling and marketing expenses

 

4

 

1

 

10

 

2

 

General and administrative expenses

 

1,471

 

1,104

 

4,276

 

2,134

 

Total

 

$

1,490

 

$

1,106

 

$

4,305

 

$

2,138

 

 


 

Xueda Education Group

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of US Dollars)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended June
30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Net income

 

$

14,984

 

$

17,214

 

$

16,319

 

$

19,401

 

Other comprehensive income (loss), net of tax of nil

 

377

 

418

 

(624

)

153

 

Total comprehensive income

 

15,361

 

17,632

 

15,695

 

19,554

 

Less: Comprehensive income (loss) attributable to non-controlling interests

 

(274

)

50

 

(76

)

221

 

Total comprehensive income attributable to Xueda Education Group

 

$

15,635

 

$

17,582

 

$

15,771

 

$

19,333

 

 


 

Xueda Education Group

UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES

(in thousands of US Dollars )

 

 

 

Three Months Ended June 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Cost of revenues

 

$

(79,160

)

$

(69,772

)

Share-based compensation expense included in cost of revenues

 

15

 

1

 

Non-GAAP cost of revenues

 

(79,145

)

(69,771

)

 

 

 

 

 

 

General and administrative expenses

 

(13,202

)

(13,768

)

Share-based compensation expense included in general and administrative expenses

 

1,471

 

1,104

 

Non-GAAP general and administrative expenses

 

(11,731

)

(12,664

)

 

 

 

 

 

 

Selling and marketing expenses

 

(10,117

)

(9,543

)

Share-based compensation expense included in selling and marketing expenses

 

4

 

1

 

Non-GAAP selling and marketing expenses

 

(10,113

)

(9,542

)

 

 

 

 

 

 

Total costs of revenues and operating expenses

 

(102,479

)

(93,083

)

Share-based compensation expenses

 

1,490

 

1,106

 

Non-GAAP costs of revenues and operating expenses

 

(100,989

)

(91,977

)

 

 

 

 

 

 

Gross profit

 

41,650

 

44,855

 

Share-based compensation expenses

 

15

 

1

 

Non-GAAP gross profit

 

41,665

 

44,856

 

 

 

 

 

 

 

Income from operations

 

18,331

 

21,544

 

Share-based compensation expenses

 

1,490

 

1,106

 

Non-GAAP income from operations

 

19,821

 

22,650

 

 

 

 

 

 

 

Net income attributable to Xueda Education Group

 

15,256

 

17,170

 

Share-based compensation expenses

 

1,490

 

1,106

 

Non-GAAP net income attributable to Xueda Education Group

 

16,746

 

18,276

 

 

 

 

 

 

 

Non-GAAP net income attributable to Xueda Education Group per ADS:

 

 

 

 

 

Basic

 

0.27

 

0.28

 

Diluted

 

0.27

 

0.28

 

 

 

 

 

 

 

Weighted average ADS numbers used in calculating non-GAAP net income attributable to Xueda Education Group per ADS:

 

 

 

 

 

Basic

 

61,919,516

 

65,560,089

 

Diluted

 

63,161,208

 

66,123,546

 

 


 

Xueda Education Group

UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES

(in thousands of  US Dollars)

 

 

 

Six Months Ended June 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Cost of revenues

 

$

(140,319

)

$

(129,953

)

Share-based compensation expense included in cost of revenues

 

19

 

2

 

Non-GAAP cost of revenues

 

(140,300

)

(129,951

)

 

 

 

 

 

 

General and administrative expenses

 

(28,507

)

(27,155

)

Share-based compensation expense included in general and administrative expenses

 

4,276

 

2,134

 

Non-GAAP general and administrative expenses

 

(24,231

)

(25,021

)

 

 

 

 

 

 

Selling and marketing expenses

 

(18,605

)

(18,202

)

Share-based compensation expense included in selling and marketing expenses

 

10

 

2

 

Non-GAAP selling and marketing expenses

 

(18,595

)

(18,200

)

 

 

 

 

 

 

Total costs of revenues and operating expenses

 

(187,431

)

(175,310

)

Share-based compensation expenses

 

4,305

 

2,138

 

Non-GAAP costs of revenues and operating expenses

 

(183,126

)

(173,172

)

 

 

 

 

 

 

Gross profit

 

65,745

 

68,575

 

Share-based compensation expenses

 

19

 

2

 

Non-GAAP gross profit

 

65,764

 

68,577

 

 

 

 

 

 

 

Income from operations

 

18,633

 

23,218

 

Share-based compensation expenses

 

4,305

 

2,138

 

Non-GAAP income from operations

 

22,938

 

25,356

 

 

 

 

 

 

 

Net income attributable to Xueda Education Group

 

16,412

 

19,187

 

Share-based compensation expenses

 

4,305

 

2,138

 

Non-GAAP net income attributable to Xueda Education Group

 

20,717

 

21,325

 

 

 

 

 

 

 

Non-GAAP net income attributable to Xueda Education Group per ADS:

 

 

 

 

 

Basic

 

0.32

 

0.33

 

Diluted

 

0.31

 

0.32

 

 

 

 

 

 

 

Weighted average ADS numbers used in calculating non-GAAP net income attributable to Xueda Education Group per ADS:

 

 

 

 

 

Basic

 

64,350,949

 

65,409,790

 

Diluted

 

65,864,497

 

65,766,756