Stock in News Spotlight: China Distance Education Hldgs Ltd (NYSE: DL)

On Wednesday, China Distance Education Hldgs Ltd (NYSE: DL) stock dipped -1.7% and closed at 9.25. The stock opened the session at $9.47 and touched its highest price point at $9.57. Its recent trading capacity is 39,145 shares versus to its average trading volume of 52628 shares.

China Distance Education Holdings Limited (DL) recently reported unaudited financial results for the third quarter of fiscal year 2020 ended June 30, 2020.

Third Quarter Fiscal 2020 Financial and Operational Highlights

Net revenue reduced by 17.9% to $50.7M from $61.7M in the previous year period.

Total course enrollments were 738,300, a raise of 0.5% from the third quarter of fiscal 2019.

Cash receipts from online course registration were $34.6M, a 31.3% decrease from the third quarter of fiscal 2019.

Gross profit reduced by 22.8% to $24.1M from $31.2M in the previous year period.

Non-GAAP[1] gross profit reduced by 22.7% to $24.1M from $31.2M in the previous year period.

Gross margin was 47.5%, contrast with 50.5% in the previous year period. Non-GAAP[1] gross margin was 47.5%, contrast with 50.5% in the previous year period.

Operating income reduced by 75.0% to $2.5M from $9.9M in the previous year period.

Non-GAAP[1] operating income reduced by 69.6% to $3.2M from $10.4M in the previous year period.

Net income attributable to CDEL was $3.0M, contrast with net income attributable to CDEL of $9.4M in the previous year period.

Non-GAAP[1] net income attributable to CDEL was $3.7M, contrast with non- GAAP[1] net income attributable to CDEL of $10.0M in the previous year period.

Basic and diluted net income per American Depositary Share (“ADS”) attributable to CDEL were $0.089 and $0.088, respectively, contrast with basic and diluted net income per ADS attributable to CDEL of $0.282 and $0.281, respectively, for the third quarter of fiscal 2019. Each ADS represents four ordinary shares.

Basic and diluted non-GAAP[1] net income per ADS attributable to CDEL were $0.111 and $0.109, respectively, contrast with basic and diluted non-GAAP[1] net income per ADS attributable to CDEL of $0.299 and $0.296, respectively, for the third quarter of fiscal 2019.

Cash flow from operations reduced by 59.2% to $7.2M from $17.6M in the third quarter of fiscal 2019.

Third Quarter Fiscal 2020 Financial Results

Net Revenue. Total net revenue reduced by 17.9% to $50.7M in the third quarter of fiscal 2020 from $61.7M in the third quarter of fiscal 2019. Net revenue from online education services, books and reference materials, and other sources contributed 78.9%, 12.8% and 8.3%, respectively, of total net revenues for the third quarter of fiscal 2020.

Online education services. Net revenue from online education services reduced by 8.1% to $40.0M in the third quarter of fiscal 2020 from $43.5M in the third quarter of fiscal 2019, primarily attributable to the decrease in revenue from the Company’s healthcare and accounting verticals Because of the impact of COVID-19, stemming from the postponement of certain professional certification examinations across China and the aforementioned socially responsive actions the Company adopted, which resulted in a important decline in cash receipts from online course registration in both the second and third fiscal quarters of 2020.

Books and reference materials. Net revenue from books and reference materials reduced by 33.8% to $6.5M in the third quarter of fiscal 2020 from $9.8M in the third quarter of fiscal 2019, primarily attributable to the delay in the publication of certain Legal Professional Qualification Examination books, Because of the promulgation of new laws.

Others. Net revenue from other sources reduced by 49.8% to $4.2M in the third quarter of fiscal 2020 from $8.4M in the third quarter of fiscal 2019, primarily Because of a important decrease in revenue from the sale of college-related learning simulation software, and a important decrease in the provision of offline training courses, resulting from the impact of COVID-19.

Cost of Sales. Cost of sales reduced by 12.8% to $26.6M in the third quarter of fiscal 2020, from $30.6M in the third quarter of fiscal 2019. Non-GAAP[1] cost of sales reduced by 13.0% to $26.6M in the third quarter of fiscal 2020, from $30.6M in the third quarter of fiscal 2019. The decrease in cost of sales was primarily attributable to a decrease in cost of books and reference materials and lecture fees.

The price moved ahead of 3.16% from the mean of 20 days, 4.37% from mean of 50 days SMA and performed 19.10% from mean of 200 days price. Company’s performance for the week was 2.78%, 4.76% for month and YTD performance remained 25.37%.

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