67 WALL STREET, New York - August 30, 2013 - The Wall Street Transcript has just published its Education Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Gainful Employment Clarification - Enrollment and Retention Trends - Economic Recovery and Enrollment Trends - Growth Drivers in Chinese Education Sector
Companies include: ATA, Inc. (ATAI) and many more.
In the following excerpt from the Education Report, the CFO and Chief Accounting Officer of ATA Inc. (ATAI) discusses company strategy and the outlook for this vital industry:
TWST: In May the company announced its fourth-quarter and year-end results. What were the important points in your opinion?
Mr. Tsang: From a business and results perspective, one of our major customers, the Securities Association of China, was affected by the securities market slowdown in China and maybe globally as well. Our previous door-to-door strategy in marketing to the private sector was not effective, and as a result 2013 was very challenging for ATA. However, I would say 2013 fiscal year was also a good year for the management. The reason I say that is the management really was compelled to think harder to adjust our marketing strategy for our private sector business, and we needed to expedite the development of a new testing technology to provide a high-margin alternative source of revenue for the company. As a result of these efforts, we have signed a cooperation arrangement with Cambridge in the U.K. on our new mobile testing system, and we have seen encouraging results in our private sector business in Q1 2014.
TWST: In looking over the results, I noticed that revenues were up, but profits and income were down over the prior year. What contributed to that, and what is your outlook for the next year?
Mr. Tsang: In terms of the revenue, we grew a little bit in 2013, and in terms of profits it was primarily due to the decrease in revenue generated from financial security exams, which I mentioned earlier, and also the selling and marketing expenses incurred for the door-to-door marketing strategy in our private sector business. Unfortunately, the results were not that good in 2013. So that's the reason for the decrease in the profitability in 2013.
For 2014, we provided guidance to the market: net revenue is 403 million RMB to 423 million RMB, so in terms of U.S. dollars it is about $65 million to $68 million. On a non-GAAP basis, the net income we provided in guidance is 37 million RMB to 47 million RMB; in terms of U.S. dollars, it should about $6 million to $7.5 million. In terms of the non-GAAP net income, it's pretty flat, but the main reason is the investment we intend to put in, which is up to about 10 million RMB for a new mobile testing system. We are now in the middle of our Q2 financial year 2014, and we maintain our ...
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