SHENZHEN, China, Aug. 21 /Xinhua-PRNewswire/ -- Noah Education Holdings Ltd. ('Noah') (NYSE: NED), a leading provider of interactive education content in China, today announced its unaudited financial results for the fourth fiscal quarter and full fiscal year ending June 30, 2008.(1)

    (1) This announcement contains translations of certain RMB amounts into
        U.S. dollars at specified rates solely for the convenience of the
        reader.  Unless otherwise noted, all translations from RMB to U.S.
        dollars are made at a rate of RMB6.8591 to US$1.00, the noon buying
        rate as of June 30, 2008 in The City of New York for cable transfers
        of RMB as certified for customs purposes by the Federal Reserve Bank
        of New York.
    Highlights for the Fourth Fiscal Quarter Ended June 30, 2008
    -- Noah reported net revenue of RMB97.9 million (US$14.2 million), a
       17.9% increase over net revenue of RMB83.1 million during the
       corresponding period of the previous year.
    -- Gross profit was RMB50.1 million (US$7.3 million), or 51.1% of net
       revenue, compared to RMB37.6 million, or 45.3% of net revenue during
       the corresponding period of the previous year.
    -- Net income was RMB31.2 million (US$4.5 million) compared to RMB4.0
       million during the corresponding period of the previous year, an
       increase of 681.6%.
    -- Basic and diluted earnings per share were RMB0.82 (US$0.12) and
       RMB0.71 (US$0.10) compared to RMB0.09 and RMB0.07 for the fourth
       quarter of 2007, respectively.  Basic and diluted earnings per share,
       excluding share-based compensation expenses and the change in the fair
       value of warrants (non-GAAP), were RMB0.79 (US$0.12) and RMB0.77
       (US$0.11), compared to RMB0.17 and RMB0.15 for the fourth quarter of
       2007, respectively.
    -- Total sales volume of handheld digital learning devices (DLDs) for
       the fourth quarter increased 11.7% year-over-year to approximately
       78,700.
    -- As of June 30, 2008, over 700 schools were signed up for the 'Access
       Noah' program, covering more than 1.6 million students, up from
       approximately 600 schools and 1.4 million students at the end of
       March 2008.

'Noah produced sound results during the fourth quarter, bringing the full fiscal year to a solid close,' said Mr. Dong Xu, Noah's chairman and chief executive officer. 'Our core DLD business has continued to grow this quarter. The consistent strength of this business has enabled us to expand into other innovative delivery platforms and systems of content creation, allowing for more comprehensive Noah-branded offerings.'

Mr. Rick Chen, Noah's executive vice president added, 'We strive to provide the best possible products and services to help students learn. With the Access Noah In-school Program, we are steadily building the Noah brand while helping students increase their level of engagement in learning materials and improving in-class learning efficacy. During the last quarter, we established 50 experimental Access Noah classes in five provinces across China. Results from all the experimental classes have shown an increase in student tests scores across academic subjects. We are fully immersed in the test phase of Access Noah Online, our web 2.0 portal that will create an online knowledge-sharing community centered around the Noah brand. The site is set to launch in the first half of fiscal year 2009. In addition, in a company-wide effort to improve our operating efficiency and internal control functions, we have engaged two top-tier international consulting firms in implementing our Enterprise Resource Planning (ERP) project and Sarbanes Oxley compliance (SOX) project. We are confident that these projects will yield substantial savings and improve transparency and internal control measures for the company.'

Financial Results for the Fiscal Quarter Ended June 30, 2008

For the fourth fiscal quarter of 2008, Noah reported net revenue of RMB97.9 million (US$14.2 million), a 17.9% increase over net revenue of RMB83.1 million in the corresponding period of the previous year.

Total sales volume of DLDs for the fourth quarter was approximately 78,700, an 11.7% increase from approximately 70,500 in the fourth quarter of 2007. E- dictionary sales volume decreased to approximately 105,600, a 27.5% decrease from approximately 145,600 the corresponding period last year. The sales results reflect the Company's strategy of continuous migration toward higher margin DLD products.

Total courseware titles at the end of the fourth quarter were approximately 35,000 compared to 28,000 in the fourth quarter of the previous year. DLD products with Noah's new proprietary graphic calculator technology, embedded in a number of higher-end DLD products, accounted for approximately 88% of all DLDs sold in the quarter.

Gross profit was RMB50.1 million (US$7.3 million), or 51.1% of net revenue in the fourth quarter, compared to RMB37.6 million, or 45.3% of net revenue in the corresponding period last year. The increase was primarily attributable to the Company's increased focus on selling higher-end DLDs and also attributable to a decrease in the cost of raw materials. In the fourth quarter, the Company took a charge of approximately RMB6.0 million (US$0.88 million) against dated inventory. The Company expects a reduction in this type of charge in the coming quarters.

Sales and marketing expenses were RMB30.9 million (US$4.5 million), or 31.6% of net revenue, compared to RMB20.1 million, or 24.2% of net revenue in the corresponding period of last year. The increase was primarily due to advancing the schedule of marketing efforts in preparation for the upcoming back-to-school season.

Research and development expenses for the quarter were RMB14.7 million (US$2.1 million), or 15.0% of net revenue. This compares to RMB10.2 million, or 12.3% of net revenue in the corresponding quarter of last year. The increase was primarily due to higher staff costs and third party software, and content development costs.

General and administrative expenses for the quarter were RMB12.5 million (US$1.8 million), or 12.9% of net revenue. This compares to RMB9.1 million, or 10.9% of net revenue in the corresponding quarter of last year. The increase was due to higher staff costs, accrued auditing fees and a charge of aging accounts receivable.

Operating loss for the quarter was approximately RMB1.7 million (US$0.2 million) compared to operating income of RMB3.3 million in the corresponding period last year. This was primarily due to an increase in advertising spending, accrued auditing fees and a one time RMB3.0 million donation to the Sichuan earthquake relief effort. Excluding share-based compensation expenses and the earthquake donation, operating margin for the quarter was 3.9%, compared to 6.6% in the corresponding period last year.

Total share-based compensation expenses, which were allocated to related operating costs and expenses, increased 10.3% to RMB2.5 million (US$0.4 million), up from RMB2.2 million in the corresponding period last year.

Net income for the quarter was RMB31.2 million (US$4.5 million), a 681.6% increase over RMB3.987 million in the fourth quarter of 2007. Net income excluding share-based compensation expenses and the change in the fair value of warrants (non-GAAP) was RMB30.4 million (US$4.4 million), an increase of 381.6% year-over-year. In the fourth quarter, the Company recorded a gain in the fair value of warrants of RMB3.3 million.

Basic and diluted earnings per share were RMB0.82 (US$0.12) and RMB0.71 (US$0.10), compared to RMB0.09 and RMB0.07 in the fourth quarter of 2007, respectively.