* Quarterly Revenue Increased 33% Year-Over-Year(1)  * Quarterly Net Income Attributable to the Company Increased 146%    Year-Over-Year  * Quarterly EBITDA (non-GAAP) Increased 165% Year-Over-Year 

BEIJING, May 11, 2009 (GLOBE NEWSWIRE) -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq:CAST), a leading for-profit, post-secondary and e-learning services provider in China, today announced its financial results for the first quarter ended March 31, 2009.

Highlights for the First Quarter Ended March 31, 2009

    * Total revenue for the quarter increased 33% year-over-year to    $11.3 million from $8.5 million.  * Gross profit for the quarter increased 67% year-over-year to    $6.8 million from $4.1 million. Gross profit margin for the quarter    was 60% compared to 48% in the first quarter of 2008.  * Net income attributable to the Company for the quarter increased    146% year-over-year to $2.9 million from $1.2 million. Net income    margin for the quarter was 26% compared to 14% in the first quarter    of 2008. Adjusted net income excluding share based compensation    expenses (non-GAAP) for the quarter increased 56% year-over-year to    $3.9 million from $2.5 million. Adjusted net income margin    excluding share based compensation expenses (non-GAAP) for the    quarter was 34% compared to 29% in the first quarter of 2008.  * EBITDA (non-GAAP) for the quarter increased 165% year-over-year to    $6.7 million from $2.5 million. EBITDA margin (non-GAAP) for the    quarter was 59% compared to 30% in the first quarter of 2008.  * Diluted earnings per share for the quarter were $0.08 compared to    $0.04 in the first quarter of 2008. Adjusted diluted earnings per    share excluding share based compensation expenses (non-GAAP) for    the quarter were $0.11 compared to $0.09 in the first quarter of    2008.  * As of March 31, 2009, the Company reported cash, cash equivalents    and term deposits of $86.9 million. 

"ChinaCast delivered another strong quarter of revenue growth and improved profitability as we are now providing post-secondary education services to over 11,000 on-campus and 135,000 distance learning students throughout China," said Ron Chan, Chairman and Chief Executive Officer. "As in the USA and other countries, we continue to see healthy growth in the higher education sector in China as students continue to improve their job skills to compete in a tight labor market. The investments we have made in our business are yielding solid improvements in all of our financial operating metrics and we expect this momentum to accelerate with our recently announced MOU to acquire an additional accredited university in China which will further expand our degree offerings while driving future growth. We remain optimistic on the long term growth of the industry and our position as a leading for-profit, post-secondary education service provider."

First Quarter 2009 Financial Results

ChinaCast is organized into two business segments: the E-Learning Group ("ELG"), encompassing the Company's e-learning education service businesses, and the Traditional University Group ("TUG"), offering accredited bachelor and diploma degree programs to students from the Foreign Trade and Business College (FTBC) campus in Chongqing.

Total Revenues - In the first quarter of 2009, total revenue increased 33% year-over-year to $11.3 million from $8.5 million. The Company's total revenue is comprised of service and equipment revenue. Service revenue for the quarter increased 90% year-over-year to $10.9 million from $5.7 million while equipment revenue decreased 85% year-over-year to $0.4 million from $2.8 million. The Company also reports revenue by its two business segments, ELG and TUG:

    * ELG Revenue - ELG revenue for the quarter decreased 18%    year-over-year to $6.9 million from $8.5 million, primarily due to    a large decrease in equipment sales. ELG revenue is further    comprised of the following three business services:     -- Post Secondary Education Distance Learning: Revenue from Post       Secondary Education Distance Learning Services increased 17%       year-over-year to $3.8 million from $3.3 million. The total       number of post-secondary students enrolled in courses using the       Company's distance learning platforms increased to 135,000 as of       September 30, 2008.    -- K-12 and Content Delivery: Revenue from K-12 and Content       Delivery Services increased 5% year-over-year to $2.4 million       from $2.3 million. The number of subscribing schools for K-12       distance learning services has stabilized at 6,500.    -- Vocational Training, Enterprise/Government Training and       Networking and English Training Services: Revenue from this       segment decreased 75% year-over-year to $0.8 million from       $3.0 million mainly due to a decrease in equipment sales and the       change of the business model in English Training service.   * TUG Revenue - TUG was newly established in the second quarter of    2008 after the acquisition of Hai Lai, the holding company of the    Foreign Trade and Business College of Chongqing Normal University    ('FTBC'). TUG total revenue for the quarter was $4.4 million    comprised of $3.9 million of tuition revenue and $0.5 million of    other revenue (mainly accommodation and catering revenue). In the    first quarter of 2009, FTBC had approximately 11,000 students    enrolled. 

Gross Profit and Gross Margin - Gross profit for the quarter increased 67% year-over-year to $6.8 million from $4.1 million. Gross profit margin for the quarter was 60% compared to 48% in the first quarter of 2008.

Net Income, Net Income Margin - Net income attributable to the Company for the quarter increased 146% year-over-year to $2.9 million from $1.2 million. Net income margin for the quarter was 26% compared to 14% in the first quarter of 2008. Adjusted net income excluding share based compensation expenses (non-GAAP) for the quarter increased 56% year-over-year to $3.9 million from $2.5 million. Adjusted net income margin excluding share based compensation expenses (non-GAAP) for the quarter was 34% compared to 29% in the first quarter of 2008.

EBITDA and EBITDA Margin - EBITDA (non-GAAP) for the quarter increased 165% year-over-year to $6.7 million from $2.5 million. EBITDA margin (non-GAAP) for the quarter was 59% compared to 30% in the first quarter of 2008.

Diluted EPS - Diluted earnings per share for the quarter were $0.08 compared to $0.04 in the first quarter of 2008. Diluted earnings per share excluding share based compensation expenses (non-GAAP) for the quarter were $0.11 compared to $0.09 in the first quarter of 2008. The weighted average number of shares used in the computation was 35,648,251 and 28,292,257 for the first quarter of 2009 and the first quarter of 2008, respectively.

Cash and Bank Balances together with Term Deposits - Cash and bank balances together with term deposits totaled $86.9 million as of March 31, 2009, compared to $86.7 million as of December 31, 2008.

Free Cash Flow - Free cash flow is a non-GAAP measure defined as net cash provided by operating activities minus purchase of property and equipment. Net cash provided by operating activities for the quarter decreased to $0.006 million compared to $1.9 million in the first quarter of 2008. In the first quarter of 2009, there was an increase in accounts receivables in the current period and a considerable part of the revenue recognized, in particular the revenue of the TUG, was received in previous periods. Payments received before recognition of revenue are recorded as deferred revenue while payments not received at the time goods and service have been provided are recorded as accounts receivable. Purchase of property and equipment for the quarter was $0.7 million compared to $0.09 million in the first quarter of 2008. Thus, free cash outflow (non-GAAP) for the quarter was $0.6 million compared to free cash inflow of $1.8 million in the first quarter of 2008, a 136% decrease year-over-year.

Financial Outlook for 2009

As stated previously, for the full year ending December 31, 2009, the Company estimates that total revenue will be between $49 million to $51 million and adjusted net income (non-GAAP) between $14 million to $16 million, which does not include shared-based compensation and impairment charges. In addition, this guidance does not include the anticipated contribution from the pending university acquisition. This is the Company's current and preliminary view, which is subject to change.

Conference Call Information

ChinaCast's management team will host an earnings conference call at 8 AM on Tuesday, May 12, 2009, U.S. Eastern Time (8 PM on May 12, 2009, Beijing/Hong Kong Time). The dial-in details for the earnings conference call are as follows:

    U.S./Canada Toll Free: +1-877-719-9786  International: +1-719-325-4807 

A replay of the conference call will be available at the following numbers from 11:00 am Tuesday, May 12, 2009, U.S.