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China Bilingual Technology And Education Group Inc. (CBLY) Posts Solid Q2 Gains

China Bilingual Technology and Education Group is an education company that owns and operates high-quality, K-12 private boarding schools in China. Founded in 1998, CBYL now runs three schools encompassing the kindergarten, elementary, middle school, and high school levels. CBYL has approximately 13,881 students and 1,876 faculty and staff.

CBYL's schools are located in Shanxi and Sichuan Provinces. The learning institutions provide students with an innovative and high-quality education focusing on fluency and cultural skills in both Chinese and English. CBYL's schools regularly rank among the top schools in their respective regions for college entrance rates and national college entrance exam scores. The schools have also earned excellent teaching reputations and are recognized for the success of their students and strong faculty.

Total revenues for the 3 months ended February 29, 2012, was $10,953,811. This was a very strong 80.2% increase over the $6,079,354 earned for the same period in 2011. CBYL attributes the revenue growth to the purchase of its 3rd school campus, the Shanxi South School. With the acquisition of Shanxi South, CBYL gained an additional 4,681 students as of February 29, 2012. Total enrollment now stands at 13,881 students. The company also increased tuition 7.2% from $3,126 per student for the 2010-11 school year to $3,352 per student for the 2011-2012 school year.

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) increased an impressive 119.0% year-over-year to $5.6 million, compared to $2.5 million for the three months ended February 28, 2011. The additional enrollment allowed the schools to better absorb fixed overhead costs, and the second fiscal quarter had fewer one-time costs compared to the start of the school year in the first fiscal quarter ended November 30, 2011.

Net Income also increased because of the Shanxi acquisition, increase in student enrollment, and the tuition increase. Net Income was $2,455,168 for the 3 months ended February 29, 2012, as compared to $2,203,594 for the same period in 2011. This increase represents a 11.4% gain, or $251,574. Another contributing factor to the increase was the company's effective cost and expense control for the quarter.

Basic and diluted earnings per share grew to $0.08 per share for the quarter ended February 29, 2012 as compared to $0.07 for the same quarter in 2011.

Commenting on the company's impressive results, Dr. Ren Zhiqing, Chairman and CEO of China Bilingual said, "Increasing enrollment at our schools continues to improve margins as we are able to better absorb our fixed operating costs. With our schools currently at approximately 70% capacity, our focus remains on ramping up our total enrollment to 20,000 students over time without compromising our academic standards. Driven by China's growing middle class, the demand for private education is accelerating, and our reputation for academic excellence strongly positions us for long-term revenue and earnings growth."

In the face of China's rapid economic development and industrialization, governmental policy in China is focused on education as the primary way to increase worker productivity and raise the country's standard of living. The rise of a Chinese middle class and upper class has generated demand for private school educations that will give children an advantage in China's increasingly competitive workforce. The Chinese government's policy of not subjecting private educational companies to corporate income tax also benefits the industry. CBYL anticipates its future growth will come from increased enrollment and new schools to be acquired by the company.

For more information on China Bilingual, visit chinabilingualedu.com

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