1、中国教育集团电话会议中国教育集团12月7日电话会议记录（英文版）2010年12月08日 08:31i美股【大 中 小】【打印】 共有评论0条Operator:Good day， ladies and gentlemen， and thank you for standing by.Welcome to the China Education Alliance Shareholder Update Conference Call.During this Conference call， all participants are in a listen-only mode except speak
2、ers.As a reminder， this conference is being recorded.It is now my pleasure to introduce our host， Alan Sheinwald， Managing Director of HSC Global.Thank you.Please go ahead， Mr. Sheinwald.Alan Sheinwald:Thank you very much.Good morning， everybody in North America and good evening to those of you in C
3、hina， and welcome to the China Education Alliance shareholder update conference call.With us today is Chairman and CEO of the Company， Mr. Xiqun Yu， and Chief Financial Officer， Mr. Zack Pan， who will be the translator and will also be speaking on behalf of Mr. Yu.Id like to remind listeners that du
4、ring the call， managements prepared remarks may contain forward-looking statements which are subject to risks and uncertainties.Management may make additional forward-looking statements in response to your questions today.Therefore， the company claims protection under Safe Harbor for forward-looking
5、 statements contained in the Private Securities Litigation Reform Act of 1995.Actual results may differ from results discussed today and， therefore， we refer you to a more detailed discussion of these risks and uncertainties in the Companys filings with the SEC.In addition， any projections as to the
6、 Companys future performance represented by management include estimates today， as of December 7， 2010， and the Company assumes no obligation to update these projections in the future as market conditions change.And at this time， Id like to welcome the Chairman， Mr. Yu， who will give opening comment
7、s and will be translated by Zack Pan， CFO. Mr. Yu:Opening comments by Mr. Yu (translated by Zack)在过去一周 ，我们收到大量的投资人电话和电邮我们夜以继日的回答大家的询问为了对我们现在和未来的投资人作出统一公开问答，我们认为有必要以此电话会议来回复我们的投资者，次电话会议将被录音作为公司的公共记录 .我和公司的 F 收集并总结了一些关键的问题 ，并准备了答案我们认为这些包括了最重要的最关心的问题 .我们认为公司的真诚，信誉第一重要 ，希望这次电话会议更能提高公司的披露与透明度 .另外，公司通过常驻美
8、国的与美国的投资人交流及会晤 ，及时提交的财务报表，定期发布新闻等方式来加强与投资人的密切关系，使你们能更好的理解公司的运作 ，重大决定和成长战略 .除此以外，我们我们还安排了投资人月底参观我们在北京的设施，哈尔滨的总部和培训中心也许此时哈尔滨天气寒冷，但我们迷人的冰雕节会让您留下难忘的记忆 .我诚挚的欢迎你们参观 ，并期待着亲自与你们讨论我们的激动人心的发展规划 .Zack Pan:The following is the TRANSLATION OF MR. YUS OPENING COMMENTSOver the last week， we have received a signifi
9、cant number of calls and emails from investors. We have worked around the clock to respond to each investor inquiry. To be consistent and open with all our current and prospective investors， we thought it appropriate to address the investment community on this call which will be recorded and held as
10、 part of our Company public records.Our Chief Financial Officer and I have collected and summarized a number of the over-riding questions which have been posed and have prepared responses we think addresses the most important themes.We stand by the integrity of our company and hope that our disclosu
11、re and transparency provided by this conference call， in addition to having a U.S. based CFO that is always available for US based investor meetings， timely financial reporting to the SEC， and periodic press releases will help investors foster close ties and a clearer understandings of our business
12、operations， business decisions and growth strategies.In addition， we have scheduled a shareholder tour for later this month at both our Beijing facility and headquarters and training centers located in Harbin. While it might be cold our amazing ice festival will help make your visit quite memorable.
13、 I welcome you to attend and look forward to personally discussing our exciting growth plans.This concludes translation of Mr. Yus opening remarks.Since the past week I have worked closely with the Chairman， our IR firm， our lawyers， and auditor， to address the current situation at hand in the most
14、efficient and responsible manner possible. China Education Alliance has always strived to be a transparent company and we will continue to cross language and cultural barriers to actively engage the investment community and be responsive to their needs.We recognize that many of our investors do not
15、have the ability to readily visit our facilities and operations in China and the distance presents a special challenge. We have always been open to any investor requests to visit our headquarters and training facilities in Harbin， Heilongjiang Province. Recently we announced our annual meeting of st
16、ockholders which will take place on December 20， 2010. Following the meeting on the 20 th we would like to invite our investors to tour our new facility in Beijing. The next day， the 21 st ， we will host a tour of our training facilities in Harbin. Additionally， our website was updated today to incl
17、ude several pictures of our facilities to bridge the gap for our investors who are not able to visit China. We have also posted a video tutorial showing investors a step by step process of how to use our prepaid cards online. Both the pictures and video can be found .Recently we announced that on No
18、vember 5， 2010， as a supplemental procedure of our third quarter financial review， our audit firm Sherb & Co.，LLP performed additional confirmation procedures to our bank balances. These procedures were performed by staff members from Sherbs Beijing office. The confirmation procedures were applied t
19、o approximately $67 million or 86% of our total cash balance of approximately $77 million. Such procedures included visits to PRC financial institutions， meeting bank personnel and obtaining cash balance information as of September 30， 2010. As of September 30， 2010 we also maintained approximately
20、$8.6 million in the U.S. at JP Morgan and EastWest Bank and approximately $1.3 million at ICBC bank in Beijing which auditors reviewed related bank statements.These balances encompass our total cash at September 30， 2010 of $77.5 million. Some questions were raised with regards to the dates on the c
21、onfirmations.The confirmations were all processed and sent on the same date.Sherb sent a staff member with its standard form bank confirmation， who visiting all the banks on the same day to verify the cash balances.The date was penned by the same staff member when the bank affixed its seal.More deta
22、iled information regarding the additional procedures by our audit firm can be found in the press release issued on December 2 nd and the 8k filed with the SEC.A number of our investors have voiced the opinion that as a NYSE firm they would prefer to have a top name brand audit firm represent CEU. Ou
23、r current auditor， Sherb & Co.， LLP has provided China Education Alliance with timely and accurate review of our financial information for our quarterly and yearend financial results.Additionally， they have performed enhanced audit procedures at the 3 rd quarter this year as discussed above which ha
24、ve been filed with the SEC and reported to our shareholders. The interests of our shareholders are our number one priority and at the moment our board of directors is evaluating their recommendations.We will gladly update investors when the board reaches a final determination on this issue.For the p
25、urposes of this call， we have categorized the different questions and will be responding to them by reading the question and then the answer.TOPICS:MARGINS:1.What contributed to the seemingly high gross margins (20+ %) relative to CEUs competitors? How do you do things so much better?Gross margins a
26、re different with different business segments and at different companies. Our high gross margin was mainly due to the Companys effective control on costs.Our higher gross margins are typically received with our on-line course materials， versus our on-site training revenue that requires physical clas
27、srooms and teachers. On-line materials typically have higher set up and implementation costs， or fixed costs， and minimal variable costs on a per unit basis， or on a student by student basis. Due to this structural advantage of on-line education， and our large on-line student customer base， we are a
28、ble to achieve high gross margins. Our high margins are a reflection of our educational products. Other educational companys margins might differ from ours that might be due to their own course material offered and their own operating structure. The student focus of our on-line effort is geared to m
29、iddle and high school students. The student focus of other on-line educational companies might be different from ours resulting in different gross profit margins.2.What accounts for the majority of the companys learning card sales? What are the mostly likely locales we will find students using the l
30、earning cards?How many sales people do you have selling prepaid cards?The majority of our cards are sold by our sales people to students.We have around 200 sales people located at different areas in North China， not including part-time sale agents. 3.How does the company explain the declining balanc
31、e of deferred revenue yet 30+% higher online and combined sales figures in 2009 relative to 2008?Our deferred revenue declined slightly from approximately $1.2 million in 2008 to $1.0 million in 2009. Our deferred revenue reflects the unearned portion of debit cards sold in the online division and u
32、nearned tuition from training centers. The deferred revenue is not necessarily in direct proportion to our revenue. Usually our deferred revenue remains at a relatively low level， as most students consume their debit cards in a short period of time， and mostly tuition fees are expensed monthly. So a change in deferred revenue is not necessarily related to students enrollment， and also has no significant impact in subsequent periods.4.Given the high margins， how will the company hold on to those margins given that the abundance of similar websites that offer free downloa
