Carolyne Sohn - Senior Associate, The Equity Group Inc. Benson Tsang - Chief Financial Officer Cheng-Yaw Sun - Chief Executive Officer.

Analysts:.

Greetings and welcome to the ATA Inc. Fiscal Year 2015 First Quarter Financial Results Conference Call. All lines have been placed on a listen-only mode. (Operator Instructions) At this time, it is my pleasure to turn the floor over to your host Carolyne Sohn. Ma'am, the floor is yours..

Thank you, operator, and good morning, everyone. Thank you for joining us. Copies of the press release announcing ATA's fiscal 2015 first quarter results are available at the IR section of the company's website at www.ata.net.cn. As part of this conference call, the company has an accompanying slide presentation available on the company's website.

You are also welcome to contact our office at 212-836-9600 and we would be happy to send you a copy. In addition, a replay of this broadcast will be made available at ATA's website for the next 90 days.

Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward‐looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995.

Although the company believes that the expectations reflected in its forward looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could cause the actual results to differ dramatically from those projected. There can be no assurance that those expectations will prove to be correct.

Information about the risks associated with investing in ATA is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision.

The company does not assume any obligation to update any forward‐looking statements as a result of new information, future events, changes in market conditions or otherwise, except as required by law. Regarding the disclaimer language, I would also like to refer you to slide two of the conference call presentation for further information.

All US dollar amounts in this conference call relating to financial results for the company's most recent quarter ended June, 30, 2014, are converted from RMB using an exchange rate of 6.2036 RMB to 1 US dollar. All historical conversions are accurate as of the time reported unless otherwise noted. The company reports its financial results under U.S.

GAAP in RMB and all percentages calculated in the presentation are based on RMB unless otherwise noted. For those of you following along with the accompanying PowerPoint presentation, there is an overview of the company on slide three. The company's CFO Mr.

Benson Tsang will provide an overview of operational and financial highlights for first quarter 2015 beginning with Slide 4. The company's CEO, Mr. Cheng-Yaw Sun, will then discuss ATA's outlook for fiscal year 2015. Please note that we will not be conducting a question-and-answer session following the management's prepared remarks.

For more discussion following the call, welcome to contact management or ATA's IR firm, The Equity Group. Management also plans to conduct calls with investors over the next few weeks. With that, I'll turn the call over to ATA's CFO, Mr. Benson Tsang..

testing services and test preparation and training solutions. At 94%, our core business of testing services was a significant percentage of our total revenue in the 2015 first quarter. On the next slide, we have provided a breakdown of the company's financial results for the quarter.

Gross profit stayed relatively flat at RMB47.5 million compared to RMB48.1 million in the prior-year period. Gross margin for first quarter 2015 improved to 56.3% compared to 52.2% in the prior-year period for the reasons I stated earlier.

Net income was RMB4.6 million compared to RMB9.4 million in the prior-year period as a result of decreased revenues and increased operating expenses as a percentage of revenues.

According to US GAAP, we have reported that dividend declared of approximately $9.6 million in this quarter as a result of our diluted earnings per ADS of RMB0.18 in first quarter 2015 compared to RMB0.40 in the prior-year period. Please turn to Slide 9.

Here we provide a supplemental chart of quarterly numbers adjusted for share-based compensation expense and foreign currency exchange gains and losses. I would like to highlight that excluding these items, our total net income for first quarter 2015 was RMB8.7 million compared to RMB11.1 million in the prior-year period.

Diluted earnings per ADS during first quarter 2015 on a non-GAAP basis was RMB0.36 compared to RMB0.48 in the prior-year period. We continued to be supported by free cash flow and a solid balance sheet, which we have highlighted on Slide 10. As of June 30, 2014, we had about $54 million in cash.

We have no long-term debt or short-term borrowings and continue to follow the strict cost structure that has served us well over the past several years. ATA's Board of Directors have approved a share repurchase plan effective immediately. The company is authorized to repurchase up to $5 million worth of its issued and outstanding.

And the plan is set through January 31, 2015. Slide 11 shows our annual guidance for fiscal year 2015. We reiterate our expectation of net revenues between RMB385 million to RMB405 million and non-GAAP net income guidance between RMB28 million and RMB38 million, which improves about RMB30 million to maintain and expand our businesses.

We expect second quarter net revenues will be in the range of RMB90 million to RMB100 million, which you will notice is much higher than revenues achieved in the fiscal 2014 second quarter. This increase is due to the CPA exam taken place during second quarter 2015, for which we expect to recognize revenues during the period.

In previous years, the CPA exam has taken place during our fiscal third quarter. Just to remind that this guidance is based on our own internal projections and we will continue to evaluate our projection on an ongoing basis. With that, I would like to turn it over to our CEO, Mr.

Cheng-Yaw Sun to provide some more detail on our outlook for fiscal year 2015..

Thank you, Benson. We were pleased with the exam volume growth we achieved in first quarter 2015. We are working on a number of new initiatives that we believe will properly position ATA for the next stage of growth.

In addition to continuing to invest in our technologies this fiscal year, we will provide our clients and test sponsors with the latest assessment ability to (inaudible). We were pleased with our initiatives on Slide 13, now this is a (inaudible) for ATA and bringing in the new growth opportunities for ATA in the future.

We are (inaudible) one is our mobile application, which Benson mentioned earlier, which is an exam navigation tool that allows users' mobile device to access information on exams such as pricing, date, location on the go, the result being administered by ATA with even more functionalities available to users such as ability to (inaudible) on the tool.

We are very excited (inaudible) and look forward to our users (inaudible). We also recently announced a new joint venture with one of China's premier education company, New Oriental.

The joint venture will develop the online education and training services as well as mobile application catering to the workforce in China with an initial focus on the healthcare, accounting and finance industries.

The joint venture management team will (inaudible) business trends and expect to launch the new online education and training services website by the end of 2014.

The partnership proves the value of ATA (inaudible) ATA's strengths in excellent delivery (inaudible) learning tool, software and New Oriental's capability to provide the working professionals in China with professional education and training solutions as well as (inaudible).

This joint venture will also help ATA expand and reinforce its online continuing education business (inaudible). We announced in our last earnings call that we were planning to invest in our platform and related content to (inaudible) fiscal year 2015.

Moving to Slide 14, we also intend to continue seeking opportunities to expand our current relationship with existing clients that are working on looking to establish new business partnerships in this market or in essence to further accelerate ATA's growth into the consumer market.

As Benson mentioned earlier, we are moving forward (inaudible) conservative approach, maintaining our progress and making adjustments as needed. With our new initiative, ATA (inaudible). As shown on Slide 15, we added (inaudible). With it, we will be able to add value (inaudible).

While we are in the early stage of (inaudible), we are optimistic, given the progress we have managed so far and look forward to providing future updates to the community. Thanks to all of you for joining us. If anyone has question for us, please feel free to reach out to Benson or myself, as well as (inaudible).

We look forward to speaking with you again during our second quarter 2015 financial results call. As always, we welcome any listeners to our August in Beijing. Thank you..