Carolyne Sohn - Investor Relations, The Equity Group Amy Tung - Chief Financial Officer Kevin Ma - Chairman and CEO.

Good morning, ladies and gentlemen. Thank you for joining today’s ATA Incorporated Fiscal 2017 Fourth Quarter and Year-End Financial Results Conference Call. And it is moment, all participants are in listen-only, and later we’ll have a question-and-answer session [Operator Instructions]. I’d now like to turn the call over to Ms. Carolyne Sohn.

Please proceed..

Thank you, operator and hello everyone. Thank you for joining us. Copies of the press release announcing ATA’s fiscal 2017 fourth quarter and year-end results are available at IR section of the Company’s Web site at www.atai.net.cn. As part of this conference call, the Company has a slide presentation available on its Web site.

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 Web site 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 obligations 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 the slide two of the conference call presentation for further information.

All U.S. dollar amounts in this conference call relating to the financial results for most recent quarter ended March 31, 2017, are converted from RMB using an exchange rate of RMB6.8832 to US$1, the noon buying rate as of March 31, 2017. All historical conversions are accurate as of the time reported unless otherwise noted.

The Company reports its financial results under U.S. GAAP and 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. On today's call, the Company’s CFO, Ms.

Amy Tung, will provide an overview of operational and financial highlights for fiscal year 2017 and fourth quarter 2017 beginning with slide four. The Company's Chairman and CEO, Mr. Kevin Ma will then discuss ATA’s outlook and growth strategy for the nine month transition period before opening the floor for question.

With that, I'll turn the call over to ATA's CFO, Ms. Amy Tung. Please go ahead, Amy..

Thank you, Carolyne. And welcome everyone. Today, I will provide an overview of our operating and financial highlights and then briefly provide an update on our outlook for our nine month transition period 2017.

As we announced in our earnings release earlier today, ATA is changing its fiscal year-end from March 31st to December 31st to better reflect the business cycle of the Company and its subsidiary, and align to Company's reporting schedule and processes with its ATA online subsidiary, which has maturated at December 31st year-end date in China.

We will file a transition report on Form 20-F after December 31, 2017 to transfer the nine months transition period from April 01, 2017 to December 31, 2017.

Overall, ATA's fiscal 2017 was an exceptional year highlighted by our double-digit percentage increase in billable expense, driven by the contingent migration to our reliable and more efficient computer based testing platform.

In addition, ATA was able to continue its push into private sector, singing significant recruitment exam contracts with some of China's largest entities. These were important signings for our Company that we believe have ATA well positioned for the future.

With that, I will begin on slide five, which lists some of our operating highlights for our fiscal year 2017. During the year, ATA delivered a record 12.1 million billable exams, a 17.5% increase from our previous record of 10.3 million exams in fiscal year 2016.

The National Unified Certified Public Accountant or CPA exam saw volume growth in fiscal year 2017. This year marks the first consecutive year that ATA has provided services for the CPA exam. And we successfully delivered the record 2.2 million exams in October 2016 through our partnership with the Chinese Institute of Certified Public Accountants.

In fiscal year 2017, we substantially administered new government exams, such as the Ministry of Housing and Urban-Rural Development exams and the National Tour Guide Qualification Exam, both of which have the potential for geographic expansion of volume growth in the future.

In the private sector, ATA delivered a number of new testing exam projects, such as the 2017 campus recruitment exam for the Agricultural Development Bank of China and the university enrollment exams for the Southern University of Science and Technology.

We are very pleased with the growth in our exam volumes, while maintaining a margin in the 50% range. This growth is especially notable as we were able to more than offset the loss of the sector rotation of China exam, which was one of our largest exams with volume growth in our other exams, particularly the Fund Practitioner Certification Exam.

Lastly, we announced earlier today that the companies for the financials occurs a cash of $0.205 per common share or $0.41 per ADS. The total amount of cash attributed in the dividend is expected to be approximately $10 million.

The dividend will be paid on or around June 30, 2017 to all shareholders of record as of the close of business on June 12, 2017. We are pleased to be in a position where we can return capital to our loyal shareholders, and are confidence that we will be able to contribute generating positive free cash flows in the future.

Moving to slide six, which list our financial highlights for fourth quarter of 2017 and fiscal year 2017.

ATA invested previously raised net revenue guidance for fiscal year 2017 of between RMB455 million to RMB475 million, and reported record net revenues of RMB472.4 million in fiscal year 2017, a 13.2% increase from RMB417.1 in the prior year period.

This was driven by increased exam volumes from both new and existing exams such as the Fund Practitioner Certification Exam, the CPA Exam and National Tour Guide Qualification Exam and the Qualification Exam for Housing and Urban-Rural Construction Field Professionals.

Gross margin for fiscal year 2017 was 49.2% compared to 50.1% in the current fiscal year. The decrease was primarily due to increased labor costs associated with salary increases, as well as a change in revenue mix.

The Company reported net revenues of RMB36.9 million for first quarter of 2017, which exceeded the guidance range of RMB26 million to RMB31 million but was the decreased currency RMB44.7 million reported for first quarter of 2016.

This was primarily due to the change in timing of the CPA exam, which was held in November of fiscal year 2017 as opposed to February of fiscal year 2016. On the next slide, we breakout revenues for first quarter 2017 and fiscal year 2017 by our businesses, which are testing services, online education services, and other revenues.

Testing services accounted for about 74.4% of revenues in first quarter 2017. On slides eight and nine, we provide a breakdown of the Company’s financial results for fiscal year 2017 and first quarter 2017.

As this information has been fully detailed in our earnings release, I won’t repeat the numbers here, but I’m happy to take any questions on this information during the Q&A. ATA reported a net loss of RMB9.7 million for fiscal year 2017, which compared to net income of RMB26.1 million in fiscal year 2016.

The loss was primarily a result of RMB22.6 million accrual in dividend withholding taxes relating to distributor earnings of [10.38] [indiscernible] subsidiary, as well as impairment losses associated with the Company's strategic investments. We continue to believe in the long term prospects of our investing companies.

However, we felt it was best to take a consecutive approach in evaluating assets, going forward. The impairment is in no way affect ATA’s core businesses. We will likely continue to expand new opportunities that make sense for our business in future and will only support that will provide access with the critical resource on investments.

Moving to slide 10, we provide a supplemental chart of quarterly numbers adjusted for share based compensation expense and foreign currency exchange gains on losses. Excluding these items, adjusted net loss attributable to ATA Inc. to our first quarter 2017 was RMB49.8 million or $7.2 million compared to RMB14 million in the prior year period.

Diluted losses per ADS attributable to ATA Inc. during first quarter 2017 on a non-GAAP basis were RMB2.18 or $0.32 compared to RMB2.62 in prior year period.

Adjusted net loss attributable to ATA for fiscal year 2017 was RMB2.7 million compared to adjusted net income of RMB36.7 million in the prior year period, and diluted losses per ADS on a non-GAAP basis were RMB0.12 or $0.02. We continue to be supported by free cash flow and an solid balance sheet, which we have highlighted on slide 11.

As of March 31, 2017, ATA’s cash and cash equivalents were about $32.3 million; working capital was $28 million; shareholders' equity was $57 million compared to $28.4 million, $37.6 million and $61.1 million at March 31, 2016.

As shown on slide 12, we expect net revenues for the quarter ending June 30, 2017 will be in the range of RMB91 million to RMB93 million. We expect the net revenues for the nine months ending December 31, 2017 to be between RMB490 million and RMB510 million.

We have a high degree of confidence in our long-term relationships, as well as an effective pipeline of potential exams going forward. We remain committed to provide investors as much transparency into our operations as possible, and are available to answer your questions to provide additional clarity as needed.

Please keep in mind that this guidance is based on our 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 Chairman and CEO, Mr. Kevin Ma to provide some more detail on our growth strategy and also for the nine months transition period and beyond..

Thank you, Amy and welcome everyone. I would like to take a moment to also welcome Amy aboard as ATA’s CFO. Amy is no stranger to ATA, having being with our Company for more than 10 years in various roles from plans to operations. I am confident her leadership will be a variable asset to us in the months and years ahead.

And with that, it's my pleasure to congratulate all ATA’s employees on achieving yet another year of record billable exam delivered and revenues earned. As we transition to our new December 31st fiscal year end, we expect to continue building upon the positive momentum on our new business areas in fiscal year 2017.

As Amy mentioned we signed new clients and successfully delivered several largest payroll exams, as well as enabled smaller recruitment and assessment exams for private clients, many of which have tremendous opportunities for growth down the road.

While example such opportunities are that education assessment exams ATA delivered for the Tianjin Nankai Education Bureau in January of this year. This exam was administered to about 7,000 students in Grade 7 through Grade 10 in the Nankai District of Tianjin. And was the first exam ATA delivered for K-12 public Schools in China.

We continue to explore similar prospective for this same type of exam in other regions.

In addition to gross income and to start the exams, ATA continues to deepen its relationships with corporate clients that see the value of our exams and assessment as those in their HR process, some of our long-term clients in cloud, globally the colonized corporations such as [16.50] [indiscernible] NOL, China Mobile and China Tech, as well as Bank of China and the China Construction Bank.

We continue to pursue new business leads on a number of fronts from pay based exam conversions to geographic expansion opportunities to growing existing client relationships. Our testing services business continues to be the foundation of ATA and we’ll remain optimistically as a potential for growth over the long-term.

In February, we announced a partnership with MOOC-CN Investment, a special online education firm with Tsinghua Holdings as one of the cornerstone investors, which became a strategic investor in our assessment business subsidiary ATA Learning Data & Technology Beijing Limited.

We are pleased to have more of our investments those of confidence and are working to develop education assessment tools and accountant. By leveraging more of our investors to the sources and are sourcing with investments of education we believe that ATA become more quickly penetrated China’s education system.

We opportunistically continue to put on for our shareholders and having said that, are pleased to be able to return some capital to our growing shareholders with today's announcement of a cash dividend.

All of us as ATA are working harder to accelerate the growth of our business and are looking forward to meeting and speaking with investors when we visited the U.S. latest months..

With that, operator, let's open it up for any questions..

[Operator Instructions] Our first question is coming from Patrick Lane. Please proceed..

Thanks for taking my question. And I just want to say, first of all, I really appreciate you guys focusing on the core business, which I think is a terrific strategy. My other question is in terms of the dividend, I think that's terrific.

In terms of going forward, is that something that you plan, not necessarily the dollar amount, but is your intention to continue to distribute dividends in the future? Thank you..

Regarding your second question, we intend to declare a portion of our cash generated from operations yearly. The portion will be dependent upon the company for business and planning..

Thank you..

Okay, thank you..

And we have no further questions at this moment [Operator Instructions]. We have no more questions..

Thanks again to all of you for joining us. If anyone has questions for us, please feel free to reach out directly to us, or our Investor Relations firm, the Equity Group. We’ll look forward to speaking with you all again during our next quarterly report. As always, we welcome any visitors to our office in Beijing. Thank you..

Thank you. Ladies and gentlemen, you may now disconnect. Thank you for participation..