UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2022
Commission File Number: 001-34900
TAL EDUCATION GROUP
5/F, Tower B, Heying Center
Xiaoying West Street, Haidian District
Beijing 100085
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TAL Education Group | |||
| By: | /s/ Alex Zhuangzhuang Peng | ||
| Name: | Alex Zhuangzhuang Peng | ||
| Title: | President and Chief Financial Officer | ||
Date: February 22, 2022
Exhibit Index
Exhibit 99.1
TAL Education Group Announces Unaudited Financial Results for the Third Fiscal Quarter Ended November 30, 2021
(Beijing–February 21, 2022)—TAL Education Group (NYSE: TAL) (“TAL” or the “Company”), a smart learning solutions provider in China, today announced its unaudited financial results for the third quarter of fiscal year 2022 ended November 30, 2021.
Highlights for the Third Quarter of Fiscal Year 2022
| - | Net revenues decreased by 8.8% year-over-year to US$1,020.9 million from US$1,119.1 million in the same period of the prior year. |
| - | Loss from operations was US$108.4 million, compared to loss from operations of US$127.4 million in the same period of the prior year. |
| - | Non-GAAP loss from operations, which excluded share-based compensation expenses, was US$67.6 million, compared to non-GAAP loss from operations of US$73.4 million in the same period of the prior year. |
| - | Net loss attributable to TAL was US$99.4 million, compared to net loss attributable to TAL of US$43.6 million in the same period of the prior year. |
| - | Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$58.6 million, compared to non-GAAP net income attributable to TAL of US$10.4 million in the same period of the prior year. |
| - | Basic and diluted net loss per American Depositary Share (“ADS”) were both US$0.15. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.09. Three ADSs represent one Class A common share. |
| - | Cash, cash equivalents and short-term investments totaled US$2,837.2 million as of November 30, 2021, compared to US$5,937.5 million as of February 28, 2021. |
Highlights for the Nine Months Ended November 30, 2021
| - | Net revenues increased by 22.9% year-over-year to US$3,849.8 million from US$3,133.1 million in the same period of the prior year. |
| - | Loss from operations was US$615.2 million, compared to loss from operations of US$141.0 million in the same period of the prior year. |
| - | Non-GAAP loss from operations, which excluded share-based compensation expenses, was US$440.5 million, compared to non-GAAP loss from operations of US$16.4 million in the same period of the prior year. |
| - | Net loss attributable to TAL was US$1,028.0 million, compared to net income attributable to TAL of US$53.0 million in the same period of the prior year. |
| - | Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$853.3 million, compared to non-GAAP net income attributable to TAL of US$177.6 million in the same period of the prior year. |
| - | Basic and diluted net loss per ADS were both US$1.60. Non-GAAP basic and diluted net loss per ADS, excluding share-based compensation expenses, were both US$1.33. |
Financial Data——Third Quarter and First Nine Months of Fiscal Year 2022
(In US$ thousands, except per ADS data and percentages)
| Three Months Ended | ||||||||||||
| November 30, | ||||||||||||
| 2020 | 2021 | Pct. Change | ||||||||||
| Net revenues | 1,119,135 | 1,020,932 | (8.8 | %) | ||||||||
| Loss from operations | (127,389 | ) | (108,429 | ) | (14.9 | %) | ||||||
| Non-GAAP loss from operations | (73,354 | ) | (67,611 | ) | (7.8 | %) | ||||||
| Net loss attributable to TAL | (43,608 | ) | (99,368 | ) | 127.9 | % | ||||||
| Non-GAAP net income/(loss) attributable to TAL | 10,427 | (58,550 | ) | (661.5 | %) | |||||||
| Net loss per ADS attributable to TAL – basic | (0.07 | ) | (0.15 | ) | 114.5 | % | ||||||
| Net loss per ADS attributable to TAL – diluted | (0.07 | ) | (0.15 | ) | 114.5 | % | ||||||
| Non-GAAP net income/(loss) per ADS attributable to TAL – basic | 0.02 | (0.09 | ) | (628.5 | %) | |||||||
| Non-GAAP net income/(loss) per ADS attributable to TAL – diluted | 0.02 | (0.09 | ) | (647.5 | %) | |||||||
| Nine Months Ended | ||||||||||||
| November 30, | ||||||||||||
| 2020 | 2021 | Pct. Change | ||||||||||
| Net revenues | 3,133,066 | 3,849,755 | 22.9 | % | ||||||||
| Loss from operations | (141,014 | ) | (615,160 | ) | 336.2 | % | ||||||
| Non-GAAP loss from operations | (16,407 | ) | (440,463 | ) | 2,584.6 | % | ||||||
| Net income/(loss) attributable to TAL | 53,012 | (1,027,992 | ) | (2,039.2 | %) | |||||||
| Non-GAAP net income/(loss) attributable to TAL | 177,619 | (853,295 | ) | (580.4 | %) | |||||||
| Net income/(loss) per ADS attributable to TAL – basic | 0.09 | (1.60 | ) | (1,914.2 | %) | |||||||
| Net income/(loss) per ADS attributable to TAL – diluted | 0.08 | (1.60 | ) | (1,985.8 | %) | |||||||
| Non-GAAP net income/(loss) per ADS attributable to TAL – basic | 0.29 | (1.33 | ) | (549.4 | %) | |||||||
| Non-GAAP net income/(loss) per ADS attributable to TAL – diluted | 0.28 | (1.33 | ) | (567.2 | %) | |||||||
Financial Results for the Third Quarter of Fiscal Year 2022
Net Revenues
In the third quarter of fiscal year 2022, TAL reported net revenues of US$1,020.9 million, representing an 8.8% decrease from US$1,119.1 million in the third quarter of fiscal year 2021.
Operating Costs and Expenses
In the third quarter of fiscal year 2022, operating costs and expenses were US$1,139.3 million, representing a 9.3% decrease from US$1,255.9 million in the third quarter of fiscal year 2021. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$1,098.5 million, representing an 8.6% decrease from US$1,201.8 million in the third quarter of fiscal year 2021.
Cost of revenues increase by 0.8% to US$519.5 million from US$516.0 million in the third quarter of fiscal year 2021. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increase by 0.8% to US$519.2 million, from US$515.2 million in the third quarter of fiscal year 2021.
Selling and marketing expenses decreased by 35.0% to US$273.6 million from US$420.7 million in the third quarter of fiscal year 2021. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 36.4% to US$258.6 million, from US$406.4 million in the third quarter of fiscal year 2021.
General and administrative expenses increased by 5.7% to US$300.0 million from US$283.8 million in the third quarter of fiscal year 2021. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 12.2% to US$274.4 million, from US$244.5 million in the third quarter of fiscal year 2021.
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 24.5% to US$40.8 million in the third quarter of fiscal year 2022 from US$54.0 million in the same period of fiscal year 2021.
Impairment loss on intangible assets and goodwill was $46.2 million for the third quarter of fiscal year 2022, compared to US$35.7 million for the third quarter of fiscal year 2021.
Gross Profit
Gross profit decreased by 16.9% to US$501.4 million from US$603.6 million in the third quarter of fiscal year 2021.
Loss from Operations
Loss from operations was US$108.4 million in the third quarter of fiscal year 2022, compared to loss from operations of US$127.4 million in the third quarter of fiscal year 2021. Non-GAAP loss from operations was US$67.6 million, compared to Non-GAAP loss from operations of US$73.4 million in the same period of the prior year.
Other Income
Other income was US$9.5 million for the third quarter of fiscal year 2022, compared to other income of US$45.5 million in the third quarter of fiscal year 2021.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was nil for the third quarter of fiscal year 2022, compared to US$11.5 million for the third quarter of fiscal year 2021.
Income Tax Benefit/(expense)
Income tax expense was US$25.6 million in the third quarter of fiscal year 2022, compared to US$13.9 million of income tax benefit in the third quarter of fiscal year 2021.
Net Loss/(income) Attributable to TAL Education Group
Net loss attributable to TAL was US$99.4 million in the third quarter of fiscal year 2022, compared to net loss attributable to TAL of US$43.6 million in the third quarter of fiscal year 2021. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$58.6 million, compared to Non-GAAP net income attributable to TAL of US$10.4 million in the third quarter of fiscal year 2021.
Basic and Diluted Net Loss per ADS
Basic and diluted net loss per ADS were both US$0.15 in the third quarter of fiscal year 2022. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.09, in the third quarter of fiscal year 2022.
Cash, Cash Equivalents, and Short-Term Investments
As of November 30, 2021, the Company had US$1,347.9 million of cash and cash equivalents and US$1,489.3 million of short-term investments, compared to US$3,243.0 million of cash and cash equivalents and US$2,694.5 million of short-term investments as of February 28, 2021.
Financial Results for the First Nine Months of Fiscal Year 2022
Net Revenues
For the first nine months of fiscal year 2022, TAL reported net revenues of US$3,849.8 million, representing a 22.9% increase from US$3,133.1 million in the first nine months of fiscal year 2021.
Operating Costs and Expenses
In the first nine months of fiscal year 2022, operating costs and expenses were US$4,480.0 million, a 36.1% increase from US$3,291.5 million in the first nine months of fiscal year 2021. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$4,305.3 million, a 35.9% increase from US$3,166.9 million in the first nine months of fiscal year 2021.
Cost of revenues increased by 36.7% to US$2,005.3 million from US$1,467.1 million in the first nine months of fiscal year 2021. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 36.7% to US$2,004.3 million from US$1,466.0 million in the first nine months of fiscal year 2021.
Selling and marketing expenses decreased by 0.5% to US$1,014.7 million from US$1,019.6 million in the first nine months of fiscal year 2021. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 3.7% to US$951.2 million from US$988.0 million in the first nine months of fiscal year 2021.
General and administrative expenses increased by 28.5% to US$987.6 million from US$768.7 million in the first nine months of fiscal year 2021. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 29.6% to US$877.3 million from US$676.9 million in the first nine months of fiscal year 2021.
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 40.2% to US$174.7 million in the first nine months of fiscal year 2022 from US$124.6 million in the same period of fiscal year 2021.
Impairment loss on intangible assets and goodwill was US$472.4 million for the first nine months of fiscal year 2022, compared to US$36.0 million for the same period of fiscal year 2021.
Gross Profit
Gross profit grew by 10.7% to US$1,844.5 million from US$1,666.0 million in the first nine months of fiscal year 2021.
Loss from Operations
Loss from operations was US$615.2 million in the first nine months of fiscal year 2022, compared to loss from operations of US$141.0 million in the same period of the prior year. Non-GAAP loss from operations, which excluded share-based compensation expenses, was US$440.5 million for the first nine months of fiscal year 2022, compared to non-GAAP loss from operations, which excluded share-based compensation expenses, was US$16.4 million in the first nine months of fiscal year 2021.
Other Income
Other income was US$17.6 million for the first nine months of fiscal year 2022, compared to other income of US$132.9 million for the first nine months of fiscal year 2021.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US$178.1 million for the first nine months of fiscal year 2022, compared to US$18.4 million for the first nine months of fiscal year 2021.
Income Tax Expense
Income tax expense was US$367.1 million in the first nine months of fiscal year 2022, compared to US$10.6 million of income tax expense in the first nine months of fiscal year 2021.
Net Loss/(income) Attributable to TAL Education Group
Net loss attributable to TAL was US$1,028.0 million in the first nine months of fiscal year 2022, compared to net income attributable to TAL of US$53.0 million in the first nine months of fiscal year 2021. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$853.3 million in the first nine months of fiscal year 2022, compared to Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$177.6 million in the first nine months of fiscal year 2021.
Basic and Diluted Net Loss per ADS
Basic and diluted net loss per ADS were both US$1.60, in the first nine months of fiscal year 2022. Non-GAAP basic and Non-GAAP diluted net loss per ADS, which excluded share-based compensation expenses, were both US$1.33, in the first nine months of fiscal year 2022.
Recent Development
On November 12, 2021, the Company issued a press release to announce that in response to the regulatory developments relating to after-school tutoring services, including the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education, published in July 2021 by the General Office of the CPC Central Committee and the General Office of the State Council (the “Opinion”) and the related implementation rules, regulations and measures promulgated by competent authorities, the Company decided to cease offering academic subjects to students from kindergarten through grade nine (“K9 Academic AST Services”) in the mainland of China by the end of December 2021.
The Company has completed the cessation by the due date and expects that the cessation will have a substantial adverse impact on the Company’s revenues for the fiscal year ending February 28, 2022 and subsequent periods. In the fiscal year ended February 28, 2021, the revenues from offering K9 Academic AST Services accounted for a substantial majority of the Company’s total revenues in the year. Therefore, the Company believes that the financial results for the fiscal periods ended November 30, 2021 would not be indicative for its performance going forward.
By leveraging its leading-edge education technology, high quality content and extensive experience, the Company will continue to operate and develop the portion of its business other than K9 Academic AST Services, and will also explore other opportunities to provide learning solutions in accordance with relevant rules and regulations.
The Company will continue to seek guidance from and cooperate with government authorities in various provinces and municipalities in China in connection with its efforts to comply with the policy directives in the Opinion and any related implementation rules, regulations and measures. The Company will further adjust its business operations as required, and provide updates to its shareholders as appropriate.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, TAL Education Group’s strategic and operational plans contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s ability to continue to provide competitive learning services and products; the Company’s ability to continue to recruit, train and retain talents; the Company’s ability to improve the content of current course offerings and develop new courses; the Company’s ability to maintain and enhance its brand; the Company’s ability to maintain and continue to improve its teaching results; and the Company’s ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company’s reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and TAL Education Group undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.
About TAL Education Group
TAL Education Group is a smart learning solutions provider in China. The acronym “TAL” stands for “Tomorrow Advancing Life”, which reflects our vision to promote top learning opportunities for students through both high-quality teaching and content, as well as leading edge application of technology in the education experience. TAL Education Group offers comprehensive learning services to students from pre-school to the twelfth grade primarily through three flexible class formats: small classes, personalized premium services, and online courses. Our learning services mainly cover enrichment learnings programs and some academic subjects in and out of China. Our ADSs trade on the New York Stock Exchange under the symbol “TAL”.
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP operating costs and expenses, non-GAAP cost of revenues, non-GAAP selling and marketing expenses, non-GAAP general and administrative expenses, non-GAAP income from operations, non-GAAP net income attributable to TAL, non-GAAP basic and non-GAAP diluted net income per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” set forth at the end of this release.
TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. TAL believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to TAL’s historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company’s business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
For further information, please contact:
Jackson Ding
Investor Relations
TAL Education Group
Tel: +86 10 5292 6669-8809
Email: ir@tal.com
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
As of February 28, | As of November 30, | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 3,242,953 | $ | 1,347,934 | ||||
| Restricted cash-current | 1,758,937 | 1,110,112 | ||||||
| Short-term investments | 2,694,555 | 1,489,245 | ||||||
| Inventory | 38,675 | 22,239 | ||||||
| Amounts due from related parties-current | 2,964 | 2,093 | ||||||
| Income tax receivables | 15,641 | 20,926 | ||||||
| Prepaid expenses and other current assets | 403,110 | 178,349 | ||||||
| Total current assets | 8,156,835 | 4,170,898 | ||||||
| Restricted cash-non-current | 16,094 | 377,898 | ||||||
| Property and equipment, net | 511,415 | 358,914 | ||||||
| Deferred tax assets | 317,189 | 8,524 | ||||||
| Rental deposits | 102,555 | 94,234 | ||||||
| Intangible assets, net | 66,041 | 16,776 | ||||||
| Land use right, net | 216,702 | 216,942 | ||||||
| Goodwill | 454,413 | 18,836 | ||||||
| Amounts due from related parties- non-current | - | 63 | ||||||
| Long-term investments | 667,636 | 557,974 | ||||||
| Long-term prepayments and other non-current assets | 57,694 | 19,943 | ||||||
| Operating lease right-of-use assets | 1,545,735 | 828,980 | ||||||
| Total assets | $ | 12,112,309 | $ | 6,669,982 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 353,778 | $ | 150,867 | ||||
| Deferred revenue-current | 1,387,493 | 538,979 | ||||||
| Amounts due to related parties-current | 3,488 | 312 | ||||||
| Accrued expenses and other current liabilities | 911,283 | 928,463 | ||||||
| Income tax payable | 65,138 | 33,297 | ||||||
| Current portion of long-term debt | 270,000 | - | ||||||
| Operating lease liabilities, current portion | 382,671 | 247,344 | ||||||
| Total current liabilities | 3,373,851 | 1,899,262 | ||||||
| Deferred revenue-non-current | 30,005 | 20 | ||||||
| Deferred tax liabilities | 10,333 | 17,898 | ||||||
| Bond payable | 2,300,000 | - | ||||||
| Operating lease liabilities, non-current portion | 1,193,564 | 634,295 | ||||||
| Total liabilities | 6,907,753 | 2,551,475 | ||||||
| Mezzanine equity | ||||||||
| Redeemable non-controlling interests | 1,775 | - | ||||||
| Equity | ||||||||
| Class A common shares | 148 | 166 | ||||||
| Class B common shares | 67 | 49 | ||||||
| Additional paid-in capital | 4,369,125 | 4,358,131 | ||||||
| Statutory reserve | 121,285 | 111,151 | ||||||
| Retained earnings/(accumulated deficit) | 624,883 | (392,975 | ) | |||||
| Accumulated other comprehensive income | 86,321 | 68,888 | ||||||
| Total TAL Education Group's equity | 5,201,829 | 4,145,410 | ||||||
| Noncontrolling interest | 952 | (26,903 | ) | |||||
| Total equity | 5,202,781 | 4,118,507 | ||||||
| Total liabilities, mezzanine equity and equity | $ | 12,112,309 | $ | 6,669,982 | ||||
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)
| For the Three Months Ended November 30, | For the Nine Months Ended November 30, | |||||||||||||||
| 2020 | 2021 | 2020 | 2021 | |||||||||||||
| Net revenues | $ | 1,119,135 | $ | 1,020,932 | $ | 3,133,066 | $ | 3,849,755 | ||||||||
| Cost of revenues (note 1) | 515,560 | 519,483 | 1,467,112 | 2,005,252 | ||||||||||||
| Gross profit | 603,575 | 501,449 | 1,665,954 | 1,844,503 | ||||||||||||
| Operating expenses (note 1) | ||||||||||||||||
| Selling and marketing | 420,747 | 273,629 | 1,019,598 | 1,014,666 | ||||||||||||
| General and administrative | 283,827 | 299,963 | 768,719 | 987,595 | ||||||||||||
| Impairment loss on intangible assets and goodwill | 35,727 | 46,247 | 36,031 | 472,437 | ||||||||||||
| Total operating expenses | 740,301 | 619,839 | 1,824,348 | 2,474,698 | ||||||||||||
| Government subsidies | 9,337 | 9,961 | 17,380 | 15,035 | ||||||||||||
| Loss from operations | (127,389 | ) | (108,429 | ) | (141,014 | ) | (615,160 | ) | ||||||||
| Interest income | 28,879 | 12,747 | 79,065 | 84,644 | ||||||||||||
| Interest expense | (2,714 | ) | (1,821 | ) | (9,378 | ) | (7,871 | ) | ||||||||
| Other income | 45,507 | 9,520 | 132,948 | 17,611 | ||||||||||||
| Impairment loss on long-term investments | (11,472 | ) | - | (18,357 | ) | (178,063 | ) | |||||||||
| (Loss)/income before provision for income tax and income from equity method investments | (67,189 | ) | (87,983 | ) | 43,264 | (698,839 | ) | |||||||||
| Income tax benefit/(expense) | 13,887 | (25,562 | ) | (10,556 | ) | (367,120 | ) | |||||||||
| Income from equity method investments | 411 | 6,423 | 6,352 | 10,471 | ||||||||||||
| Net (loss)/income | (52,891 | ) | (107,122 | ) | 39,060 | (1,055,488 | ) | |||||||||
| Add: Net loss attributable to noncontrolling interest | 9,283 | 7,754 | 13,952 | 27,496 | ||||||||||||
| Total net (loss)/income attributable to TAL Education Group | $ | (43,608 | ) | $ | (99,368 | ) | $ | 53,012 | $ | (1,027,992 | ) | |||||
| Net (loss)/income per common share | ||||||||||||||||
| Basic | $ | (0.22 | ) | $ | (0.46 | ) | $ | 0.26 | $ | (4.79 | ) | |||||
| Diluted | (0.22 | ) | (0.46 | ) | 0.25 | (4.79 | ) | |||||||||
| Net (loss)/income per ADS (note 2) | ||||||||||||||||
| Basic | $ | (0.07 | ) | $ | (0.15 | ) | $ | 0.09 | $ | (1.60 | ) | |||||
| Diluted | (0.07 | ) | (0.15 | ) | 0.08 | (1.60 | ) | |||||||||
| Weighted average shares used in calculating net (loss)/income per common share | ||||||||||||||||
| Basic | 202,039,751 | 214,672,624 | 200,786,811 | 214,619,651 | ||||||||||||
| Diluted | 202,039,751 | 214,672,624 | 208,710,216 | 214,619,651 | ||||||||||||
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows:
| For the Three Months | For the Nine Months | |||||||||||||||
| Ended November 30, | Ended November 30, | |||||||||||||||
| 2020 | 2021 | 2020 | 2021 | |||||||||||||
| Cost of revenues | $ | 404 | $ | 262 | $ | 1,158 | $ | 996 | ||||||||
| Selling and marketing expenses | 14,322 | 15,008 | 31,644 | 63,440 | ||||||||||||
| General and administrative expenses | 39,309 | 25,548 | 91,805 | 110,261 | ||||||||||||
| Total | $ | 54,035 | $ | 40,818 | $ | 124,607 | $ | 174,697 | ||||||||
Note 2: Three ADSs represent one Class A common Share.
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
Comprehensive Income/(LOSS)
(In thousands of U.S. dollars)
For the Three Months Ended November 30, | For the Nine Months Ended November 30, | |||||||||||||||
| 2020 | 2021 | 2020 | 2021 | |||||||||||||
| Net (loss)/income | $ | (52,891 | ) | $ | (107,122 | ) | $ | 39,060 | $ | (1,055,488 | ) | |||||
| Other comprehensive income/(loss), net of tax | 54,944 | 6,053 | 87,834 | (17,796 | ) | |||||||||||
| Comprehensive income/(loss) | 2,053 | (101,069 | ) | 126,894 | (1,073,284 | ) | ||||||||||
| Add: Comprehensive loss attributable to noncontrolling interest | 8,581 | 8,106 | 12,872 | 27,855 | ||||||||||||
| Comprehensive income/(loss) attributable to TAL Education Group | $ | 10,634 | $ | (92,963 | ) | $ | 139,766 | $ | (1,045,429 | ) | ||||||
TAL EDUCATION GROUP
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)
For the Three Months Ended November 30, | For the Nine Months Ended November 30, | |||||||||||||||
| 2020 | 2021 | 2020 | 2021 | |||||||||||||
| Cost of revenues | $ | 515,560 | $ | 519,483 | $ | 1,467,112 | $ | 2,005,252 | ||||||||
| Share-based compensation expense in cost of revenues | 404 | 262 | 1,158 | 996 | ||||||||||||
| Non-GAAP cost of revenues | 515,156 | 519,221 | 1,465,954 | 2,004,256 | ||||||||||||
| Selling and marketing expenses | 420,747 | 273,629 | 1,019,598 | 1,014,666 | ||||||||||||
| Share-based compensation expense in selling and marketing expenses | 14,322 | 15,008 | 31,644 | 63,440 | ||||||||||||
| Non-GAAP selling and marketing expenses | 406,425 | 258,621 | 987,954 | 951,226 | ||||||||||||
General and administrative expenses | 283,827 | 299,963 | 768,719 | 987,595 | ||||||||||||
| Share-based compensation expense in general and administrative expenses | 39,309 | 25,548 | 91,805 | 110,261 | ||||||||||||
| Non-GAAP general and administrative expenses | 244,518 | 274,415 | 676,914 | 877,334 | ||||||||||||
| Operating costs and expenses | 1,255,861 | 1,139,322 | 3,291,460 | 4,479,950 | ||||||||||||
| Share-based compensation expense in operating costs and expenses | 54,035 | 40,818 | 124,607 | 174,697 | ||||||||||||
| Non-GAAP operating costs and expenses | 1,201,826 | 1,098,504 | 3,166,853 | 4,305,253 | ||||||||||||
| Loss from operations | (127,389 | ) | (108,429 | ) | (141,014 | ) | (615,160 | ) | ||||||||
| Share based compensation expenses | 54,035 | 40,818 | 124,607 | 174,697 | ||||||||||||
| Non-GAAP loss from operations | (73,354 | ) | (67,611 | ) | (16,407 | ) | (440,463 | ) | ||||||||
| Net (loss)/income attributable to TAL Education Group | (43,608 | ) | (99,368 | ) | 53,012 | (1,027,992 | ) | |||||||||
| Share based compensation expenses | 54,035 | 40,818 | 124,607 | 174,697 | ||||||||||||
| Non-GAAP net income/(loss) attributable to TAL Education Group | $ | 10,427 | $ | (58,550 | ) | $ | 177,619 | $ | (853,295 | ) | ||||||
| Net (loss)/income per ADS | ||||||||||||||||
| Basic | $ | (0.07 | ) | $ | (0.15 | ) | $ | 0.09 | $ | (1.60 | ) | |||||
| Diluted | (0.07 | ) | (0.15 | ) | 0.08 | (1.60 | ) | |||||||||
| Non-GAAP Net income/(loss) per ADS | ||||||||||||||||
| Basic | $ | 0.02 | $ | (0.09 | ) | $ | 0.29 | $ | (1.33 | ) | ||||||
| Diluted | 0.02 | (0.09 | ) | 0.28 | (1.33 | ) | ||||||||||
| ADSs used in calculating net (loss)/income per ADS | ||||||||||||||||
| Basic | 606,119,253 | 644,017,872 | 602,360,433 | 643,858,953 | ||||||||||||
| Diluted | 606,119,253 | 644,017,872 | 626,130,648 | 643,858,953 | ||||||||||||
| ADSs used in calculating Non-GAAP income/(loss) per ADS | ||||||||||||||||
| Basic | 606,119,253 | 644,017,872 | 602,360,433 | 643,858,953 | ||||||||||||
| Diluted | 627,950,637 | 644,017,872 | 626,130,648 | 643,858,953 | ||||||||||||