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 January 2020
Commission File Number: 001-34900
TAL EDUCATION GROUP
12/F, Danling SOHO
No. 6 Danling Street, Haidian District
Beijing 100080
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/ Bangxin Zhang | |
| Name: | Bangxin Zhang | |
| Title: | Chief Executive Officer | |
| Date: January 21, 2020 | ||
Exhibit Index
| Exhibit 99.1 – Press Release | |
| Exhibit 99.2 – Press Release |
Exhibit 99.1
TAL Education Group Announces Unaudited Financial Results for the Third Fiscal Quarter Ended November 30, 2019
- Net Revenues up by 47.2% Year-Over-Year
- Income from Operations up by 9.9% Year-Over-Year
- Net income Attributable to TAL was US$28.2 million, compared to net income attributable to TAL of US$123.8 million in the same period of prior year
- Total Student Enrollments of normal priced long-term course up by 66.0% Year-Over-Year
(Beijing–January 21, 2020)—TAL Education Group (NYSE: TAL) (“TAL” or the “Company”), a leading K-12 after-school tutoring services provider in China, today announced its unaudited financial results for the third quarter of fiscal year 2020 ended November 30, 2019.
Highlights for the Third Quarter of Fiscal Year 2020
| • | Net revenues increased by 47.2% year-over-year to US$862.4 million from US$586.0 million in the same period of prior year. |
| • | Income from operations increased by 9.9% year-over-year to US$78.0 million, from US$71.0 million in the same period of prior year. |
| • | Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 16.4% year-over-year to US$108.2 million, from US$92.9 million in the same period of prior year. |
| • | Net income attributable to TAL was US$28.2 million, compared to net income attributable to TAL of US$123.8 million in the same period of prior year. |
| • | Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$58.3 million, compared to Non-GAAP net income attributable to TAL of US$145.8 million in the same period of prior year. |
| • | Basic and diluted net income per American Depositary Share (“ADS”) were both US$0.05. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.10 and US$0.09, respectively. Three ADSs represent one Class A common share. |
| • | Cash, cash equivalents and short-term investments totaled US$2,729.8 million as of November 30, 2019, compared to US$1,515.6 million as of February 28, 2019. |
| • | Total Student Enrollments of normal priced long-term course increased by 66.0% year-over-year to approximately 2,318,000 from approximately 1,396,620 in the same period of prior year. |
Highlights for the Nine Months Ended November 30, 2019
| • | Net revenues increased by 36.2% year-over-year to US$2,501.8 million from US$1,836.4 million in the same period of prior year. |
| • | Income from operations decreased by 9.5% to US$205.3 million from US$226.9 million in the same period of prior year. |
| • | Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 3.0% to US$290.4 million from US$281.9 million in the same period of prior year. |
| • | Net income attributable to TAL was US$6.5 million, compared to net income attributable to TAL of US$267.6 million in the same period of prior year. |
| • | Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$91.6 million, compared to Non-GAAP net income attributable to TAL of US$322.6 million in the same period of prior year. |
| • | Basic and diluted net income per ADS were both US$0.01. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, were both US$0.15. |
| • | Average student enrollments of normal priced long-term course per quarter during fiscal year 2020 increased by 54.3% year-over-year to approximately 2,483,100 from approximately 1,609,000 in the same period of fiscal year 2019. |
| • | Total physical network increased from 676 learning centers in 56 cities in China as of February 28, 2019 to 794 learning centers in 70 cities as of November 30, 2019. |
Financial and Operating Data—Third Quarter and First Nine Months of Fiscal Year 2020
(In US$ thousands, except per ADS data, student enrollments and percentages)
| Three Months Ended | ||||||||||||
| November 30, | ||||||||||||
| 2018 | 2019 | Pct. Change | ||||||||||
| Net revenues | 585,991 | 862,357 | 47.2 | % | ||||||||
| Operating income | 70,996 | 78,036 | 9.9 | % | ||||||||
| Non-GAAP operating income | 92,931 | 108,175 | 16.4 | % | ||||||||
| Net income attributable to TAL | 123,834 | 28,177 | (77.2 | )% | ||||||||
| Non-GAAP net income attributable to TAL | 145,769 | 58,316 | (60.0 | )% | ||||||||
| Net income per ADS attributable to TAL – basic | 0.22 | 0.05 | (78.2 | )% | ||||||||
| Net income per ADS attributable to TAL – diluted | 0.21 | 0.05 | (78.1 | )% | ||||||||
| Non-GAAP net income per ADS attributable to TAL – basic | 0.26 | 0.10 | (61.7 | )% | ||||||||
| Non-GAAP net income per ADS attributable to TAL – diluted | 0.24 | 0.09 | (61.4 | )% | ||||||||
| Total Student Enrollments of normal priced long-term course | 1,396,620 | 2,318,000 | 66.0 | % | ||||||||
| Nine Months Ended | ||||||||||||
| November 30, | ||||||||||||
| 2018 | 2019 | Pct. Change | ||||||||||
| Net revenues | 1,836,423 | 2,501,753 | 36.2 | % | ||||||||
| Operating income | 226,876 | 205,293 | (9.5 | )% | ||||||||
| Non-GAAP operating income | 281,878 | 290,372 | 3.0 | % | ||||||||
| Net income attributable to TAL | 267,624 | 6,473 | (97.6 | )% | ||||||||
| Non-GAAP net income attributable to TAL | 322,626 | 91,552 | (71.6 | )% | ||||||||
| Net income per ADS attributable to TAL – basic | 0.47 | 0.01 | (97.7 | )% | ||||||||
| Net income per ADS attributable to TAL – diluted | 0.45 | 0.01 | (97.7 | )% | ||||||||
| Non-GAAP net income per ADS attributable to TAL – basic | 0.57 | 0.15 | (72.8 | )% | ||||||||
| Non-GAAP net income per ADS attributable to TAL – diluted | 0.54 | 0.15 | (72.5 | )% | ||||||||
| Average Student Enrollments of normal priced long-term course | 1,609,000 | 2,483,100 | 54.3 | % | ||||||||
“This quarter’s results reflect the progress in our efforts to build a healthy and sustainable business model based on product development, technology, customer satisfaction and operational efficiencies,” said Mr. Rong Luo, TAL’s Chief Financial Officer.
“We expect the growth momentum of our overall business to continue as we further develop our offline network at a suitable speed and scale our online offerings,” Mr. Luo continued. “We will keep up the progress to make our various offline and online tutoring services more widely available in larger geographies by leveraging our offline and online advantages and new technology resources,” Mr. Luo added.
Financial Results for the Third Quarter of Fiscal Year 2020
Net Revenues
In the third quarter of fiscal year 2020, TAL reported net revenues of US$862.4 million, representing a 47.2% increase from US$586.0 million in the third quarter of fiscal year 2019. The increase was mainly driven by an increase in total student enrollments of normal priced long-term course, which increased by 66.0% to approximately 2,318,000 from approximately 1,396,620 in the same period of prior year. The increase in total Student Enrollments of normal priced long-term course was primarily driven by the growth of enrollments in the small class offerings and online courses.
Operating Costs and Expenses
In the third quarter of fiscal year 2020, operating costs and expenses were US$785.6 million, representing a 52.4% increase from US$515.4 million in the third quarter of fiscal year 2019. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$755.4 million, a 53.1% increase from US$493.5 million in the third quarter of fiscal year 2019.
Cost of revenues increased by 43.9% to US$385.1 million from US$267.6 million in the third quarter of fiscal year 2019. The increase in cost of revenues was mainly due to an increase in teacher compensation, rental costs and learning materials. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 43.9% to US$384.9 million, from US$267.5 million in the third quarter of fiscal year 2019.
Selling and marketing expenses increased by 87.9% to US$190.9 million from US$101.6 million in the third quarter of fiscal year 2019. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 89.2% to US$186.4 million, from US$98.5 million in the third quarter of fiscal year 2019. The increase of selling and marketing expenses in the third quarter of fiscal year 2020 was primarily a result of more marketing promotion activities to expand our customer base and brand enhancement, as well as a rise in the compensation to sales and marketing staff to support a greater number of programs and service offerings compared to the same period in the prior year.
General and administrative expenses increased by 43.3% to US$209.5 million from US$146.2 million in the third quarter of fiscal year 2019. The increase in general and administrative expenses was mainly due to an increase of the number of our general and administrative personnel compared to the same period in the prior year and a rise in compensation to our general and administrative personnel. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 44.5% to US$184.2 million, from US$127.5 million in the third quarter of fiscal year 2019.
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 37.4% to US$30.1 million in the third quarter of fiscal year 2020 from US$21.9 million in the same period of fiscal year 2019.
Gross Profit
Gross profit increased by 49.9% to US$477.2 million from US$318.4 million in the third quarter of fiscal year 2019.
Income from Operations
Income from operations increased by 9.9% to US$78.0 million from US$71.0 million in the third quarter of fiscal year 2019. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 16.4% to US$108.2 million from US$92.9 million in the third quarter of fiscal year 2019.
Other Income/(Expense)
Other expense was US$3.7 million for the third quarter of fiscal year 2020, compared to other income of US$98.7 million in the third quarter of fiscal year 2019. Other income in the third quarter of fiscal year 2019 was substantially all from the fair value changes of a long-term investment. The fair value changes of such long-term investment were transferred from accumulated other comprehensive income to other income as the investment was reclassified from available-for-sale investment to equity security with readily determinable fair value upon listing on the Hong Kong Exchange in November 2018.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US$46.4 million for the third quarter of fiscal year 2020, compared to US$41.1 million for the third quarter of fiscal year 2019. Impairment loss on long-term investments was mainly due to other-than temporary declines in the value of long-term investments in several investees.
Income Tax Expense
Income tax expense was US$16.6 million in the third quarter of fiscal year 2020, compared to US$10.4 million of income tax expense in the third quarter of fiscal year 2019.
Net Income Attributable to TAL Education Group
Net income attributable to TAL was US$28.2 million in the third quarter of fiscal year 2020, compared to net income attributable to TAL of US$123.8 million in the third quarter of fiscal year 2019. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, decreased by 60.0% to US$58.3 million, from US$145.8 million in the third quarter of fiscal year 2019.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were both US$0.05 in the third quarter of fiscal year 2020. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.10 and US$0.09, respectively.
Capital Expenditures
Capital expenditures for the third quarter of fiscal year 2020 were US$40.1 million, compared to US$73.0 million of capital expenditures for the third quarter of fiscal year 2019.
Cash, Cash Equivalents, and Short-Term Investments
As of November 30, 2019, the Company had US$2,357.4 million of cash and cash equivalents and US$372.4 million of short-term investments, compared to US$1,247.1 million of cash and cash equivalents and US$268.4 million of short-term investments as of February 28, 2019.
Deferred Revenue
As of November 30, 2019, the Company’s deferred revenue balance was US$1,241.2 million, compared to US$866.3 million as of November 30, 2018, representing a year-over-year increase of 43.3%. Deferred revenue primarily consisted of the tuition collected in advance of Xueersi Peiyou small classes, as well as deferred revenue related to other businesses.
Financial Results for the First Nine Months of Fiscal Year 2020
Net Revenues
For the first nine months of fiscal year 2020, TAL reported net revenues of US$2,501.8 million, representing a 36.2% increase from US$1,836.4 million in the first nine months of fiscal year 2019. The increase was mainly driven by the growth in average student enrollments of normal priced long-term course, which increased by 54.3% to approximately 2,483,100 from approximately 1,609,000 in the same period of prior year. The increase in average student enrollments of normal priced long-term course was driven primarily by the growth of enrollments in the small class offerings and online courses.
Operating Costs and Expenses
In the first nine months of fiscal year 2020, operating costs and expenses were US$2,305.5 million, a 42.7% increase from US$1,616.2 million in the first nine months of fiscal year 2019. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$2,220.5 million, a 42.2% increase from US$1,561.2 million in the first nine months of fiscal year 2019.
Cost of revenues grew by 30.6% to US$1,120.8 million from US$858.3 million in the first nine months of fiscal year 2019. The increase in cost of revenues was mainly due to increase in teacher compensation, rental costs and learning materials. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 30.6% to US$1,120.0 million from US$857.8 million in the first nine months of fiscal year 2019.
Selling and marketing expenses increased by 75.3% to US$609.6 million from US$347.8 million in the first nine months of fiscal year 2019. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 75.1% to US$596.7 million from US$340.7 million in the first nine months of fiscal year 2019. The increase of selling and marketing expenses in the first nine months of fiscal year 2020 was primarily a result of more marketing promotion activities to expand our customer base and brand enhancement, as well as a rise in the compensation to sales and marketing staff to support a greater number of programs and service offerings compared to the same period in the prior year.
General and administrative expenses increased by 40.2% to US$575.1 million from US$410.1 million in the first nine months of fiscal year 2019. The increase in general and administrative expenses was mainly due to an increase of the number of our general and administrative personnel compared to the same period in the prior year and a rise in compensation to our general and administrative personnel. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 38.9% to US$503.8 million from US$362.7 million in the first nine months of fiscal year 2019.
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 54.7% to US$85.1 million in the first nine months of fiscal year 2020 from US$55.0 million in the same period of fiscal year 2019.
Gross Profit
Gross profit grew by 41.2% to US$1,381.0 million from US$978.1 million in the first nine months of fiscal year 2019.
Income from Operations
Income from operations decreased by 9.5% to US$205.3 million from US$226.9 million in the first nine months of fiscal year 2019. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 3.0% to US$290.4 million from US$281.9 million in the first nine months of fiscal year 2019.
Other Income/(Expense)
Other expense was US$90.6 million for the first nine months of fiscal year 2020, compared to other income of US$107.0 million in the third quarter of fiscal year 2019. Other expense in the first nine months of fiscal year 2020 was mainly related to the fair value changes of a long-term investment.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US$151.2 million for the first nine months of fiscal year 2020, compared to US$50.8 million for the first nine months of fiscal year 2019. Impairment loss on long-term investments was mainly due to other-than temporary declines in the value of long-term investments in several investees.
Income Tax Expense
Income tax expense was US$5.7 million in the first nine months of fiscal year 2020, compared to US$43.3 million of income tax expense in the first nine months of fiscal year 2019.
Net Income Attributable to TAL Education Group
Net income attributable to TAL was US$6.5 million in the first nine months of fiscal year 2020, compared to net income attributable to TAL of US$267.6 million in the first nine months of fiscal year 2019. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, decreased by 71.6% to US$91.6 million from US$322.6 million in the first nine months of fiscal year 2019.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were both US$0.01 in the first nine months of fiscal year 2020. Non-GAAP basic and Non-GAAP diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.15.
Capital Expenditures
Capital expenditures for the first nine months of fiscal year 2020 were US$125.2 million, compared to US$144.2 million of capital expenditures for the first nine months of fiscal year 2019.
Business Outlook
Based on our current estimates, total net revenues for the fourth quarter of fiscal year 2020 are expected to be between US$959.1 million and US$980.9 million, representing an increase of 32% to 35% on a year-over-year basis.
If not taking into consideration the impact of potential change in exchange rate between Renminbi and the U.S. Dollar, the projected revenue growth rate is expected to be in the range of 35% to 38% for the fourth quarter of fiscal year 2020.
These estimates reflect the Company’s current expectation, which is subject to change.
Conference Call
The Company will host a conference call and live webcast to discuss its financial results for the third fiscal quarter of fiscal year 2020 ended November 30, 2019 at 8:00 a.m. Eastern Time on January 21, 2020 (9:00 p.m. Beijing time on January 21, 2020).
The dial-in details for the live conference call are as follows:
| - U.S. toll free: | +1-866-519-4004 |
| - Hong Kong toll free: | 800-906-601 |
| - International toll: | +65-6713-5090 |
| Conference ID: | 2999454 |
A live and archived webcast of the conference call will be available on the Investor Relations section of TAL’s website at https://ir.100tal.com/.
A telephone replay of the conference call will be available through 7:59 a.m. U.S. Eastern time, January 29, 2020 (8:59 p.m. Beijing time, January 29, 2020).
The dial-in details for the replay are as follows:
| - U.S. toll free: | +1-855-452-5696 |
| - Hong Kong toll free: | 800-963-117 |
| - International toll: | +61-2-8199-0299 |
| Conference ID: | 2999454 |
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, the outlook for the fourth quarter of fiscal year 2020, quotations from management in this announcement, as well as 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 attract students to enroll in its courses; the Company’s ability to continue to recruit, train and retain qualified teachers; the Company’s ability to improve the content of its existing course offerings and to 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 leading K-12 after-school tutoring services provider in China. The acronym “TAL” stands for “Tomorrow Advancing Life”, which reflects our vision to promote top learning opportunities for Chinese 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 tutoring services to students from pre-school to the twelfth grade through three flexible class formats: small classes, personalized premium services, and online courses. Our tutoring services cover the core academic subjects in China’s school curriculum as well as competence oriented programs. The Company's learning center network currently covers 70 cities.
We also operate www.jzb.com, a leading online education platform in 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:
Echo Yan
Investor Relations
TAL Education Group
Tel: +86 10 5292 6658
Email: ir@100tal.com
Caroline Straathof
IR Inside
Tel: +31 6 5462 4301
Email: info@irinside.com
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
| As of February 28, 2019 | As of November 30, 2019 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 1,247,140 | $ | 2,357,357 | ||||
| Restricted cash-current | 9,227 | 5,348 | ||||||
| Short-term investments | 268,424 | 372,430 | ||||||
| Inventory | 7,750 | 21,288 | ||||||
| Amounts due from related parties-current | 3,341 | 5,812 | ||||||
| Income tax receivables | 7,204 | 28 | ||||||
| Prepaid expenses and other current assets | 202,630 | 244,873 | ||||||
| Total current assets | 1,745,716 | 3,007,136 | ||||||
| Restricted cash-non-current | 7,334 | 9,162 | ||||||
| Amounts due from related parties-non-current | 1,747 | 1,422 | ||||||
| Property and equipment, net | 287,877 | 328,446 | ||||||
| Deferred tax assets-non-current | 29,179 | 75,726 | ||||||
| Rental deposits | 56,135 | 65,319 | ||||||
| Intangible assets, net | 74,776 | 61,055 | ||||||
| Land use right, net | — | 204,721 | ||||||
| Goodwill | 414,228 | 406,439 | ||||||
| Long-term investments | 850,695 | 583,158 | ||||||
| Long-term prepayments and other non-current assets | 267,404 | 71,208 | ||||||
| Operating lease right-of-use assets | — | 1,124,903 | ||||||
| Total assets | $ | 3,735,091 | $ | 5,938,695 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable (including accounts payable of the consolidated VIEs without recourse to TAL Education Group of 98,436 and 138,872 as of February 28, 2019 and November 30, 2019, respectively) | $ | 106,493 | $ | 148,393 | ||||
| Deferred revenue-current (including deferred revenue-current of the consolidated VIEs without recourse to TAL Education Group of 401,027 and 1,163,866 as of February 28, 2019 and November 30, 2019, respectively) | 433,610 | 1,240,318 | ||||||
| Amounts due to related parties-current (including amounts due to related parties-current of the consolidated VIEs without recourse to TAL Education Group of 18,504 and 3,085 as of February 28, 2019 and November 30, 2019, respectively) | 24,375 | 9,075 | ||||||
| Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to TAL Education Group of 291,728 and 416,653 as of February 28, 2019 and November 30, 2019, respectively) | 365,195 | 503,781 | ||||||
| Income tax payable (including income tax payable of the consolidated VIEs without recourse to TAL Education Group of 36,670 and 52,617 as of February 28, 2019 and November 30, 2019, respectively) | 38,743 | 7,935 | ||||||
| Short-term debt and current portion of long-term debt (including short-term debt and current portion of long-term debt of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019 and November 30, 2019, respectively) | 210,027 | — | ||||||
| Bond payable, current portion (including bond payable, current portion of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019 and November 30, 2019, respectively) | 5,275 | — | ||||||
| Operating lease liabilities, current portion (including operating lease liabilities, current portion of the consolidated VIEs without recourse to TAL Education Group of nil and 246,233 as of February 28, 2019 and November 30, 2019, respectively) | — | 278,389 | ||||||
| Total current liabilities | 1,183,718 | 2,187,891 | ||||||
| Deferred revenue-non-current (including deferred revenue-non-current of the consolidated VIEs without recourse to TAL Education Group of 2,497 and 918 as of February 28, 2019 and November 30, 2019, respectively) | 2,497 | 918 | ||||||
| Amounts due to related parties-non-current (including amounts due to related parties-non-current of the consolidated VIEs without recourse to TAL Education Group of 106 and 5 as of February 28, 2019 and November 30, 2019, respectively) | 196 | 5 | ||||||
| Deferred tax liabilities-non-current (including deferred tax liabilities-non-current of the consolidated VIEs without recourse to TAL Education Group of 16,951 and 7,169 as of February 28, 2019 and November 30, 2019, respectively) | 17,738 | 7,766 | ||||||
| Other non-current liabilities (including other non-current liabilities of the consolidated VIEs without recourse to TAL Education Group of 465 and nil as of February 28, 2019 and November 30, 2019, respectively) | 465 | — | ||||||
| Long-term debt (including long-term debt of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019, and November 30, 2019, respectively) | — | 260,900 | ||||||
| Operating lease liabilities, non-current portion (including operating lease liabilities, non-current portion of the consolidated VIEs without recourse to TAL Education Group of nil and 778,634 as of February 28, 2019 and November 30, 2019, respectively) | — | 850,392 | ||||||
| Total liabilities | 1,204,614 | 3,307,872 | ||||||
| Equity | ||||||||
| Class A common shares | 127 | 132 | ||||||
| Class B common shares | 71 | 67 | ||||||
| Class A common shares issuable | 1,977 | — | ||||||
| Additional paid-in capital | 1,485,521 | 1,642,850 | ||||||
| Statutory reserve | 58,690 | 58,690 | ||||||
| Retained earnings | 920,314 | 926,787 | ||||||
| Accumulated other comprehensive income/(loss) | 17,047 | (34,400 | ) | |||||
| Total TAL Education Group's equity | 2,483,747 | 2,594,126 | ||||||
| Noncontrolling interest | 46,730 | 36,697 | ||||||
| Total equity | 2,530,477 | 2,630,823 | ||||||
| Total liabilities and equity | $ | 3,735,091 | $ | 5,938,695 | ||||
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 | |||||||||||||||
| 2018 | 2019 | 2018 | 2019 | |||||||||||||
Net revenues | $ | 585,991 | $ | 862,357 | $ | 1,836,423 | $ | 2,501,753 | ||||||||
| Cost of revenues (note 1) | 267,633 | 385,122 | 858,280 | 1,120,800 | ||||||||||||
| Gross profit | 318,358 | 477,235 | 978,143 | 1,380,953 | ||||||||||||
| Operating expenses (note 1) | ||||||||||||||||
| Selling and marketing | 101,597 | 190,947 | 347,804 | 609,604 | ||||||||||||
| General and administrative | 146,170 | 209,491 | 410,119 | 575,132 | ||||||||||||
| Total operating expenses | 247,767 | 400,438 | 757,923 | 1,184,736 | ||||||||||||
| Government subsidies | 405 | 1,239 | 6,656 | 9,076 | ||||||||||||
| Income from operations | 70,996 | 78,036 | 226,876 | 205,293 | ||||||||||||
| Interest income | 13,507 | 19,691 | 49,329 | 53,561 | ||||||||||||
| Interest expense | (4,059 | ) | (2,735 | ) | (11,881 | ) | (7,963 | ) | ||||||||
| Other income/(expense) | 98,690 | (3,732 | ) | 107,021 | (90,618 | ) | ||||||||||
| Impairment loss on long-term investments | (41,131 | ) | (46,408 | ) | (50,844 | ) | (151,196 | ) | ||||||||
| Income before provision for income tax and loss from equity method investments | 138,003 | 44,852 | 320,501 | 9,077 | ||||||||||||
| Income tax expense | (10,404 | ) | (16,611 | ) | (43,268 | ) | (5,736 | ) | ||||||||
| Loss from equity method investments | (3,934 | ) | (3,206 | ) | (11,072 | ) | (5,895 | ) | ||||||||
| Net income/(loss) | 123,665 | 25,035 | 266,161 | (2,554 | ) | |||||||||||
| Add: Net loss attributable to noncontrolling interest | 169 | 3,142 | 1,463 | 9,027 | ||||||||||||
| Total net income attributable to TAL Education Group | $ | 123,834 | $ | 28,177 | $ | 267,624 | $ | 6,473 | ||||||||
| Net income per common share | ||||||||||||||||
| Basic | $ | 0.65 | $ | 0.14 | $ | 1.41 | $ | 0.03 | ||||||||
| Diluted | 0.62 | 0.14 | 1.34 | 0.03 | ||||||||||||
| Net income per ADS (note 2) | ||||||||||||||||
| Basic | $ | 0.22 | $ | 0.05 | $ | 0.47 | $ | 0.01 | ||||||||
| Diluted | 0.21 | 0.05 | 0.45 | 0.01 | ||||||||||||
| Weighted average shares used in calculating net income per common share | ||||||||||||||||
| Basic | 190,312,127 | 198,555,124 | 189,601,790 | 197,882,722 | ||||||||||||
| Diluted | 199,636,171 | 207,120,564 | 200,186,601 | 206,627,034 | ||||||||||||
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, | |||||||||||||||
| 2018 | 2019 | 2018 | 2019 | |||||||||||||
| Cost of revenues | $ | 158 | $ | 267 | $ | 506 | $ | 832 | ||||||||
| Selling and marketing expenses | 3,090 | 4,534 | 7,123 | 12,951 | ||||||||||||
| General and administrative expenses | 18,687 | 25,338 | 47,373 | 71,296 | ||||||||||||
| Total | $ | 21,935 | $ | 30,139 | $ | 55,002 | $ | 85,079 | ||||||||
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, |
|||||||||||||||
| 2018 | 2019 | 2018 | 2019 | |||||||||||||
| Net income/(loss) | $ | 123,665 | $ | 25,035 | $ | 266,161 | $ | (2,554 | ) | |||||||
| Other comprehensive (loss) /income, net of tax | (213,073 | ) | 22,202 | (169,744 | ) | (53,505 | ) | |||||||||
| Comprehensive (loss)/ income | (89,408 | ) | 47,237 | 96,417 | (56,059 | ) | ||||||||||
| Add: Comprehensive loss attributable to noncontrolling interest | 441 | 2,537 | 2,987 | 11,085 | ||||||||||||
| Comprehensive (loss)/ income attributable to TAL Education Group | $ | (88,967 | ) | $ | 49,774 | $ | 99,404 | $ | (44,974 | ) | ||||||
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, |
|||||||||||||||
| 2018 | 2019 | 2018 | 2019 | |||||||||||||
| Cost of revenues | $ | 267,633 | $ | 385,122 | $ | 858,280 | $ | 1,120,800 | ||||||||
| Share-based compensation expense in cost of revenues | 158 | 267 | 506 | 832 | ||||||||||||
| Non-GAAP cost of revenues | 267,475 | 384,855 | 857,774 | 1,119,968 | ||||||||||||
| Selling and marketing expenses | 101,597 | 190,947 | 347,804 | 609,604 | ||||||||||||
| Share-based compensation expense in selling and marketing expenses | 3,090 | 4,534 | 7,123 | 12,951 | ||||||||||||
| Non-GAAP selling and marketing expenses | 98,507 | 186,413 | 340,681 | 596,653 | ||||||||||||
| General and administrative expenses | 146,170 | 209,491 | 410,119 | 575,132 | ||||||||||||
| Share-based compensation expense in general and administrative expenses | 18,687 | 25,338 | 47,373 | 71,296 | ||||||||||||
| Non-GAAP general and administrative expenses | 127,483 | 184,153 | 362,746 | 503,836 | ||||||||||||
| Operating costs and expenses | 515,400 | 785,560 | 1,616,203 | 2,305,536 | ||||||||||||
| Share-based compensation expense in operating costs and expenses | 21,935 | 30,139 | 55,002 | 85,079 | ||||||||||||
| Non-GAAP operating costs and expenses | 493,465 | 755,421 | 1,561,201 | 2,220,457 | ||||||||||||
| Income from operations | 70,996 | 78,036 | 226,876 | 205,293 | ||||||||||||
| Share based compensation expenses | 21,935 | 30,139 | 55,002 | 85,079 | ||||||||||||
| Non-GAAP income from operations | 92,931 | 108,175 | 281,878 | 290,372 | ||||||||||||
| Net income attributable to TAL Education Group | 123,834 | 28,177 | 267,624 | 6,473 | ||||||||||||
| Share based compensation expenses | 21,935 | 30,139 | 55,002 | 85,079 | ||||||||||||
| Non-GAAP net income attributable to TAL Education Group | $ | 145,769 | $ | 58,316 | $ | 322,626 | $ | 91,552 | ||||||||
| Net income per ADS | ||||||||||||||||
| Basic | $ | 0.22 | $ | 0.05 | $ | 0.47 | $ | 0.01 | ||||||||
| Diluted | 0.21 | 0.05 | 0.45 | 0.01 | ||||||||||||
| Non-GAAP Net income per ADS | ||||||||||||||||
| Basic | $ | 0.26 | $ | 0.10 | $ | 0.57 | $ | 0.15 | ||||||||
| Diluted | 0.24 | 0.09 | 0.54 | 0.15 | ||||||||||||
| ADSs used in calculating net income per ADS | ||||||||||||||||
| Basic | 570,936,381 | 595,665,372 | 568,805,370 | 593,648,166 | ||||||||||||
| Diluted | 598,908,513 | 621,361,692 | 600,559,803 | 619,881,102 | ||||||||||||
| ADSs used in calculating Non-GAAP net income per ADS | ||||||||||||||||
| Basic | 570,936,381 | 595,665,372 | 568,805,370 | 593,648,166 | ||||||||||||
| Diluted | 598,908,513 | 621,361,692 | 600,559,803 | 620,250,195 | ||||||||||||
Exhibit 99.2
TAL Education Group Announces Changes to Board of Directors
Beijing, January 21, 2020—TAL Education Group (NYSE: TAL) (“TAL” or the “Company”), a leading K-12 after-school tutoring services provider in China, today announced the appointment of Mr. Yunfeng Bai to TAL’s board of directors and the resignation of Mr. Yachao Liu from his post as a director of the Company, both effective January 21, 2020.
Mr. Yunfeng Bai will serve as the chairman of the Company’s board of directors, whereas Mr. Bangxin Zhang will continue serving as a director. Each of Mr. Bangxin Zhang, Mr. Yunfeng Bai and Mr. Yachao Liu will continue serving their respective executive roles as chief executive officer, president, and chief operating officer of the Company.
About TAL Education Group
TAL Education Group is a leading K-12 after-school tutoring services provider in China. The acronym “TAL” stands for “Tomorrow Advancing Life”, which reflects our vision to promote top learning opportunities for Chinese 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 tutoring services to students from pre-school to the twelfth grade through three flexible class formats: small classes, personalized premium services, and online courses. Our tutoring services cover the core academic subjects in China’s school curriculum as well as competence oriented programs. The Company's learning center network currently covers 70 cities.
We also operate www.jzb.com, a leading online education platform in China. Our ADSs trade on the New York Stock Exchange under the symbol “TAL”.
For further information, please contact:
Echo Yan
Investor Relations
TAL Education Group
Tel: +86 10 5292 6658
Email: ir@100tal.com
Caroline Straathof
IR Inside
Tel: +31 6 5462 4301
Email: info@irinside.com