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News Release

TAL Education Group Announces Unaudited Financial Results for the Third Fiscal Quarter Ended November 30, 2017

-Quarterly Net Revenues up by 66.3% Year-Over-Year
-Quarterly Income from Operations Increased by 102.1% Year-Over-Year
-Quarterly Non-GAAP Income from Operations Increased by 82.6% Year-Over-Year
-Quarterly Total Student Enrollments up by 85.0% Year-Over-Year

BEIJING, Jan. 25, 2018 /PRNewswire/ -- 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 2018 ended November 30, 2017.

Highlights for the Third Quarter of Fiscal Year 2018

  • Net revenues increased by 66.3% year-over-year to US$433.3 million from US$260.6 million in the same period of the prior year.
  • Income from operations increased by 102.1% to US$44.6 million from US$22.1 million in the same period of the prior year. Non-GAAP income from operations increased by 82.6% to US$56.8 million from US$31.1 million in the same period of the prior year.
  • Basic and diluted net income per American Depositary Share ("ADS") were US$0.08 and US$0.07, respectively. 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$1,311.0 million as of November 30, 2017, compared to US$699.7 million as of February 28, 2017.
  • Total student enrollments increased by 85.0% year-over-year to approximately 1,543,740 from approximately 834,420 in the same period of the prior year.

Highlights for the Nine Months Ended November 30, 2017

  • Net revenues increased by 66.6% year-over-year to US$1,210.9 million from US$726.8 million in the same period of the prior year.
  • Income from operations increased by 55.5% to US$141.7 million from US$91.2 million in the same period of fiscal year 2017. Non-GAAP income from operations increased by 50.8% to US$176.3 million from US$116.9 million in the same period of the prior year.
  • Net income attributable to TAL increased by 56.1% year-over-year to US$128.9 million from US$82.6 million in the same period of the prior year.
  • Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 50.9% year-over-year to US$163.5 million from US$108.3 million in the same period of the prior year.
  • Basic and diluted net income per ADS were US$0.24 and US$0.22, respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, were US$0.31 and US$0.28, respectively.
  • Total student enrollments during the first nine months of fiscal year 2018 increased by 86.1% year-over-year to approximately 4,833,880 from approximately 2,598,120 in the same period of the prior year.
  • Total physical network increased from 507 learning centers in 30 cities as of February 28, 2017, to 579 learning centers in 38 cities as of November 30, 2017.

Financial and Operating Data--Third Quarter and First Nine months of Fiscal Year 2018

(In US$ thousands, except per ADS data, student enrollments and percentages)


Three Months Ended


November 30,


2016

2017

Pct. Change

Net revenues

260,553

433,265

66.3%

Operating income

22,070

44,597

102.1%

Non-GAAP operating income

31,125

56,844

82.6%

Net income attributable to TAL

13,625

40,662

198.4%

Non-GAAP net income attributable to
TAL

22,681

52,909

133.3%

Net income per ADS attributable to
TAL - basic

0.03

0.08

173.2%

Net income per ADS attributable to
TAL - diluted

0.03

0.07

167.7%

Non-GAAP net income per ADS
attributable to TAL - basic

0.05

0.10

113.6%

Non-GAAP net income per ADS
attributable to TAL - diluted

0.04

0.09

112.5%

Total student enrollments in small class,
one-on-one, and online courses

834,420

1,543,740

85.0%

 


Nine Months Ended


November 30,


2016

2017

Pct. Change

Net revenues

726,769

1,210,918

66.6%

Operating income

91,164

141,728

55.5%

Non-GAAP operating income

116,895

176,278

50.8%

Net income attributable to TAL

82,602

128,901

56.1%

Non-GAAP net income attributable to
TAL

108,332

163,451

50.9%

Net income per ADS attributable to
TAL - basic

0.17

0.24

42.7%

Net income per ADS attributable to
TAL - diluted

0.16

0.22

41.0%

Non-GAAP net income per ADS
attributable to TAL - basic

0.22

0.31

38.0%

Non-GAAP net income per ADS
attributable to TAL - diluted

0.20

0.28

37.9%

Total student enrollments in small class,
one-on-one, and online courses

2,598,120

4,833,880

86.1%

"I am pleased that we managed to maintain our growth momentum, driven by the robust enrollment growth from the classroom capacity we added earlier in previous quarters. The year-over-year revenue growth of 66.3% was supported by 85.0% enrollment growth across all cities," commented Mr. Rong Luo, TAL's Chief Financial Officer.

Mr. Luo continued, "As our longstanding track record shows, TAL has deeply committed to exploring the possibilities of technology-based education reform. We will continue to run pilots in AI and other cutting-edge areas of EDTECH, to create innovative ways to better serve our customers."

Financial Results for the Third Quarter of Fiscal Year 2018

Net Revenues

In the third quarter of fiscal year 2018, TAL reported net revenues of US$433.3 million, representing a 66.3% increase from US$260.6 million in the third quarter of fiscal year 2017. The increase was mainly driven by an increase in total student enrollments, which increased by 85.0% to approximately 1,543,740 from approximately 834,420 in the same period of the prior year. The increase in total student enrollments was driven primarily by the growth of enrollments in the small class offerings and online courses.

Operating Costs and Expenses

In the third quarter of fiscal year 2018, operating costs and expenses were US$389.3 million, a 63.0% increase from US$238.8 million in the third quarter of fiscal year 2017. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$377.0 million, a 64.1% increase from US$229.8 million in the third quarter of fiscal year 2017.

Cost of revenues increased by 67.7% to US$221.1 million, from US$131.9 million in the third quarter of fiscal year 2017. The increase in cost of revenues was mainly due to an increase in teacher compensation and rental costs. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 67.6% to US$221.0 million from US$131.8 million in the third quarter of fiscal year 2017.

Selling and marketing expenses increased by 75.4% to US$61.8 million from US$35.2 million in the third quarter of fiscal year 2017. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 75.7% to US$60.5 million from US$34.4 million in the third quarter of fiscal year 2017. The increase of selling and marketing expenses in the third quarter of fiscal year 2018 was primarily a result of a rise in the compensation to sales and marketing staff to support a greater number of programs and service offerings compared to the year-ago period, as well as more marketing promotion activities mainly in brand enhancement.

General and administrative expenses increased by 47.8% to US$106.0 million from US$71.7 million in the third quarter of fiscal year 2017. 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 year-ago period and a rise in compensation to our general and administrative personnel, as well as an increase in rental cost. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 49.9% to US$95.2 million from US$63.5 million in the third quarter of fiscal year 2017.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 35.2% to US$12.2 million in the third quarter of fiscal year 2018 from US$9.1 million in the same period of fiscal year 2017.

Gross Profit                                                                                                                                 

Gross profit increased by 64.9% to US$212.2 million from US$128.7 million in the third quarter of fiscal year 2017.

Income from Operations

Income from operations increased by 102.1% to US$44.6 million from US$22.1 million in the third quarter of fiscal year 2017. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 82.6% to US$56.8 million from US$31.1 million in the third quarter of fiscal year 2017.

Other (expenses)/income

Other income was US$5.4 million for the third quarter of fiscal year 2018, compared to other expense of US$0.7 million in the third quarter of fiscal year 2017. Other income in the third quarter of fiscal year 2018 was mainly due to gains from the disposal of investments. 

Impairment loss on long-term investments

Impairment loss on long-term investments was US$1.5 million in the third quarter of fiscal year 2018, compared to US$3.8 million in the third quarter of fiscal year 2017. Impairment loss on long-term investments was mainly due to the other-than-temporary declines in the value of long-term investments in several investees.

Income Tax Expense

Income tax expense was US$11.4 million in the third quarter of fiscal year 2018, compared to US$3.1 million in the third quarter of fiscal year 2017. The increase was mainly due to increase in income before provision for income tax and loss from equity method investments.

Net Income Attributable to TAL Education Group 

Net income attributable to TAL increased by 198.4% to US$40.7 million from US$13.6 million in the third quarter of fiscal year 2017. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 133.3% to US$52.9 million from US$22.7 million in the third quarter of fiscal year 2017.

Basic and Diluted Net Income per ADS

Basic and diluted net income per ADS were US$0.08 and US$0.07, respectively in the third quarter of fiscal year 2018. 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 2018 were US$28.3 million, representing an increase of US$11.2 million from US$17.1 million in the third quarter of fiscal year 2017. The increase was mainly due to leasehold improvements and the purchase of servers, computers, software systems and other hardware for the Company's teaching facilities and mobile network research and development.

Cash, Cash Equivalents and Short-Term Investments

As of November 30, 2017, the Company had US$1,126.6 million of cash and cash equivalents and US$184.3 million of short-term investments, compared to US$470.2 million of cash and cash equivalents and US$229.5 million of short-term investments as of February 28, 2017.

Deferred Revenue

As of November 30, 2017, the Company's deferred revenue balance was US$1,074.9 million, compared to US$679.9 million as of November 30, 2016, representing an increase of 58.1%. Deferred revenue primarily consisted of the tuition collected in advance for the fall semester, winter semester and spring semester of Xueersi Peiyou small classes, as well as the deferred revenue related to other businesses. 

Financial Results for the First Nine Months of Fiscal Year 2018

Net Revenues

For the first nine months of fiscal year 2018, TAL reported net revenues of US$1,210.9 million, representing a 66.6% increase from US$726.8 million in the first nine months of fiscal year 2017. The increase was mainly driven by an increase in total student enrollments, which increased by 86.1% to approximately 4,833,880 from approximately 2,598,120 in the same period of the prior year. The increase in total student enrollments was driven primarily by the increase in total student enrollments, primarily from small class offerings and online courses.

Operating Costs and Expenses

In the first nine months of fiscal year 2018, operating costs and expenses were US$1,073.7 million, a 68.1% increase from US$638.7 million in the first nine months of fiscal year 2017. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$1,039.1 million, a 69.5% increase from US$613.0 million in the first nine months of fiscal year 2017.

Cost of revenues increased by 74.5% to US$635.6 million from US$364.2 million in the first nine months of fiscal year 2017. The increase in cost of revenues was mainly due to an increase in teacher compensation and rental costs. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 74.5% to US$635.4 million from US$364.2 million in the first nine months of fiscal year 2017.

Selling and marketing expenses increased by 86.1% to US$163.8 million from US$88.0 million in the first nine months of fiscal year 2017. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 86.9% to US$160.0 million from US$85.6 million in the first nine months of fiscal year 2017. The increase of selling and marketing expenses in the first nine months of fiscal year 2018 was primarily a result of a rise in the compensation to sales and marketing staff to support a greater number of programs and service offerings compared to the year-ago period, as well as more marketing promotion activities mainly in brand enhancement.

General and administrative expenses increased by 46.9% to US$273.9 million from US$186.5 million in the first nine months of fiscal year 2017. 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 year-ago period and a rise in compensation to our general and administrative personnel, as well as an increase in rental cost. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 49.1% to US$243.4 million from US$163.2 million in the first nine months of fiscal year 2017.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 34.3% to US$34.6 million in the first nine months of fiscal year 2018 from US$25.7 million in the same period of fiscal year 2017.

Gross Profit

Gross profit increased by 58.7% to US$575.3 million from US$362.5 million in the first nine months of fiscal year 2017.

Income from Operations

Income from operations increased by 55.5% to US$141.7 million from US$91.2 million in the first nine months of fiscal year 2017. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 50.8% to US$176.3 million from US$116.9 million in the first nine months of fiscal year 2017.

Other (expenses)/income  

Other income was US$14.2 million for the first nine months of fiscal year 2018, compared to other income of US$23.1 million in the first nine months of fiscal year 2017. Other income for the first nine months of fiscal year 2018 was mainly due to gains from the disposal of investments. Other income for the first nine months of fiscal year 2017 was mainly due to a gain from remeasuring the fair value of the previously held equity interests in an acquiree at its acquisition date fair value during a business combination achieved in stages.

Impairment loss on long-term investments

Impairment loss on long-term investments was US$2.2 million for the first nine months of fiscal year 2018, compared to US$6.0 million for the first nine months of fiscal year 2017. Impairment loss on long-term investments was mainly due to the other-than-temporary declines in the value of long-term investments in several investees.

Income Tax Expense

Income tax expense was US$35.9 million in the first nine months of fiscal year 2018, compared to US$25.1 million in the first nine months of fiscal year 2017.

Net Income Attributable to TAL Education Group

Net income attributable to TAL increased by 56.1% to US$128.9 million from US$82.6 million in the first nine months of fiscal year 2017. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 50.9% to US$163.5 million from US$108.3 million in the first nine months of fiscal year 2017.

Basic and Diluted Net Income per ADS

Basic and diluted net income per ADS were US$0.24 and US$0.22, respectively, in the first nine months of fiscal year 2018. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.31 and US$0.28, respectively.

Business Outlook

Based on the Company's current estimates, total net revenues for the fourth quarter of fiscal year 2018 are expected to be between US$474.5 million and US$480.8 million, representing an increase of 50% to 52% on a year-over-year basis, assuming no material change in exchange rates.

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 2018 ended November 30, 2017 at 8:00 a.m. U.S. Eastern Time on January 25, 2018 (9:00 p.m.Beijing time on January 25, 2018).

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:

2279489

A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at en.100tal.com.

A telephone replay of the conference call will be available through 7:59 a.m. U.S. Eastern time, February 2, 2018 (8:59 p.m.Beijing time, February 2, 2018).

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: 

2279489

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 2018 and the fiscal year ending February 28, 2018, 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 including mathematics, English, Chinese, physics, chemistry, and biology. The Company's learning center network includes 579 physical learning centers as of November 30, 2017, located in 38 key cities in China: Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Wuhan, Xi`an, Chengdu, Nanjing, Hangzhou, Taiyuan, Zhengzhou, Chongqing, Suzhou, Shenyang, Jinan, Shijiazhuang, Qingdao, Changsha, Luoyang, Nanchang, Ningbo, Wuxi, Fuzhou, Hefei, Xiamen, Lanzhou, Dalian, Changchun, Guiyang, Dongguan, Changzhou, Xuzhou, Nantong, Foshan, Zhenjiang, Shaoxing and Yangzhou. 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 U.S. Securities and Exchange Commission 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 from 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:

Mei Li
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 U.S. dollars)



As of

February 28,
2017


As of

November 30,
2017

ASSETS








Current assets




Cash and cash equivalents

$ 470,217,004


$ 1,126,642,148

Restricted cash-current

2,732,559


2,164,377

Short-term investments

229,456,397


184,326,187

Inventory

2,823,039


5,559,978

Amounts due from related parties-current

3,424,285


3,248,237

Income tax receivables

2,244,898


15,109,152

Prepaid expenses and other current assets

160,222,823


109,587,569

Total current assets

871,121,005


1,446,637,648

Restricted cash-non-current

5,660,713


8,971,005

Property and equipment, net

154,306,718


230,020,719

Deferred tax assets-non-current

16,188,301


20,691,570

Rental deposits

32,659,360


43,493,779

Intangible assets, net

37,966,808


39,600,719

Goodwill

267,162,685


285,018,179

Long-term investments

347,732,444


423,450,302

Long-term prepayments and other non-current assets

96,107,917


105,649,113

Total assets

$ 1,828,905,951


$ 2,603,533,034





LIABILITIES AND EQUITY








Current liabilities




Accounts payable (including accounts payable of the
     consolidated VIEs without recourse to TAL
     Education Group of 20,905,226 and 51,700,253 as of
     February 28, 2017, and November 30, 2017,
     respectively)

$ 22,637,199


$ 55,557,044

Deferred revenue-current (including deferred revenue-
     current of the consolidated VIEs without recourse to
     TAL Education Group of 465,944,822 and
     1,023,169,868 as of February 28, 2017, and
     November 30, 2017, respectively)

504,147,032


1,069,144,179

Amounts due to related parties-current (including
     amounts due to related parties-current of the
     consolidated VIEs without recourse to TAL
     Education Group of 192,785 and 2,752,940 as of
     February 28, 2017, and November 30, 2017,
     respectively)

3,042,785


5,783,378

Accrued expenses and other current liabilities (including
     accrued expenses and other current liabilities of the
     consolidated VIEs without recourse to TAL
     Education Group of 90,834,954 and 147,141,374 as
     of February 28, 2017, and November 30, 2017,
     respectively)

116,830,290


182,136,803

Income tax payable (including income tax payable of
     the consolidated VIEs without recourse to TAL
     Education Group of 15,204,900 and 19,039,495
     as of February 28, 2017, and November 30, 2017,
     respectively)

20,483,037


28,062,871

Total current liabilities

667,140,343


1,340,684,275

Deferred revenue-non-current (including deferred
     revenue-non-current of the consolidated VIEs without
     recourse to TAL Education Group of 14,726,473 and
     5,715,904 as of February 28, 2017, and November 30,
     2017, respectively)

14,726,473


5,715,904

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 nil and nil as of February 28,
     2017, and November 30, 2017, respectively)

 

 

2,840,000


 

 

3,155,767

Deferred tax liabilities-non-current (including deferred
     tax liabilities-non-current of the consolidated VIEs
     without recourse to TAL Education Group of
     13,063,488 and 14,924,375 as of February 28, 2017,
     and November 30, 2017, respectively)

 

 

13,185,886


 

 

15,166,254

Bond payable (including bond payable of the
     consolidated VIEs without recourse to TAL
     Education Group of nil and nil as of February 28,
     2017, and November 30, 2017, respectively)

 

225,148,918


 

24,508,000

Long-term payable (including long-term payable of
     the consolidated VIEs without recourse to TAL
     Education Group of nil and 4,462,097 as of February
     28, 2017, and November 30, 2017, respectively)

-


4,462,097

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,
     2017, and November 30, 2017, respectively)

 

225,000,000


 

225,000,000

Total liabilities

1,148,041,620


1,618,692,297





TAL Education Group Shareholders' Equity




Class A common shares

93,131


110,270

Class B common shares

71,456


70,556

Additional paid-in capital

141,968,264


357,167,852

Statutory reserve

28,407,421


28,407,421

Retained earnings

417,835,502


505,570,942

Accumulated other comprehensive income

55,869,132


74,052,205

Total TAL Education Group's equity

644,244,906


965,379,246

Noncontrolling interest

36,619,425


19,461,491

Total equity

680,864,331


984,840,737

Total liabilities and equity

$ 1,828,905,951


$ 2,603,533,034

 

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In 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,


2016


2017


2016


2017

Net revenues

$ 260,552,500


$ 433,265,168


$ 726,768,875


$ 1,210,918,283

Cost of revenues

131,868,712


221,101,762


364,234,954


635,636,148

Gross profit

128,683,788


212,163,406


362,533,921


575,282,135

Operating expenses (note 1)








  Selling and marketing

35,236,057


61,801,641


87,979,800


163,754,616

  General and administrative

71,715,676


106,000,685


186,488,899


273,943,749

  Impairment loss on
  intangible assets and
  goodwill

 

-


 

357,762


 

-


 

357,762

Total operating expenses

106,951,733


168,160,088


274,468,699


438,056,127

Government subsidies

337,487


593,506


3,099,094


4,501,503

Income from operations

22,069,542


44,596,824


91,164,316


141,727,511

Interest income

3,884,150


8,249,392


11,721,610


26,485,071

Interest expense

(3,791,536)


(3,906,460)


(8,346,747)


(13,001,338)

Other (expenses)/income

(661,721)


5,369,895


23,125,398


14,175,932

Impairment loss on long-term 
  investments

(3,769,650)


(1,513,088)


(5,981,292)


(2,212,836)

Income before provision for 
  income tax and loss from 
  equity method investments

17,730,785


52,796,563


111,683,285


167,174,340

Provision for income tax

(3,053,243)


(11,388,652)


(25,128,529)


(35,942,430)

Loss from equity method
  investments

(2,351,086)


(1,790,499)


(6,191,219)


(5,037,833)

Net income

12,326,456


39,617,412


80,363,537


126,194,077

Add: Net loss attributable to
  noncontrolling interest

1,299,005


1,044,425


2,238,337


2,707,197

Total net income attributable
  to TAL Education Group

$ 13,625,461


$ 40,661,837


$ 82,601,874


$ 128,901,274

Net income per common share








Basic

$ 0.08


$ 0.23


$ 0.51


$ 0.73

Diluted

0.08


0.21


0.47


0.66

Net income per ADS (note 2)








Basic

$ 0.03


$ 0.08


$ 0.17


$ 0.24

Diluted

0.03


0.07


0.16


0.22

 

Weighted average shares
  used in calculating net income per
  common share








  Basic

162,852,524


177,882,195


162,256,681


177,388,055

  Diluted

172,359,338


193,855,487


188,466,059


198,821,015









Note 1: 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,


2016


2017


2016


2017

Cost of revenues

$ 44,655


$ 111,850


$ 67,993


$ 253,387

Selling and marketing

812,288


1,329,977


2,350,914


3,705,576

General and administrative

8,198,227


10,805,016


23,311,326


30,591,134

Total

$ 9,055,170


$ 12,246,843


$ 25,730,233


$ 34,550,097


Note 2: Three ADSs represent one Class A common Share.

 

 

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In U.S. dollars)



For the Three Months Ended

November 30,


For the Nine Months Ended

November 30,


2016


2017


2016


2017









Net income

$ 12,326,456


$ 39,617,412


$ 80,363,537


$ 126,194,077

Other comprehensive
(loss)/income, net of tax

(12,385,172)


(13,116,159)


51,962,294


18,183,073

Comprehensive (loss)/income

(58,716)


26,501,253


132,325,831


144,377,150

Add: Comprehensive loss
attributable to noncontrolling
interest

2,697,983


1,044,425


3,702,739


2,707,197

Comprehensive income
attributable to TAL
Education Group

$ 2,639,267


$ 27,545,678


$ 136,028,570


$ 147,084,347

 

 

TAL EDUCATION GROUP

Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures

(In 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,


2016


2017


2016


2017









Cost of revenues

$ 131,868,712


$ 221,101,762


$ 364,234,954


$ 635,636,148

Share-based compensation
  expense in cost of revenues

44,655


111,850


67,993


253,387

Non-GAAP cost of revenues

131,824,057


220,989,912


364,166,961


635,382,761









Selling and marketing expenses

35,236,057


61,801,641


87,979,800


163,754,616

Share-based compensation
   expense in selling and
  marketing expenses

812,288


1,329,977


2,350,914


3,705,576

Non-GAAP selling and
marketing expenses

34,423,769


60,471,664


85,628,886


160,049,040

 

General and administrative
expenses

71,715,676


106,000,685


186,488,899


273,943,749

Share-based compensation
  expense in general and
  administrative expenses

8,198,227


10,805,016


23,311,326


30,591,134

Non-GAAP general and
administrative expenses

63,517,449


95,195,669


163,177,573


243,352,615









Operating costs and expenses

238,820,445


389,261,850


638,703,653


1,073,692,275

Share-based compensation
   expense in operating costs and
  expenses

9,055,170


12,246,843


25,730,233


34,550,097

Non-GAAP operating costs and
expenses

229,765,275


377,015,007


612,973,420


1,039,142,178









Income from operations

22,069,542


44,596,824


91,164,316


141,727,511

Share based compensation
expenses

9,055,170


12,246,843


25,730,233


34,550,097

Non-GAAP income from
operations

31,124,712


56,843,667


116,894,549


176,277,608









Net income attributable to TAL
Education Group

13,625,461


40,661,837


82,601,874


 

128,901,274

Share based compensation
expenses

9,055,170


12,246,843


25,730,233


34,550,097

Non-GAAP net income
attributable to TAL Education

Group

$ 22,680,631


$ 52,908,680


$ 108,332,107


$ 163,451,371

Net income per ADS








Basic

$ 0.03


$ 0.08


$ 0.17


$ 0.24

Diluted

0.03


0.07


0.16


0.22

Non-GAAP Net income per
ADS








Basic

$ 0.05


$ 0.10


$ 0.22


$ 0.31

Diluted

0.04


0.09


0.20


0.28









ADSs used in calculating net
income per ADS








Basic

488,557,573


533,646,584


486,770,042


532,164,166

Diluted

517,078,014


581,566,462


565,398,177


596,463,046

ADSs used in calculating Non-
GAAP net income per ADS








     Basic

488,557,573


533,646,584


486,770,042


532,164,166

     Diluted

569,577,216


581,566,462


565,398,177


596,463,046

 

Cision View original content:http://www.prnewswire.com/news-releases/tal-education-group-announces-unaudited-financial-results-for-the-third-fiscal-quarter-ended-november-30-2017-300588085.html

SOURCE TAL Education Group

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