-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
Highlights for the Third Quarter of Fiscal Year 2018
- Net revenues increased by 66.3% year-over-year to
US$433.3 million fromUS$260.6 million in the same period of the prior year. - Income from operations increased by 102.1% to
US$44.6 million fromUS$22.1 million in the same period of the prior year. Non-GAAP income from operations increased by 82.6% toUS$56.8 million fromUS$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 andUS$0.07 , respectively. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, wereUS$0.10 andUS$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 ofNovember 30, 2017 , compared toUS$699.7 million as ofFebruary 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
- Net revenues increased by 66.6% year-over-year to
US$1,210.9 million fromUS$726.8 million in the same period of the prior year. - Income from operations increased by 55.5% to
US$141.7 million fromUS$91.2 million in the same period of fiscal year 2017. Non-GAAP income from operations increased by 50.8% toUS$176.3 million fromUS$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 fromUS$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 fromUS$108.3 million in the same period of the prior year. - Basic and diluted net income per ADS were
US$0.24 andUS$0.22 , respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, wereUS$0.31 andUS$0.28 , respectively. - Total student enrollments during the first nine months of fiscal year 2018 increased by 86.1% year-over-year to approximately 4,833,880 from approximately 2,598,120 in the same period of the prior year.
- Total physical network increased from 507 learning centers in 30 cities as of
February 28, 2017 , to 579 learning centers in 38 cities as ofNovember 30, 2017 .
Financial and Operating Data--Third Quarter and First Nine months of Fiscal Year 2018
(In US$ 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 |
22,681 |
52,909 |
133.3% |
Net income per ADS attributable to |
0.03 |
0.08 |
173.2% |
Net income per ADS attributable to |
0.03 |
0.07 |
167.7% |
Non-GAAP net income per ADS |
0.05 |
0.10 |
113.6% |
Non-GAAP net income per ADS |
0.04 |
0.09 |
112.5% |
Total student enrollments in small class, |
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 |
108,332 |
163,451 |
50.9% |
Net income per ADS attributable to |
0.17 |
0.24 |
42.7% |
Net income per ADS attributable to |
0.16 |
0.22 |
41.0% |
Non-GAAP net income per ADS |
0.22 |
0.31 |
38.0% |
Non-GAAP net income per ADS |
0.20 |
0.28 |
37.9% |
Total student enrollments in small class, |
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
Operating Costs and Expenses
In the third quarter of fiscal year 2018, operating costs and expenses were
Cost of revenues increased by 67.7% to
Selling and marketing expenses increased by 75.4% to
General and administrative expenses increased by 47.8% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 35.2% to
Gross Profit
Gross profit increased by 64.9% to
Income from Operations
Income from operations increased by 102.1% to
Other (expenses)/income
Other income was
Impairment loss on long-term investments
Impairment loss on long-term investments was
Income Tax Expense
Income tax expense was
Net Income Attributable to TAL Education Group
Net income attributable to TAL increased by 198.4% to
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were
Capital Expenditures
Capital expenditures for the third quarter of fiscal year 2018 were
Cash, Cash Equivalents and Short-Term Investments
As of
Deferred Revenue
As of
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
Operating Costs and Expenses
In the first nine months of fiscal year 2018, operating costs and expenses were
Cost of revenues increased by 74.5% to
Selling and marketing expenses increased by 86.1% to
General and administrative expenses increased by 46.9% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 34.3% to
Gross Profit
Gross profit increased by 58.7% to
Income from Operations
Income from operations increased by 55.5% to
Other (expenses)/income
Other income was
Impairment loss on long-term investments
Impairment loss on long-term investments was
Income Tax Expense
Income tax expense was
Net Income Attributable to
Net income attributable to TAL increased by 56.1% to
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were
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
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
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
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
About
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the
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:
Investor Relations
Tel: +86 10 5292 6658
Email: ir@100tal.com
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, |
As of November 30, |
||
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 |
$ 22,637,199 |
$ 55,557,044 |
|
Deferred revenue-current (including deferred revenue- |
504,147,032 |
1,069,144,179 |
|
Amounts due to related parties-current (including |
3,042,785 |
5,783,378 |
|
Accrued expenses and other current liabilities (including |
116,830,290 |
182,136,803 |
|
Income tax payable (including income tax payable of |
20,483,037 |
28,062,871 |
|
Total current liabilities |
667,140,343 |
1,340,684,275 |
|
Deferred revenue-non-current (including deferred |
14,726,473 |
5,715,904 |
|
Amounts due to related parties-non-current (including |
2,840,000 |
3,155,767 |
|
Deferred tax liabilities-non-current (including deferred |
13,185,886 |
15,166,254 |
|
Bond payable (including bond payable of the |
225,148,918 |
24,508,000 |
|
Long-term payable (including long-term payable of |
- |
4,462,097 |
|
Long-term debt (including long-term debt of the |
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 |
- |
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 |
(3,769,650) |
(1,513,088) |
(5,981,292) |
(2,212,836) |
|||
Income before provision for |
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 |
(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 |
1,299,005 |
1,044,425 |
2,238,337 |
2,707,197 |
|||
Total net income attributable |
$ 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 |
|||||||
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 |
(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 |
2,697,983 |
1,044,425 |
3,702,739 |
2,707,197 |
|||
Comprehensive income |
$ 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 |
||||||
2016 |
2017 |
2016 |
2017 |
||||
Cost of revenues |
$ 131,868,712 |
$ 221,101,762 |
$ 364,234,954 |
$ 635,636,148 |
|||
Share-based compensation |
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 |
812,288 |
1,329,977 |
2,350,914 |
3,705,576 |
|||
Non-GAAP selling and |
34,423,769 |
60,471,664 |
85,628,886 |
160,049,040 |
|||
General and administrative |
71,715,676 |
106,000,685 |
186,488,899 |
273,943,749 |
|||
Share-based compensation |
8,198,227 |
10,805,016 |
23,311,326 |
30,591,134 |
|||
Non-GAAP general and |
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 |
9,055,170 |
12,246,843 |
25,730,233 |
34,550,097 |
|||
Non-GAAP operating costs and |
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 |
9,055,170 |
12,246,843 |
25,730,233 |
34,550,097 |
|||
Non-GAAP income from |
31,124,712 |
56,843,667 |
116,894,549 |
176,277,608 |
|||
Net income attributable to TAL |
13,625,461 |
40,661,837 |
82,601,874 |
128,901,274 |
|||
Share based compensation |
9,055,170 |
12,246,843 |
25,730,233 |
34,550,097 |
|||
Non-GAAP net income |
$ 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 |
|||||||
Basic |
$ 0.05 |
$ 0.10 |
$ 0.22 |
$ 0.31 |
|||
Diluted |
0.04 |
0.09 |
0.20 |
0.28 |
|||
ADSs used in calculating net |
|||||||
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- |
|||||||
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 |
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