- Net Revenues up by 71.1% Year-Over-Year
- Income from Operations up by 160.3% Year-Over-Year
- Net Income Attributable to TAL up by 132.0% Year-Over-Year
- Total Student Enrollments up by 88.7% Year-Over-Year
Highlights for the First Quarter of Fiscal Year 2019
- Net revenues increased by 71.1% year-over-year to
US$550.6 million fromUS$321.9 million in the same period of the prior year. - Income from operations increased by 160.3% year-over-year to
US$75.0 million , fromUS$28.8 million in the same period of the prior year. - Non-GAAP income from operations increased by 127.8% year-over-year to
US$90.0 million , fromUS$39.5 million in the same period of the prior year. - Net income attributable to TAL increased by 132.0% year-over-year to
US$66.8 million , fromUS$28.8 million in the same period of the prior year. - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 107.1% to
US$81.8 million fromUS$39.5 million in the same period of the prior year. - Basic and diluted net income per American Depositary Share ("ADS") were
US$0.12 andUS$0.11 , respectively. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were bothUS$0.14 . Three ADSs represent one Class A common share. - Cash, cash equivalents and short-term investments totaled
US$1,929.2 million as ofMay 31, 2018 , compared toUS$1,498.9 million as ofFebruary 28, 2018 . - Total student enrollments increased by 88.7% year-over-year to approximately 1,976,960 from approximately 1,047,760 in the same period of the prior year.
- Total physical network increased from 594 learning centers in 42 cities as of
February 28, 2018 to 630 learning centers in 43 cities as ofMay 31, 2018 .
Financial and Operating Data -- First Quarter of Fiscal Year 2019 |
|||
(In US$ thousands, except per ADS data, student enrollments and percentages) |
|||
Three Months Ended |
|||
May 31, |
|||
2017 |
2018 |
Pct. Change |
|
Net revenues |
321,903 |
550,649 |
71.1% |
Operating income |
28,805 |
74,989 |
160.3% |
Non-GAAP operating income |
39,490 |
89,955 |
127.8% |
Net income attributable to TAL |
28,789 |
66,800 |
132.0% |
Non-GAAP net income attributable to |
39,474 |
81,766 |
107.1% |
Net income per ADS attributable to |
0.06 |
0.12 |
102.2% |
Net income per ADS attributable to |
0.05 |
0.11 |
109.8% |
Non-GAAP net income per ADS |
0.08 |
0.14 |
80.5% |
Non-GAAP net income per ADS |
0.07 |
0.14 |
90.2% |
Total student enrollments in small |
1,047,760 |
1,976,960 |
88.7% |
"The first quarter's financial and operational results reflect the steady growth of our offline and online business revenue and enrollments on a year-over-year basis," said Mr. Rong Luo, TAL's Chief Financial Officer. "Looking ahead, we will pursue continuous improvements in product quality and customer satisfaction and we remain committed to a healthy and sustainable overall business development."
Financial Results for the First Quarter of Fiscal Year 2019
Net Revenues
In the first quarter of fiscal year 2019, TAL reported net revenues of
Operating Costs and Expenses
In the first quarter of fiscal year 2019, operating costs and expenses were
Cost of revenues increased by 53.9% to
Selling and marketing expenses increased by 117.4% to
General and administrative expenses increased by 55.2% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 40.1% to
Gross Profit
Gross profit increased by 90.1% to
Income from Operations
Income from operations increased by 160.3% to
Other Income
Other income was
Impairment Loss on
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 132.0% to
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were
Capital Expenditures
Capital expenditures for the first quarter of fiscal year 2019 were
Cash, Cash Equivalents, and Short-Term Investments
As of
Deferred Revenue
Revenue from Contracts with Customers ("Topic 606") became effective for the Company on
New accounting standards
1> The "New Revenue Accounting Standard"
On
In addition, reclassification was made from deferred revenue to accrued expenses and other current liabilities for tuition collected that may be refunded to the customers in the future if students withdraw from a course for any remaining classes.
2> The "New Financial Instruments Accounting Standard"
The Company adopted the new financial instruments accounting standard (ASC321) on
Business Outlook
Based on our current estimates, total net revenues for the second quarter of fiscal year 2019 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 first fiscal quarter of fiscal year 2019 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: |
8470159 |
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: |
8470159 |
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 second quarter of fiscal year 2019, quotations from management in this announcement, as well as
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 thousands) |
||||
As of February 28, |
As of May 31, |
|||
ASSETS |
||||
Current assets |
||||
Cash and cash equivalents |
$ 711,519 |
$ 924,376 |
||
Restricted cash-current |
6,267 |
2,395 |
||
Short-term investments |
787,391 |
1,004,780 |
||
Inventory |
5,272 |
4,507 |
||
Amounts due from related parties-current |
3,229 |
6,717 |
||
Income tax receivables |
15,093 |
21,971 |
||
Prepaid expenses and other current assets |
133,235 |
259,317 |
||
Total current assets |
1,662,006 |
2,224,063 |
||
Restricted cash-non-current |
9,911 |
11,069 |
||
Property and equipment, net |
247,266 |
262,465 |
||
Deferred tax assets-non-current |
17,361 |
15,619 |
||
Rental deposits |
47,333 |
51,157 |
||
Intangible assets, net |
43,505 |
61,436 |
||
Goodwill |
291,382 |
289,449 |
||
Long-term investments |
597,606 |
776,003 |
||
Long-term prepayments and other non-current assets |
138,190 |
119,866 |
||
Total assets |
$ 3,054,560 |
$ 3,811,127 |
||
LIABILITIES AND EQUITY |
||||
Current liabilities |
||||
Accounts payable (including accounts payable of the |
$ 57,605 |
$ 64,014 |
||
Deferred revenue-current (including deferred revenue-current |
824,276 |
1,320,423 |
||
Amounts due to related parties-current (including amounts due |
8,746 |
13,015 |
||
Accrued expenses and other current liabilities |
229,122 |
316,657 |
||
Income tax payable (including income tax payable of |
13,638 |
25,540 |
||
Total current liabilities |
1,133,387 |
1,739,649 |
||
Deferred revenue-non-current (including deferred revenue- |
17,980 |
8,033 |
||
Amounts due to related parties-non-current (including |
271 |
226 |
||
Deferred tax liabilities-non-current (including deferred tax |
20,039 |
7,359 |
||
Bond payable (including bond payable of the consolidated |
11,075 |
10,375 |
||
Long-term payable (including long-term payable of the |
6,344 |
1,683 |
||
Long-term debt (including long-term debt of the consolidated |
225,000 |
225,000 |
||
Total liabilities |
1,414,096 |
1,992,325 |
||
TAL Education Group Shareholders' Equity |
||||
Class A common shares |
118 |
119 |
||
Class B common shares |
71 |
71 |
||
Additional paid-in capital |
884,717 |
900,801 |
||
Statutory reserve |
38,315 |
38,315 |
||
Retained earnings |
565,202 |
640,253 |
||
Accumulated other comprehensive income |
132,325 |
219,247 |
||
Total TAL Education Group's equity |
1,620,748 |
1,798,806 |
||
Noncontrolling interest |
19,716 |
19,996 |
||
Total equity |
1,640,464 |
1,818,802 |
||
Total liabilities and equity |
$ 3,054,560 |
$ 3,811,127 |
TAL EDUCATION GROUP |
|||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||
(In thousands, except share, ADS, per share and per ADS data) |
|||
For the Three Months Ended May 31, |
|||
2017 |
2018 |
||
Net revenues |
$ 321,903 |
$ 550,649 |
|
Cost of revenues (note 1) |
169,604 |
261,082 |
|
Gross profit |
152,299 |
289,567 |
|
Operating expenses (note 1) |
|||
Selling and marketing |
43,462 |
94,507 |
|
General and administrative |
80,631 |
125,151 |
|
Total operating expenses |
124,093 |
219,658 |
|
Government subsidies |
599 |
5,080 |
|
Income from operations |
28,805 |
74,989 |
|
Interest income |
7,701 |
16,563 |
|
Interest expense |
(5,225) |
(3,865) |
|
Other income |
6,788 |
8,686 |
|
Impairment loss on long-term investments |
(700) |
(9,713) |
|
Income before provision for income tax and loss from |
37,369 |
86,660 |
|
Provision for income tax |
(8,395) |
(17,332) |
|
Loss from equity method investments |
(1,283) |
(3,057) |
|
Net income |
27,691 |
66,271 |
|
Add: Net loss attributable to noncontrolling interest |
1,098 |
529 |
|
Total net income attributable |
$ 28,789 |
$ 66,800 |
|
Net income per common share |
|||
Basic |
$ 0.17 |
$ 0.35 |
|
Diluted |
0.16 |
0.33 |
|
Net income per ADS (note 2) |
|||
Basic |
$ 0.06 |
$ 0.12 |
|
Diluted |
0.05 |
0.11 |
|
Weighted average shares used in calculating net |
|||
Basic |
164,734,334 |
189,017,417 |
|
Diluted |
191,868,574 |
200,427,699 |
|
Note 1: Share-based compensation expenses are included in the operating costs and expenses as follows: |
|||
For the Three Months |
|||
Ended May 31, |
|||
2017 |
2018 |
||
Cost of revenues |
$ 33 |
$ 163 |
|
Selling and marketing |
1,118 |
1,626 |
|
General and administrative |
9,534 |
13,177 |
|
Total |
$ 10,685 |
$ 14,966 |
|
Note 2: Three ADSs represent one Class A common Share. |
TAL EDUCATION GROUP |
||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF |
||||
COMPREHENSIVE INCOME |
||||
(In thousands) |
||||
For the Three Months Ended May 31, |
||||
2017 |
2018 |
|||
Net income |
$ 27,691 |
$ 66,271 |
||
Other comprehensive income, net of tax |
7,294 |
86,709 |
||
Comprehensive income |
34,985 |
152,980 |
||
Add: Comprehensive loss attributable to |
1,098 |
742 |
||
Comprehensive income attributable to TAL |
$ 36,083 |
$ 153,722 |
TAL EDUCATION GROUP |
|||
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures |
|||
(In thousands, except share, ADS per share and per ADS data) |
|||
For the Three Months Ended May 31, |
|||
2017 |
2018 |
||
Cost of revenues |
$ 169,604 |
$ 261,082 |
|
Share-based compensation expense in cost of revenues |
33 |
163 |
|
Non-GAAP cost of revenues |
169,571 |
260,919 |
|
Selling and marketing expenses |
43,462 |
94,507 |
|
Share-based compensation expense in selling and |
1,118 |
1,626 |
|
Non-GAAP selling and marketing expenses |
42,344 |
92,881 |
|
General and administrative expenses |
80,631 |
125,151 |
|
Share-based compensation expense in general and |
9,534 |
13,177 |
|
Non-GAAP general and administrative expenses |
71,097 |
111,974 |
|
Operating costs and expenses |
293,697 |
480,740 |
|
Share-based compensation expense in operating costs |
10,685 |
14,966 |
|
Non-GAAP operating costs and expenses |
283,012 |
465,774 |
|
Income from operations |
28,805 |
74,989 |
|
Share-based compensation expenses |
10,685 |
14,966 |
|
Non-GAAP income from operations |
39,490 |
89,955 |
|
Net income attributable to TAL Education Group |
28,789 |
66,800 |
|
Share-based compensation expenses |
10,685 |
14,966 |
|
Non-GAAP net income attributable to TAL Education Group |
$ 39,474 |
$ 81,766 |
|
Net income per ADS |
|||
Basic |
$ 0.06 |
$ 0.12 |
|
Diluted |
0.05 |
0.11 |
|
Non-GAAP net income per ADS (note 3) |
|||
Basic |
$ 0.08 |
$ 0.14 |
|
Diluted |
0.07 |
0.14 |
|
ADSs used in calculating net income per ADS |
|||
Basic |
494,203,002 |
567,052,251 |
|
Diluted |
575,605,722 |
601,283,097 |
|
Note 3: The Non-GAAP adjusted net income per ADS is computed using Non-GAAP adjusted net income |
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