Highlights for the First Quarter of Fiscal Year 2020
- Net revenues increased by 27.6% year-over-year to
US$702.8 million fromUS$550.6 million in the same period of the prior year. - Income from operations decreased by 23.6% year-over-year to
US$57.3 million , fromUS$75.0 million in the same period of the prior year. - Non-GAAP income from operations, which excluded share-based compensation expenses, decreased by 7.3% year-over-year to
US$83.4 million , fromUS$90.0 million in the same period of the prior year. - Net loss attributable to TAL was
US$7.3 million , compared to net income attributable to TAL ofUS$66.8 million in the same period of the prior year. - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, decreased by 77.0% to
US$18.8 million fromUS$81.8 million in the same period of the prior year. - Basic and diluted net loss per American Depositary Share ("ADS") were both
US$0.01 . Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were bothUS$0.03 . Three ADSs represent one Class A common share. - Cash, cash equivalents and short-term investments totaled
US$1,912.2 million as ofMay 31, 2019 , compared toUS$1,515.6 million as ofFebruary 28, 2019 . - Total Student Enrollments of normal priced long-term course increased by 40.6% year-over-year to approximately 1,718,190 from approximately 1,221,750 in the same period of the prior year.
- Total physical network increased from 676 learning centers in 56 cities as of
February 28, 2019 to 725 learning centers in 57 cities as ofMay 31, 2019 .
Financial and Operating Data -- First Quarter of Fiscal Year 2020 |
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(In US$ thousands, except per ADS data, student enrollments and percentages) |
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Three Months Ended |
|||
May 31, |
|||
2018 |
2019 |
Pct. Change |
|
Net revenues |
550,649 |
702,770 |
27.6% |
Operating income |
74,989 |
57,318 |
(23.6%) |
Non-GAAP operating income |
89,955 |
83,402 |
(7.3%) |
Net income/(loss) attributable to TAL |
66,800 |
(7,304) |
(110.9%) |
Non-GAAP net income attributable to |
81,766 |
18,780 |
(77.0%) |
Net income/(loss) per ADS |
0.12 |
(0.01) |
(110.5%) |
Net income/(loss) per ADS |
0.11 |
(0.01) |
(111.1%) |
Non-GAAP net income per ADS |
0.14 |
0.03 |
(78.0%) |
Non-GAAP net income per ADS |
0.14 |
0.03 |
(77.7%) |
Total Student Enrollments of normal |
1,221,750 |
1,718,190 |
40.6% |
"The first quarter's topline results reflected the success of our consistent growth strategy. We recorded healthy growth of small class business in the cities we currently cover and further scaled our online courses," said Mr. Rong Luo, TAL's Chief Financial Officer.
"Looking ahead, our long-term development strategy remains unchanged. We will pursue solid, organic and sustainable expansion of our offline business. At the same time, we will continuously invest in new technology and other initiatives to accelerate our online business development and realize the promising potential of online education. These investments will also enable us to actively promote the integration of online and offline education, and contribute to the development of innovative, technology-focused education models," Mr. Luo added.
Financial Results for the First Quarter of Fiscal Year 2020
Net Revenues
In the first quarter of fiscal year 2020, TAL reported net revenues of
Operating Costs and Expenses
In the first quarter of fiscal year 2020, operating costs and expenses were
Cost of revenues increased by 21.4% to
Selling and marketing expenses increased by 64.4% to
General and administrative expenses increased by 40.3% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 74.3% to
Gross Profit
Gross profit increased by 33.3% to
Income from Operations
Income from operations decreased by 23.6% to
Other Income/(Expense)
Other expense was
Impairment Loss on
Impairment loss on long-term investments was
Income Tax (Expense) /Benefit
Income tax benefit was
Net Income/(Loss) Attributable to
Net loss attributable to TAL was
Basic and Diluted Net Income/(Loss) per ADS
Basic and diluted net loss per ADS were both US$0.01 in the first quarter of fiscal year 2020. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both
Capital Expenditures
Capital expenditures for the first quarter of fiscal year 2020 were
Cash, Cash Equivalents, and Short-Term Investments
As of
Deferred Revenue
The Company's deferred revenue balance was
New Accounting Standard
The Company adopted the new lease accounting standard (ASC 842) on
Business Outlook
Based on our current estimates, total net revenues for the second quarter of fiscal year 2020 are expected to be between
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 32% to 35% for the second 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 first fiscal quarter of fiscal year 2020 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: |
1787553 |
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
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: |
1787553 |
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 2020, quotations from management in this announcement, as well as
About
We also operate www.jzb.com, a leading online education platform in
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 of U.S. dollars) |
|||
As of |
As of |
||
February 28, |
May 31, |
||
2019 |
2019 |
||
ASSETS |
|||
Current assets |
|||
Cash and cash equivalents |
$1,247,140 |
$ 1,568,429 |
|
Restricted cash-current |
9,227 |
3,097 |
|
Short-term investments |
268,424 |
343,767 |
|
Inventory |
7,750 |
10,880 |
|
Amounts due from related parties-current |
3,341 |
3,356 |
|
Income tax receivables |
7,204 |
16,816 |
|
Prepaid expenses and other current assets |
202,630 |
199,730 |
|
Total current assets |
1,745,716 |
2,146,075 |
|
Restricted cash-non-current |
7,334 |
7,041 |
|
Amounts due from related parties-non-current |
1,747 |
1,724 |
|
Property and equipment, net |
287,877 |
297,493 |
|
Deferred tax assets-non-current |
29,179 |
34,737 |
|
Rental deposits |
56,135 |
60,459 |
|
Intangible assets, net |
74,776 |
69,657 |
|
Land use right, net |
- |
13,281 |
|
Goodwill |
414,228 |
406,914 |
|
Long-term investments |
850,695 |
739,652 |
|
Long-term prepayments and other non-current assets |
267,404 |
251,329 |
|
Operating lease right-of-use assets |
- |
1,073,048 |
|
Total assets |
$ 3,735,091 |
$ 5,101,410 |
|
LIABILITIES AND EQUITY |
|||
Current liabilities |
|||
Accounts payable (including accounts payable of the |
$ 106,493 |
$ 76,759 |
|
Deferred revenue-current (including deferred revenue-current |
433,610 |
966,652 |
|
Amounts due to related parties-current (including amounts due |
24,375 |
24,315 |
|
Accrued expenses and other current liabilities (including |
365,195 |
361,707 |
|
Income tax payable (including income tax payable of the |
38,743 |
5,924 |
|
Short-term debt and current portion of long-term debt |
210,027 |
- |
|
Bond payable, current portion (including bond payable, current |
5,275 |
- |
|
Operating lease liabilities, current portion (including |
- |
248,918 |
|
Total current liabilities |
1,183,718 |
1,684,275 |
|
Deferred revenue-non-current (including deferred revenue- |
2,497 |
1,729 |
|
Amounts due to related parties-non-current (including amounts |
196 |
115 |
|
Deferred tax liabilities-non-current (including deferred tax |
17,738 |
11,446 |
|
Other non-current liabilities (including other non-current |
465 |
451 |
|
Operating lease liabilities, non-current portion (including |
- |
820,242 |
|
Total liabilities |
1,204,614 |
2,518,258 |
|
Equity |
|||
Class A common shares |
127 |
129 |
|
Class B common shares |
71 |
69 |
|
Class A common shares issuable |
1,977 |
1,977 |
|
Additional paid-in capital |
1,485,521 |
1,583,360 |
|
Statutory reserve |
58,690 |
58,690 |
|
Retained earnings |
920,314 |
913,010 |
|
Accumulated other comprehensive income/(loss) |
17,047 |
(16,635) |
|
Total TAL Education Group's equity |
2,483,747 |
2,540,600 |
|
Noncontrolling interest |
46,730 |
42,552 |
|
Total equity |
2,530,477 |
2,583,152 |
|
Total liabilities and equity |
$ 3,735,091 |
$ 5,101,410 |
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 May 31, |
|||
2018 |
2019 |
||
Net revenues |
$ 550,649 |
$ 702,770 |
|
Cost of revenues (note 1) |
261,082 |
316,875 |
|
Gross profit |
289,567 |
385,895 |
|
Operating expenses (note 1) |
|||
Selling and marketing |
94,507 |
155,399 |
|
General and administrative |
125,151 |
175,585 |
|
Total operating expenses |
219,658 |
330,984 |
|
Government subsidies |
5,080 |
2,407 |
|
Income from operations |
74,989 |
57,318 |
|
Interest income |
16,563 |
16,087 |
|
Interest expense |
(3,865) |
(3,124) |
|
Other income/(expense) |
8,686 |
(31,331) |
|
Impairment loss on long-term investments |
(9,713) |
(50,594) |
|
Income/(loss) before income tax and loss from equity |
86,660 |
(11,644) |
|
Income tax (expense)/benefit |
(17,332) |
2,759 |
|
Loss from equity method investments |
(3,057) |
(1,331) |
|
Net income/(loss) |
66,271 |
(10,216) |
|
Add: Net loss attributable to noncontrolling interest |
529 |
2,912 |
|
Net income/(loss) attributable |
$ 66,800 |
$ (7,304) |
|
Net income/(loss) per common share |
|||
Basic |
$ 0.35 |
$ (0.04) |
|
Diluted |
0.33 |
(0.04) |
|
Net income/(loss) per ADS (note 2) |
|||
Basic |
$ 0.12 |
$ (0.01) |
|
Diluted |
0.11 |
(0.01) |
|
Weighted average shares used in calculating net |
|||
Basic |
189,017,417 |
197,160,090 |
|
Diluted |
200,427,699 |
197,160,090 |
|
Note 1: Share-based compensation expenses are included in the operating costs and expenses as follows: |
|||
For the Three Months |
|||
Ended May 31, |
|||
2018 |
2019 |
||
Cost of revenues |
$ 163 |
$ 247 |
|
Selling and marketing expenses |
1,626 |
4,040 |
|
General and administrative expenses |
13,177 |
21,797 |
|
Total |
$ 14,966 |
$ 26,084 |
|
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 |
|||
2018 |
2019 |
||
Net income/(loss) |
$ 66,271 |
$ (10,216) |
|
Other comprehensive income/(loss), net of tax |
86,709 |
(34,948) |
|
Comprehensive income/(loss) |
152,980 |
(45,164) |
|
Add: Comprehensive loss attributable to |
742 |
4,178 |
|
Comprehensive income/(loss) attributable to |
$ 153,722 |
$ (40,986) |
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 May 31, |
|||
2018 |
2019 |
||
Cost of revenues |
$ 261,082 |
$ 316,875 |
|
Share-based compensation expense in cost of revenues |
163 |
247 |
|
Non-GAAP cost of revenues |
260,919 |
316,628 |
|
Selling and marketing expenses |
94,507 |
155,399 |
|
Share-based compensation expense in selling and |
1,626 |
4,040 |
|
Non-GAAP selling and marketing expenses |
92,881 |
151,359 |
|
General and administrative expenses |
125,151 |
175,585 |
|
Share-based compensation expense in general and |
13,177 |
21,797 |
|
Non-GAAP general and administrative expenses |
111,974 |
153,788 |
|
Operating costs and expenses |
480,740 |
647,859 |
|
Share-based compensation expense in operating costs |
14,966 |
26,084 |
|
Non-GAAP operating costs and expenses |
465,774 |
621,775 |
|
Income from operations |
74,989 |
57,318 |
|
Share-based compensation expenses |
14,966 |
26,084 |
|
Non-GAAP income from operations |
89,955 |
83,402 |
|
Net income/(loss) attributable to TAL Education |
66,800 |
(7,304) |
|
Share-based compensation expenses |
14,966 |
26,084 |
|
Non-GAAP net income attributable to TAL |
$ 81,766 |
$ 18,780 |
|
Net income/(loss) per ADS |
|||
Basic |
$ 0.12 |
$ (0.01) |
|
Diluted |
0.11 |
(0.01) |
|
Non-GAAP net income per ADS |
|||
Basic |
$ 0.14 |
$ 0.03 |
|
Diluted |
0.14 |
0.03 |
|
ADSs used in calculating net income/(loss) per ADS |
|||
Basic |
567,052,251 |
591,480,270 |
|
Diluted |
601,283,097 |
591,480,270 |
|
ADSs used in calculating Non-GAAP net income per |
|||
Basic |
567,052,251 |
591,480,270 |
|
Diluted |
601,283,097 |
619,768,119 |
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