- Quarterly Results:
Net Revenues up by 59.4% Year-Over-Year
Income from Operations up by 54.0% Year-Over-Year
Non-GAAP Income from Operations up by 47.7% Year-Over-Year
Total Student Enrollments up by 95.7% Year-Over-Year
- Fiscal Year Results:
Net Revenues up by 64.4%
Income from Operations up by 55.0%
Non-GAAP Income from Operations up by 49.8%
Highlights for the Fourth Quarter of Fiscal Year 2018
- Net revenues increased by 59.4% year-over-year to
US$504.1 million fromUS$316.3 million in the same period of the prior year. - Income from operations increased by 54.0% to
US$66.9 million fromUS$43.4 million in the same period of the prior year. - Non-GAAP income from operations increased by 47.7% to
US$79.5 million fromUS$53.8 million in the same period of the prior year. - Net income attributable to TAL increased by 102.9% to
US$69.5 million fromUS$34.3 million in the same period of the prior year. - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 83.9% to
US$82.1 million fromUS$44.7 million in the same period of the prior year. - Basic and diluted net income per American Depositary Share ("ADS") were
US$0.13 andUS$0.12 , respectively. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, wereUS$0.15 andUS$0.14 , respectively. Three ADSs represent one Class A common share. - Cash, cash equivalents and short-term investments totaled
US$1,498.9 million as ofFebruary 28, 2018 , compared toUS$699.7 million as ofFebruary 28, 2017 . - Total student enrollments increased by 95.7% year-over-year to approximately 2,615,760 from approximately 1,336,600 in the same period of the prior year.
Highlights for the Fiscal Year Ended
- Net revenues increased by 64.4% year-over-year to
US$1,715.0 million fromUS$1,043.1 million in fiscal year 2017. - Income from operations increased by 55.0% to
US$208.6 million fromUS$134.6 million in fiscal year 2017. - Non-GAAP income from operations increased by 49.8% to
US$255.8 million fromUS$170.7 million in fiscal year 2017. - Net income attributable to TAL increased by 69.8% year-over-year to
US$198.4 million fromUS$116.9 million in fiscal year 2017. - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 60.5% year-over-year to
US$245.6 million fromUS$153.0 million in fiscal year 2017. - Basic and diluted net income per ADS were
US$0.38 andUS$0.34 , respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, wereUS$0.47 andUS$0.43 , respectively. - Average student enrollments per quarter in fiscal year 2018 increased by 89.3% year-over-year to approximately 1,862,410 from approximately 983,680 in fiscal year 2017.
- Total physical network increased from 507 learning centers in 30 cities as of
February 28, 2017 to 594 learning centers in 42 cities as ofFebruary 28, 2018 .
Financial and Operating Data--Fourth Quarter and Fiscal Year 2018
(In US$ thousands, except per ADS data, student enrollments and percentages)
Three Months Ended |
|||
February 28, |
|||
2017 |
2018 |
Pct. Change |
|
Net revenues |
316,331 |
504,098 |
59.4% |
Operating income |
43,430 |
66,876 |
54.0% |
Non-GAAP operating income |
53,815 |
79,475 |
47.7% |
Net income attributable to TAL |
34,278 |
69,539 |
102.9% |
Non-GAAP net income attributable |
44,663 |
82,138 |
83.9% |
Net income per ADS attributable to |
0.07 |
0.13 |
79.1% |
Net income per ADS attributable to |
0.06 |
0.12 |
85.8% |
Non-GAAP net income per ADS |
0.09 |
0.15 |
62.3% |
Non-GAAP net income per ADS |
0.08 |
0.14 |
70.4% |
Total student enrollments in small |
1,336,600 |
2,615,760 |
95.7% |
Fiscal Year Ended |
|||
February 28, |
|||
2017 |
2018 |
Pct. Change |
|
Net revenues |
1,043,100 |
1,715,016 |
64.4% |
Operating income |
134,594 |
208,603 |
55.0% |
Non-GAAP operating income |
170,710 |
255,753 |
49.8% |
Net income attributable to TAL |
116,880 |
198,440 |
69.8% |
Non-GAAP net income attributable to |
152,995 |
245,590 |
60.5% |
Net income per ADS attributable to |
0.24 |
0.38 |
57.7% |
Net income per ADS |
0.22 |
0.34 |
56.6% |
Non-GAAP net income per ADS |
0.31 |
0.47 |
49.1% |
Non-GAAP net income per ADS |
0.28 |
0.43 |
49.9% |
Average student enrollments per |
983,680 |
1,862,410 |
89.3% |
"We are pleased to have finished a robust fiscal year 2018 with good fourth quarter performance. Our progress was mainly driven by rapid enrollment growth and all-round structural improvement in our business. In fiscal year 2018, we continued to invest in new education initiatives to develop online courses and further improve our teaching and learning experience and other operational efficiencies," said Mr. Rong Luo, TAL's Chief Financial Officer.
Mr. Luo continued, "Looking ahead, we believe we are well positioned to maintain healthy growth in the core small class business as we continue our dynamic growth trajectory for online in fiscal 2019. As always, we remain committed to investing in research and development for our long-term growth."
Financial Results for the Fourth Quarter of Fiscal Year 2018
Net Revenues
In the fourth quarter of fiscal year 2018, TAL reported net revenues of
Operating Costs and Expenses
In the fourth quarter of fiscal year 2018, operating costs and expenses were
Cost of revenues increased by 56.0% to
Selling and marketing expenses increased by 106.0% to
General and administrative expenses increased by 46.3% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 21.3% to
Gross Profit
Gross profit increased by 62.7% to
Income from Operations
Income from operations increased by 54.0% to
Other (expenses) / income
Other income was
Impairment loss on long-term investments
Impairment loss on long-term investments was nil in the fourth quarter of fiscal year 2018, compared to
Income Tax Expense
Income tax expense was
Net Income Attributable to
Net income attributable to TAL increased by 102.9% to
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were
Capital Expenditures
Capital expenditures for the fourth quarter of fiscal year 2018 were
Cash, Cash Equivalents and Short-Term Investments
As of
Deferred Revenue
As of
Financial Results for the Fiscal Year Ended
Net Revenues
For fiscal year 2018, TAL reported net revenues of
Operating Costs and Expenses
In fiscal year 2018, operating costs and expenses were
Cost of revenues increased by 68.9% to
Selling and marketing expenses increased by 92.1% to
General and administrative expenses increased by 46.7% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 30.6% to
Gross Profit
Gross profit increased by 59.9% to
Income from Operations
Income from operations increased by 55.0% 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 69.8% to
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were
Capital Expenditures
Capital expenditures for fiscal year 2018 were
Business Outlook
Based on the Company's current estimates, total net revenues for the first 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 fourth fiscal quarter and the fiscal year 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: |
8551037 |
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: |
8551037 |
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 first 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 U.S. dollars) |
|||||
As of February 28, |
As of February 28, |
||||
ASSETS |
|||||
Current assets |
|||||
Cash and cash equivalents |
$ 470,217,004 |
$ 711,519,091 |
|||
Restricted cash-current |
2,732,559 |
6,266,671 |
|||
Short-term investments |
229,456,397 |
787,390,754 |
|||
Inventory |
2,823,039 |
5,271,710 |
|||
Amounts due from related parties-current |
3,424,285 |
3,228,839 |
|||
Income tax receivables |
2,244,898 |
15,093,207 |
|||
Prepaid expenses and other current assets |
160,222,823 |
133,235,873 |
|||
Total current assets |
871,121,005 |
1,662,006,145 |
|||
Restricted cash-non-current |
5,660,713 |
9,910,866 |
|||
Property and equipment, net |
154,306,718 |
247,265,848 |
|||
Deferred tax assets-non-current |
16,188,301 |
17,361,013 |
|||
Rental deposits |
32,659,360 |
47,332,671 |
|||
Intangible assets, net |
37,966,808 |
43,504,780 |
|||
Goodwill |
267,162,685 |
291,382,129 |
|||
Long-term investments |
347,732,444 |
597,605,775 |
|||
Long-term prepayments and other non-current assets |
96,107,917 |
138,189,853 |
|||
Total assets |
$ 1,828,905,951 |
$ 3,054,559,080 |
|||
LIABILITIES AND EQUITY |
|||||
Current liabilities |
|||||
Accounts payable (including accounts payable of the |
$ 22,637,199
|
$ 57,605,414
|
|||
Deferred revenue-current (including deferred revenue- |
504,147,032
|
824,276,004
|
|||
Amounts due to related parties-current (including amounts |
3,042,785
|
8,745,624
|
|||
Accrued expenses and other current liabilities (including |
116,830,290
|
229,122,303
|
|||
Income tax payable (including income tax payable of the |
20,483,037
|
13,637,696
|
|||
Total current liabilities |
667,140,343 |
1,133,387,041 |
|||
Deferred revenue-non-current (including deferred revenue- |
14,726,473
|
17,980,379
|
|||
Amounts due to related parties-non-current (including |
2,840,000
|
270,657
|
|||
Deferred tax liabilities-non-current (including deferred tax |
13,185,886
|
20,039,040
|
|||
Bond payable (including bond payable of the consolidated |
225,148,918
|
11,075,000
|
|||
Long-term payable (including long-term payable of the |
-
|
6,343,565
|
|||
Long-term debt (including long-term debt of the consolidated |
225,000,000
|
225,000,000
|
|||
Total liabilities |
1,148,041,620 |
1,414,095,682 |
|||
TAL Education Group Shareholders' Equity |
|||||
Class A common shares |
93,131 |
118,402 |
|||
Class B common shares |
71,456 |
70,556 |
|||
Additional paid-in capital |
141,968,264 |
884,716,838 |
|||
Statutory reserve |
28,407,421 |
38,315,493 |
|||
Retained earnings |
417,835,502 |
565,201,532 |
|||
Accumulated other comprehensive income |
55,869,132 |
132,324,966 |
|||
Total TAL Education Group's equity |
644,244,906 |
1,620,747,787 |
|||
Noncontrolling interest |
36,619,425 |
19,715,611 |
|||
Total equity |
680,864,331 |
1,640,463,398 |
|||
Total liabilities and equity |
$ 1,828,905,951 |
$ 3,054,559,080 |
|||
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 |
For the Fiscal Year Ended |
||||||
2017 |
2018 |
2017 |
2018 |
||||
Net revenues |
$ 316,330,780 |
$ 504,097,701 |
$ 1,043,099,655 |
$ 1,715,015,984 |
|||
Cost of revenues (note 1) |
158,092,034 |
246,679,935 |
522,326,988 |
882,316,083 |
|||
Gross profit |
158,238,746 |
257,417,766 |
520,772,667 |
832,699,901 |
|||
Operating expenses (note 1) |
|||||||
Selling and marketing |
38,025,565 |
78,346,937 |
126,005,365 |
242,101,553 |
|||
General and administrative |
76,797,811 |
112,343,568 |
263,286,710 |
386,287,317 |
|||
Impairment loss on intangible |
- |
- |
- |
357,762 |
|||
Total operating expenses |
114,823,376 |
190,690,505 |
389,292,075 |
628,746,632 |
|||
Government subsidies |
14,783 |
148,556 |
3,113,877 |
4,650,059 |
|||
Income from operations |
43,430,153 |
66,875,817 |
134,594,469 |
208,603,328 |
|||
Interest income |
6,411,619 |
13,353,106 |
18,133,229 |
39,838,177 |
|||
Interest expense |
(4,797,814) |
(3,638,991) |
(13,144,561) |
(16,640,329) |
|||
Other (expense) / income |
(52,680) |
3,229,554 |
23,072,718 |
17,405,486 |
|||
Impairment loss on long-term |
(2,093,599) |
- |
(8,074,891) |
(2,212,836) |
|||
Income before provision for |
42,897,679 |
79,819,486 |
154,580,964 |
246,993,826 |
|||
Provision for income tax |
(8,937,160) |
(8,711,295) |
(34,065,689) |
(44,653,725) |
|||
Loss from equity method |
(1,834,212) |
(2,639,761) |
(8,025,431) |
(7,677,594) |
|||
Net income |
$ 32,126,307 |
$ 68,468,430 |
$ 112,489,844 |
$ 194,662,507 |
|||
Add: Net loss attributable to |
2,151,831 |
1,070,232 |
4,390,168 |
3,777,429 |
|||
Total net income attributable |
$ 34,278,138 |
$ 69,538,662 |
$ 116,880,012 |
$ 198,439,936 |
|||
Net income per common share |
|||||||
Basic |
$ 0.21 |
$ 0.38 |
$ 0.72 |
$ 1.13 |
|||
Diluted |
0.19 |
0.35 |
0.66 |
1.03 |
|||
Net income per ADS (note 2) |
|||||||
Basic |
$ 0.07 |
$ 0.13 |
$ 0.24 |
$ 0.38 |
|||
Diluted |
0.06 |
0.12 |
0.22 |
0.34 |
|||
Weighted average shares used in |
|||||||
Basic |
163,440,145 |
185,165,815 |
162,548,494 |
174,979,574 |
|||
Diluted |
190,130,758 |
197,095,699 |
188,508,419 |
194,331,305 |
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows: |
|||||||
For the Three Months |
For the Fiscal Year |
||||||
Ended February 28, |
Ended February 28, |
||||||
2017 |
2018 |
2017 |
2018 |
||||
Cost of revenues |
$ 43,008 |
$ 111,678 |
$ 111,001 |
$ 365,065 |
|||
Selling and marketing |
1,016,926 |
1,331,437 |
3,367,840 |
5,037,013 |
|||
General and administrative |
9,325,033 |
11,156,526 |
32,636,359 |
41,747,660 |
|||
Total |
$10,384,967 |
$ 12,599,641 |
$ 36,115,200 |
$ 47,149,738 |
|||
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 February 28, |
For the Fiscal Year Ended February 28, |
|||||||
2017 |
2018 |
2017 |
2018 |
|||||
Net income |
$ 32,126,307 |
$ 68,468,430 |
$ 112,489,844 |
$ 194,662,507 |
||||
Other comprehensive |
3,633,714 |
59,597,113 |
55,596,008 |
77,780,186 |
||||
Comprehensive income |
35,760,021 |
128,065,543 |
168,085,852 |
272,442,693 |
||||
Add: Comprehensive loss / |
1,910,200 |
(254,120) |
5,612,939 |
2,453,077 |
||||
Comprehensive income |
$ 37,670,221 |
$ 127,811,423 |
$ 173,698,791 |
$ 274,895,770 |
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 February 28, |
For the Fiscal Year |
|||||||
2017 |
2018 |
2017 |
2018 |
|||||
Cost of revenues |
$ 158,092,034 |
$ 246,679,935 |
$ 522,326,988 |
$ 882,316,083 |
||||
Share-based compensation |
43,008 |
111,678 |
111,001 |
365,065 |
||||
Non-GAAP cost of revenues |
158,049,026 |
246,568,257 |
522,215,987 |
881,951,018 |
||||
Selling and marketing expenses |
38,025,565 |
78,346,937 |
126,005,365 |
242,101,553 |
||||
Share-based compensation |
1,016,926 |
1,331,437 |
3,367,840 |
5,037,013 |
||||
Non-GAAP selling and |
37,008,639 |
77,015,500 |
122,637,525 |
237,064,540 |
||||
General and administrative |
76,797,811 |
112,343,568 |
263,286,710 |
386,287,317 |
||||
Share-based compensation |
9,325,033 |
11,156,526 |
32,636,359 |
41,747,660 |
||||
Non-GAAP general and |
67,472,778 |
101,187,042 |
230,650,351 |
344,539,657 |
||||
Operating costs and expenses |
272,915,410 |
437,370,440 |
911,619,063 |
1,511,062,715 |
||||
Share-based compensation |
10,384,967 |
12,599,641 |
36,115,200 |
47,149,738 |
||||
Non-GAAP operating costs and |
262,530,443 |
424,770,799 |
875,503,863 |
1,463,912,977 |
||||
Income from operations |
43,430,153 |
66,875,817 |
134,594,469 |
208,603,328 |
||||
Share based compensation |
10,384,967 |
12,599,641 |
36,115,200 |
47,149,738 |
||||
Non-GAAP income from |
53,815,120 |
79,475,458 |
170,709,669 |
255,753,066 |
||||
Net income attributable to TAL |
34,278,138 |
69,538,662 |
116,880,012 |
198,439,936 |
||||
Share based compensation |
10,384,967 |
12,599,641 |
36,115,200 |
47,149,738 |
||||
Non-GAAP net income |
$ 44,663,105 |
$ 82,138,303 |
$ 152,995,212 |
$ 245,589,674 |
||||
Net income per ADS |
||||||||
Basic |
$ 0.07 |
$ 0.13 |
$ 0.24 |
$ 0.38 |
||||
Diluted |
0.06 |
0.12 |
0.22 |
0.34 |
||||
Non-GAAP net income per |
||||||||
Basic |
$ 0.09 |
$ 0.15 |
$ 0.31 |
$ 0.47 |
||||
Diluted |
0.08 |
0.14 |
0.28 |
0.43 |
||||
ADSs used in calculating net |
||||||||
Basic |
490,320,434 |
555,497,445 |
487,645,481 |
524,938,722 |
||||
Diluted |
570,392,273 |
591,287,098 |
565,525,257 |
582,993,914 |
||||
Note 3: The Non-GAAP adjusted net income per ADS is computed using Non-GAAP adjusted net income and the same number of ADSs used in GAAP basic and diluted EPS calculation. |
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