UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 


 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of October 2013

 

Commission File Number: 001-34900

 


 

TAL EDUCATION GROUP

 


 

12/F, Danling SOHO

No. 6 Danling Street, Haidian District

Beijing 100080

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x            Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

TAL Education Group

 

 

 

 

 

By:

/s/ Joseph Kauffman

 

 

Name: Joseph Kauffman

 

 

Title: Chief Financial Officer

 

 

 

Date: October 23, 2013

 

 

 

2



 

Exhibit Index

 

Exhibit 99.1 — Press Release

 

3


Exhibit 99.1

 

TAL Education Group Announces Unaudited Financial Results for the

 

Second Fiscal Quarter Ended August 31, 2013

 

· Quarterly Net Revenues up by 35.1% Year-Over-Year

· Quarterly Income from Operations up by 46.6% Year-Over-Year

· Quarterly Net Income Attributable to TAL up by 45.4% Year-Over-Year

 

(Beijing — October 22, 2013)—TAL Education Group (NYSE: XRS) (“TAL” or the “Company”), a leading K-12 after-school tutoring services provider in China, today announced its unaudited financial results for the quarter ended August 31, 2013, which is the second quarter of TAL’s fiscal year 2014.

 

Highlights for the Second Quarter of Fiscal Year 2014

 

·                  Net revenues increased by 35.1% year-over-year to US$92.0 million from US$68.1 million in the same period of the prior year.

·                  Income from operations increased by 46.6% to US$24.4 million, from US$16.7 million in the second quarter of fiscal year 2013.

·                  Net income attributable to TAL increased by 45.4% year-over-year to US$23.3 million from US$16.0 million in the same period of the prior year.

·                  Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 38.7% year-over-year to US$25.1 million from US$18.1 million in the same period of the prior year.

·                  Basic and diluted net income per American Depositary Share (“ADS”) were US$0.30 and US$0.29, respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, were US$0.32 and US$0.31, respectively. Each ADS represents two Class A common shares.

·                  Cash, cash equivalents and term deposits totaled US$294.1 million as of August 31, 2013, compared to US$209.2 million of cash, cash equivalents and term deposits as of February 28, 2013.

·                  Total student enrollments increased by 24.8% year-over-year to approximately 308,490.

·                  Total physical network consisted of 264 learning centers as of August 31, 2013, from 255 as of May 31, 2013.

 

Highlights for the First Six Months Ended August 31, 2013

 

·                  Net revenues increased by 30.7% year-over-year to US$153.4 million from US$117.4 million in the same period of the prior year.

·                  Income from operations increased by 37.1% to US$31.1 million, from US$22.7 million in the same period of fiscal year 2013.

·                  Net income attributable to TAL increased by 49.5% year-over-year to US$31.4 million from US$21.0 million in the same period of the prior year.

·                  Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 38.7% year-over-year to US$35.1 million from US$25.3 million in the same period of the prior year.

·                  Basic and diluted net income per American Depositary Share (“ADS”) were US$0.40 and US$0.39, respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, were US$0.45 and US$0.44, respectively.

·                  Total student enrollments during the first six months of fiscal year 2014 increased by 21.8% year-over-year to approximately 501,140.

·                  Total physical network increased to 264 learning centers as of August 31, 2013 from 255 learning centers as of February 28, 2013.

 

1



 

Financial and Operating Data——Second Quarter and First Six Months of Fiscal Year 2014

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

 

 

 

Three Months Ended

 

 

 

 

 

August 31,

 

 

 

 

 

2012

 

2013

 

Pct. Change

 

Net revenues

 

68,064

 

91,968

 

35.1

%

Net income attributable to TAL

 

16,042

 

23,329

 

45.4

%

Non-GAAP net income attributable to TAL

 

18,121

 

25,138

 

38.7

%

Operating income

 

16,673

 

24,440

 

46.6

%

Non-GAAP operating income

 

18,752

 

26,249

 

40.0

%

Net income per ADS attributable to TAL — basic

 

0.21

 

0.30

 

44.4

%

Net income per ADS attributable to TAL — diluted

 

0.21

 

0.29

 

42.3

%

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

 

0.23

 

0.32

 

37.7

%

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

 

0.23

 

0.31

 

35.7

%

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

 

247,100

 

308,490

 

24.8

%

 

 

 

Six Months Ended

 

 

 

 

 

August 31,

 

 

 

 

 

2012

 

2013

 

Pct. Change

 

Net revenues

 

117,378

 

153,367

 

30.7

%

Net income attributable to TAL

 

20,993

 

31,387

 

49.5

%

Non-GAAP net income attributable to TAL

 

25,301

 

35,086

 

38.7

%

Operating income

 

22,689

 

31,107

 

37.1

%

Non-GAAP operating income

 

26,997

 

34,806

 

28.9

%

Net income per ADS attributable to TAL — basic

 

0.27

 

0.40

 

48.4

%

Net income per ADS attributable to TAL — diluted

 

0.27

 

0.39

 

46.9

%

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

 

0.33

 

0.45

 

37.7

%

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

 

0.32

 

0.44

 

36.2

%

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

 

411,610

 

501,140

 

21.8

%

 

 

 

 

 

 

 

 

 

2



 

“The second quarter was an outstanding quarter for our business. Net revenues increased by 35.1% year-over-year to US$92.0 million, exceeding the top-end of our guidance by US$1.5 million. Revenue growth was supported by a 24.8% increase in enrollments. Our small class business in markets other than Beijing and Shanghai continued to perform well, and accounted for 35% of small class revenues compared to 22% during the same period last year. In addition, our Shanghai operation maintained its solid revenue growth trajectory on the back of continued strong enrollment increases in the summer semester,” said TAL’s Chairman and Chief Executive Officer, Mr. Bangxin Zhang.

 

“Given the improved learning center utilization, we took the opportunity to more aggressively ramp up our tutoring network capacity in the quarter. We added a net of nine learning centers, bringing the total to 264 centers, as compared to 255 at the end of the first fiscal quarter. In terms of classroom capacity, we signed leases for a net 247 additional classrooms in the quarter for our small class business, bringing us to a net 351 additional classrooms for the first half of the year. For the remainder of this fiscal year, we plan to continue to add new learning centers as well as classrooms to existing learning centers, but at a slower pace than in the first half of the year,” Mr. Zhang said.

 

Mr. Joseph Kauffman, Chief Financial Officer, continued, “In addition to strong top line results, we had better-than-expected net income growth of 45.4% year-on-year in the second quarter. In coming quarters, we expect to incur higher year-on-year growth in operational costs and expenses as we will bear the impact of past quarters’ center and classroom additions as well as invest further in center capacity and the human capital needed to support our current operations and new businesses. In our approach to network expansion, we will continue to be disciplined, employing a combination of scaling up existing facilities and investing in new centers.”

 

3



 

Financial Results for the Second Quarter of Fiscal Year 2014

 

Net Revenues

 

In the second quarter of fiscal year 2014, TAL reported net revenues of US$92.0 million, representing a 35.1% increase from US$68.1 million in the second quarter of fiscal year 2013. The increase was mainly driven by an increased number of total student enrollments combined with increased average selling prices (ASPs). Total student enrollments increased by 24.8% to approximately 308,490 from approximately 247,100 in the same period one year ago. The increase in total student enrollments was driven primarily by increases of enrollments in the small class offerings. ASP increased by 8.2% from US$275 in the second quarter of fiscal year 2013 to US$298 in the same quarter of fiscal year 2014. The growth in ASP was mainly driven by the hourly rate increases of a portion of the small class course offerings and the foreign exchange rate fluctuation.

 

Operating Costs and Expenses

 

Operating costs and expenses were US$67.6 million, a 31.6% increase from US$51.4 million in the second quarter of fiscal year 2013. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$65.8 million, a 33.5% increase from US$49.3 million in the second quarter of fiscal year 2013.

 

Cost of revenues increased by 35.0% to US$43.0 million, from US$31.8 million in the second quarter of fiscal year 2013. The increase in cost of revenues was mainly due to an increase in teacher compensation, an increase in rental costs and other staff costs associated primarily with an expansion of learning center capacity, increases in wages and teacher fees and settlement of a third-party claim. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 35.1% to US$43.0 million, from US$31.8 million in the second quarter of fiscal year 2013.

 

Selling and marketing expenses increased by 20.9% to US$8.5 million, from US$7.0 million in the second quarter of fiscal year 2013. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 26.1% to US$8.2 million, from US$6.5 million in the second quarter of fiscal year 2013. The increase of selling and marketing expenses in the second quarter of fiscal year 2014 was primarily a result of an increase in compensation to sales and marketing staff to support a greater number of programs and service offerings.

 

General and administrative expenses increased by 28.8% to US$16.1 million, from US$12.5 million in the second quarter of fiscal year 2013. The increase in general and administrative expenses was mainly due to an increase in compensation to our general and administrative personnel to support a greater number of programs and service offerings and depreciation expenses for Beijing office space. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 33.0% to US$14.6 million, from US$11.0 million in the second quarter of fiscal year 2013.

 

Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 13.0% to US$1.8 million in the second quarter of fiscal year 2014, from US$2.1 million in the same period of fiscal year 2013.

 

4



 

Gross Profit

 

Gross profit increased by 35.2% to US$49.0 million, from US$36.2 million in the second quarter of fiscal year 2013.

 

Income from Operations

 

Income from operations increased by 46.6% to US$24.4 million, from US$16.7 million in the second quarter of fiscal year 2013. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 40.0% to US$26.2 million, from US$18.8 million in the second quarter of fiscal year 2013.

 

Other Income /(Expense)

 

Other expense was US$0.3 million for the second quarter of fiscal year 2014, compared to other income of US$0.3 million in the second quarter of fiscal year 2013. Other expense in this quarter was mainly due to the donation of US$0.2 million to support victims of the Ya’an earthquake.

 

Income Tax Expense

 

Income tax expense was US$3.5 million in the second quarter of fiscal year 2014, as compared to US$2.4 million in the second quarter of fiscal year 2013.

 

Net Income Attributable to TAL Education Group

 

Net income attributable to TAL increased by 45.4% to US$23.3million, from US$16.0 million in the second quarter of fiscal year 2013. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 38.7% to US$25.1 million, from US$18.1 million in the second quarter of fiscal year 2013.

 

Basic and Diluted Net Income per ADS

 

Basic and diluted net income per ADS were US$0.30 and US$0.29, respectively, in the second quarter of fiscal year 2014. Non-GAAP basic and Non-GAAP diluted net income per ADS, which excluded share-based compensation expenses, were US$0.32 and US$0.31, respectively.

 

Capital Expenditures

 

Capital expenditures for the second quarter of fiscal year 2014 were US$3.3 million, representing an increase of US$1.6 million from US$1.7 million in the second quarter of fiscal year 2013. The increase was mainly from the purchase of equipment, including servers, computers, and other hardware used in our teaching facilities, to better support the Company’s operation.

 

Cash, Cash Equivalents, and Term Deposits

 

As of August 31, 2013, the Company had US$267.2 million of cash and cash equivalents and US$27.0 million of term deposits, as compared to US$185.1 million of cash and cash equivalents and US$24.1 million of term deposits as of February 28, 2013.

 

Deferred Revenue

 

As of August 31, 2013, the Company’s deferred revenue balance was US$143.7 million as compared to US$103.3 million as of August 31, 2012, representing an increase of 39.0% versus the same period of the previous year.

 

5



 

Business Outlook

 

Based on the Company’s current estimates, total net revenues for the third quarter of fiscal year 2014 are expected to be between US$69.5 million and US$71.0 million, representing an increase of 42% to 45% on a year-over-year basis.

 

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 second fiscal quarter of fiscal year 2014 ended August 31, 2013 at 8:00 a.m. Eastern Time on October 22, 2013 (8:00 p.m. Beijing time on October 22, 2013).

 

The dial-in details for the live conference call are as follows:

 

· U.S. toll free:

+1-866-519-4004

· Hong Kong toll free:

800-930-346

· China toll free:

400-620-8038

· International toll:

+65-6723-9381

Conference ID:

81911776

 

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 11:59 a.m. U.S. Eastern time (11:59 p.m. Beijing time), October 29, 2013.

 

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

· China toll free:

400-120-0932

· International toll:

+61-2-8199-0299

Conference ID:

81911776

 

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 third quarter of fiscal year 2014, 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: its ability to continue to attract students to enroll in its courses; its ability to continue to recruit, train and retain qualified teachers; its ability to improve the content of its existing course offerings and to develop new courses; its ability to maintain and enhance its brand; its ability to maintain and continue to improve its teaching results; and its 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 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.

 

6



 

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 264 physical learning centers as of August 31, 2013, located in fifteen key cities in China: Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Wuhan, Xi`an, Chengdu, Nanjing, Hangzhou, Taiyuan, Zhengzhou, Chongqing, Suzhou and Shenyang. We also operate www.eduu.com, a leading online education platform in China. Our ADSs trade on the New York Stock Exchange under the symbol “XRS.”

 

About Non-GAAP Financial Measures

 

In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the SEC 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 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: +861052926658

Email: ir@100tal.com

 

Caroline Straathof

IR Inside

Tel: +31 6 5462 4301

Email: info@irinside.com

 

7



 

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In U.S. dollars)

 

 

 

As of
February 28,
2013

 

As of
August 31,
2013

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

185,080,673

 

$

267,184,130

 

Term deposits

 

24,110,716

 

26,963,868

 

Restricted cash-current

 

2,270,269

 

719,480

 

Available-for-sale securities

 

399,955

 

422,074

 

Inventory

 

410,167

 

346,363

 

Deferred tax assets-current

 

2,260,446

 

3,268,827

 

Prepaid expenses and other current assets

 

11,906,317

 

12,853,543

 

Total current assets

 

226,438,543

 

311,758,285

 

Restricted cash-non-current

 

 

2,403,966

 

Property and equipment, net

 

76,115,088

 

77,875,454

 

Deferred tax assets-non-current

 

538,464

 

950,582

 

Rental deposit

 

5,179,073

 

6,467,499

 

Intangible assets, net

 

1,724,444

 

1,532,245

 

Goodwill

 

555,194

 

564,448

 

Long-term investment

 

5,491,073

 

3,080,000

 

Total assets

 

$

316,041,879

 

$

404,632,479

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable (including accounts payable of the consolidated VIEs without recourse to TAL Education Group of 1,739,337 and 1,704,868 as of February 28, 2013, and August 31, 2013, respectively)

 

$

2,009,473

 

$

1,980,092

 

Deferred revenue (including deferred revenue of the consolidated VIEs without recourse to TAL Education Group of 67,743,448 and 107,198,687 as of February 28, 2013, and August 31, 2013, respectively)

 

102,513,876

 

143,685,668

 

Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to TAL Education Group of 11,269,507 and 18,021,990 as of February 28, 2013, and August 31, 2013, respectively)

 

17,196,001

 

25,637,839

 

Income tax payable (including income tax payable of the consolidated VIEs without recourse to TAL Education Group of 2,165,785 and 4,374,308 as of February 28, 2013, and August 31, 2013, respectively)

 

2,778,305

 

3,082,466

 

Total current liabilities

 

124,497,655

 

174,386,065

 

Deferred tax liabilities-non-current (including deferred tax liabilities-non-current of the consolidated VIEs without recourse to TAL Education Group of 36,845 and 31,924 as of February 28, 2013, and August 31, 2013, respectively)

 

98,945

 

168,544

 

Long-term payable (including long-term payable of the consolidated VIEs without recourse to TAL Education Group of nil and 1,307,339 as of February 28, 2013, and August 31, 2013, respectively)

 

 

1,307,339

 

Total liabilities

 

124,596,600

 

175,861,948

 

 

 

 

 

 

 

TAL Education Group Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Class A common shares

 

68,314

 

69,213

 

Class B common shares

 

87,806

 

87,806

 

Additional paid-in capital

 

86,016,387

 

89,600,473

 

Statutory reserve

 

12,291,341

 

12,291,341

 

Retained earnings

 

86,430,705

 

117,817,653

 

Accumulated other comprehensive income

 

6,550,726

 

8,904,045

 

Total TAL Education Group’s equity

 

191,445,279

 

228,770,531

 

Total liabilities and equity

 

$

316,041,879

 

$

404,632,479

 

 

8



 

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(In U.S. dollars, except share, ADS, per share and per ADS data)

 

 

 

For the Three Months Ended
August 31,

 

For the Six Months Ended
August 31,

 

 

 

2012

 

2013

 

2012

 

2013

 

Net revenues

 

$

68,063,752

 

$

91,968,361

 

$

117,378,427

 

$

153,366,749

 

Cost of revenues

 

31,845,082

 

42,993,981

 

57,622,215

 

74,913,633

 

Gross profit

 

36,218,670

 

48,974,380

 

59,756,212

 

78,453,116

 

Operating expenses (note 1)

 

 

 

 

 

 

 

 

 

Selling and marketing

 

7,012,903

 

8,477,695

 

13,145,236

 

16,269,718

 

General and administrative

 

12,532,377

 

16,144,405

 

23,959,949

 

31,170,396

 

Total operating expenses

 

19,545,280

 

24,622,100

 

37,105,185

 

47,440,114

 

Government Subsidies

 

 

87,610

 

38,069

 

93,661

 

Income from operations

 

16,673,390

 

24,439,890

 

22,689,096

 

31,106,663

 

Interest income

 

1,447,465

 

2,647,613

 

2,364,029

 

4,155,887

 

Other income / (expenses)

 

309,364

 

(290,237

)

(931,748

)

517,281

 

Gain on short-term investment

 

 

18,089

 

 

297,120

 

Income before income tax provision

 

18,430,219

 

26,815,355

 

24,121,377

 

36,076,951

 

Provision for income tax

 

(2,388,159

)

(3,485,970

)

(3,128,009

)

(4,690,003

)

Net income

 

16,042,060

 

23,329,385

 

20,993,368

 

31,386,948

 

Total net income attributable to TAL Education Group

 

$

16,042,060

 

$

23,329,385

 

$

20,993,368

 

$

31,386,948

 

Net income per common share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.10

 

$

0.15

 

$

0.14

 

$

0.20

 

Diluted

 

0.10

 

0.15

 

0.13

 

0.20

 

Net income per ADS (note 2)

 

 

 

 

 

 

 

 

 

Basic

 

0.21

 

0.30

 

0.27

 

0.40

 

Diluted

 

$

0.21

 

$

0.29

 

$

0.27

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income, net of tax

 

322,790

 

371,836

 

(769,149

)

2,353,319

 

Comprehensive income

 

16,364,850

 

23,701,221

 

20,224,219

 

33,740,267

 

Comprehensive income attributable to TAL Education Group

 

$

16,364,850

 

$

23,701,221

 

$

20,224,219

 

$

33,740,267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in calculating net income per common share

 

 

 

 

 

 

 

 

 

Basic

 

155,387,963

 

156,488,897

 

155,173,004

 

156,304,523

 

Diluted

 

156,311,147

 

159,797,296

 

156,432,354

 

159,245,689

 

 


Note1: Share-based compensation expenses are included in the operating costs and expenses as follows:

 

 

 

For the Three Months
Ended August 31

 

For the Six Months
Ended August 31

 

 

 

2012

 

2013

 

2012

 

2013

 

Cost of revenues

 

$

38,115

 

$

11,277

 

$

88,711

 

$

22,068

 

Selling and marketing

 

494,524

 

261,118

 

1,066,860

 

584,988

 

General and administrative

 

1,546,212

 

1,536,442

 

3,152,170

 

3,092,193

 

Total

 

$

2,078,851

 

$

1,808,837

 

$

4,307,741

 

$

3,699,249

 

 

Note 2: Each ADS represents two Class A common shares.

 

9



 

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 August 31,

 

For the Six Months
Ended August 31,

 

 

 

2012

 

2013

 

2012

 

2013

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

$

31,845,082

 

$

42,993,981

 

$

57,622,215

 

$

74,913,633

 

Share-based compensation expense in cost of revenues

 

38,115

 

11,277

 

88,711

 

22,068

 

Non-GAAP cost of revenues

 

31,806,967

 

42,982,704

 

57,533,504

 

74,891,565

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

7,012,903

 

8,477,695

 

13,145,236

 

16,269,718

 

Share-based compensation expense in selling and marketing expenses

 

494,524

 

261,118

 

1,066,860

 

584,988

 

Non-GAAP selling and marketing expenses

 

6,518,379

 

8,216,577

 

12,078,376

 

15,684,730

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

12,532,377

 

16,144,405

 

23,959,949

 

31,170,396

 

Share-based compensation expense in general and administrative expenses

 

1,546,212

 

1,536,442

 

3,152,170

 

3,092,193

 

Non-GAAP general and administrative expenses

 

10,986,165

 

14,607,963

 

20,807,779

 

28,078,203

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

51,390,362

 

67,616,081

 

94,727,400

 

122,353,747

 

Share-based compensation expense in operating costs and expenses

 

2,078,851

 

1,808,837

 

4,307,741

 

3,699,249

 

Non-GAAP operating costs and expenses

 

49,311,511

 

65,807,244

 

90,419,659

 

118,654,498

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

16,673,390

 

24,439,890

 

22,689,096

 

31,106,663

 

Share based compensation expenses

 

2,078,851

 

1,808,837

 

4,307,741

 

3,699,249

 

Non-GAAP income from operations

 

18,752,241

 

26,248,727

 

26,996,837

 

34,805,912

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TAL Education Group

 

16,042,060

 

23,329,385

 

20,993,368

 

31,386,948

 

Share based compensation expenses

 

2,078,851

 

1,808,837

 

4,307,741

 

3,699,249

 

Non-GAAP net income attributable to TAL Education Group

 

$

18,120,911

 

$

25,138,222

 

$

25,301,109

 

$

35,086,197

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per ADS

 

 

 

 

 

 

 

 

 

Basic

 

$

0.21

 

$

0.30

 

$

0.27

 

$

0.40

 

Diluted

 

0.21

 

0.29

 

0.27

 

0.39

 

Non-GAAP Net income per ADS (note 3)

 

 

 

 

 

 

 

 

 

Basic

 

0.23

 

0.32

 

0.33

 

0.45

 

Diluted

 

$

0.23

 

$

0.31

 

$

0.32

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

ADSs used in calculating net income per ADS

 

 

 

 

 

 

 

 

 

Basic

 

77,693,982

 

78,244,448

 

77,586,502

 

78,152,262

 

Diluted

 

78,155,573

 

79,898,648

 

78,216,177

 

79,622,845

 

 


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.

 

10