Highlights for the Second Quarter of Fiscal Year 2019
- Net revenues increased by 53.5% year-over-year to
US$699.8 million fromUS$455.8 million in the same period of the prior year. - Income from operations increased by 18.4% to
US$80.9 million fromUS$68.3 million in the same period of the prior year. - Non-GAAP income from operations increased by 23.8% to
US$99.0 million fromUS$79.9 million in the same period of the prior year. - Net income attributable to TAL increased by 29.5% year-over-year to
US$77.0 million , fromUS$59.5 million in the same period of the prior year. - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 33.8% to
US$95.1 million fromUS$71.1 million in the same period of the prior year. - Basic and diluted net income per American Depositary Share ("ADS") were
US$0.14 andUS$0.13 , respectively. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, wereUS$0.17 andUS$0.16 , respectively. Three ADSs represent one Class A common share. - Cash, cash equivalents and short-term investments totaled
US$1,646.5 million as ofAugust 31, 2018 , compared toUS$1,498.9 million as ofFebruary 28, 2018 . - Total student enrollments increased by 120.2% year-over-year to approximately 4,937,320 from approximately 2,242,380 in the same period of the prior year.
Highlights for the Six Months Ended
- Net revenues increased by 60.8% year-over-year to
US$1,250.4 million fromUS$777.7 million in the same period of the prior year. - Income from operations increased by 60.5% to
US$155.9 million fromUS$97.1 million in the same period of fiscal year 2018. - Non-GAAP income from operations increased by 58.2% to
US$188.9 million fromUS$119.4 million in the same period of the prior year. - Net income attributable to TAL increased by 63.0% year-over-year to
US$143.8 million , fromUS$88.2 million in the same period of the prior year. - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 60.0% to
US$176.9 million fromUS$110.5 million in the same period of the prior year. - Basic and diluted net income per ADS were
US$0.25 andUS$0.24 , respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, wereUS$0.31 andUS$0.29 , respectively. - Average student enrollments per quarter during fiscal year 2019 increased by 110.2% year-over-year to approximately 3,457,140 from approximately 1,645,070 in the same period of fiscal year 2018.
- Total physical network increased from 594 learning centers in 42 cities as of
February 28, 2018 to 648 learning centers in 43 cities as ofAugust 31, 2018 .
Financial and Operating Data -- Second Quarter and First Six Months of Fiscal Year 2019
(In US$ thousands, except per ADS data, student enrollments and percentages)
Three Months Ended |
|||
August 31, |
|||
2017 |
2018 |
Pct. Change |
|
Net revenues |
455,750 |
699,783 |
53.5% |
Net income attributable to TAL |
59,450 |
76,990 |
29.5% |
Non-GAAP net income attributable to |
71,069 |
95,091 |
33.8% |
Operating income |
68,326 |
80,891 |
18.4% |
Non-GAAP operating income |
79,945 |
98,992 |
23.8% |
Net income per ADS attributable to |
0.11 |
0.14 |
17.8% |
Net income per ADS attributable to |
0.10 |
0.13 |
24.2% |
Non-GAAP net income per ADS |
0.14 |
0.17 |
21.7% |
Non-GAAP net income per ADS |
0.12 |
0.16 |
28.4% |
Total student enrollments in small |
2,242,380 |
4,937,320 |
120.2% |
Six Months Ended |
|||
August 31, |
|||
2017 |
2018 |
Pct. Change |
|
Net revenues |
777,653 |
1,250,432 |
60.8% |
Net income attributable to TAL |
88,239 |
143,790 |
63.0% |
Non-GAAP net income attributable to |
110,543 |
176,857 |
60.0% |
Operating income |
97,131 |
155,880 |
60.5% |
Non-GAAP operating income |
119,435 |
188,947 |
58.2% |
Net income per ADS attributable to |
0.17 |
0.25 |
46.1% |
Net income per ADS attributable to |
0.16 |
0.24 |
53.9% |
Non-GAAP net income per ADS |
0.22 |
0.31 |
43.4% |
Non-GAAP net income per ADS |
0.19 |
0.29 |
51.8% |
Average student enrollments per |
1,645,070 |
3,457,140 |
110.2% |
"In the second quarter, our revenue and enrollments grew steadily, which was based on stable online and offline business performance," said Mr. Rong Luo, TAL's Chief Financial Officer. "Looking ahead, we will continue to enhance product quality and customer satisfaction, and further our contribution to the healthy and sustainable development of the education sector."
Mr. Luo continued, "We continue to explore new technologies and deploy smart intelligence in our online and offline products to help promote education progress. We are confident that through our investments, we will continue to offer students innovative technology-based tutoring in a positive learning environment."
Adoption of Share Repurchase Program
On
This share repurchase program authorizes the Company to purchase its ADSs or common shares from time to time on the open market at prevailing market prices, in negotiated transactions off the market, in block trades and/ or other legally permissible ways in accordance with applicable rules and regulations. The timing and extent of any purchases will depend upon market conditions, the trading price of ADSs and other factors. TAL's board of directors will review the share repurchase program periodically and may authorize adjustment to its terms and size accordingly. TAL plans to fund any share repurchases made under this program from the Company's available cash balance.
Financial Results for the Second Quarter of Fiscal Year 2019
Net Revenues
In the second quarter of fiscal year 2019, TAL reported net revenues of
Operating Costs and Expenses
In the second quarter of fiscal year 2019, operating costs and expenses were
Cost of revenues grew by 34.6% to
Selling and marketing expenses increased by 159.4% to
General and administrative expenses increased by 59.0% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 55.8% to
Gross Profit
Gross profit grew by 75.6% to
Income from Operations
Income from operations increased by 18.4% to
Other Income/(Expense)
Other expense was
Income Tax Expense
Income tax expense was
Net Income Attributable to
Net income attributable to TAL increased by 29.5% to
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were
Capital Expenditures
Capital expenditures for the second quarter of fiscal year 2019 were
Cash, Cash Equivalents, and Short-Term Investments
As of
Deferred Revenue
As of
Financial Results for the First Six Months of Fiscal Year 2019
Net Revenues
For the first six months of fiscal year 2019, TAL reported net revenues of
Operating Costs and Expenses
In the first six months of fiscal year 2019, operating costs and expenses were
Cost of revenues grew by 42.5% to
Selling and marketing expenses increased by 141.5% to
General and administrative expenses increased by 57.2% to
Total share-based compensation expenses allocated to the related operating costs and expenses increased by 48.3% to
Gross Profit
Gross profit grew by 81.7% to
Income from Operations
Income from operations increased by 60.5% to
Other Income/(Expense)
Other income was
Income Tax Expense
Income tax expense was
Net Income Attributable to
Net income attributable to TAL increased by 63.0% to
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were
Capital Expenditures
Capital expenditures for the first six months of fiscal year 2019 were
Business Outlook
Based on our current estimates, total net revenues for the third quarter of fiscal year 2019 are expected to be between
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 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: |
2299945 |
A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at http://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: |
2299945 |
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 2019, 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) |
|||
As of February 28, |
As of August 31, |
||
ASSETS |
|||
Current assets |
|||
Cash and cash equivalents |
$ 711,519 |
$ 819,376 |
|
Restricted cash-current |
6,267 |
1,867 |
|
Short-term investments |
787,391 |
827,074 |
|
Inventory |
5,272 |
8,375 |
|
Amounts due from related parties-current |
3,229 |
14,886 |
|
Income tax receivables |
15,093 |
7,058 |
|
Prepaid expenses and other current assets |
133,235 |
172,157 |
|
Total current assets |
1,662,006 |
1,850,793 |
|
Restricted cash-non-current |
9,911 |
9,513 |
|
Property and equipment, net |
247,266 |
269,858 |
|
Deferred tax assets-non-current |
17,361 |
25,033 |
|
Rental deposits |
47,333 |
51,008 |
|
Intangible assets, net |
43,505 |
57,275 |
|
Goodwill |
291,382 |
280,222 |
|
Long-term investments |
597,606 |
811,619 |
|
Long-term prepayments and other non-current assets |
138,190 |
100,818 |
|
Total assets |
$ 3,054,560 |
$ 3,456,139 |
|
LIABILITIES AND EQUITY |
|||
Current liabilities |
|||
Accounts payable (including accounts payable of |
$ 57,605 |
$ 71,370 |
|
Deferred revenue-current (including deferred revenue- |
824,276 |
864,573 |
|
Amounts due to related parties-current (including |
8,746 |
13,652 |
|
Accrued expenses and other current liabilities |
229,122 |
342,087 |
|
Income tax payable (including income tax payable of |
13,638 |
29,948 |
|
Short-term debt and current portion of long-term debt |
- |
239,641 |
|
Bond payable, current portion (including bond |
- |
5,275 |
|
Total current liabilities |
1,133,387 |
1,566,546 |
|
Deferred revenue-non-current (including deferred |
17,980 |
5,273 |
|
Amounts due to related parties-non-current (including |
271 |
331 |
|
Deferred tax liabilities-non-current (including deferred |
20,039 |
7,400 |
|
Bond payable (including bond payable of the |
11,075 |
- |
|
Long-term payable (including long-term payable of |
6,344 |
1,683 |
|
Long-term debt (including long-term debt of the |
225,000 |
- |
|
Total liabilities |
1,414,096 |
1,581,233 |
|
TAL Education Group Shareholders' Equity |
|||
Class A common shares |
118 |
120 |
|
Class B common shares |
71 |
71 |
|
Additional paid-in capital |
884,717 |
924,059 |
|
Statutory reserve |
38,315 |
38,315 |
|
Retained earnings |
565,202 |
717,243 |
|
Accumulated other comprehensive income |
132,325 |
176,906 |
|
Total TAL Education Group's equity |
1,620,748 |
1,856,714 |
|
Noncontrolling interest |
19,716 |
18,192 |
|
Total equity |
1,640,464 |
1,874,906 |
|
Total liabilities and equity |
$ 3,054,560 |
$ 3,456,139 |
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 |
For the Six Months Ended |
||||||
2017 |
2018 |
2017 |
2018 |
||||
Net revenues |
$ 455,750 |
$ 699,783 |
$ 777,653 |
$ 1,250,432 |
|||
Cost of revenues (note 1) |
244,930 |
329,565 |
414,534 |
590,647 |
|||
Gross profit |
210,820 |
370,218 |
363,119 |
659,785 |
|||
Operating expenses (note 1) |
|||||||
Selling and marketing |
58,491 |
151,700 |
101,953 |
246,207 |
|||
General and administrative |
87,312 |
138,798 |
167,943 |
263,949 |
|||
Total operating expenses |
145,803 |
290,498 |
269,896 |
510,156 |
|||
Government subsidies |
3,309 |
1,171 |
3,908 |
6,251 |
|||
Income from operations |
68,326 |
80,891 |
97,131 |
155,880 |
|||
Interest income |
10,534 |
19,259 |
18,235 |
35,822 |
|||
Interest expense |
(3,870) |
(3,957) |
(9,095) |
(7,822) |
|||
Other income/(expense) |
2,018 |
(355) |
8,806 |
8,331 |
|||
Impairment loss on long-term |
- |
- |
(700) |
(9,713) |
|||
Income before provision for |
77,008 |
95,838 |
114,377 |
182,498 |
|||
Provision for income tax |
(16,158) |
(15,532) |
(24,553) |
(32,864) |
|||
Loss from equity method |
(1,965) |
(4,081) |
(3,248) |
(7,138) |
|||
Net income |
58,885 |
76,225 |
86,576 |
142,496 |
|||
Add: Net loss attributable to |
565 |
765 |
1,663 |
1,294 |
|||
Total net income attributable |
$ 59,450 |
$ 76,990 |
$ 88,239 |
$ 143,790 |
|||
Net income per common share |
|||||||
Basic |
$ 0.34 |
$ 0.41 |
$ 0.52 |
$ 0.76 |
|||
Diluted |
0.31 |
0.38 |
0.47 |
0.72 |
|||
Net income per ADS (note 2) |
|||||||
Basic |
$ 0.11 |
$ 0.14 |
$ 0.17 |
$ 0.25 |
|||
Diluted |
0.10 |
0.13 |
0.16 |
0.24 |
|||
Weighted average shares used in |
|||||||
Basic |
172,388,942 |
189,483,546 |
169,669,402 |
189,250,482 |
|||
Diluted |
193,131,866 |
200,422,889 |
193,585,695 |
200,406,007 |
|||
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows: |
|||||||
For the Three Months |
For the Six Months |
||||||
Ended August 31, |
Ended August 31, |
||||||
2017 |
2018 |
2017 |
2018 |
||||
Cost of revenues |
$109 |
$185 |
$142 |
$348 |
|||
Selling and marketing |
1,258 |
2,407 |
2,376 |
4,033 |
|||
General and administrative |
10,252 |
15,509 |
19,786 |
28,686 |
|||
Total |
$11,619 |
$18,101 |
$22,304 |
$33,067 |
|||
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 August 31, |
For the Six Months Ended August 31, |
||||||
2017 |
2018 |
2017 |
2018 |
||||
Net income |
$ 58,885 |
$ 76,225 |
$ 86,576 |
$ 142,496 |
|||
Other comprehensive |
24,005 |
(43,380) |
31,299 |
43,329 |
|||
Comprehensive income |
82,890 |
32,845 |
117,875 |
185,825 |
|||
Add: Comprehensive loss |
565 |
1,804 |
1,663 |
2,546 |
|||
Comprehensive income |
$ 83,455 |
$ 34,649 |
$ 119,538 |
$ 188,371 |
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 August 31, |
For the Six Months |
||||||
2017 |
2018 |
2017 |
2018 |
||||
Cost of revenues |
$ 244,930 |
$ 329,565 |
$ 414,534 |
$ 590,647 |
|||
Share-based compensation expense |
109 |
185 |
142 |
348 |
|||
Non-GAAP cost of revenues |
244,821 |
329,380 |
414,392 |
590,299 |
|||
Selling and marketing expenses |
58,491 |
151,700 |
101,953 |
246,207 |
|||
Share-based compensation expense |
1,258 |
2,407 |
2,376 |
4,033 |
|||
Non-GAAP selling and marketing |
57,233 |
149,293 |
99,577 |
242,174 |
|||
General and administrative |
87,312 |
138,798 |
167,943 |
263,949 |
|||
Share-based compensation expense |
10,252 |
15,509 |
19,786 |
28,686 |
|||
Non-GAAP general and |
77,060 |
123,289 |
148,157 |
235,263 |
|||
Operating costs and expenses |
390,733 |
620,063 |
684,430 |
1,100,803 |
|||
Share-based compensation expense |
11,619 |
18,101 |
22,304 |
33,067 |
|||
Non-GAAP operating costs and |
379,114 |
601,962 |
662,126 |
1,067,736 |
|||
Income from operations |
68,326 |
80,891 |
97,131 |
155,880 |
|||
Share based compensation expenses |
11,619 |
18,101 |
22,304 |
33,067 |
|||
Non-GAAP income from |
79,945 |
98,992 |
119,435 |
188,947 |
|||
Net income attributable to TAL |
59,450 |
76,990 |
88,239 |
143,790 |
|||
Share based compensation expenses |
11,619 |
18,101 |
22,304 |
33,067 |
|||
Non-GAAP net income |
$ 71,069 |
$ 95,091 |
$ 110,543 |
$ 176,857 |
|||
Net income per ADS |
|||||||
Basic |
$ 0.11 |
$ 0.14 |
$ 0.17 |
$ 0.25 |
|||
Diluted |
0.10 |
0.13 |
0.16 |
0.24 |
|||
Non-GAAP Net income per ADS |
|||||||
Basic |
$ 0.14 |
$ 0.17 |
$ 0.22 |
$ 0.31 |
|||
Diluted |
0.12 |
0.16 |
0.19 |
0.29 |
|||
ADSs used in calculating net |
|||||||
Basic |
517,166,827 |
568,450,639 |
509,008,205 |
567,751,446 |
|||
Diluted |
579,395,597 |
601,268,668 |
580,757,085 |
601,218,021 |
|||
Note 3: The Non-GAAP adjusted net income per ADS is computed using Non-GAAP adjusted net |
SOURCE