In the news release, Tarena International, Inc. Announces Third
Quarter 2016 Results, issued 21-Nov-2016 by Tarena International, Inc. over PR
Newswire, technical errors caused by PR Newswire resulted in units
of million to not appear in a number of places in the e-mail that
was sent to you. The corrected release is as follows:
Tarena International, Inc. Announces Third Quarter 2016 Results
BEIJING, Nov. 21, 2016 /PRNewswire/ --
- Third Quarter Net Revenues Increased by 29.4%
Year-Over-Year, Exceeding Guidance
- Third Quarter Student Enrollment Increased by 28.0%
Year-Over-Year
- Third Quarter Net Margin increased by 2.01 percentage
points
Tarena International, Inc. (NASDAQ: TEDU) ("Tarena" or the
"Company"), a leading provider of professional education services
in China today announced its
unaudited financial results for the first nine months and the third
quarter ended September 30, 2016.
Change in Reporting Currency to the Renminbi
Starting from the third quarter of 2016, the Company changed its
reporting currency from the U.S. dollar ("US$") to the Renminbi
("RMB"). The aligning of the reporting currency with the underlying
operations will better depict the Company's results of operations
for each period. Prior periods' financial information have been
recasted as if the Company always used RMB as the Company's
reporting currency.
Third Quarter 2016Financial and Operational
Highlights
- Net revenues increased by 29.4% year-over-year to RMB481.0 million (US$72.0
million) from RMB371.6 million
in the same period in 2015
- Gross profit increased by 28.9% year-over-year to RMB360.1 million (US$53.9
million) from RMB279.4 million
in the same period in 2015.
- Operating income increased by 25.1% year-over-year to
RMB113.8 million (US$17.0 million) from RMB91.0 million in the same period in 2015.
Non-GAAP operating income, which excluded share-based compensation
expenses, increased by 27.6% year-over-year to RMB127.1 million (US$19.0
million) from RMB99.6 million
in the same period in 2015.
- Net income increased by 40.7% year-over-year to RMB120.3 million (US$18.0
million) from RMB85.5 million
in the same period in 2015. Non-GAAP net income, which excluded
share-based compensation expenses, increased by 42.0%
year-over-year to RMB133.6 million
(US$20.0 million) from RMB94.1 million in the same period in 2015.
- Basic and diluted net income per American Depositary Share
("ADS") were RMB2.16 (US$0.32) and RMB2.05 (US$0.31),
respectively. Non-GAAP basic and Non-GAAP diluted net income per
ADS, which excluded share-based compensation expenses, were
RMB2.40 (US$0.36) and RMB2.28 (US$0.34),
respectively. Each ADS represents one Class A ordinary share.
- Total student enrollments, defined as the total number of new
students recruited and registered, in the third quarter of 2016
increased by 28.0% year-over-year to 30,818.
- Total course enrollments, defined as the cumulative number of
courses enrolled in by our students, in the third quarter of 2016
increased by 23.7% year-over-year to 29,586.
- Cash, cash equivalents and time deposits totaled RMB1,375.8 million (US$206.0 million) as of September 30, 2016, compared to RMB1,228.0 million as of December 31, 2015.
- Deferred revenue totaled RMB331.5
million (US$49.6 million) as
of September 30, 2016, compared to
RMB164.5 million as of December 31, 2015.
- Total seat capacity, defined as the total number of seats
available in our learning centers, increased by 21.0% to 50,270 as
of September 30, 2016, from 41,557 as
of September 30, 2015.
- Total number of learning centers increased to 138 as of
September 30, 2016, from 128 as of
September 30, 2015.
First Nine Months2016Financial and Operational
Highlights
- Net revenues increased by 39.9% year-over-year to RMB1,115.6 million (US$167.1 million)from RMB797.7 million in the same period in 2015
- Gross profit increased by 41.0% year-over-year to RMB789.9 million (US$118.3
million) from RMB560.1 million
in the same period in 2015.
- Operating income increased by 91.8% year-over-year to
RMB133.9 million (US$20.0 million) from RMB69.8 million in the same period in 2015.
Non-GAAP operating income, which excluded share-based compensation
expenses, increased by 89.8% year-over-year to RMB177.7 million (US$26.6
million) from RMB93.6 million
in the same period in 2015.
- Net income increased by 58.6% year-over-year to RMB139.1 million (US$20.8
million) from RMB87.7 million
in the same period in 2015.Non-GAAP net income, which excluded
share-based compensation expenses and loss on foreign currency
forward contract, increased by 75.5% year-over-year to RMB195.8 million (US$29.3
million) from RMB111.6 million
in the same period in 2015.
- Basic and diluted net income per American Depositary Share
("ADS") were RMB2.51 (US$0.38) and RMB2.37 (US$0.36),
respectively. Non-GAAP basic and Non-GAAP diluted net income per
ADS, which excluded share-based compensation expenses and loss on
foreign currency forward contract, were RMB3.54 (US$0.53)
and RMB3.34 (US$0.50), respectively.
- Total student enrollments during the first nine months of 2016
increased by 31.6% year-over-year to 80,595.
- Total course enrollments during the first nine months of 2016
increased by 34.6% year-over-year to 74,401.
"We are pleased to report another strong quarter in terms of
both growth and profitability," said Mr. Shaoyun Han, Tarena's Chairman and Chief
Executive Officer. "For the third quarter of 2016, we continued to
make solid progress on all fronts, given better course selections
for our students, positive job market dynamics and improved
operational efficiency. Our student enrollments for both IT and
non-IT courses grew strongly at 28.0% year over year to reach
30,818, which marks a record high. This can be attributable to the
execution of our core strategy to penetrate additional verticals
and extend our reach into new geographical areas and new consumer
segments. In the third quarter of 2016, we commenced our inaugural
class in Beijing, Guangzhou and Hangzhou for our new course in Virtual Reality
/Augmented Reality and opened 5 new learning centers in 5 cities,
including Huhhot, a second tier city we newly entered. Going
forward, we will continue to diversify our course offerings and
revenues."
"More importantly, we began to implement a series of initiatives
to further strengthen our position as a leading professional
education services provider. In the third quarter of 2016, we have
successfully cooperated with China Higher Education Publishing
House to launch textbooks in Java, Digital arts and Android and
forged joint major programs with Beijing Open University to deepen
the cooperation with universities and colleges in China. Also in the third quarter, we continued
to improve our employee productivity and operational efficiency by
streamlining our organizational structure, upgrading IT facilities
to promote communication and learning process, as well as
continuing to optimize our advertising spending. As the number of
college graduates in China has
risen to a record high of 7.7 million in 2016,Tarena has been well
positioned to capture the opportunities presented by this favorable
market environment to drive future growth," Mr. Han continued.
Mr. Yuduo Yang, Tarena's Chief Financial Officer, added,
"Despite the business expansion,
both of our gross profit margin and operating margin stabilized at
high level and we again delivered a strong growth in operating
profit. Operating profits in the third quarter of 2016 increased by
25.1%year-over-year while operating profits for the first nine
months of 2016 increased by 91.8% year-over-year. We will continue
to manage our business with a passion for driving efficiency and
bringing value to more students."
Third Quarter 2016 Results
Net Revenues
Net revenues increased by 29.4% to RMB481.0 million (US$72.0
million) in the third quarter of 2016, from RMB371.6 million in the same period in 2015. The
increase was primarily due to increased course enrollments and to a
lesser extent, an increase in the standard tuition fees.
Total course enrollments in the third quarter of 2016 increased
by 23.7% to 29,586 from 23,912 in the same period in 2015, which
was driven mainly by the number and the popularity of our course
offerings. The number of our course offerings increased from 14to
18 in the third quarter year-over-year while the total seat
capacity in our learning centers increased by 21.0% from 41,557 as
of September 30, 2015 to 50,270 as of
September 30, 2016, to cater to the
increased demand for our courses.
We also raised the standard tuition fees on selected courses by
RMB1,000 to RMB 2,000 per course since March 2016. We charge students enrolled through
the retail channel our standard tuition fee and provide students
enrolled through the university channel a discount of approximately
RMB4,000 per person per course. Our
student enrollment mix from retail and university channel was
84%/16% and 86%/14% in the third quarter of 2016 and 2015,
respectively.
Cost of Revenues
Cost of revenues grew by 31.0% to RMB120.9 million (US$18.1
million) in the third quarter of 2016, from RMB92.2 million in the same period in 2015. Along
with the business expansion, the increase in cost of revenues was
mainly due to an increase in personnel cost and welfare expenses
resulting from growing number of teaching and advisory staff at our
learning centers, rental cost resulting from higher seat capacity,
as well as depreciation expenses for our learning centers.
Gross Profit and Gross Margin
Gross profit increased by 28.9% to RMB360.1 million (US$53.9
million) in the third quarter of 2016, from RMB279.4 million in the same period in 2015.
Gross margin was flattish at 74.9% in the third quarter of 2016 as
compared with 75.2% in the same period in 2015. The slight decrease
in gross margin was mainly due to increased number of learning
centers and expansion of course offerings.
Operating Expenses
Total operating expenses increased by 30.8% to RMB246.3 million (US$36.9
million) in the third quarter of 2016, from RMB188.4 million in the same period in 2015.
Total non-GAAP operating expenses, which excluded share-based
compensation expenses, increased by 30.0% to RMB234.0 million (US$35.0
million) in the third quarter of 2016, from RMB179.9 million in the same period in 2015.
Total share-based compensation expenses allocated to the related
operating expenses increased by 45.9% to RMB12.3 million (US$1.8
million) in the third quarter of 2016, from RMB8.4 million in the same period in 2015.
Selling and marketing expenses increased by 48.6% to
RMB149.7 million (US$22.4 million) in the third quarter of 2016,
from RMB100.8 million in the same
period in 2015. The increase was due to an increase in personnel
cost and welfare expenses related to the growth in our selling and
marketing headcount, and marketing efforts as we expanded our
course offerings and network of learning centers.
General and administrative expenses increased by 7.4% to
RMB79.8 million (US$11.9 million) in the third quarter of 2016,
from RMB74.2 million in the same
period in 2015. The increase was mainly due to an increase in
compensation cost for our increased number of general and
administrative personnel to support our growing operations and an
increase in share-based compensation expenses. Non-GAAP general and
administrative expenses, which excluded share-based compensation
expenses, increased by 4.0% to RMB69.6
million (US$10.4 million),
from RMB66.9 million in the same
period in 2015.
Research and development expenses increased by 26.0% to
RMB16.8 million (US$2.5 million) in the third quarter of 2016,
from RMB13.3 million in the same
period in 2015. The increase was mainly due to an increase in
personnel cost and welfare expenses of our instructors allocated to
their content development activities for our courses, as well as
growing number of research and development staff as we expanded our
course offerings and operations.
Operating Income
Operating income increased by 25.1% to RMB113.8 million (US$17.0
million) in the third quarter of 2016, from RMB91.0 million in the same period in 2015.
Operating margin was 23.7% in the third quarter of 2016 as compared
to 24.5% in the same period in 2015. Non-GAAP operating income,
which excluded share-based compensation expenses, increased by
27.6% to RMB127.1 million
(US$19.0 million) in the third
quarter of 2016, from RMB99.6 million
in the same period in 2015. Non-GAAP operating margin remained
stable at 26.4% in the third quarter of 2016 as compared to 26.8%
in the same period in 2015.
Interest Income
Interest income was RMB4.3 million
(US$0.6 million) in the third quarter
of 2016, compared to RMB13.0 million
in the same period in 2015. Interest income in both periods
consisted of interest earned on our cash, cash equivalents and time
deposits in commercial banks and interest income recognized in
relation to our installment payment plan for students. The decrease
in interest income was primarily due to lower bank deposits and
interest rate, as well as lower tuition interest income in relation
to our installment payment plan for students.
Foreign Exchange Gain (Loss)
Foreign exchange gain was RMB1.3
million (US$0.2 million) in
the third quarter of 2016, compared to RMB21.0 million foreign exchange loss in the same
period in 2015. Due to the depreciation of China's RMB against U.S.
Dollar, the company has converted its offshore bank deposits
previously in RMB into US dollars under a foreign currency forward
contract. The contract had been settled in May 2016.
Income Tax Expense
Income tax expense was RMB4.7
million (US$0.7 million) in
the third quarter of 2016, compared to RMB1.6 million in the same period in 2015. The
increase was mainly due to an increase in the effective income tax
rate and higher taxable income.
Net Income
As a result of the foregoing, net income increased by 40.7% to
RMB120.3 million (US$18.0 million) in the third quarter of 2016,
from RMB85.5 million in the same
period in 2015. Non-GAAP net income, which excluded share-based
compensation expenses, increased by 42.0% year-over-year to
RMB133.6 million (US$20.0 million) from RMB94.1 million in the same period in 2015.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were RMB2.16 (US$0.32)
and RMB2.05 (US$0.31) respectively in the third quarter of
2016. Non-GAAP basic and Non-GAAP diluted net income per ADS, which
excluded share-based compensation expenses, were RMB2.40 (US$0.36)
and RMB2.28 (US$0.34), respectively.
Cash, Cash Equivalents and Time Deposits
Cash, cash equivalents and time deposits totaled RMB1,375.8 million (US$206.0 million) as of September 30, 2016, compared to RMB1,228.0 million as of December 31, 2015. In the second quarter of 2016,
the Company purchased an office building, mainly for teaching
purpose, and to a lesser extent, for administrative functions, with
a total consideration of approximately RMB114.6 million.
Cash Flow
Net operating cash flow for the third quarter of 2016 was
approximately RMB245.4 million
(US$36.8 million). Capital
expenditures for the quarter were RMB30.6
million (US$4.6 million).
Shares Issued and Outstanding
As of September 30, 2016, the
Company had 45,369,402 Class A and 10,574,896 Class B ordinary
shares outstanding. Each ADS represents one Class A ordinary
share.
Exchange Rate
The translation of RMB amounts for the third quarter ended
September 30, 2016, into US$ are
included solely for the convenience of readers and have been made
at the rate of RMB6.6778 to
US$1.00, the noon buying rate as of
September 30, 2016, in New York for cable transfers in RMB per US$ as
set forth in the daily statistical release of the People's Bank of
China. Such translations should not be construed as representations
that RMB amounts could be converted into U.S. dollars at that rate
or any other rate, or to be the amounts that would have been
reported under U.S. GAAP.
First Nine Months2016 Results
Net Revenues
Net revenues increased by 39.9% to RMB1,115.6 million (US$167.1 million) for the first nine months of
2016, from RMB797.7 million in the
same period in 2015. The increase was primarily due to increased
course enrollments and to a lesser extent, an increase in the
standard tuition fees.
Total course enrollments for the first nine months of 2016
increased by 34.6% to 74,401 from 55,264 in the same period in
2015, which was driven mainly by the number and the popularity of
our course offerings. We also raised the standard tuition fees on
selected courses by RMB1,000 to
RMB2,000 per course since March
2016.
Cost of Revenues
Cost of revenues grew by 37.1% to RMB325.7 million (US$48.8
million)in the first nine months of 2016, from RMB237.5 million in the same period in 2015.
Along with the business expansion, the increase in cost of revenues
was mainly due to an increase in personnel cost and welfare
expenses resulting from growing number of teaching and advisory
staff at our learning centers, rental cost resulting from higher
seat capacity, as well as depreciation expenses for our learning
centers.
Gross Profit and Gross Margin
Gross profit increased by 41.0% to RMB789.9 million (US$118.3
million) in the first nine months of 2016, from RMB560.1 million in the same period in 2015.
Gross margin increased to 70.8% for of 2016 from 70.2% in the same
period in 2015. The improvement in gross margin was mainly due to
increased standard tuition fees in RMB.
Operating Expenses
Total operating expenses increased by 33.8% to RMB656.0 million (US$98.2
million) in the first nine months of 2016, from RMB490.3 million in the same period in 2015.
Total non-GAAP operating expenses, which excluded share-based
compensation expenses, increased by 31.6% to RMB614.5 million (US$92.0
million) in the first nine months of 2016, from RMB467.0 million in the same period in 2015.
Total share-based compensation expenses allocated to the related
operating expenses increased by 77.8% to RMB41.5 million (US$6.2
million) in the first nine months of 2016, from RMB23.4 million in the same period in 2015.
Selling and marketing expenses increased by 39.9% to
RMB389.0 million (US$58.3 million) in the first nine months of
2016, from RMB278.1 million in the
same period in 2015. The increase was due to an increase in
personnel cost and welfare expenses related to the growth in our
selling and marketing headcount, and marketing efforts as we
expanded our course offerings and network of learning centers.
General and administrative expenses increased by 26.2% to
RMB222.9 million (US$33.4 million) in the first nine months of
2016, from RMB176.6 million in the
same period in 2015. The increase was mainly due to an increase in
compensation cost for our increased number of general and
administrative personnel to support our growing operations and an
increase in share-based compensation expenses. Non-GAAP general and
administrative expenses, which excluded share-based compensation
expenses, increased by 20.5% to RMB187.9
million (US$28.1 million),
from RMB156.0 million in the same
period in 2015.
Research and development expenses increased by 23.5% to
RMB44.1 million (US$6.6 million) in the first nine months of 2016,
from RMB35.7 million in the same
period in 2015. The increase was mainly due to an increase in
personnel cost and welfare expenses of our instructors allocated to
their content development activities for our courses, as well as
growing number of research and development staff as we expanded our
course offerings and operations.
Operating Income
Operating income increased by 91.8% to RMB133.9 million (US$20.0
million) in the first nine months of 2016, from RMB69.8 million in the same period in 2015.
Operating margin was 12.0% in the first nine months of 2016 as
compared to 8.7% in the same period in 2015. Non-GAAP operating
income, which excluded share-based compensation expenses, increased
by 89.8% to RMB177.7 million
(US$26.6 million) in the first nine
months of 2016, from RMB93.6 million
in the same period in 2015. Non-GAAP operating margin increased to
15.9% in the first nine months of 2016 as compared to 11.7% in the
same period in 2015.
Interest Income
Interest income was RMB18.6
million (US$2.8 million)in the
first nine months of 2016, compared to RMB30.4 million in the same period in 2015.
Interest income in both periods consisted of interest earned on our
cash, cash equivalents and time deposits in commercial banks and
interest income recognized in relation to our installment payment
plan for students. The decrease in interest income was primarily
due to lower bank deposits and interest rate, as well as lower
tuition interest income in relation to our installment payment plan
for students.
Foreign Exchange Gain (Loss)
Foreign exchange loss was RMB2.5
million (US$0.4 million) in
the first nine months of 2016, compared to RMB18.9 million foreign exchange loss in the same
period in 2015. Due to the depreciation of China's RMB against U.S.
Dollar, the company has converted its offshore bank deposits
previously in RMB into US dollars under a foreign currency forward
contract. The contract had been settled in May 2016.
Income Tax Expense
Income tax expense was RMB8.9
million (US$1.3 million) in
the first nine months of 2016, compared to RMB3.1 million in the same period in 2015. The
increase was mainly due to an increase in the effective income tax
rate and higher taxable income.
Net Income
As a result of the foregoing, net income increased by 58.6% to
RMB139.1 million (US$20.8 million) in the first nine months of
2016, from RMB87.7 million in the
same period in 2015. Non-GAAP net income, which excluded
share-based compensation expenses and loss on foreign currency
forward contract, increased by 75.5% year-over-year to RMB195.8 million (US$29.3
million) from RMB111.6 million
in the same period in 2015.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were RMB2.51 (US$0.38)
and RMB2.37 (US$0.36) respectively in the first nine months
of 2016. Non-GAAP basic and Non-GAAP diluted net income per ADS,
which excluded share-based compensation expenses and loss on
foreign currency forward contract, were RMB3.54 (US$0.53)
and RMB3.34 (US$0.50), respectively.
Business Outlook
Based on the Company's current estimates, total net revenues for
the fourth quarter of 2016 are expected to be between RMB450.0 million and RMB469.0 million, representing an increase of
18.3% to 23.3% on a year-over-year basis.
The Company also expects its total net revenues for the full
year of 2016 to be between RMB1,566.0
million and RMB1,585.0 million, representing an increase of
32.9% to 34.6% on a year-over-year basis. The latest net revenues
projection is higher than the original recasted full year 2016 net
revenues projection of between RMB1,528.0
million and RMB1,568.0 million, representing an increase of
29.7% and 33.1% on a year-over-year basis, which was issued in
August 2016.
This guidance is based on the current market conditions and
reflects the Company's current and preliminary estimates of market
and operating conditions, which are subject to change.
Conference Call
The Company will host a conference call and live webcast to
discuss its financial results for the third quarter ended
September 30, 2016 at 8:00PM U.S. Eastern Time on Monday, November 21, 2016 (9:00AM Beijing Time on Tuesday, November 22, 2016).
The dial-in details for the live conference call are as
follows:
United States:
18552983404
Hong Kong: 800 905
927
China Mainland: 400 120 0539
Singapore: 800 616 3222
Taiwan: +886 2 7708 3282
United Kingdom: 800 015 9725
International: +65 6823
2299
Conference ID: 9818757
A replay of the call will be available approximately 2 hours
after the conclusion of the conference call through November 29, 2016. The dial-in details for the
replay are:
United States: 1866 846
0868
Hong Kong: 800 966
697
China Mainland: 400 184 2240
Singapore: 800 616 2127
Taiwan: 801 232 352
United Kingdom: 800 169 7301
Conference ID: 9818757
Additionally, a live and archived webcast of this call will be
available on the Investor Relations section of Tarena's website at
http://ir.tedu.cn.
Safe Harbor Statement
This press release contains forward-looking statements made
under the "safe harbor" provisions of Section 21E of the Securities
Exchange Act of 1934, as amended, and 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," "confident" and similar statements. Tarena 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 report to shareholders, in press releases
and other written materials and in oral statements made by its
officers, directors or employees to third parties. Any statements
that are not historical facts, including the business outlook for
the third quarter of 2016 and for the full fiscal year 2016
and statements about Tarena's beliefs and expectations, are
forward-looking statements. Many factors, risks and uncertainties
could cause actual results to differ materially from those in the
forward-looking statements. Such factors and risks include, but not
limited to the following: Tarena's goals and strategies; its future
business development, financial condition and results of
operations; its ability to continue to attract students to enroll
in its courses; its ability to continue to recruit, train and
retain qualified instructors and teaching assistants; its ability
to continually tailor its curriculum to market demand and enhance
its courses to adequately and promptly respond to developments in
the professional job market; its ability to maintain or enhance its
brand recognition, its ability to maintain high job placement rate
for its students, and its ability to maintain cooperative
relationships with financing service providers for student loans.
Further information regarding these and other risks, uncertainties
or factors is included in Tarena's filings with the U.S. Securities
and Exchange Commission. All information provided in this press
release is current as of the date of the press release, and Tarena
does not undertake any obligation to update such information,
except as required under applicable law.
About Tarena International, Inc.
Tarena International, Inc. (NASDAQ: TEDU) is a leading provider
of professional education services in China. Through its innovative education
platform combining live distance instruction, classroom-based
tutoring and online learning modules, Tarena offers professional
education courses in twelve IT subjects and three non-IT
subjects.Tarena also offers three kid education programs. Its
professional education courses provide students with practical
skills to prepare them for jobs in industries with significant
growth potential and strong hiring demand. Since its inception in
2002, Tarena has trained over 353,000 students, cooperated with
more than 670 universities and colleges and placed students with
approximately 90,000 corporate employers in a variety of
industries. For further information, please visit
http://ir.tedu.cn.
About Non-GAAP Financial Measures
Beginning in the first quarter of 2016, the Company revised its
non-GAAP financial measures to exclude gain or loss on derivative
instruments, goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, in addition
to its historical practice of excluding share-based compensation
expenses for non-GAAP results.
To supplement Tarena's consolidated financial results presented
in accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Tarena's management uses non-GAAP measures of
cost of revenues, operating expenses, operating income (loss), net
income (loss), and net income (loss) per ADS, which are adjusted
from results based on GAAP to exclude the share-based compensation
expenses, gain or loss on derivative instruments, goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact. These non-GAAP financial
measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. In addition, calculation of the
non-GAAP financial measures may be different from the calculation
used by other companies, and therefore comparability may be
limited.
Tarena's management believes that excluding the share-based
compensation expenses, gain or loss on derivative instruments,
goodwill impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact provides meaningful
supplemental information regarding our performance and liquidity by
excluding certain items identified as non-recurring and infrequent
in nature, and non-cash charges. The amount of share-based
compensation expenses, gain or loss on derivative instruments,
goodwill impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact are not built into the
Company's annual budgets and quarterly forecasts, which generally
will be the basis for information Tarena provides to analysts and
investors as guidance for future operating performance.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Tarena's current financial
performance and prospects for the future. A limitation of using
non-GAAP cost of revenues, operating expenses, operating income
(loss) and net income (loss), excluding the share-based
compensation expenses, gain or loss on derivative instruments,
goodwill impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact is that the share-based
compensation charge has been and will continue to be a recurring
expense in the Company's business for the foreseeable future, and
gain or loss on derivative instruments, goodwill impairment,
impairment of intangibles via acquisitions of businesses and the
related tax impact may recur in the future. In order to mitigate
these limitations the Company has provided specific information
regarding the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables include details on the reconciliation between
GAAP financial measures that are most directly comparable to the
non-GAAP financial measures the Company has presented.
For further information, please contact:
Helen Song
Investor Relations
Tarena International Inc.
Tel: +8610 56219451
Email: ir@tedu.cn
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except share data and per share data)
|
|
|
As
of
|
|
December 31,
|
|
September 30,
|
|
September 30,
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
513,938
|
|
1,024,106
|
|
153,360
|
Time
deposits
|
449,878
|
|
239,723
|
|
35,898
|
Restricted time
deposits
|
150,000
|
|
—
|
|
—
|
Accounts receivable,
net of allowance for doubtful accounts
|
146,999
|
|
106,031
|
|
15,878
|
Prepaid expenses and
other current assets
|
66,103
|
|
152,387
|
|
22,820
|
Total current
assets
|
1,326,918
|
|
1,522,247
|
|
227,956
|
Time
deposits
|
114,227
|
|
111,958
|
|
16,766
|
Accounts receivable,
net of allowance for doubtful accounts
|
7,771
|
|
2,111
|
|
316
|
Property and
equipment, net
|
127,864
|
|
262,485
|
|
39,307
|
Goodwill
|
—
|
|
3,365
|
|
504
|
Cost method
investments
|
24,000
|
|
26,000
|
|
3,893
|
Other non-current
assets
|
53,111
|
|
67,394
|
|
10,092
|
Total
assets
|
1,653,891
|
|
1,995,560
|
|
298,834
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
4,413
|
|
7,941
|
|
1,189
|
Amounts due to a
related party
|
879
|
|
267
|
|
40
|
Income taxes
payable
|
56,293
|
|
75,732
|
|
11,341
|
Deferred
revenue
|
164,524
|
|
331,501
|
|
49,642
|
Accrued expenses and
other current liabilities
|
79,835
|
|
119,077
|
|
17,832
|
Total current
liabilities
|
305,944
|
|
534,518
|
|
80,044
|
Other non-current
liabilities
|
9,333
|
|
7,562
|
|
1,132
|
Total
liabilities
|
315,277
|
|
542,080
|
|
81,176
|
|
|
|
|
|
|
Commitments and
contingencies
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Class A ordinary
shares
|
276
|
|
289
|
|
43
|
Class B ordinary
shares
|
98
|
|
98
|
|
15
|
Treasury
stock(a)
|
(49,355)
|
|
(93,761)
|
|
(14,041)
|
Additional paid-in
capital
|
907,018
|
|
969,183
|
|
145,135
|
Accumulated other
comprehensive income
|
30,232
|
|
42,231
|
|
6,324
|
Retained
earnings
|
450,345
|
|
535,440
|
|
80,182
|
Total
shareholders' equity
|
1,338,614
|
|
1,453,480
|
|
217,658
|
Total liabilities
and shareholders' equity
|
1,653,891
|
|
1,995,560
|
|
298,834
|
|
Note:
|
(a) On August 20, 2015, the
Board of Directors approved a share repurchase plan under which the
Company may repurchase up to US$20 (RMB 133,556,000) of its shares
over the next 12 months. According to the plan, the share
repurchases may be made from time to time on the open market at
prevailing market prices, in privately negotiated transactions, in
block trades and/or through other legally permissible means,
depending on market conditions and in accordance with applicable
rules and regulations. As of September 30, 2016, the Company
repurchased 1,574,980 Class A ordinary shares from the open market
with the consideration of US$14.4 (RMB 93,761,156).
|
|
|
|
|
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(in thousands,
except share data and per share data)
|
|
|
For the Three
Months Ended September 30
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
US$
|
Net
revenues
|
371,605
|
|
480,959
|
|
72,024
|
Cost of
revenues(a)
|
(92,237)
|
|
(120,856)
|
|
(18,098)
|
Gross
profit
|
279,368
|
|
360,103
|
|
53,926
|
Selling and marketing
expenses(a)
|
(100,781)
|
|
(149,722)
|
|
(22,421)
|
General and
administrative expenses(a)
|
(74,244)
|
|
(79,774)
|
|
(11,946)
|
Research and
development expenses(a)
|
(13,338)
|
|
(16,807)
|
|
(2,517)
|
Operating
income
|
91,005
|
|
113,800
|
|
17,042
|
Interest
income
|
12,985
|
|
4,252
|
|
637
|
Other
income
|
4,052
|
|
5,721
|
|
857
|
Foreign exchange
gain/(loss)
|
(20,996)
|
|
1,264
|
|
189
|
Income before
income taxes
|
87,046
|
|
125,037
|
|
18,725
|
Income tax
expense
|
(1,566)
|
|
(4,739)
|
|
(710)
|
Net
income
|
85,480
|
|
120,298
|
|
18,015
|
Net income
attributable to Class A and Class B ordinary
shareholders
|
85,480
|
|
120,298
|
|
18,015
|
|
|
|
|
|
|
Net income per
Class A and Class B ordinary share:
|
|
|
|
|
|
Basic
|
1.55
|
|
2.16
|
|
0.32
|
|
1.45
|
|
2.05
|
|
0.31
|
Diluted
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
Basic
|
55,100,731
|
|
55,722,319
|
|
55,722,319
|
|
58,807,037
|
|
58,649,835
|
|
58,649,835
|
Diluted
|
|
|
|
|
|
|
Net
income
|
85,480
|
|
120,298
|
|
18,015
|
Other
comprehensive income
|
|
|
|
|
|
Foreign currency
translation adjustment, net of nil income taxes
|
23,957
|
|
2,358
|
|
353
|
Unrealized gain on
available for sale securities, net of RMB37 income taxes
|
-
|
|
208
|
|
31
|
Comprehensive
income
|
109,437
|
|
122,864
|
|
18,399
|
|
Notes:
|
(a)
Includes share-based compensation expense as follows:
|
|
|
For the Three
Months Ended September 30
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
US$
|
Cost of
revenues
|
181
|
|
1,017
|
|
152
|
Selling and marketing
expenses
|
538
|
|
971
|
|
145
|
General and
administrative expenses
|
7,319
|
|
10,180
|
|
1,525
|
Research and
development expenses
|
566
|
|
1,137
|
|
170
|
|
|
|
|
|
|
|
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(in thousands,
except share data and per share data)
|
|
|
For the Nine
Months Ended September 30
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
US$
|
Net
revenues
|
797,664
|
|
1,115,566
|
|
167,056
|
Cost of
revenues(a)
|
(237,536)
|
|
(325,675)
|
|
(48,770)
|
Gross
profit
|
560,128
|
|
789,891
|
|
118,286
|
Selling and marketing
expenses(a)
|
(278,090)
|
|
(389,035)
|
|
(58,258)
|
General and
administrative expenses(a)
|
(176,575)
|
|
(222,923)
|
|
(33,383)
|
Research and
development expenses(a)
|
(35,672)
|
|
(44,063)
|
|
(6,598)
|
Operating
income
|
69,791
|
|
133,870
|
|
20,047
|
Interest
income
|
30,351
|
|
18,612
|
|
2,787
|
Other
income
|
9,512
|
|
10,899
|
|
1,632
|
Loss from fair value
change of foreign currency forward
|
-
|
|
(12,898)
|
|
(1,931)
|
Foreign exchange
loss
|
(18,852)
|
|
(2,481)
|
|
(372)
|
Income before
income taxes
|
90,802
|
|
148,002
|
|
22,163
|
Income tax
expense
|
(3,062)
|
|
(8,881)
|
|
(1,330)
|
Net
income
|
87,740
|
|
139,121
|
|
20,833
|
Net income
attributable to Class A and Class B ordinary
shareholders
|
87,740
|
|
139,121
|
|
20,833
|
|
|
|
|
|
|
Net income per
Class A and Class B ordinary share:
|
|
|
|
|
|
Basic
|
1.64
|
|
2.51
|
|
0.38
|
|
1.50
|
|
2.37
|
|
0.36
|
Diluted
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
Basic
|
53,537,533
|
|
55,393,174
|
|
55,393,174
|
|
58,561,904
|
|
58,673,904
|
|
58,673,904
|
Diluted
|
|
|
|
|
|
|
Net
income
|
87,740
|
|
139,121
|
|
20,833
|
Other
comprehensive income
|
|
|
|
|
|
Foreign currency
translation adjustment, net of nil income taxes
|
23,372
|
|
11,791
|
|
1,766
|
Unrealized gain on
available for sale securities, net of RMB37 income taxes
|
—
|
|
208
|
|
31
|
Comprehensive
income
|
111,112
|
|
151,120
|
|
22,630
|
|
Notes:
|
(a) Includes
share-based compensation expense as follows:
|
|
|
For the Nine
Months Ended September 30
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
US$
|
Cost of
revenues
|
471
|
|
2,281
|
|
342
|
Selling and marketing
expenses
|
1,373
|
|
3,038
|
|
455
|
General and
administrative expenses
|
20,555
|
|
34,987
|
|
5,239
|
Research and
development expenses
|
1,434
|
|
3,507
|
|
525
|
|
|
|
|
|
|
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
|
(in thousands,
except share data and per share data)
|
|
|
For the Three
Months Ended September 30
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
US$
|
GAAP Cost of
revenues
|
92,237
|
|
120,856
|
|
18,098
|
Share-based
compensation expense in cost of revenues
|
181
|
|
1,017
|
|
152
|
Non-GAAP Cost of
revenues
|
92,056
|
|
119,839
|
|
17,946
|
|
|
|
|
|
|
GAAP Selling and
marketing expenses
|
100,781
|
|
149,722
|
|
22,421
|
Share-based
compensation expense in selling and marketing expenses
|
538
|
|
971
|
|
145
|
Non-GAAP Selling
and marketing expenses
|
100,243
|
|
148,751
|
|
22,276
|
|
|
|
|
|
|
GAAP General and
administrative expenses
|
74,244
|
|
79,774
|
|
11,946
|
Share-based
compensation expense in general and administrative
expenses
|
7,319
|
|
10,180
|
|
1,525
|
Non-GAAP General
and administrative expenses
|
66,925
|
|
69,594
|
|
10,421
|
|
|
|
|
|
|
GAAP Research and
development expenses
|
13,338
|
|
16,807
|
|
2,517
|
Share-based
compensation expense in research and development
expenses
|
566
|
|
1,137
|
|
170
|
Non-GAAP Research
and development expenses
|
12,772
|
|
15,670
|
|
2,347
|
|
|
|
|
|
|
Operating
income
|
91,005
|
|
113,800
|
|
17,042
|
Share-based
compensation expenses
|
8,604
|
|
13,305
|
|
1,992
|
Non-GAAP Operating
income
|
99,609
|
|
127,105
|
|
19,034
|
|
|
|
|
|
|
Net
income
|
85,480
|
|
120,298
|
|
18,015
|
Share-based
compensation expenses
|
8,604
|
|
13,305
|
|
1,992
|
Non-GAAP Net
income
|
94,084
|
|
133,603
|
|
20,007
|
Non-GAAP net
income attributable to Class A and Class B ordinary
shareholders
|
94,084
|
|
133,603
|
|
20,007
|
|
|
|
|
|
|
Non-GAAP net
income per Class A and Class B ordinary
share(a)
|
|
|
|
|
|
Basic
|
1.71
|
|
2.40
|
|
0.36
|
Diluted
|
1.60
|
|
2.28
|
|
0.34
|
Weighted average
number of ordinary shares outstanding used in calculating Non-GAAP
net income per Class A and Class B ordinary
share(a)
|
|
|
|
|
|
Basic
|
55,100,731
|
|
55,722,319
|
|
55,722,319
|
Diluted
|
58,807,037
|
|
58,649,835
|
|
58,649,835
|
|
Notes:
|
(a) The Non-GAAP net
income per share is computed using Non-GAAP net income attributable
to ordinary shareholders and the same number of ordinary shares
used in GAAP basic and diluted net income per share
calculation.
|
(b) There was no tax
impact of share-based compensation expenses for the third quarter
ended September 30, 2016 and 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TARENA
INTERNATIONAL, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
|
(in thousands,
except share data and per share data)
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
US$
|
GAAP Cost of
revenues
|
237,536
|
|
325,675
|
|
48,770
|
Share-based
compensation expense in cost of revenues
|
471
|
|
2,281
|
|
342
|
Non-GAAP Cost of
revenues
|
237,065
|
|
323,394
|
|
48,428
|
|
|
|
|
|
|
GAAP Selling and
marketing expenses
|
278,090
|
|
389,035
|
|
58,258
|
Share-based
compensation expense in selling and marketing expenses
|
1,373
|
|
3,038
|
|
455
|
Non-GAAP Selling
and marketing expenses
|
276,717
|
|
385,997
|
|
57,803
|
|
|
|
|
|
|
GAAP General and
administrative expenses
|
176,575
|
|
222,923
|
|
33,383
|
Share-based
compensation expense in general and administrative
expenses
|
20,555
|
|
34,987
|
|
5,239
|
Non-GAAP General
and administrative expenses
|
156,020
|
|
187,936
|
|
28,144
|
|
|
|
|
|
|
GAAP Research and
development expenses
|
35,672
|
|
44,063
|
|
6,598
|
Share-based
compensation expense in research and development
expenses
|
1,434
|
|
3,507
|
|
525
|
Non-GAAP Research
and development expenses
|
34,238
|
|
40,556
|
|
6,073
|
|
|
|
|
|
|
Operating
income
|
69,791
|
|
133,870
|
|
20,047
|
Share-based
compensation expenses
|
23,833
|
|
43,813
|
|
6,561
|
Non-GAAP Operating
income
|
93,624
|
|
177,683
|
|
26,608
|
|
|
|
|
|
|
Net
income
|
87,740
|
|
139,121
|
|
20,833
|
Share-based
compensation expenses
|
23,833
|
|
43,813
|
|
6,561
|
Loss on foreign
currency forward contract
|
—
|
|
12,898
|
|
1,931
|
Non-GAAP Net
income
|
111,573
|
|
195,832
|
|
29,325
|
Non-GAAP net
income attributable to Class A and Class B ordinary
shareholders
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per Class A and Class B ordinary
share(a)
|
|
|
|
|
|
Basic
|
2.08
|
|
3.54
|
|
0.53
|
Diluted
|
1.91
|
|
3.34
|
|
0.50
|
Weighted average
number of ordinary shares outstanding used in calculating Non-GAAP
net income per Class A and Class B ordinary
share(a)
|
|
|
|
|
|
Basic
|
53,537,533
|
|
55,393,174
|
|
55,393,174
|
Diluted
|
58,561,904
|
|
58,673,904
|
|
58,673,904
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
(a) The Non-GAAP net
income per share is computed using Non-GAAP net income attributable
to ordinary shareholders and the same number of ordinary shares
used in GAAP basic and diluted net income per share
calculation.
|
(b) There was no tax
impact of share-based compensation expenses and loss on foreign
currency forward contract for the nine months ended September 30,
2016 and 2015.
|
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visit:http://www.prnewswire.com/news-releases/tarena-international-inc-announces-third-quarter-2016-results-300366752.html
SOURCE Tarena International, Inc.