Quarterly Net Revenues Increased by 15.9%
Year-Over-Year
Quarterly Operating Income Increased by
22.4% Year-Over-Year
Quarterly Net Income Attributable to
New Oriental Increased by 41.4% Year-Over-Year
BEIJING, April 21, 2020 /PRNewswire/ -- New Oriental
Education & Technology Group Inc. (the "Company" or "New
Oriental") (NYSE: EDU), the largest provider of private educational
services in China, today announced
its unaudited financial results for the third fiscal quarter ended
February 29, 2020, which is the third
quarter of New Oriental's fiscal year 2020.
Financial Highlights for the Third Fiscal Quarter Ended
February 29, 2020
- Total net revenues increased by 15.9% year-over-year to
US$923.2 million for the third fiscal
quarter of 2020.
- Operating income increased by 22.4% year-over-year to
US$117.3 million for the third fiscal
quarter of 2020.
- Net income attributable to New Oriental increased by 41.4%
year-over-year to US$137.7 million
for the third fiscal quarter of 2020.
Key Financial Results
(in thousands US$,
except per ADS(1) data)
|
3Q
FY2020
|
3Q
FY2019
|
% of
change
|
Net
revenues
|
923,221
|
796,722
|
15.9%
|
Operating income/
(loss)
|
117,253
|
95,780
|
22.4%
|
Non-GAAP operating
income/ (loss) (2)(3)
|
134,802
|
113,769
|
18.5%
|
Net income/ (loss)
attributable to New Oriental
|
137,715
|
97,411
|
41.4%
|
Non-GAAP net income
attributable to New Oriental (2)(3)
|
148,502
|
108,873
|
36.4%
|
Net income/ (loss)
per ADS attributable to New Oriental - basic
|
0.87
|
0.62
|
41.0%
|
Net income/ (loss)
per ADS attributable to New Oriental - diluted
|
0.86
|
0.61
|
40.8%
|
Non-GAAP net income
per ADS attributable to New Oriental -
basic(3)(4)
|
0.94
|
0.69
|
36.0%
|
Non-GAAP net income
per ADS attributable to New Oriental -
diluted(3)(4)
|
0.93
|
0.69
|
35.8%
|
|
|
|
|
(in thousands US$,
except per ADS(1) data)
|
9M
FY2020
|
9M
FY2019
|
% of
change
|
Net
revenues
|
2,780,209
|
2,253,640
|
23.4%
|
Operating income/
(loss)
|
388,748
|
228,562
|
70.1%
|
Non-GAAP operating
income/ (loss) (2)(3)
|
428,532
|
274,158
|
56.3%
|
Net income/ (loss)
attributable to New Oriental
|
400,142
|
194,817
|
105.4%
|
Non-GAAP net income
attributable to New Oriental (2)(3)
|
435,650
|
316,005
|
37.9%
|
Net income/ (loss)
per ADS attributable to New Oriental - basic
|
2.53
|
1.23
|
105.5%
|
Net income/ (loss)
per ADS attributable to New Oriental - diluted
|
2.51
|
1.23
|
104.8%
|
Non-GAAP net income
per ADS attributable to New Oriental -
basic(3)(4)
|
2.75
|
1.99
|
37.9%
|
Non-GAAP net income
per ADS attributable to New Oriental -
diluted(3)(4)
|
2.73
|
1.99
|
37.4%
|
|
|
|
|
|
(1) Each
ADS represents one common share.
|
(2) GAAP
represents Generally Accepted Accounting Principles in the United
States of America.
|
(3) New
Oriental provides net income attributable to New Oriental,
operating income and net income per ADS attributable
to New Oriental on a non-GAAP basis that excludes share-based
compensation expenses and loss from fair value
change of long-term investments to provide supplemental information
regarding its operating performance. For more
information on these non-GAAP financial measures, please see the
section captioned "About Non-GAAP Financial
Measures" and the tables captioned "Reconciliations of Non-GAAP
Measures to the Most Comparable GAAP
Measures" set forth at the end of this release.
|
(4) The
Non-GAAP net income per ADS is computed using Non-GAAP net income
and the same number of shares and
ADSs used in GAAP basic and diluted EPS calculation.
|
Operating Highlights for the Third Fiscal Quarter Ended
February 29, 2020
- Total student enrollments in academic subjects tutoring and
test preparation courses increased by 2.3% year-over-year to
approximately 1,606,100 for the third fiscal quarter of 2020.
- The total number of schools and learning centers was 1,416 as
of February 29, 2020, an increase of
252 compared to 1,164 as of February 28,
2019, and an increase of 112 compared to 1,304 as of
November 30, 2019. The total number
of schools was 99 as of February 29,
2020.
Michael Yu, New Oriental's
Executive Chairman, commented, "Despite the challenges posed by the
outbreak of COVID-19 in China, we recorded a top line growth of 15.9%,
or 18.7% if measured in Renminbi for the third quarter of fiscal
year 2020. The K-12 after-school tutoring business recorded a
year-over-year revenue growth of approximately 24%, or 27% if
measured in Renminbi. Furthermore, our U-Can middle and high school
all-subjects after-school tutoring business grew by approximately
23%, or 26% if measured in Renminbi, while our POP Kids program
achieved a growth of approximately 26%, or 29% if measured in
Renminbi. From the end of January, we stopped the operation of all
learning centers nationwide and effectively moved our offline
classes to small size online live broadcasting classes through the
self-developed OMO (online merging offline) system, which has
played a fundamental role in cushioning the impact on our service
and operation. We estimate that the COVID-19 pandemic negatively
impacted our top line growth by 8% to 10% for this quarter, as we
experienced higher-than-normal refund rates from cancellations and
deferments in enrollments for the winter classes from registered
students in February. Due to the recent outbreak of COVID-19
pandemics around the globe, we expect the impact on our business as
well as the entire education industry in China will last over the coming one to two
quarters, especially on overseas related businesses including test
preparation and consulting business, which have been unavoidably
affected by cancellation of overseas exams, suspension of overseas
schools and restrictions on travels. That said, on the other hand,
we are also seeing an effective control of the pandemic in
China and are pleased to hear the
announcement of public school resumption plans which have shed a
positive light on our business domestically."
Mr. Yu continued, "Although we are facing the negative impacts
from the pandemics for the near term, we remain committed to
ensuring the best learning experience and teaching quality to our
customers during the challenging time. We remain optimistic of a
brighter prospects of our business over the long run. We are
confident that with New Oriental's leading brand, superior
education product and system and the best teacher resources, we
will keep taking market share and continue to be a leader in
China's huge after-school tutoring
and training market."
Chenggang Zhou, New Oriental's
Chief Executive Officer, added, "During the third fiscal quarter,
notwithstanding the challenges to daily operations posed by the
COVID-19 outbreak, we remained committed to carry out our expansion
plan during the quarter and we added a net of 110 learning centers
in existing cities and two new training schools in the city of
Zhangjiagang and Nanjing. By the
end of this quarter, the total square meters of classroom area
increased by approximately 30% year-over-year, 11%
quarter-over-quarter and 21% comparing with the end of fiscal year
2019. As we expect the industry will undergo a wave of market
consolidation once the COVID-19 pandemic fades as certain players
may lack financial and digital capabilities to sustain their
operations, we believe our fresh offline facilities and strong
financial capacity will prepare us to further take market share and
strengthen our market-leading position and penetration."
Mr. Zhou continued, "Thanks to our continuous effort in
upgrading our OMO system in recent years, we accomplished a prompt
migration from offline classroom teaching to online live
broadcasting for all customers with online class size the same as
offline classes and interactive features highly similar to offline
classes. This enabled us to minimize the impact posed by the
COVID-19 outbreak and achieve such encouraging results this
quarter. We will continue to upgrade our technology platforms and
broaden the usage of online tools and content in our OMO system for
all business lines throughout the whole network, as well as further
develop the best teaching content and courseware to cater to online
and offline integrated education method. At the same time, we will
provide more advanced training programs to our teachers to enhance
their online and offline integrated teaching skills in response to
the growing demand."
Stephen Zhihui Yang, New
Oriental's Chief Financial Officer, commented, "Due to the negative
impact from the COVID-19 pandemic, our gross margin for the quarter
was 56.8%, down 80 basis points year-over-year. Our Non-GAAP
operating margin for the quarter was 14.6%, up 30 basis points
year-over-year, and Non-GAAP net margin for the quarter was 16.1%,
up 240 basis points year-over-year. In addition to the direct
impact on bottom line from the 8% to 10% shortage of revenue
growth, we also incurred some incremental IT cost to support the
migration of offline classes to online. In order to minimize the
negative impact from the COVID-19 pandemic on our bottom line, we
actively adjusted our operational strategy and made more efforts on
cost control and reducing expenditures, especially for business
lines facing bigger negative impact in the near term. We believe
that our continuous efforts will sustain us through the crisis
and hopeful that the adverse effects on our business from the
pandemic will subside gradually."
Financial Results for the Third Fiscal Quarter Ended
February 29, 2020
Net Revenues
For the third fiscal quarter of 2020, New Oriental reported net
revenues of US$923.2 million,
representing a 15.9% increase year-over-year. Net revenues from
educational programs and services for the third fiscal quarter were
US$845.7 million, representing a
16.3% increase year-over-year. The growth was mainly driven by
increases in student enrollments in academic subjects tutoring
and test preparation courses in the recent two quarters.
Total student enrollments in academic subjects tutoring and test
preparation courses in the third fiscal quarter of 2020 increased
by 2.3% year-over-year to approximately 1,606,100. The
lower-than-normal increase in the number of student enrollments is
primarily due to a big portion of enrollments for the winter
semester falling into the second fiscal quarter because of the
earlier timing of Chinese New Year this year compared with last
year, as well as the higher-than-normal cancelation for winter
classes. The outbreak of COVID-19 has also caused challenges on
acquiring new customers in the second half of the quarter while the
enrollment for classes in Q4 and summer classes have also been
delayed.
Operating Costs and Expenses
Operating costs and expenses for the quarter were US$806.0 million, representing a 15.0%
increase year-over-year. Non-GAAP operating costs and expenses for
the quarter, which exclude share-based compensation expenses, were
US$788.4 million, representing a
15.4% increase year-over-year.
- Cost of revenues increased by 18.1% year-over-year to
US$398.6 million, primarily due to
increases in teachers' compensation for more teaching hours and
higher rental costs for the increased number of schools and
learning centers in operation.
- Selling and marketing expenses increased by 35.2%
year-over-year to US$118.2 million,
primarily due to a significant increase of promotion expenses
derived from offering free large size online live broadcasting
classes to the public. Another reason is the addition of a number
of customer service representatives and marketing staff with the
aim of capturing the new market opportunity during COVID-19
pandemic, especially for new initiatives in K-12 tutoring on our
pure online education platform, Koolearn.com.
- General and administrative expenses for the quarter
increased by 4.8% year-over-year to US$289.1
million. Non-GAAP general and administrative expenses, which
exclude share-based compensation expenses, were US$273.3 million, representing a 5.9% increase
year-over-year.
Total share-based compensation expenses, which were allocated to
related operating costs and expenses, decreased by 2.4% to
US$17.5 million in the third
fiscal quarter of 2020.
Operating Income and Operating Margin
Operating income was US$117.3 million, representing a 22.4%
increase year-over-year. Non-GAAP income from operations for the
quarter was US$134.8 million,
representing an 18.5% increase year-over-year.
Operating margin for the quarter was 12.7%, compared to
12.0% in the same period of the prior fiscal year. Non-GAAP
operating margin, which excludes share-based compensation expenses,
for the quarter was 14.6%, compared to 14.3% in the same period of
the prior fiscal year.
Net Income and EPS
Net income attributable to New Oriental for the quarter was
US$137.7 million, representing a
41.4% increase from the same period of the prior fiscal year. Basic
and diluted earnings per ADS attributable to New Oriental were
US$0.87 and US$0.86, respectively.
Non-GAAP Net Income and Non-GAAP EPS
Non-GAAP net income attributable to New Oriental for the quarter
was US$148.5 million,
representing a 36.4% increase from the same period of the prior
fiscal year. Non-GAAP basic and diluted earnings per ADS
attributable to New Oriental were US$0.94 and US$0.93, respectively.
Cash Flow
Net operating cash flow for the third fiscal quarter of 2020 was
approximately US$39.7 million.
Capital expenditures for the quarter were US$103.2 million, which were primarily
attributable to opening of 127 facilities and renovations at
existing learning centers.
Balance Sheet
As of February 29, 2020, New
Oriental had cash and cash equivalents of US$1,057.1 million, as compared to
US$1,414.2 million as of May 31, 2019. In addition, the Company had
US$269.2 million in term
deposits, US$2,241.0 million in
short-term investment.
New Oriental's deferred revenue balance, which is cash collected
from registered students for courses and recognized proportionally
as revenue as the instructions are delivered, at the end of the
third quarter of fiscal year 2020 was US$1,375.0 million, an increase of 15.4% as
compared to US$1,191.8 million
at the end of the third quarter of fiscal year 2019.
Financial Results for the Nine Months Ended February 29, 2020
For the first nine months of fiscal year 2020, New Oriental
reported net revenues of US$2,780.2
million, representing a 23.4% increase year-over-year.
Total student enrollments in academic subjects tutoring and test
preparation courses in the first nine months of fiscal year 2020
increased by 42.3% to approximately 8,004,500.
Income from operations for the first nine months of fiscal year
2020 was US$388.7 million,
representing a 70.1% increase year-over-year. Non-GAAP income from
operations for the first nine months of fiscal year 2020 was
US$428.5 million, representing a
56.3% increase year-over-year.
Operating margin for the first nine months of fiscal year 2020
was 14.0%, compared to 10.1% for the same period of the prior
fiscal year. Non-GAAP operating margin, which excludes share-based
compensation expenses for the first nine months of fiscal year
2020, was 15.4%, compared to 12.2% for the same period of the prior
fiscal year.
Net income attributable to New Oriental for the first nine
months of fiscal year 2020 was US$400.1
million, representing a 105.4% increase year-over-year.
Basic and diluted net income per ADS attributable to New Oriental
for the first nine months of fiscal year 2020 amounted to
US$2.53 and US$2.51, respectively.
Non-GAAP net income attributable to New Oriental for the first
nine months of fiscal year 2020 was US$435.7
million, representing a 37.9% increase year-over-year.
Non-GAAP basic and diluted net income per ADS attributable to New
Oriental for the first nine months of fiscal year 2020 amounted to
US$2.75 and US$2.73 respectively.
Outlook for Fourth Quarter of Fiscal Year 2020
New Oriental expects total net revenues in the fourth quarter of
fiscal year 2020 (March 1, 2020 to
May 31, 2020) to be in the range of
US$774.0 million to US$806.2 million, representing
year-over-year decline in the range of 8% to 4%.
The projected decline of revenue in our functional currency
Renminbi is expected to be in the range of 4% to 0% for the fourth
quarter of fiscal year 2020.
We expect the impact on our business from the outbreak
of COVID-19 pandemics around the globe will continue
during our fourth fiscal quarter, especially on overseas related
businesses including test preparation and consulting
business. The exchange rate used to calculate expected
revenues for the fourth quarter of fiscal year 2020 is 7.07. The
historical exchange rate used to calculate revenues for the fourth
quarter of fiscal year 2019 was 6.76.
This forecast reflects New Oriental's current and preliminary
view, which is subject to change.
Conference Call Information
New Oriental's management will host an earnings conference call
at 8 AM on April 21, 2020, U.S. Eastern Time (8 PM on April 21,
2020, Beijing/Hong Kong
Time).
Please register in advance of the conference, using the link
provided below. Upon registering, you will be provided with
participant dial-in numbers, passcode and unique registrant ID.
Conference call registration link:
http://apac.directeventreg.com/registration/event/1443508. It will
automatically direct you to the registration page of "New Oriental
Third Fiscal Quarter 2020 Earnings Conference Call" where you may
fill in your details for RSVP. If it requires you to enter a
participant conference ID, please enter "1443508".
In the 10 minutes prior to the call start time, you may use the
conference access information (including dial in number(s), direct
event passcode and registrant ID) provided in the confirmation
email received at the point of registering.
A replay of the conference call may be accessed by phone at the
following number until April 28,
2021:
International:
|
+61 2 8199
0299
|
Passcode:
|
1443508
|
Additionally, a live and archived webcast of the conference call
will be available at http://investor.neworiental.org.
About New Oriental
New Oriental is the largest provider of private educational
services in China based on the
number of program offerings, total student enrollments and
geographic presence. New Oriental offers a wide range of
educational programs, services and products consisting primarily of
language training and test preparation, primary and secondary
school education, online education, content development and
distribution, overseas study consulting services, pre-school
education and study tour. New Oriental's ADSs, each of which
represents one common share, currently trade on the New York Stock
Exchange under the symbol "EDU."
For more information about New Oriental, please
visit http://www.neworiental.org/english/.
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 fourth quarter of fiscal year 2020, quotations
from management in this announcement, as well as New Oriental's
strategic and operational plans, contain forward-looking
statements. New Oriental may also make written or oral
forward-looking statements in its reports filed 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 New Oriental'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: our ability to attract students without a significant
decrease in course fees; our ability to continue to hire, train and
retain qualified teachers; our ability to maintain and enhance our
"New Oriental" brand; our ability to effectively and efficiently
manage the expansion of our school network and successfully execute
our growth strategy; the outcome of ongoing, or any future,
litigation or arbitration, including those relating to copyright
and other intellectual property rights; competition in the private
education sector in China; changes in our revenues and certain cost
or expense items as a percentage of our revenues; the expected
growth of the Chinese private education market; Chinese
governmental policies relating to private educational services and
providers of such services; health epidemics and other outbreaks in
China; and general economic conditions in China. Further
information regarding these and other risks is included in our
annual report on Form 20-F and other documents filed with the
Securities and Exchange Commission. New Oriental does not undertake
any obligation to update any forward-looking statement, except as
required under applicable law. All information provided in this
press release and in the attachments is as of the date of this
press release, and New Oriental undertakes no duty to update such
information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement New Oriental's consolidated financial results
presented in accordance with GAAP, New Oriental uses the following
measures defined as non-GAAP financial measures by the SEC: net
income excluding share-based compensation expenses and gain /
(loss) from fair value change of long-term investments, operating
income excluding share-based compensation expenses, operating cost
and expenses excluding share-based compensation expenses, general
and administrative expenses excluding share-based compensation
expenses, operating margin excluding share-based compensation
expenses, and basic and diluted net income per ADS and per share
excluding share-based compensation expenses and gain / (loss) from
fair value change of long-term investments. 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
tables captioned "Reconciliations of non-GAAP measures to the most
comparable GAAP measures" set forth at the end of this release.
New Oriental believes that these non-GAAP financial measures
provide meaningful supplemental information regarding its
performance and liquidity by excluding share-based compensation
expenses and gain / (loss) from fair value change of long-term
investments that may not be indicative of its operating performance
from a cash perspective. New Oriental believes that both management
and investors benefit from referring to 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 New Oriental's
historical performance and liquidity. New Oriental 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 these non-GAAP measures is that they exclude
share-based compensation charge and gain / (loss) from fair value
change of long-term investments that has been and will continue to
be for the foreseeable future a significant recurring expense in
our 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.
Contacts
For investor and media inquiries, please contact:
Ms. Rita
Fong
|
Ms. Sisi
Zhao
|
FTI
Consulting
|
New Oriental
Education & Technology Group Inc.
|
Tel: +852 3768
4548
|
Tel:
+86-10-6260-5568
|
Email:
rita.fong@fticonsulting.com
|
Email:
zhaosisi@xdf.cn
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In
thousands)
|
|
|
|
|
As of February
29
|
|
As of May
31
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Audited)
|
|
|
USD
|
|
USD
|
|
ASSETS:
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
1,057,138
|
|
1,414,171
|
|
Restricted
cash
|
43
|
|
43
|
|
Term
deposits
|
269,172
|
|
108,672
|
|
Short-term
investments
|
2,241,000
|
|
1,668,689
|
|
Accounts receivable,
net
|
4,916
|
|
3,300
|
|
Inventory,
net
|
32,776
|
|
29,046
|
|
Prepaid expenses and
other current assets, net
|
237,720
|
|
199,677
|
|
Amounts due from
related parties, current
|
37,002
|
|
42,644
|
|
Total current
assets
|
3,879,767
|
|
3,466,242
|
|
|
|
|
|
|
Restricted cash,
non-current
|
3,423
|
|
4,013
|
|
Property and
equipment, net
|
586,008
|
|
532,015
|
|
Land use rights,
net
|
6,202
|
|
6,405
|
|
Amounts due from
related parties, non-current
|
2,252
|
|
1,204
|
|
Long-term
deposits
|
58,435
|
|
49,742
|
|
Long-term prepaid
rents
|
548
|
|
442
|
|
Intangible assets,
net
|
11,588
|
|
13,935
|
|
Goodwill,
net
|
81,647
|
|
79,614
|
|
Long-term investments,
net
|
473,240
|
|
404,704
|
|
Deferred tax assets,
non-current, net
|
89,456
|
|
61,467
|
|
Right-of-use
assets
|
1,393,401
|
|
-
|
|
Other non-current
assets
|
55,906
|
|
26,776
|
|
Total
assets
|
6,641,873
|
|
4,646,559
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
(including accounts payable of the consolidated variable interest
entities
without recourse to New Oriental of US$33,646 and US$35,680 as of
May 31, 2019 and
February 29, 2020, respectively)
|
38,392
|
|
34,057
|
|
Accrued expenses and
other current liabilities (including accrued expenses and other
current
liabilities of the consolidated variable interest entities without
recourse to New Oriental of
US$518,937 and US$574,254 as of May 31, 2019 and February 29, 2020,
respectively)
|
634,162
|
|
576,521
|
|
Income taxes payable
(including income tax payable of the consolidated variable
interest
entities without recourse to New Oriental of US$79,067 and
US$123,601 as of May 31, 2019
and February 29, 2020, respectively)
|
125,114
|
|
94,071
|
|
Amounts due to related
parties (including amounts due to related parties of the
consolidated
variable interest entities without recourse to New Oriental of
US$472 and US$967 as of May
31, 2019 and February 29, 2020, respectively)
|
1,145
|
|
472
|
|
Deferred revenue
(including deferred revenue of the consolidated variable interest
entities
without recourse to New Oriental of US$1,268,318 and
US$1,366,414 as of May 31, 2019 and
February 29, 2020, respectively)
|
1,374,990
|
|
1,301,103
|
|
Operating Lease
Liability-current (including operating lease liabilities-current of
the
consolidated variable interest entities without recourse to New
Oriental of nil and US$375,573
as of May 31, 2019 and February 29, 2020, respectively)
|
382,825
|
|
-
|
|
|
|
|
|
|
Total current
liabilities
|
2,556,628
|
|
2,006,224
|
|
|
|
|
|
|
Deferred tax
liabilities, non-current (including deferred tax liabilities of the
consolidated
variable interest entities without recourse to New Oriental of
US$18,607 and US$17,945 as of
May 31, 2019 and February 29, 2020, respectively)
|
17,596
|
|
18,781
|
|
Long term loan
(including Long term loan of the consolidated variable interest
entities
without recourse to New Oriental of nil and nil as of May 31, 2019
and February 29, 2020,
respectively)
|
117,523
|
|
96,457
|
|
Operating lease
liabilities (including operating lease liabilities of the
consolidated variable
interest entities without recourse to New Oriental of nil and
US$1,029,261 as of May 31, 2019
and February 29, 2020, respectively)
|
1,044,303
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
3,736,050
|
|
2,121,462
|
|
|
|
|
|
|
Equity
|
|
|
|
|
New Oriental
Education & Technology Group Inc. shareholders'
equity
|
2,754,775
|
|
2,360,686
|
|
Non-controlling interests
|
151,048
|
|
164,411
|
|
Total
equity
|
2,905,823
|
|
2,525,097
|
|
|
|
|
|
|
Total liabilities
and equity
|
6,641,873
|
|
4,646,559
|
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands
except for per share and per ADS amounts)
|
|
|
|
|
For the Three
Months
Ended February 29
|
|
For the Three
Months
Ended February 28
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
Net
revenues
|
923,221
|
|
796,722
|
|
|
|
|
Operating cost and
expenses (note 1)
|
|
|
|
Cost of
revenues
|
398,628
|
|
337,524
|
Selling and
marketing
|
118,233
|
|
87,458
|
General and
administrative
|
289,107
|
|
275,960
|
|
|
|
|
Total operating
cost and expenses
|
805,968
|
|
700,942
|
Operating
income
|
117,253
|
|
95,780
|
Add: Gain from fair
value change of long-term investments
|
4,083
|
|
6,527
|
|
|
|
|
Other income,
net
|
30,387
|
|
24,124
|
Provision for income
taxes
|
(33,255)
|
|
(29,464)
|
Loss from equity
method investments
|
(1,244)
|
|
(1,734)
|
Net
income
|
117,224
|
|
95,233
|
|
|
|
|
Add: Net loss
attributable to non-controlling interests
|
20,491
|
|
2,178
|
|
|
|
|
Net income
attributable to New Oriental Education &
Technology Group Inc.'s shareholders
|
137,715
|
|
97,411
|
|
|
|
|
Net income per
common share
|
|
|
|
-
Basic
|
0.87
|
|
0.62
|
-
Diluted
|
0.86
|
|
0.61
|
|
|
|
|
Net income per ADS
(note 2)
|
|
|
|
-
Basic
|
0.87
|
|
0.62
|
-
Diluted
|
0.86
|
|
0.61
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
RECONCILIATION OF
NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP
MEASURES
|
|
(In thousands
except for per share and per ADS amounts)
|
|
|
For the Three
Months Ended
February 29
|
|
For the Three
Months Ended February
28
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
General and
administrative expenses
|
289,107
|
|
275,960
|
Less: Share-based
compensation expenses in general and administrative
expenses
|
15,852
|
|
17,989
|
Non-GAAP general and
administrative expenses
|
273,255
|
|
257,971
|
|
|
|
|
Total operating cost
and expenses
|
805,968
|
|
700,942
|
Less: Share-based
compensation expenses
|
17,549
|
|
17,989
|
Non-GAAP operating
cost and expenses
|
788,419
|
|
682,953
|
|
|
|
|
Operating
income
|
117,253
|
|
95,780
|
Add: Share-based
compensation expenses
|
17,549
|
|
17,989
|
Non-GAAP operating
income(loss)
|
134,802
|
|
113,769
|
|
|
|
|
Operating
margin
|
12.7%
|
|
12.0%
|
Non-GAAP operating
margin
|
14.6%
|
|
14.3%
|
Net income
attributable to New Oriental
|
137,715
|
|
97,411
|
Add: Share-based
compensation expenses
|
14,870
|
|
17,989
|
Less: Gain from fair
value change of long-term investments
|
(4,083)
|
|
(6,527)
|
Non-GAAP net income
attributable to New Oriental
|
148,502
|
|
108,873
|
Net income per ADS
attributable to New Oriental- Basic (note 2)
|
0.87
|
|
0.62
|
Net income per
ADS attributable to New Oriental- Diluted (note 2)
|
0.86
|
|
0.61
|
Non-GAAP net income
per ADS attributable to New Oriental - Basic (note 2)
|
0.94
|
|
0.69
|
Non-GAAP net income
per ADS attributable to New Oriental - Diluted (note 2)
|
0.93
|
|
0.69
|
Weighted average
shares used in calculating basic net income per ADS (note
2)
|
158,503,487
|
|
158,060,274
|
Weighted average
shares used in calculating diluted net income per ADS (note
2)
|
159,529,187
|
|
158,865,345
|
Non-GAAP income per
share - basic
|
0.94
|
|
0.69
|
Non-GAAP income per
share - diluted
|
0.93
|
|
0.69
|
Notes:
|
Note 1: Share-based
compensation expenses (in thousands) are included in the operating
cost and expenses as follows:
|
|
|
For the Three
Months Ended February
29
|
|
For the Three
Months Ended February 28
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
Cost of
revenues
|
593
|
|
-
|
Selling and
marketing
|
1,104
|
|
-
|
General and
administrative
|
15,852
|
|
17,989
|
Total
|
17,549
|
|
17,989
|
|
|
|
|
Note 2: Each ADS
represents one common share.
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands
except for per share and per ADS amounts)
|
|
|
|
|
For the Nine
Months
Ended February 29
|
|
For the Nine
Months
Ended February 28
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
Net
revenues
|
2,780,209
|
|
2,253,640
|
|
|
|
|
Operating costs
and expenses (note 1):
|
|
|
|
Cost of
revenues
|
1,197,819
|
|
1,005,028
|
Selling and
marketing
|
327,273
|
|
278,356
|
General and
administrative
|
866,369
|
|
745,269
|
Total operating
costs and expenses
|
2,391,461
|
|
2,028,653
|
Gain on disposal of a
subsidiary
|
-
|
|
3,575
|
Operating
income
|
388,748
|
|
228,562
|
Less: Loss from fair
value change of long-term investments
|
(486)
|
|
(75,592)
|
|
|
|
|
Other income,
net
|
77,556
|
|
93,416
|
Provision for income
taxes
|
(98,168)
|
|
(55,159)
|
Income (Loss) from
equity method investments
|
2,385
|
|
(1,212)
|
|
|
|
|
Net
income
|
370,035
|
|
190,015
|
|
|
|
|
Add: Net loss
attributable to non-controlling interests
|
30,107
|
|
4,802
|
|
|
|
|
Net income
attributable to New Oriental Education &
Technology Group Inc.
|
400,142
|
|
194,817
|
|
|
|
|
|
|
|
|
Net income per
share attributable to New Oriental-Basic
|
2.53
|
|
1.23
|
|
|
|
|
Net income per
share attributable to New Oriental-Diluted
|
2.51
|
|
1.23
|
|
|
|
|
Net income per ADS
attributable to New Oriental-Basic
(note 2)
|
2.53
|
|
1.23
|
|
|
|
|
Net income per ADS
attributable to New Oriental-Diluted
(note 2)
|
2.51
|
|
1.23
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
RECONCILIATION OF
NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP
MEASURES
|
|
(In thousands
except for per share and per ADS amounts)
|
|
|
|
For the Nine
Months Ended February
29
|
|
For the Nine
Months Ended February
28
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
|
|
|
|
General and
administrative expenses
|
866,369
|
|
745,269
|
Less: Share-based
compensation expenses in general and administrative
expenses
|
37,459
|
|
45,596
|
Non-GAAP general and
administrative expenses
|
828,910
|
|
699,673
|
|
|
|
|
Total operating costs
and expenses
|
2,391,461
|
|
2,028,653
|
Less: Share-based
compensation expenses
|
39,784
|
|
45,596
|
Non-GAAP operating
costs and expenses
|
2,351,677
|
|
1,983,057
|
|
|
|
|
Operating
income
|
388,748
|
|
228,562
|
Add: Share-based
compensation expenses
|
39,784
|
|
45,596
|
Non-GAAP operating
income
|
428,532
|
|
274,158
|
|
|
|
|
Operating
margin
|
14.0%
|
|
10.1%
|
Non-GAAP operating
margin
|
15.4%
|
|
12.2%
|
|
|
|
|
Net income
attributable to New Oriental
|
400,142
|
|
194,817
|
Add: Share-based
compensation expenses
|
35,022
|
|
45,596
|
Add: Loss from fair
value change of long-term investments
|
486
|
|
75,592
|
Non-GAAP net income
to New Oriental
|
435,650
|
|
316,005
|
|
|
|
|
Net income per ADS
attributable to New Oriental- Basic (note 2)
|
2.53
|
|
1.23
|
Net income per ADS
attributable to New Oriental- Diluted (note 2)
|
2.51
|
|
1.23
|
|
|
|
|
Non-GAAP net income
per ADS attributable to New Oriental - Basic (note 2)
|
2.75
|
|
1.99
|
Non-GAAP net income
per ADS attributable to New Oriental - Diluted (note
2)
|
2.73
|
|
1.99
|
|
|
|
|
Weighted average
shares used in calculating basic net income per ADS (note
2)
|
158,392,472
|
|
158,443,487
|
Weighted average
shares used in calculating diluted net income per ADS (
note 2)
|
159,523,235
|
|
159,031,798
|
|
|
|
|
Non-GAAP income per
share - basic
|
2.75
|
|
1.99
|
Non-GAAP income per
share - diluted
|
2.73
|
|
1.99
|
Notes:
|
Note 1: Share-based
compensation expenses (in thousands) are included in the operating
costs and expenses as follows:
|
|
|
|
|
For the Nine
Months Ended February
29
|
|
For the Nine
Months Ended February
28
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
Cost of
revenues
|
650
|
|
-
|
Selling and
marketing
|
1,675
|
|
-
|
General and
administrative
|
37,459
|
|
45,596
|
Total
|
39,784
|
|
45,596
|
Note 2: Each ADS
represents one common share.
|
View original
content:http://www.prnewswire.com/news-releases/new-oriental-announces-results-for-the-third-fiscal-quarter-ended-february-29-2020-301044224.html
SOURCE New Oriental Education and Technology Group Inc.