Net Revenues Increased by 42.5% Year-Over-Year Net Income Increased
by 55.1% Year-Over-Year BEIJING, Oct. 15
/Xinhua-PRNewswire-FirstCall/ -- New Oriental Education and
Technology Group Inc. (the 'Company') (NYSE:EDU), the largest
provider of private educational services in China, today announced
its unaudited financial results for the fiscal quarter ended August
31, 2007, which is the first quarter for New Oriental's fiscal year
2008.(1) Highlights for the Fiscal Quarter Ended August 31, 2007 --
Total net revenues increased by 42.5% year-over-year to RMB612.0
million (US$81.1 million) from RMB429.3 million in the same period
of the prior fiscal year. -- Net income increased by 55.1%
year-over-year to RMB256.0 million (US$33.9 million) from RMB165.1
million in the same period of the prior fiscal year, and net income
attributable to holders of common shares excluding share-based
compensation expenses (non-GAAP) increased to RMB268.7 million
(US$35.6 million) from RMB170.7 million in the first quarter of
fiscal year 2007. -- Basic and diluted earnings per ADS were
RMB6.86 (US$0.91) and RMB6.56 (US$0.87), respectively. Excluding
share-based compensation expenses (non-GAAP), basic and diluted
earnings per ADS were RMB7.20 (US$0.95) and RMB6.89 (US$0.91),
respectively. Each ADS represents four common shares of the
Company.(2) -- Total student enrollments in language training and
test preparation courses increased by 30.5% year-over-year to
approximately 440,500 from approximately 337,400 in the same period
of the prior fiscal year. -- Opened two new schools and 17 new
learning centers in the quarter, bringing the total number of
schools and learning centers to 37 and 149 (including the 37
schools), respectively, as of the August 31, 2007. 'We are
delighted to start our 2008 fiscal year with such strong financial
results for the quarter ended August 31, 2007. The first fiscal
quarter is the Company's most important quarter because it includes
the two month summer holidays for Chinese students, a time when
many of those students choose to study languages at New Oriental
and prepare for future tests. In fact, this summer we exceeded
440,500 student enrollments in our language training and test
preparation courses, a 30% increase over the same period last
year,' said Mr. Michael Yu, New Oriental's Chairman and Chief
Executive Officer. 'Furthermore, we continue to leverage our widely
recognized brand name to expand our geographic network. In the
first fiscal quarter we opened two new schools, one in Dalian and
one in Jingzhou, along with 17 new learning centers, bringing our
physical school network to 149 schools and learning centers, up
from 115 a year ago. We also recently added mathematics for kids
and middle school students in addition to our renowned English
language programs. I am pleased to report that more than 4,800
students enrolled in our math programs in the first fiscal
quarter.' New Oriental's Chief Financial Officer, Mr. Louis T.
Hsieh, added, 'We are very pleased with our financial results in
the first quarter of fiscal year 2008. Increased enrollments in our
leading test preparation and language training segments allowed us
to exceed our revenue guidance by a substantial margin. As we
execute our strategy of pursuing strong organic growth while
exploring valuable partnerships to expand our product offerings, we
expect to see continued top- and bottom-line growth in the coming
quarters." Mr. Hsieh noted that the first quarter of the Company's
fiscal year is typically the strongest quarter in terms of revenue
and net income due to the seasonality of the Company's business.
For example, in the first fiscal quarter of 2007 (June 1 to August
31, 2006), the Company generated net revenues of RMB429.3 million
as compared to net revenues of RMB169.0 million in the second
fiscal quarter (September 1 to November 30, 2006). In addition, net
income for the first fiscal quarter of 2007 was RMB165.1 million
compared to net income of RMB8.2 million in the second fiscal
quarter of 2007. Financial Results for the Fiscal Quarter Ended
August 31, 2007 For the first fiscal quarter of 2008, New Oriental
reported net revenues of RMB612.0 million (US$81.1 million),
representing a 42.5% increase year- over-year. Net revenues from
educational programs and services for the first fiscal quarter were
RMB578.2 million (US$76.6 million), representing a 40.4% increase
year-over-year. The growth was mainly driven by the increase in the
number of student enrollments in language training and test
preparation courses. Total student enrollments in language training
and test preparation courses in the first quarter of fiscal year
2008 increased by 30.5% year-over-year to approximately 440,500
from approximately 337,400 in the first quarter of fiscal year
2007. Total operating costs and expenses for the quarter were
RMB343.2 million (US$45.5 million), a 37.7% increase
year-over-year. Cost of revenues increased by 40.0% year-over-year
to RMB194.1 million (US$25.7 million), primarily due to the
increased number of courses being offered to a larger student base
and the greater number of schools and learning centers in
operation. Selling and marketing expenses increased by 29.5%
year-over-year to RMB46.3 million (US$6.1 million), primarily due
to brand promotion expenses. General and administrative expenses
increased by 37.5% year-over-year to RMB102.8million (US$13.6
million), primarily due to increased headcount as the Company
expands its network of schools and learning centers. Total
share-based compensation expenses, which were allocated to related
operating costs and expenses, increased to RMB12.7 million (US$1.7
million) in the first quarter of fiscal year 2008. Operating margin
for the quarter was 43.9%, compared to 42.0% in the corresponding
period of the previous year. Excluding share-based compensation
expenses (non-GAAP), operating margin for the quarter was 46.0%,
compared to 43.3% in the corresponding period of the prior year.
This increase was primarily due to the improved operating
efficiency as revenue growth outpaced the growth in operating costs
and expenses. Net income for the quarter was RMB256.0 million
(US$33.9 million), representing a 55.1% increase from the first
quarter of fiscal year 2007. Basic and diluted earnings per common
share amounted to RMB1.72 (US$0.23) and RMB1.64 (US$0.22),
respectively, and basic and diluted earnings per ADS were RMB6.86
(US$0.91) and RMB6.56 (US$0.87), respectively. Income attributable
to holders of common shares excluding share-based compensation
expenses (non-GAAP) was RMB268.7 million (US$35.6 million). Basic
and diluted earnings per ADS excluding share-based compensation
expenses (non-GAAP) were RMB7.20 (US$0.95) and RMB6.89 (US$0.91),
respectively. Capital expenditures for the quarter were RMB23.1
million (US$3.1 million). As of August 31, 2007, New Oriental had
cash and cash equivalents of RMB1,743.9 million (US$231.1 million),
as compared to RMB1,563.8 million as of May 31, 2007. Net operating
cash flow for the first quarter of fiscal year 2008 was RMB212.4
million (US$28.2 million). Outlook for Second Quarter of Fiscal
Year 2008 New Oriental expects its total net revenues in the second
quarter of fiscal year 2008 (September 1, 2007 to November 30,
2007) to be in the range of RMB211.2 million (US$28.0 million) to
RMB224.8 million (US$29.8 million), representing year-over-year
growth in the range of 25.0% to 33.0%, respectively. 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 October
15, 2007 U.S. Eastern Time (8 PM on October 15, 2007 Beijing/Hong
Kong time). Dial-in details for the earnings conference call are as
follows: US: +1-617-213-8844 Hong Kong: +852-3002-1672 Please
dial-in 10 minutes before the call is scheduled to begin and
provide the passcode to join the call. The passcode is 'New
Oriental earnings call.' A replay of the conference call may be
accessed by phone at the following number until October 22, 2007:
International: +1-617-801-6888 Passcode: 93078606 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 English and other foreign language training, test
preparation courses for major admissions and assessment tests in
the United States, the PRC and Commonwealth countries, primary and
secondary school education, development and distribution of
educational content, software and other technology, and online
education. New Oriental's ADSs, each of which represents four
common shares, currently trade on the New York Stock Exchange under
the symbol 'EDU.' For more information about New Oriental, please
visit http://english.neworiental.org/ . 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 second quarter of fiscal year 2008 and 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 periodic reports 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. 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 growth strategies; our future business development,
results of operations and financial condition; 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; and Chinese governmental policies
relating to private educational services and providers of such
services. Further information regarding these and other risks is
included in our registration statement on Form F-1 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 October 15, 2007, 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 basic and diluted earnings
per ADS excluding share- based compensation expenses. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP. For
more information on these non-GAAP financial measures, please see
the table captioned 'Reconciliations of non-GAAP measures to the
most comparable GAAP measures' set forth at the end of this
release. New Oriental 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. 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 computes its
non-GAAP financial measures using the same consistent method from
quarter to quarter. 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 non-GAAP net income excluding share-based
compensation expenses, and basic and diluted earnings per share and
per ADS excluding share-based compensation expenses is that these
non-GAAP measures exclude share-based compensation charge 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. (1) The Company's financial
information is stated in RMB. The translation of RMB amounts at and
for the quarter ended August 31, 2007 into United States dollar
("US$") is included solely for the convenience of the readers and
has been made at the rate of RMB7.5462 to US$1.00, the approximate
free rate of exchange at August 31, 2007. Such translations should
not be construed as representations that RMB amounts could be
converted into US$ at that rate or any other rate, or to be the
amounts that would have been reported under US GAAP. (2) Common
shares used in calculating basic and diluted earnings per ADS
increased in the first quarter of fiscal year 2008 as compared to
the first quarter of fiscal year 2007 due to a total of 36.9
million common shares (equivalent to 9.225 million ADS) issued and
sold by the company in its initial public offering and follow-on
offering in September 2006 and February 2007, respectively. NEW
ORIENTAL EDUCATION & TECHNOLOGY GROUP INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands) As of August 31 As of
May 31 2007 2007 (Unaudited) (Unaudited) RMB USD RMB ASSETS:
Current assets: Cash and cash equivalents 1,743,898 231,096
1,563,819 Restricted cash 3,057 405 3,057 Term deposits 20,800
2,756 23,000 Accounts receivable, net 3,990 529 4,109 Inventory
57,258 7,588 49,028 Prepaid expenses and other current assets
68,084 9,022 47,149 Total current assets 1,897,087 251,396
1,690,162 Property, plant and equipment, net 696,480 92,295 693,045
Land use right, net 24,765 3,282 24,903 Amounts due from related
parties 244 32 244 Deferred tax assets 7,935 1,052 8,345 Trade mark
1,637 217 1,637 Long term investment 15 2 15 Total assets 2,628,163
348,276 2,418,351 LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable-trade 57,692 7,645 43,282 Accrued
expenses and other current liabilities 178,624 23,669 137,455
Income tax payable 38,793 5,141 15,343 Amount due to related
parties 97 13 97 Deferred revenue 201,075 26,646 330,763 Total
current liabilities 476,281 63,114 526,940 Total long-term
liabilities -- -- -- Total liabilities 476,281 63,114 526,940
Minority interest 1,690 224 1,818 Total shareholders' equity
2,150,192 284,938 1,889,593 Total liabilities and shareholders'
equity 2,628,163 348,276 2,418,351 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 August 31 2007 2006 (Unaudited)
(Unaudited) RMB USD RMB Net Revenues: Educational Programs and
services 578,217 76,624 411,914 Books and others 33,764 4,474
17,419 Total net revenues 611,981 81,098 429,333 Operating costs
and expenses (note 1): Cost of revenues 194,068 25,717 138,637
Selling and marketing 46,287 6,134 35,732 General and
administrative 102,839 13,628 74,790 Total operating costs and
expenses 343,194 45,479 249,159 Operating income 268,787 35,619
180,174 Other income (expenses), net 12,236 1,622 (1,917) Provision
for income taxes (25,366) (3,361) (13,198) Minority interest, net
of taxes 347 46 -- Net Income 256,004 33,926 165,059 Net income per
share-basic 1.72 0.23 1.65 Net income per share-diluted 1.64 0.22
1.46 Net income per ADS-basic (note 2) 6.86 0.91 6.60 Net income
per ADS-diluted (note 2) 6.56 0.87 5.84 Notes: Note 1: Share based
compensation expenses (in thousands) are included in the operating
costs and expenses as follows: For the Three Months Ended August 31
2007 2006 Unaudited Unaudited RMB USD RMB Cost of revenues 872 116
143 Selling and marketing 446 59 99 General and administrative
11,381 1,508 5,447 Total 12,699 1,683 5,689 Note 2: Each ADS
represents four common shares NEW ORIENTAL EDUCATION &
TECHNOLOGY GROUP INC. RECONCILIATION OF NON-GAAP MEASURES TO THE
MOST COMPARABLE GAAP MEASURES (In thousands except share and per
ADS amounts) For the Three Months Ended August 31 2007 2006
(Unaudited) (Unaudited) RMB USD RMB Net income 256,004 33,926
165,059 Share-based compensation expense 12,699 1,683 5,689
Non-GAAP net income 268,703 35,609 170,748 Net income per ADS -
basic (note 1) 6.86 0.91 6.60 Net income per ADS - diluted (note 1)
6.56 0.87 5.84 Non-GAAP net income per ADS - basic (note 1) 7.20
0.95 6.83 Non-GAAP net income per ADS - diluted (note 1) 6.89 0.91
6.04 Weighted average shares used in calculating basic net income
per ADS (note 1) 149,181,240 149,181,240 100,000,000 Weighted
average shares used in calculating diluted net income per ADS (note
1) 156,018,940 156,018,940 113,131,319 Note 1: Each ADS represents
four common shares For investor and media inquiries, please
contact: In China: Ms. Sisi Zhao New Oriental Education and
Technology Group Inc. Tel: +86-10-6260-5566 x8203 Email: Mr. Derek
Mitchell Ogilvy Public Relations Worldwide (Beijing) Tel:
+86-10-8520-6284 Email: In the United States: Mr. Jeremy Bridgman
Ogilvy Public Relations Worldwide (New York) Tel: +1-212-880-5363
Email: DATASOURCE: New Oriental Education and Technology Group Inc.
CONTACT: In China, Ms. Sisi Zhao of New Oriental Education and
Technology Group Inc., +86-10-6260-5566 x8203, or , or Mr. Derek
Mitchell of Ogilvy Public Relations Worldwide (Beijing),
+86-10-8520- 6284, or , or in the United States, Mr. Jeremy
Bridgman of Ogilvy Public Relations Worldwide (New York),
+1-212-880-5363, or , both for EDU Web Site:
http://english.neworiental.org/ http://investor.neworiental.org/
Copyright
New Oriental Education a... (NYSE:EDU)
Historical Stock Chart
From May 2024 to Jun 2024
New Oriental Education a... (NYSE:EDU)
Historical Stock Chart
From Jun 2023 to Jun 2024