BEIJING, Oct. 24, 2019 /PRNewswire/ -- TAL Education Group
(NYSE: TAL) ("TAL" or the "Company"), a leading K-12 after-school
tutoring services provider in China, today announced its unaudited financial
results for the second quarter of fiscal year 2020 ended
August 31, 2019.
Highlights for the Second Quarter of Fiscal Year 2020
- Net revenues increased by 33.8% year-over-year to US$936.6 million from US$699.8 million in the same period of the prior
year.
- Income from operations decreased by 13.5% year-over-year to
US$69.9 million, from US$80.9 million in the same period of the prior
year.
- Non-GAAP income from operations, which excluded share-based
compensation expenses, decreased by 0.2% year-over-year to
US$98.8 million, from US$99.0 million in the same period of the prior
year.
- Net loss attributable to TAL was US$14.4
million, compared to net income attributable to TAL of
US$77.0 million in the same period of
the prior year.
- Non-GAAP net income attributable to TAL, which excluded
share-based compensation expenses, decreased by 84.8% to
US$14.5 million from US$95.1 million in the same period of the prior
year.
- Basic and diluted net loss per American Depositary Share
("ADS") were both US$0.02. Non-GAAP
basic and diluted net income per ADS, which excluded share-based
compensation expenses, were both US$0.02. Three ADSs represent one Class A common
share.
- Cash, cash equivalents and short-term investments totaled
US$1,542.3 million as of August 31, 2019, compared to US$1,515.6 million as of February 28, 2019.
- Total Student Enrollments of normal priced long-term course
increased by 54.5% year-over-year to approximately 3,413,120 from
approximately 2,208,640 in the same period of the prior year.
Highlights for the Six Months Ended August 31, 2019
- Net revenues increased by 31.1% year-over-year to US$1,639.4 million from US$1,250.4 million in the same period of the
prior year.
- Income from operations decreased by 18.4% to US$127.3 million from US$155.9 million in the same period of the prior
year.
- Non-GAAP income from operations decreased by 3.6% to
US$182.2 million from US$188.9 million in the same period of the prior
year.
- Net loss attributable to TAL was US$21.7
million, compared to net income attributable to TAL of
US$143.8 million in the same period
of the prior year.
- Non-GAAP net income attributable to TAL, which excluded
share-based compensation expenses, decreased by 81.2% to
US$33.2 million from US$176.9 million in the same period of the prior
year.
- Basic and diluted net loss per ADS were both US$0.04. Non-GAAP basic and diluted net income
per ADS, excluding share-based compensation expenses, were
US$0.06 and US$0.05, respectively.
- Average student enrollments of normal priced long-term course
per quarter during fiscal year 2020 increased by 49.6 %
year-over-year to approximately 2,565,660 from approximately
1,715,200 in the same period of fiscal year 2019.
- Total physical network increased from 676 learning centers in
56 cities as of February 28, 2019 to
758 learning centers in 69 cities as of August 31, 2019.
Financial and
Operating Data -- Second Quarter and First Six Months of Fiscal
Year 2020
|
(In US$ thousands,
except per ADS data, student enrollments and
percentages)
|
|
|
Three Months
Ended
|
|
August
31,
|
|
2018
|
2019
|
Pct.
Change
|
Net
revenues
|
699,783
|
936,626
|
33.8%
|
Operating
income
|
80,891
|
69,939
|
(13.5%)
|
Non-GAAP operating
income
|
98,992
|
98,795
|
(0.2%)
|
Net income/(loss)
attributable to TAL
|
76,990
|
(14,400)
|
(118.7%)
|
Non-GAAP net income
attributable to
TAL
|
95,091
|
14,456
|
(84.8%)
|
Net income/(loss) per
ADS
attributable to TAL – basic
|
0.14
|
(0.02)
|
(117.9%)
|
Net income/(loss) per
ADS
attributable to TAL – diluted
|
0.13
|
(0.02)
|
(118.9%)
|
Non-GAAP net income
per ADS
attributable to TAL – basic
|
0.17
|
0.02
|
(85.5%)
|
Non-GAAP net income
per ADS
attributable to TAL – diluted
|
0.16
|
0.02
|
(85.3%)
|
Total Student
Enrollments of normal
priced long-term course
|
2,208,640
|
3,413,120
|
54.5%
|
|
|
|
Six Months
Ended
|
|
August
31,
|
|
2018
|
2019
|
Pct.
Change
|
Net
revenues
|
1,250,432
|
1,639,396
|
31.1%
|
Operating
income
|
155,880
|
127,257
|
(18.4%)
|
Non-GAAP operating
income
|
188,947
|
182,197
|
(3.6%)
|
Net income/(loss)
attributable to TAL
|
143,790
|
(21,704)
|
(115.1%)
|
Non-GAAP net income
attributable to
TAL
|
176,857
|
33,236
|
(81.2%)
|
Net income/(loss) per
ADS
attributable to TAL – basic
|
0.25
|
(0.04)
|
(114.5%)
|
Net income/(loss) per
ADS
attributable to TAL – diluted
|
0.24
|
(0.04)
|
(115.3%)
|
Non-GAAP net income
per ADS
attributable to TAL – basic
|
0.31
|
0.06
|
(82.0%)
|
Non-GAAP net income
per ADS
attributable to TAL – diluted
|
0.29
|
0.05
|
(81.8%)
|
Average Student
Enrollments of normal
priced long-term course
|
1,715,200
|
2,565,660
|
49.6%
|
"The second quarter revenue performance was based on the healthy
and broadly distributed growth of our overall small class business
across the cities we currently cover and the continued scaling of
our online courses," said Mr. Rong Luo, TAL's Chief Financial
Officer.
"The core offline business of TAL remains the stable foundation
of our business. We have expanded our learning center network and
geographical presence to 69 cities by the end of the second quarter
of fiscal 2020. We have made unremitting efforts to innovate and
improve all areas of our education ideas, products and services,
particularly through leveraging our advanced education resources in
online and online related technologies, and will continue to do so
in the coming years," Mr. Luo added.
Financial Results for the Second Quarter of Fiscal Year
2020
Net Revenues
In the second quarter of fiscal year 2020, TAL reported net
revenues of US$936.6 million,
representing a 33.8% increase from US$699.8
million in the second quarter of fiscal year 2019. The
increase was mainly driven by an increase in total Student
Enrollments of normal priced long-term course, which increased by
54.5% to approximately 3,413,120 from approximately
2,208,640 in the same period of the prior year. The increase
in total Student Enrollments of normal priced long-term
course was primarily driven by the growth of enrollments in
the small class offerings and online courses.
Operating Costs and Expenses
In the second quarter of fiscal year 2020, operating costs and
expenses were US$872.1 million,
representing a 40.6% increase from US$620.1
million in the second quarter of fiscal year 2019. Non-GAAP
operating costs and expenses, which excluded share-based
compensation expenses, were US$843.3
million, a 40.1% increase from US$602.0 million in the second quarter of fiscal
year 2019.
Cost of revenues increased by 27.1% to US$418.8 million from US$329.6 million in the second quarter of fiscal
year 2019. The increase in cost of revenues was mainly due to an
increase in teacher compensation, rental costs and learning
materials. Non-GAAP cost of revenues, which excluded share-based
compensation expenses, increased by 27.1% to US$418.5 million, from US$329.4 million in the second quarter of fiscal
year 2019.
Selling and marketing expenses increased by 73.5% to
US$263.3 million from US$151.7 million in the second quarter of fiscal
year 2019. Non-GAAP selling and marketing expenses, which excluded
share-based compensation expenses, increased by 73.4% to
US$258.9 million, from US$149.3 million in the second quarter of fiscal
year 2019. The increase of selling and marketing expenses in the
second quarter of fiscal year 2020 was primarily a result of more
marketing promotion activities to expand our customer base and
brand enhancement, as well as a rise in the compensation to sales
and marketing staff to support a greater number of programs and
service offerings compared to the same period in the prior
year.
General and administrative expenses increased by 36.9% to
US$190.1 million from US$138.8 million in the second quarter of fiscal
year 2019. The increase in general and administrative expenses was
mainly due to an increase of the number of our general and
administrative personnel compared to the same period in the prior
year and a rise in compensation to our general and administrative
personnel. Non-GAAP general and administrative expenses, which
excluded share-based compensation expenses, increased by 34.6% to
US$165.9 million, from US$123.3 million in the second quarter of fiscal
year 2019.
Total share-based compensation expenses allocated to the related
operating costs and expenses increased by 59.4% to US$28.9 million in the second quarter of fiscal
year 2020 from US$18.1 million in the
same period of fiscal year 2019.
Gross
Profit
Gross profit increased by 39.9% to US$517.8 million from US$370.2 million in the second quarter of fiscal
year 2019.
Income from Operations
Income from operations decreased by 13.5% to US$69.9 million from US$80.9 million in the second quarter of fiscal
year 2019. Non-GAAP income from operations, which excluded
share-based compensation expenses, decreased by 0.2% to
US$98.8 million from US$99.0 million in the second quarter of fiscal
year 2019.
Other (Expense)/Income
Other expense was US$55.6 million
for the second quarter of fiscal year 2020, mainly related to loss
from the fair value change of an equity security with readily
determinable fair value.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US$54.2 million for the second quarter of fiscal
year 2020, compared to nil for the second quarter of fiscal year
2019. Impairment loss on long-term investments was mainly due to
other-than-temporary declines in the value of long-term investments
in several investees.
Income Tax (Expense)/Benefit
Income tax benefit was US$8.1
million in the second quarter of fiscal year 2020, compared
to US$15.5 million of income tax
expense in the second quarter of fiscal year 2019.
Net Income/(Loss) Attributable to TAL Education
Group
Net loss attributable to TAL was US$14.4
million in the second quarter of fiscal year 2020, compared
to net income attributable to TAL of US$77.0
million in the second quarter of fiscal year 2019. Non-GAAP
net income attributable to TAL, which excluded share-based
compensation expenses, decreased by 84.8% to US$14.5 million, from US$95.1 million in the second quarter of fiscal
year 2019.
Basic and Diluted Net Income/(Loss) per ADS
Basic and diluted net loss per ADS were both US$0.02 in the second quarter of fiscal year
2020. Non-GAAP basic and diluted net income per ADS, which excluded
share-based compensation expenses, were both US$0.02.
Capital Expenditures
Capital expenditures for the second quarter of fiscal year 2020
were US$43.7 million, an increase of
US$1.2 million from US$42.5 million in the second quarter of fiscal
year 2019. The increase was mainly due to leasehold improvements
and the purchase of servers, computers, software systems and other
hardware for the Company's teaching facilities and mobile network
research and development.
Cash, Cash Equivalents, and Short-Term
Investments
As of August 31, 2019, the Company
had US$1,288.4 million of cash and
cash equivalents and US$253.8 million
of short-term investments, compared to US$1,247.1 million of cash and cash equivalents
and US$268.4 million of short-term
investments as of February 28,
2019.
Deferred Revenue
The Company's deferred revenue balance was US$497.6 million, compared to US$869.8 million as of August 31, 2018, representing a year-over-year
decrease of 42.8% mainly due to the change of tuition fees
collection schedule to meet certain regulatory requirement.
Financial Results for the First Six Months of Fiscal Year
2019
Net Revenues
For the first six months of fiscal year 2020, TAL reported net
revenues of US$1,639.4 million,
representing a 31.1% increase from US$1,250.4 million in the first six months of
fiscal year 2019. The increase was mainly driven by the growth in
average student enrollments, which increased by 49.6% to
approximately 2,565,660 from approximately 1,715,200 in the same
period of the prior year. The increase in average student
enrollments was driven primarily by the growth of enrollments in
the small class offerings and online courses.
Operating Costs and Expenses
In the first six months of fiscal year 2020, operating costs and
expenses were US$1,520.0 million, a
38.1% increase from US$1,100.8
million in the first six months of fiscal year 2019.
Non-GAAP operating costs and expenses, which excluded share-based
compensation expenses, were US$1,465.0
million, a 37.2% increase from US$1,067.7 million in the first six months of
fiscal year 2019.
Cost of revenues grew by 24.6% to US$735.7 million from US$590.6 million in the first six months of
fiscal year 2019. The increase in cost of revenues was mainly due
to an increase in teacher compensation, rental costs and learning
materials. Non-GAAP cost of revenues, which excluded share-based
compensation expenses, increased by 24.5% to US$735.1 million from US$590.3 million in the first six months of
fiscal year 2019.
Selling and marketing expenses increased by 70.0% to
US$418.7 million from US$246.2 million in the first six months of
fiscal year 2019. Non-GAAP selling and marketing expenses, which
excluded share-based compensation expenses, increased by 69.4% to
US$410.2 million from US$242.2 million in the first six months of
fiscal year 2019. The increase of selling and marketing expenses in
the first six months of fiscal year 2020 was primarily a result of
more marketing promotion activities to expand our customer base and
brand enhancement, as well as a rise in the compensation to sales
and marketing staff to support a greater number of programs and
service offerings compared to the same period in the prior
year.
General and administrative expenses increased by 38.5% to
US$365.6 million from US$263.9 million in the first six months of
fiscal year 2019. The increase in general and administrative
expenses was mainly due to an increase of the number of our general
and administrative personnel compared to the same period in the
prior year and a rise in compensation to our general and
administrative personnel. Non-GAAP general and administrative
expenses, which excluded share-based compensation expenses,
increased by 35.9% to US$319.7
million from US$235.3 million
in the first six months of fiscal year 2019.
Total share-based compensation expenses allocated to the related
operating costs and expenses increased by 66.1% to US$54.9 million in the first six months of fiscal
year 2020 from US$33.1 million in the
same period of fiscal year 2019.
Gross Profit
Gross profit grew by 37.0% to US$903.7
million from US$659.8 million
in the first six months of fiscal year 2019.
Income from Operations
Income from operations decreased by 18.4% to US$127.3 million from US$155.9 million in the first six months of
fiscal year 2019. Non-GAAP income from operations, which excluded
share-based compensation expenses, decreased by 3.6% to
US$182.2 million from US$188.9 million in the first six months of
fiscal year 2019.
Other (Expense)/Income
Other expense was US$86.9 million
for the first six months of fiscal year 2020, mainly related to
loss from the fair value change of an equity security with readily
determinable fair value.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US$104.8 million for the first six months of
fiscal year 2020, compared to US$9.7
million for the first six months of fiscal year 2019.
Impairment loss on long-term investments was mainly due to
other-than-temporary declines in the value of long-term investments
in several investees.
Income Tax (Expense)/Benefit
Income tax benefit was US$10.9
million in the first six months of fiscal year 2020,
compared to US$32.9 million of income
tax expense in the first six months of fiscal year 2019.
Net Income/(Loss) Attributable to TAL Education
Group
Net loss attributable to TAL was US$21.7
million in the first six months of fiscal year 2020,
compared to net income attributable to TAL of US$143.8 million in the first six months of
fiscal year 2019. Non-GAAP net income attributable to TAL, which
excluded share-based compensation expenses, decreased by 81.2% to
US$33.2 million from US$176.9 million in the first six months of
fiscal year 2019.
Basic and Diluted Net Income/(Loss) per ADS
Basic and diluted net loss per ADS were both US$0.04, in the first six months of fiscal year
2020. Non-GAAP basic and Non-GAAP diluted net income per ADS, which
excluded share-based compensation expenses, were US$0.06 and US$0.05, respectively.
Capital Expenditures
Capital expenditures for the first six months of fiscal year
2020 were US$85.1 million, an
increase of US$13.9 million from
US$71.2 million in the first six
months of fiscal year 2019. The increase was mainly due to
leasehold improvements and the purchase of servers, computers,
software systems and other hardware for the Company's teaching
facilities and mobile network research and development.
Business Outlook
Based on our current estimates, total net revenues for the third
quarter of fiscal year 2020 are expected to be between US$826.2 million and US$843.8 million, representing an increase of 41%
to 44% on a year-over-year basis.
If not taking into consideration the impact of potential change
in exchange rate between Renminbi and the U.S. Dollar, the
projected revenue growth rate is expected to be in the range of 45%
to 48% for the third quarter of fiscal year 2020.
These estimates reflect the Company's current expectation, which
is subject to change.
Conference Call
The Company will host a conference call and live webcast to
discuss its financial results for the second fiscal quarter of
fiscal year 2020 ended August 31,
2019 at 8:00 a.m. Eastern Time
on October 24, 2019 (8:00 p.m. Beijing time on October
24, 2019).
The dial-in details for the live conference call are as
follows:
- U.S. toll
free:
|
+1-866-519-4004
|
- Hong Kong toll
free:
|
800-906-601
|
- International
toll:
|
+65-6713-5090
|
Conference
ID:
|
4843779
|
A live and archived webcast of the conference call will be
available on the Investor Relations section of TAL's website at
https://ir.100tal.com/.
A telephone replay of the conference call will be available
through 8:59 a.m. U.S. Eastern time,
November 1, 2019 (8:59 p.m. Beijing time, November
1, 2019).
The dial-in details for the replay are as follows:
- U.S. toll
free:
|
+1-855-452-5696
|
- Hong Kong toll
free:
|
800-963-117
|
- International
toll:
|
+61-2-8199-0299
|
Conference
ID:
|
4843779
|
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
the outlook for the third quarter of fiscal year 2020, quotations
from management in this announcement, as well as TAL Education
Group's strategic and operational plans, contain forward-looking
statements. The Company may also make written or oral
forward-looking statements in its reports filed with, or furnished
to, the U.S. Securities and Exchange Commission, in its annual
reports to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about the Company's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: the Company's ability to continue to
attract students to enroll in its courses; the Company's ability to
continue to recruit, train and retain qualified teachers; the
Company's ability to improve the content of its existing course
offerings and to develop new courses; the Company's ability to
maintain and enhance its brand; the Company's ability to maintain
and continue to improve its teaching results; and the Company's
ability to compete effectively against its competitors. Further
information regarding these and other risks is included in the
Company's reports filed with, or furnished to the U.S. Securities
and Exchange Commission. All information provided in this press
release and in the attachments is as of the date of this press
release, and TAL Education Group undertakes no duty to update such
information or any forward-looking statement, except as required
under applicable law.
About TAL Education Group
TAL Education Group is a leading K-12 after-school tutoring
services provider in China. The
acronym "TAL" stands for "Tomorrow Advancing Life", which reflects
our vision to promote top learning opportunities for Chinese
students through both high-quality teaching and content, as well as
leading edge application of technology in the education experience.
TAL Education Group offers comprehensive tutoring services to
students from pre-school to the twelfth grade through three
flexible class formats: small classes, personalized premium
services, and online courses. Our tutoring services cover the core
academic subjects in China's
school curriculum as well as competence oriented programs. The
Company's learning center network currently covers 69 key cities in
China.
We also operate www.jzb.com, a leading online education platform
in China. Our ADSs trade on the
New York Stock Exchange under the symbol "TAL".
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following
measures defined as non-GAAP financial measures by the SEC as
supplemental metrics to review and assess its operating
performance: non-GAAP operating costs and expenses, non-GAAP cost
of revenues, non-GAAP selling and marketing expenses, non-GAAP
general and administrative expenses, non-GAAP income from
operations, non-GAAP net income attributable to TAL, non-GAAP basic
and non-GAAP diluted net income per ADS. To present each of these
non-GAAP measures, the Company excludes share-based compensation
expenses. The presentation of these non-GAAP financial measures is
not intended to be considered in isolation or as a substitute for
the financial information prepared and presented in accordance with
GAAP. For more information on these non-GAAP financial measures,
please see the table captioned "Reconciliations of non-GAAP
measures to the most comparable GAAP measures" set forth at the end
of this release.
TAL believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and
liquidity by excluding share-based expenses that may not be
indicative of its operating performance from a cash perspective.
TAL believes that both management and investors benefit from these
non-GAAP financial measures in assessing its performance and when
planning and forecasting future periods. These non-GAAP financial
measures also facilitate management's internal comparisons to TAL's
historical performance and liquidity. TAL computes its non-GAAP
financial measures using the same consistent method from quarter to
quarter and from period to period. TAL believes these non-GAAP
financial measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using non-GAAP measures is that these non-GAAP
measures exclude share-based compensation charges that have been
and will continue to be for the foreseeable future a significant
recurring expense in the Company's business. Management compensates
for these limitations by providing specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables have more details on the reconciliations
between GAAP financial measures that are most directly comparable
to non-GAAP financial measures.
For further information, please contact:
Echo Yan
Investor Relations
TAL Education Group
Tel: +86 10 5292 6658
Email: ir@100tal.com
Caroline Straathof
IR Inside
Tel: +31 6 5462 4301
Email: info@irinside.com
TAL EDUCATION
GROUP
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands of
U.S. dollars)
|
|
|
As
of
|
|
As
of
|
|
February
28,
|
|
August
31,
|
|
2019
|
|
2019
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$1,247,140
|
|
$1,288,449
|
Restricted
cash-current
|
9,227
|
|
2,041
|
Short-term
investments
|
268,424
|
|
253,843
|
Inventory
|
7,750
|
|
12,456
|
Amounts due
from related parties-current
|
3,341
|
|
16,633
|
Income tax
receivables
|
7,204
|
|
1,110
|
Prepaid
expenses and other current assets
|
202,630
|
|
213,904
|
Total current
assets
|
1,745,716
|
|
1,788,436
|
Restricted
cash-non-current
|
7,334
|
|
7,240
|
Amounts due
from related parties-non-current
|
1,747
|
|
2,398
|
Property and
equipment, net
|
287,877
|
|
309,315
|
Deferred tax
assets-non-current
|
29,179
|
|
57,214
|
Rental
deposits
|
56,135
|
|
61,259
|
Intangible
assets, net
|
74,776
|
|
64,026
|
Land use
right, net
|
-
|
|
202,209
|
Goodwill
|
414,228
|
|
402,453
|
Long-term
investments
|
850,695
|
|
673,549
|
Long-term
prepayments and other non-current assets
|
267,404
|
|
70,744
|
Operating
lease right-of-use assets
|
-
|
|
1,087,330
|
Total
assets
|
$3,735,091
|
|
$4,726,173
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable
(including accounts payable of the
consolidated VIEs without recourse to TAL
Education
Group of 98,436 and 105,387 as of February 28, 2019
and
August 31, 2019, respectively)
|
$106,493
|
|
$112,246
|
Deferred
revenue-current (including deferred revenue-current
of the consolidated VIEs without recourse to TAL
Education Group of 401,027 and 468,307 as of
February
28, 2019 and August 31, 2019, respectively)
|
433,610
|
|
496,288
|
Amounts due to
related parties-current (including amounts due
to related parties-current of the consolidated VIEs
without
recourse to TAL Education Group of 18,504 and 17,012
as
of February 28, 2019 and August 31, 2019,
respectively)
|
24,375
|
|
53,058
|
Accrued expenses and
other current liabilities (including
accrued expenses and other current liabilities of
the
consolidated VIEs without recourse to TAL
Education
Group of 291,728 and 335,719 as of February 28, 2019
and
August 31, 2019, respectively)
|
365,195
|
|
401,359
|
Income tax payable
(including income tax payable of the
consolidated VIEs without recourse to TAL
Education
Group of 36,670 and 44,285 as of February 28, 2019
and August 31, 2019, respectively)
|
38,743
|
|
12,494
|
Short-term debt and
current portion of long-term debt
(including short-term debt and current portion of
long-term
debt of the consolidated VIEs without recourse to
TAL
Education Group of nil and nil as of February 28, 2019
and
August 31, 2019, respectively)
|
210,027
|
|
-
|
Bond payable, current
portion (including bond payable, current
portion of the consolidated VIEs without recourse to
TAL
Education Group of nil and nil as of February 28, 2019
and
August 31, 2019, respectively)
|
5,275
|
|
-
|
Operating lease
liabilities, current portion (including
operating lease liabilities, current portion of the
consolidated
VIEs without recourse to TAL Education Group of nil
and
230,512 as of February 28, 2019 and August 31,
2019,
respectively)
|
-
|
|
262,717
|
Total current
liabilities
|
1,183,718
|
|
1,338,162
|
Deferred
revenue-non-current (including deferred revenue
-non-current of the consolidated VIEs without recourse
to
TAL Education Group of 2,497 and 1,333 as of February
28,
2019 and August 31, 2019, respectively)
|
2,497
|
|
1,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to
related parties-non-current (including amounts
due to related parties-non-current of the consolidated
VIEs
without recourse to TAL Education Group of 106 and 36
as
of February 28, 2019 and August 31, 2019,
respectively)
|
196
|
|
36
|
|
|
|
|
Deferred tax
liabilities-non-current (including deferred tax
liabilities-non-current of the consolidated VIEs
without
recourse to TAL Education Group of 16,951 and 7,422 as
of
February 28, 2019 and August 31, 2019,
respectively)
|
17,738
|
|
8,145
|
Other non-current
liabilities (including other non-current
liabilities of the consolidated VIEs without recourse
to TAL
Education Group of 465 and 435 as of February 28,
2019
and August 31, 2019, respectively)
|
465
|
|
435
|
Operating lease
liabilities, non-current portion (including
operating lease liabilities, non-current portion of the
consolidated VIEs without recourse to TAL
Education
Group of nil and 752,925 as of February 28, 2019
and
August 31, 2019, respectively)
|
-
|
|
823,477
|
Total
liabilities
|
1,204,614
|
|
2,171,588
|
|
|
|
|
Equity
|
|
|
|
Class A common
shares
|
127
|
|
130
|
Class B common
shares
|
71
|
|
68
|
Class A common shares
issuable
|
1,977
|
|
-
|
Additional paid-in
capital
|
1,485,521
|
|
1,612,095
|
Statutory
reserve
|
58,690
|
|
58,690
|
Retained
earnings
|
920,314
|
|
898,610
|
Accumulated other
comprehensive income/(loss)
|
17,047
|
|
(55,997)
|
Total TAL
Education Group's equity
|
2,483,747
|
|
2,513,596
|
Noncontrolling
interest
|
46,730
|
|
40,989
|
Total
equity
|
2,530,477
|
|
2,554,585
|
Total liabilities
and equity
|
$
3,735,091
|
|
$
4,726,173
|
TAL EDUCATION
GROUP
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except share, ADS, per share and per ADS
data)
|
|
|
For the Three
Months Ended
August 31,
|
For the Six Months
Ended
August
31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Net
revenues
|
$ 699,783
|
|
$ 936,626
|
|
$
1,250,432
|
|
$
1,639,396
|
Cost of revenues
(note 1)
|
329,565
|
|
418,803
|
|
590,647
|
|
735,678
|
Gross
profit
|
370,218
|
|
517,823
|
|
659,785
|
|
903,718
|
Operating expenses
(note 1)
|
|
|
|
|
|
|
|
Selling and
marketing
|
151,700
|
|
263,258
|
|
246,207
|
|
418,657
|
General and
administrative
|
138,798
|
|
190,056
|
|
263,949
|
|
365,641
|
Total operating
expenses
|
290,498
|
|
453,314
|
|
510,156
|
|
784,298
|
Government
subsidies
|
1,171
|
|
5,430
|
|
6,251
|
|
7,837
|
Income from
operations
|
80,891
|
|
69,939
|
|
155,880
|
|
127,257
|
Interest
income
|
19,259
|
|
17,783
|
|
35,822
|
|
33,870
|
Interest
expense
|
(3,957)
|
|
(2,104)
|
|
(7,822)
|
|
(5,228)
|
Other
(expense)/income
|
(355)
|
|
(55,555)
|
|
8,331
|
|
(86,886)
|
Impairment loss on
long-term
investments
|
-
|
|
(54,194)
|
|
(9,713)
|
|
(104,788)
|
Income/(loss) before
provision
for income tax and loss from
equity method investments
|
95,838
|
|
(24,131)
|
|
182,498
|
|
(35,775)
|
Income tax
(expense)/benefit
|
(15,532)
|
|
8,116
|
|
(32,864)
|
|
10,875
|
Loss from equity
method
investments
|
(4,081)
|
|
(1,358)
|
|
(7,138)
|
|
(2,689)
|
Net
income/(loss)
|
76,225
|
|
(17,373)
|
|
142,496
|
|
(27,589)
|
Add: Net loss
attributable to
noncontrolling interest
|
765
|
|
2,973
|
|
1,294
|
|
5,885
|
Total net
income/(loss)
attributable to TAL Education Group
|
$ 76,990
|
|
$ (14,400)
|
|
$ 143,790
|
|
$ (21,704)
|
Net income/(loss)
per common
share
|
|
|
|
|
|
|
|
Basic
|
$ 0.41
|
|
$ (0.07)
|
|
$ 0.76
|
|
$ (0.11)
|
Diluted
|
0.38
|
|
(0.07)
|
|
0.72
|
|
(0.11)
|
Net income/(loss)
per ADS
(note 2)
|
|
|
|
|
|
|
|
Basic
|
$ 0.14
|
|
$ (0.02)
|
|
$ 0.25
|
|
$ (0.04)
|
Diluted
|
0.13
|
|
(0.02)
|
|
0.24
|
|
(0.04)
|
Weighted average
shares used in
calculating net income/(loss)
per common share
|
|
|
|
|
|
|
|
Basic
|
189,483,546
|
|
197,940,260
|
|
189,250,482
|
|
197,550,175
|
Diluted
|
200,422,889
|
|
197,940,260
|
|
200,406,007
|
|
197,550,175
|
Note 1: Share-based
compensation expenses are included in the operating costs and
expenses as follows:
|
|
|
For the Three
Months
|
|
For the Six
Months
|
|
Ended August
31,
|
|
Ended August
31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Cost of
revenues
|
$185
|
|
$318
|
|
$348
|
|
$565
|
Selling and marketing
expenses
|
2,407
|
|
4,377
|
|
4,033
|
|
8,417
|
General and
administrative expenses
|
15,509
|
|
24,161
|
|
28,686
|
|
45,958
|
Total
|
$18,101
|
|
$28,856
|
|
$33,067
|
|
$54,940
|
|
Note 2: Three ADSs
represent one Class A common Share.
|
TAL EDUCATION
GROUP
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME/(LOSS)
|
(In
thousands)
|
|
|
For the Three
Months Ended
August
31,
|
|
For the Six Months
Ended
August
31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
$ 76,225
|
|
$ (17,373)
|
|
$ 142,496
|
|
$ (27,589)
|
Other comprehensive
(loss)
/income, net of tax
|
(43,380)
|
|
(40,759)
|
|
43,329
|
|
(75,707)
|
Comprehensive
income/(loss)
|
32,845
|
|
(58,132)
|
|
185,825
|
|
(103,296)
|
Add: Comprehensive
loss
attributable to noncontrolling
interest
|
1,804
|
|
4,370
|
|
2,546
|
|
8,548
|
Comprehensive
income/(loss)
attributable to TAL
Education Group
|
$ 34,649
|
|
$ (53,762)
|
|
$ 188,371
|
|
$ (94,748)
|
TAL EDUCATION
GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In thousands,
except share, ADS, per share and per ADS
data)
|
|
|
For the Three
Months
Ended August
31,
|
|
For the Six
Months
Ended August 31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
$ 329,565
|
|
$ 418,803
|
|
$ 590,647
|
|
$ 735,678
|
Share-based
compensation expense
in cost of revenues
|
185
|
|
318
|
|
348
|
|
565
|
Non-GAAP cost of
revenues
|
329,380
|
|
418,485
|
|
590,299
|
|
735,113
|
|
|
|
|
|
|
|
|
Selling and
marketing expenses
|
151,700
|
|
263,258
|
|
246,207
|
|
418,657
|
Share-based
compensation expense
in selling and marketing expenses
|
2,407
|
|
4,377
|
|
4,033
|
|
8,417
|
Non-GAAP selling
and marketing expenses
|
149,293
|
|
258,881
|
|
242,174
|
|
410,240
|
|
|
|
|
|
|
|
|
General and
administrative
expenses
|
138,798
|
|
190,056
|
|
263,949
|
|
365,641
|
Share-based
compensation expense
in general and administrative
expenses
|
15,509
|
|
24,161
|
|
28,686
|
|
45,958
|
Non-GAAP general
and
administrative expenses
|
123,289
|
|
165,895
|
|
235,263
|
|
319,683
|
|
|
|
|
|
|
|
|
Operating costs
and expenses
|
620,063
|
|
872,117
|
|
1,100,803
|
|
1,519,976
|
Share-based
compensation expense
in operating costs and expenses
|
18,101
|
|
28,856
|
|
33,067
|
|
54,940
|
Non-GAAP operating
costs and
expenses
|
601,962
|
|
843,261
|
|
1,067,736
|
|
1,465,036
|
|
|
|
|
|
|
|
|
Income from
operations
|
80,891
|
|
69,939
|
|
155,880
|
|
127,257
|
Share based
compensation expenses
|
18,101
|
|
28,856
|
|
33,067
|
|
54,940
|
Non-GAAP income
from
operations
|
98,992
|
|
98,795
|
|
188,947
|
|
182,197
|
|
|
|
|
|
|
|
|
Net income/(loss)
attributable to
TAL Education Group
|
76,990
|
|
(14,400)
|
|
143,790
|
|
(21,704)
|
Share based
compensation expenses
|
18,101
|
|
28,856
|
|
33,067
|
|
54,940
|
Non-GAAP net
income
attributable to TAL Education
Group
|
$ 95,091
|
|
$ 14,456
|
|
$ 176,857
|
|
$ 33,236
|
Net income/(loss)
per ADS
|
|
|
|
|
|
|
|
Basic
|
$ 0.14
|
|
$ (0.02)
|
|
$ 0.25
|
|
$ (0.04)
|
Diluted
|
0.13
|
|
(0.02)
|
|
0.24
|
|
(0.04)
|
Non-GAAP Net
income per ADS
|
|
|
|
|
|
|
|
Basic
|
$ 0.17
|
|
$ 0.02
|
|
$ 0.31
|
|
$ 0.06
|
Diluted
|
0.16
|
|
0.02
|
|
0.29
|
|
0.05
|
ADSs used in
calculating net
income/(loss) per ADS
|
|
|
|
|
|
|
|
Basic
|
568,450,639
|
|
593,820,780
|
|
567,751,446
|
|
592,650,525
|
Diluted
|
601,268,668
|
|
593,820,780
|
|
601,218,021
|
|
592,650,525
|
ADSs used in
calculating Non-
GAAP net income per ADS
|
|
|
|
|
|
|
|
Basic
|
568,450,639
|
|
593,820,780
|
|
567,751,446
|
|
592,650,525
|
Diluted
|
601,268,668
|
|
619,765,083
|
|
601,218,021
|
|
619,754,673
|
View original
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SOURCE TAL Education Group