BEIJING, Oct. 27, 2016 /PRNewswire/ -- TAL Education Group
(NYSE: XRS) ("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 2017 ended
August 31, 2016.
Highlights for the Second Quarter of Fiscal Year 2017
- Net revenues increased by 56.4% year-over-year to US$271.1 million from US$173.3 million in the same period of the prior
year.
- Income from operations increased by 31.4% to US$51.5 million from US$39.2 million in the same period of the prior
year.
- Non-GAAP income from operations increased by 33.3% to
US$59.8 million from US$44.9 million in the same period of the prior
year.
- Basic and diluted net income per American Depositary Share
("ADS") were US$0.69 and US$0.61, respectively. Non-GAAP basic and diluted
net income per ADS, which excluded share-based compensation
expenses, were US$0.79 and
US$0.70, respectively. Each ADS
represents two Class A common shares.
- Cash, cash equivalents and term deposits totaled US$505.3 million as of August 31, 2016, compared to US$451.3 million as of February 29, 2016.
- Total student enrollments increased by 77.0% year-over-year to
approximately 1,117,650 from approximately 631,430 in the same
period of the prior year.
Highlights for the Six Months Ended August 31, 2016
- Net revenues increased by 54.0% year-over-year to US$466.2 million from US$302.7 million in the same period of the prior
year.
- Income from operations increased by 17.5% to US$69.1 million from US$58.8 million in the same period of fiscal year
2016.
- Non-GAAP income from operations increased by 23.3% to
US$85.8 million from US$69.5 million in the same period of the prior
year.
- Basic and diluted net income per ADS were US$0.85 and US$0.78, respectively. Non-GAAP basic and diluted
net income per ADS, excluding share-based compensation expenses,
were US$1.06 and US$0.95, respectively.
- Total student enrollments during the first six months of fiscal
year 2017 increased by 69.0% year-over-year to approximately
1,763,700.
- Total physical network increased from 363 learning centers in
25 cities as of February 29, 2016 to
422 learning centers in 25 cities as of August 31, 2016, including 47 learning centers in
5 cities from Firstleap Education ("Firstleap").
Financial and Operating Data - Second Quarter of Fiscal Year
2017
(In US$ thousands, except per ADS data, student enrollments and
percentages)
|
Three Months
Ended
|
|
August
31,
|
|
2015
|
2016
|
Pct. Change
|
Net
revenues
|
173,330
|
271,121
|
56.4%
|
Net income
attributable to TAL
|
63,481
|
55,740
|
-12.2%
|
Non-GAAP net income
attributable to TAL
|
69,157
|
64,023
|
-7.4%
|
Operating
income
|
39,201
|
51,526
|
31.4%
|
Non-GAAP operating
income
|
44,877
|
59,808
|
33.3%
|
Net income per ADS
attributable to TAL – basic
|
0.79
|
0.69
|
-13.4%
|
Net income per ADS
attributable to TAL – diluted
|
0.72
|
0.61
|
-14.4%
|
Non-GAAP net income
per ADS attributable to TAL – basic
|
0.87
|
0.79
|
-8.7%
|
Non-GAAP net income
per ADS attributable to TAL – diluted
|
0.78
|
0.70
|
-9.9%
|
Total student
enrollments in small class, one-on-one, and online
courses
|
631,430
|
1,117,650
|
77.0%
|
|
Six Months
Ended
|
|
August
31,
|
|
2015
|
2016
|
Pct. Change
|
Net
revenues
|
302,717
|
466,216
|
54.0%
|
Net income
attributable to TAL
|
82,435
|
68,976
|
-16.3%
|
Non-GAAP net income
attributable to TAL
|
93,176
|
85,651
|
-8.1%
|
Operating
income
|
58,801
|
69,095
|
17.5%
|
Non-GAAP operating
income
|
69,542
|
85,770
|
23.3%
|
Net income per ADS
attributable to TAL – basic
|
1.03
|
0.85
|
-17.4%
|
Net income per ADS
attributable to TAL – diluted
|
0.94
|
0.78
|
-17.8%
|
Non-GAAP net income
per ADS attributable to TAL – basic
|
1.17
|
1.06
|
-9.3%
|
Non-GAAP net income
per ADS attributable to TAL – diluted
|
1.06
|
0.95
|
-10.2%
|
Total student
enrollments in small class, one-on-one, and online
courses
|
1,043,550
|
1,763,700
|
69.0%
|
"We are pleased to report strong topline growth fueled by high
demand for our core small class tutoring services across the board.
We generated 66% of revenue growth in RMB terms in the second
quarter, which was supported by 77% of enrollment growth
year-over-year. We added 27 learning centers on a net basis to meet
the increased demand" said Mr. Rong Luo, TAL's Chief Financial
Officer.
Mr. Luo continued, "As of December 1,
2016, TAL Education Group's ticker symbol on the New York
Stock Exchange will change from 'XRS' to 'TAL'. With the Company
retaining the listing of its ADS under the new name 'TAL',we are
excited to see our group name and abbreviated stock symbol
unified."
Financial Results for the Second Quarter of Fiscal Year
2017
Net Revenues
In the second quarter of fiscal year 2017, TAL reported net
revenues of US$271.1 million,
representing a 56.4% increase from US$173.3
million in the second quarter of fiscal year 2016. The
increase was mainly driven by the growth in total student
enrollments, which rose by 77.0% to approximately 1,117,650 from
approximately 631,430 in the same period of the prior year. The
increase in total student enrollments was driven primarily by the
growth of enrollments in the small class offerings and online
courses.
Operating Costs and Expenses
In the second quarter of fiscal year 2017, operating costs and
expenses were US$221.8 million, a
62.2% increase from US$136.7 million
in the second quarter of fiscal year 2016. Non-GAAP operating costs
and expenses, which excluded share-based compensation expenses,
were US$213.6 million, a 62.9%
increase from US$131.1 million in the
second quarter of fiscal year 2016.
Cost of revenues grew by 63.9% to US$131.9 million from US$80.5 million in the second quarter of fiscal
year 2016. The increase in cost of revenues was mainly due to i) an
increase in teacher compensation and rental costs; and ii) cost of
sales attributable to the newly acquired business. Non-GAAP cost of
revenues, which excluded share-based compensation expenses,
increased by 63.9% to US$131.9
million, from US$80.4 million
in the second quarter of fiscal year 2016.
Selling and marketing expenses increased by 52.3% to
US$28.6 million from US$18.8 million in the second quarter of fiscal
year 2016. Non-GAAP selling and marketing expenses, which excluded
share-based compensation expenses, increased by 52.7% to
US$27.9 million from US$18.2 million in the second quarter of fiscal
year 2016. The increase of selling and marketing expenses in the
second quarter of fiscal year 2017 was primarily a result of a rise
in the compensation to sales and marketing staff to support a
greater number of programs and service offerings compared to the
year-ago period.
General and administrative expenses increased by 63.6% to
US$61.3 million from US$37.5 million in the second quarter of fiscal
year 2016. 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 year-ago period and a rise
in compensation to our general and administrative personnel, in
particular such personnel supporting our online education
initiatives among other new programs and service offerings, as well
as an increase in consulting fees related to investment activities.
Non-GAAP general and administrative expenses, which excluded
share-based compensation expenses, increased by 66.3% to
US$53.8 million, from US$32.4 million in the second quarter of fiscal
year 2016.
Total share-based compensation expenses allocated to the related
operating costs and expenses increased by 45.9% to US$8.3 million in the second quarter of fiscal
year 2017 from US$5.7 million in the
same period of fiscal year 2016. The increase was mainly due to new
grants of non-vested shares and options to directors and employees
by the Company in fiscal year 2017.
Gross
Profit
Gross profit grew by 49.9% to US$139.2
million from US$92.9 million
in the second quarter of fiscal year 2016.
Income from Operations
Income from operations increased by 31.4% to US$51.5 million from US$39.2 million in the second quarter of fiscal
year 2016. Non-GAAP income from operations, which excluded
share-based compensation expenses, increased by 33.3% to
US$59.8 million from US$44.9 million in the second quarter of fiscal
year 2016.
Other (Expense)/Income
Other income was US$23.8 million
for the second quarter of fiscal year 2017, compared to other
expense of US$4.1 million in the
second quarter of fiscal year 2016. The increase was mainly due to
a gain from remeasuring the fair value of the previously held
equity interests in an acquiree at its acquisition date fair value
during a business combination achieved in stages.
Impairment loss on long-term investments
Impairment loss on long-term investments was US$2.2 million in this quarter, compared to
impairment loss on long-term investments of US$7.5 million in the second quarter of fiscal
year 2016. Impairment loss on long-term investments was due to the
other-than-temporary declines in the value of long-term investments
in several investees.
Gain from disposal of a component
Gain from disposal of a component was nil in this quarter,
compared to a gain of US$50.0 million
in the second quarter of fiscal year 2016, which was derived from a
transaction in which the Company transferred its one-on-one
business component in Guangzhou in
exchange for noncontrolling equity interest in a third party.
Income Tax Expense
Income tax expense was US$17.6
million in the second quarter of fiscal year 2017, compared
to US$17.8 million in the second
quarter of fiscal year 2016.
Net Income Attributable to TAL Education Group
Net income attributable to TAL decreased by 12.2% to
US$55.7 million from US$63.5 million in the second quarter of fiscal
year 2016. Non-GAAP net income attributable to TAL, which excluded
share-based compensation expenses, decreased by 7.4% to
US$64.0 million from US$69.2 million in the second quarter of fiscal
year 2016.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were US$0.69 and US$0.61
respectively in the second quarter of fiscal year 2017. Non-GAAP
basic and Non-GAAP diluted net income per ADS, which excluded
share-based compensation expenses, were US$0.79 and US$0.70, respectively.
Capital Expenditures
Capital expenditures for the second quarter of fiscal year 2017
were US$18.9 million, representing an
increase of US$8.1 million from
US$10.8 million in the second quarter
of fiscal year 2016. 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 Term Deposits
As of August 31, 2016, the Company
had US$503.8 million of cash and cash
equivalents and US$1.5 million of
term deposits, compared to US$434.0
million of cash and cash equivalents and US$17.3 million of term deposits as of
February 29, 2016.
Deferred Revenue
As of August 31, 2016, the
Company's deferred revenue balance was US$463.4 million, compared to US$239.0 million as of August 31, 2015, representing an increase of
93.9%, which primarily consisted of the tuition revenue collected
in advance for the fall semester of Xueersi Peiyou small classes
and the deferred revenue acquired during the business
acquisitions.
Financial Results for the First Six Months of Fiscal Year
2017
Net Revenues
For the first six months of fiscal year 2017, TAL reported net
revenues of US$466.2 million,
representing a 54.0% increase from US$302.7
million in the first six months of fiscal year 2016. The
increase was mainly driven by an increase in total student
enrollments, which grew by 69.0% to approximately 1,763,700 from
approximately 1,043,550 in the same period of the prior year. The
increase in total student enrollments was driven primarily by
increases of enrollments in the small class offerings and online
courses.
Operating Costs and Expenses
In the first six months of fiscal year 2017, operating costs and
expenses were US$399.9 million, a
62.2% increase from US$246.5 million
in the first six months of fiscal year 2016. Non-GAAP operating
costs and expenses, which excluded share-based compensation
expenses, were US$383.2 million, a
62.5% increase from US$235.8 million
in the first six months of fiscal year 2016.
Cost of revenues grew by 64.3% to US$232.4 million from US$141.4 million in the first six months of
fiscal year 2016. The increase in cost of revenues was mainly due
to i) an increase in teacher compensation and rental costs; and ii)
cost of sales attributable to the newly acquired business. Non-GAAP
cost of revenues, which excluded share-based compensation expenses,
increased by 64.3% to US$232.3
million from US$141.4 million
in the first six months of fiscal year 2016.
Selling and marketing expenses increased by 54.9% to
US$52.7 million from US$34.0 million in the first six months of fiscal
year 2016. Non-GAAP selling and marketing expenses, which excluded
share-based compensation expenses, increased by 55.2% to
US$51.2 million from US$33.0 million in the first six months of fiscal
year 2016. The increase of selling and marketing expenses in the
first six months of fiscal year 2017 was primarily a result of an
increase in the compensation to sales and marketing staff to
support a greater number of programs and service offerings versus
the year-ago period.
General and administrative expenses increased by 61.5% to
US$114.8 million from US$71.1 million in the first six months of fiscal
year 2016. The increase in general and administrative expenses was
mainly due to an increase in the number of our general and
administrative personnel compared to the year-ago period and an
increase in compensation to our general and administrative
personnel, in particular such personnel supporting our online
education initiatives among other new programs and service
offerings, as well as an increase in consulting fees related to
investment activities. Non-GAAP general and administrative
expenses, which excluded share-based compensation expenses,
increased by 62.3% to US$99.7 million
from US$61.4 million in the first six
months of fiscal year 2016.
Total share-based compensation expenses allocated to the related
operating costs and expenses increased by 55.2% to US$16.7 million in the first six months of fiscal
year 2017 from US$10.7 million in the
same period of fiscal year 2016. The increase was mainly due to new
grants of non-vested shares and options to directors and employees
by the Company in fiscal year 2017.
Gross Profit
Gross profit grew by 45.0% to US$233.9
million from US$161.3 million
in the first six months of fiscal year 2016.
Income from Operations
Income from operations increased by 17.5% to US$69.1 million from US$58.8 million in the first six months of fiscal
year 2016. Non-GAAP income from operations, which excluded
share-based compensation expenses, increased by 23.3% to
US$85.8 million from US$69.5 million in the first six months of fiscal
year 2016.
Other (Expense)/Income
Other income was US$23.8 million
for the first six months of fiscal year 2017, compared to other
expense of US$2.7 million in the
first six months of fiscal year 2016. The increase was mainly due
to a gain from remeasuring the fair value of the previously held
equity interests in an acquiree at its acquisition date fair value
during a business combination achieved in stages.
Income Tax Expense
Income tax expense was US$22.1
million in the first six months of fiscal year 2017,
compared to US$22.6 million in the
first six months of fiscal year 2016.
Net Income Attributable to TAL Education Group
Net income attributable to TAL decreased by 16.3% to
US$69.0 million from US$82.4 million in the first six months of fiscal
year 2016. Non-GAAP net income attributable to TAL, which excluded
share-based compensation expenses, decreased by 8.1% to
US$85.7 million from US$93.2 million in the first six months of fiscal
year 2016.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were US$0.85 and US$0.78, respectively, in the first six months of
fiscal year 2017. Non-GAAP basic and Non-GAAP diluted net income
per ADS, which excluded share-based compensation expenses, were
US$1.06 and US$0.95, respectively.
Capital Expenditures
Capital expenditures for the first six months of fiscal year
2017 were US$31.6 million, an
increase of US$14.5 million from
US$17.1 million in the first six
months of fiscal year 2016. 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 the Company's current estimates, total net revenues for
the third quarter of fiscal year 2017 are expected to grow 68% to
70% on a year-over-year basis, in RMB terms. Taking into
consideration the recent significant change in RMB exchange rate
against the US dollar, the Company expects total net revenues for
the third quarter of fiscal year 2017 to be between US$227.5 million and US$230.3 million,
representing an increase of 60% to 62% on a year-over-year basis,
assuming no material change in exchange rates.
These estimates reflect the Company's current expectation, which
is subject to change.
Change of Stock Symbol
The Company will change its ticker symbol on the NYSE to "TAL",
effective on December 1, 2016, and
the Company retains the listing of its American depositary shares
on the NYSE.
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 2017 ended August 31,
2016 at 8:00 a.m. Eastern Time
on October 27, 2016 (8:00 p.m. Beijing time on October
27, 2016).
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
|
- Mainland China toll
free:
|
400-620-8038
|
- International toll:
|
+65-6713-5090
|
Conference ID:
|
90010227
|
A live and archived webcast of the conference call will be
available on the Investor Relations section of TAL's website at
en.100tal.com.
A telephone replay of the conference call will be available
through 8:59 a.m. U.S. Eastern time,
November 4, 2016 (8:59 p.m. Beijing time, November
4, 2016).
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
|
- Mainland China toll
free:
|
400-602-2065
|
- International
toll:
|
+61-2-8199-0299
|
Conference ID:
|
90010227
|
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 2017, 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 including mathematics, English, Chinese, physics,
chemistry, and biology. The Company's learning center network
includes 422 physical learning centers as of August 31, 2016, located in 25 key cities in
China: Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Wuhan, Xi'an,
Chengdu, Nanjing, Hangzhou, Taiyuan, Zhengzhou, Chongqing, Suzhou, Shenyang, Jinan, Shijiazhuang, Qingdao, Changsha, Luoyang, Nanchang, Ningbo, Wuxi, Fuzhou and Hefei. 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 "XRS."
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following
measures defined as non-GAAP financial measures by the U.S.
Securities and Exchange Commission 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 from 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:
Mei Li
Investor Relations
TAL Education Group
Tel: +86 10 52926658
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 U.S.
dollars)
|
|
|
As
of
February 29,
2016
|
|
As
of
August 31,
2016
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
434,042,036
|
|
$
503,784,203
|
Term
deposits
|
17,292,636
|
|
1,518,510
|
Restricted
cash-current
|
1,083,787
|
|
796,716
|
Short-term
investment
|
27,470,431
|
|
60,647,538
|
Inventory
|
600,441
|
|
1,671,016
|
Amounts due from related
parties-current
|
2,594,430
|
|
1,195,859
|
Deferred tax
assets-current
|
738,406
|
|
859,598
|
Income tax
receivables
|
-
|
|
1,321,015
|
Prepaid
expenses and other current assets
|
32,037,407
|
|
70,793,287
|
Total current
assets
|
515,859,574
|
|
642,587,742
|
Restricted
cash-non-current
|
3,881,858
|
|
5,166,621
|
Property and
equipment, net
|
114,629,683
|
|
133,824,115
|
Deferred tax
assets-non-current
|
6,654,778
|
|
11,106,677
|
Rental
deposit
|
17,114,552
|
|
24,115,884
|
Intangible
assets, net
|
15,194,421
|
|
35,627,251
|
Goodwill
|
87,022,517
|
|
210,636,982
|
Amounts due from related
parties-non-current
|
1,342,999
|
|
1,107,617
|
Long-term
investments
|
274,356,960
|
|
352,434,250
|
Long-term prepayments
and other non-current assets
|
25,321,691
|
|
97,760,676
|
Total
assets
|
$
1,061,379,033
|
|
$
1,514,367,815
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable
(including accounts payable of the consolidated VIEs
without recourse to TAL Education
Group of 9,371,013 and 15,072,117
as of February 29, 2016, and
August 31, 2016, respectively)
|
$
10,404,047
|
|
$
16,877,268
|
|
|
|
|
Deferred
revenue-current (including deferred revenue-current of the
consolidated VIEs without recourse to TAL Education Group of
260,137,064
and 419,885,063 as of February 29, 2016, and August 31, 2016,
respectively)
|
280,934,750
|
|
452,971,754
|
|
|
|
|
Amounts due to
related parties (including amounts due to related parties of the
consolidated VIEs without recourse
to TAL Education Group of 4,277,896
and 3,562,447 as of February 29, 2016, and August 31, 2016,
respectively)
|
4,277,896
|
|
3,562,447
|
|
|
|
|
Accrued expenses and
other current liabilities (including accrued expenses
and other current liabilities of
the consolidated VIEs without recourse to
TAL Education Group of 51,183,663 and 78,135,551 as of February 29,
2016,
and August 31, 2016,
respectively)
|
70,267,551
|
|
98,357,805
|
|
|
|
|
Income tax payable
(including income tax payable of the consolidated VIEs
without recourse to TAL Education Group of 15,525,069 and
16,238,515
as of February 29, 2016, and August 31, 2016,
respectively)
|
17,187,453
|
|
24,144,297
|
|
|
|
|
Deferred tax
liabilities-current (including deferred tax liabilities-current of the
consolidated VIEs without recourse
to TAL Education Group of 57,230 and
nil as of February 29, 2016, and
August 31, 2016, respectively)
|
91,730
|
|
75,900
|
|
|
|
|
Total current
liabilities
|
383,163,427
|
|
595,989,471
|
Deferred
revenue-non-current (including deferred revenue-non-current of
the
consolidated VIEs without recourse to TAL Education Group of
8,346,457
and 10,391,753 as of February 29, 2016, and August 31, 2016,
respectively)
|
8,346,457
|
|
10,391,753
|
|
|
|
|
Deferred tax
liabilities-non-current (including deferred tax
liabilities-non-current
of the consolidated VIEs without recourse to TAL Education Group of
1,164,389
and 12,279,721 as of February 29, 2016, and August 31, 2016,
respectively)
|
1,304,361
|
|
12,349,396
|
|
|
|
|
Bond payable
(including bond payable of the consolidated VIEs without recourse
to
TAL Education Group of nil and nil as of February 29, 2016, and
August 31,2016,
respectively)
|
227,827,301
|
|
228,740,608
|
|
|
|
|
Long-term debt
(including long-term debt of the consolidated VIEs without recourse
to
TAL Education Group of nil and nil as of February 29, 2016, and
August 31, 2016,
respectively)
|
-
|
|
25,000,000
|
Total
liabilities
|
620,641,546
|
|
872,471,228
|
|
|
|
|
TAL Education
Group Shareholders' Equity
|
|
|
|
Class A common
shares
|
90,310
|
|
91,349
|
Class B common
shares
|
71,456
|
|
71,456
|
Additional paid-in
capital
|
108,404,873
|
|
131,707,998
|
Statutory
reserve
|
22,981,900
|
|
22,981,900
|
Retained
earnings
|
306,381,011
|
|
375,357,424
|
Accumulated other
comprehensive (loss)/income
|
(949,647)
|
|
63,463,244
|
Total TAL
Education Group's equity
|
436,979,903
|
|
593,673,371
|
Non-controlling
interest
|
3,757,584
|
|
48,223,216
|
Total
equity
|
440,737,487
|
|
641,896,587
|
Total liabilities
and equity
|
$
1,061,379,033
|
|
$
1,514,367,815
|
TAL EDUCATION
GROUP
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In U.S. dollars,
except share, ADS, per share and per ADS data)
|
|
|
|
|
For the Three
Months Ended August
31,
|
For the Six Months
Ended August
31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
Net
revenues
|
$
173,329,982
|
|
$
271,121,287
|
|
$
302,716,944
|
|
$
466,216,375
|
|
Cost of
revenues
|
80,454,749
|
|
131,879,033
|
|
141,425,661
|
|
232,366,242
|
|
Gross
profit
|
92,875,233
|
|
139,242,254
|
|
161,291,283
|
|
233,850,133
|
|
Operating expenses
(note 1)
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
18,790,668
|
|
28,620,113
|
|
34,042,281
|
|
52,743,743
|
|
General and
administrative
|
37,492,740
|
|
61,343,393
|
|
71,072,504
|
|
114,773,223
|
|
Total operating
expenses
|
56,283,408
|
|
89,963,506
|
|
105,114,785
|
|
167,516,966
|
|
Government
subsidies
|
2,609,058
|
|
2,246,800
|
|
2,624,586
|
|
2,761,607
|
|
Income from
operations
|
39,200,883
|
|
51,525,548
|
|
58,801,084
|
|
69,094,774
|
|
Interest
income
|
4,927,453
|
|
4,449,108
|
|
9,739,359
|
|
7,837,460
|
|
Interest
expense
|
(1,879,395)
|
|
(2,667,238)
|
|
(3,731,975)
|
|
(4,555,211)
|
|
Other
(expenses)/income
|
(4,085,117)
|
|
23,802,211
|
|
(2,650,493)
|
|
23,787,119
|
|
Impairment loss on
long-term investments
|
(7,503,944)
|
|
(2,211,642)
|
|
(7,503,944)
|
|
(2,211,642)
|
|
Gain on fair value
change of long-term investment
|
450,000
|
|
-
|
|
450,000
|
|
-
|
|
Gain from disposal of
a component
|
50,000,000
|
|
-
|
|
50,000,000
|
|
-
|
|
Gain from disposal of
investments
|
235,797
|
|
-
|
|
235,797
|
|
-
|
|
Income before
provision for income tax and loss
from equity method investments
|
81,345,677
|
|
74,897,987
|
|
105,339,828
|
|
93,952,500
|
|
Provision for income
tax
|
(17,834,656)
|
|
(17,597,079)
|
|
(22,632,882)
|
|
(22,075,286)
|
|
Loss from equity
method investments
|
(18,741)
|
|
(2,168,346)
|
|
(273,021)
|
|
(3,840,133)
|
|
Net
income
|
63,492,280
|
|
55,132,562
|
|
82,433,925
|
|
68,037,081
|
|
Add: Net (gain)/loss
attributable to noncontrolling interest
|
(11,222)
|
|
607,705
|
|
753
|
|
939,332
|
|
Total net income
attributable
to TAL Education Group
|
$
63,481,058
|
|
$
55,740,267
|
|
$
82,434,678
|
|
$
68,976,413
|
|
Net income per
common share
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.40
|
|
$ 0.34
|
|
$ 0.52
|
|
$ 0.43
|
|
Diluted
|
0.36
|
|
0.31
|
|
0.47
|
|
0.39
|
|
Net income per ADS
(note 2)
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.79
|
|
$ 0.69
|
|
$ 1.03
|
|
$ 0.85
|
|
Diluted
|
0.72
|
|
0.61
|
|
0.94
|
|
0.78
|
|
Weighted average
shares used in calculating net income
per common share
|
|
|
|
|
|
|
|
|
Basic
|
159,898,391
|
|
162,158,462
|
|
159,863,134
|
|
161,961,997
|
|
Diluted
|
182,606,281
|
|
188,197,500
|
|
182,485,970
|
|
187,541,900
|
|
|
|
|
|
|
|
|
|
|
Note1: Share-based
compensation expenses are included in the operating costs and
expenses as follows:
|
|
|
|
|
For the Three
Months
|
|
For the Six
Months
|
|
|
Ended August
31,
|
|
Ended August
31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
Cost of
revenues
|
$11,129
|
|
$ 15,598
|
|
$ 22,258
|
|
$ 23,338
|
|
Selling and
marketing
|
548,135
|
|
762,661
|
|
1,044,755
|
|
1,538,626
|
|
General and
administrative
|
5,116,584
|
|
7,504,515
|
|
9,674,356
|
|
15,113,099
|
|
Total
|
$
5,675,848
|
|
$
8,282,774
|
|
$
10,741,369
|
|
$
16,675,063
|
|
|
|
|
|
|
|
|
|
|
Note 2: Each ADS
represents two Class A common shares.
|
|
|
|
|
|
|
|
|
TAL EDUCATION
GROUP
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(In U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
August
31,
|
|
For the Six Months
Ended
August
31,
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
|
Net
income
|
$
63,492,280
|
|
$
55,132,562
|
|
$
82,433,925
|
|
$
68,037,081
|
Other comprehensive
(loss)/income, net of tax
|
(4,367,740)
|
|
(30,496,590)
|
|
187,552
|
|
64,347,466
|
Comprehensive
income
|
59,124,540
|
|
24,635,972
|
|
82,621,477
|
|
132,384,547
|
Add: Comprehensive
(income)/loss attributable to noncontrolling
interest
|
(3,588)
|
|
659,981
|
|
5,178
|
|
1,004,756
|
Comprehensive
income attributable to TAL Education Group
|
$
59,120,952
|
|
$
25,295,953
|
|
$
82,626,655
|
|
$
133,389,303
|
|
|
|
|
|
|
|
|
TAL EDUCATION
GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In U.S. dollars,
except share, ADS, per share and per ADS data)
|
|
|
For the Three
Months
Ended August
31,
|
|
For the Six
Months
Ended August 31,
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
$
80,454,749
|
|
$
131,879,033
|
|
$
141,425,661
|
|
$
232,366,242
|
Share-based
compensation expense in cost of revenues
|
11,129
|
|
15,598
|
|
22,258
|
|
23,338
|
Non-GAAP cost of
revenues
|
80,443,620
|
|
131,863,435
|
|
141,403,403
|
|
232,342,904
|
|
|
|
|
|
|
|
|
Selling and
marketing expenses
|
18,790,668
|
|
28,620,113
|
|
34,042,281
|
|
52,743,743
|
Share-based
compensation expense in selling and marketing expenses
|
548,135
|
|
762,661
|
|
1,044,755
|
|
1,538,626
|
Non-GAAP selling
and marketing expenses
|
18,242,533
|
|
27,857,452
|
|
32,997,526
|
|
51,205,117
|
General and
administrative expenses
|
37,492,740
|
|
61,343,393
|
|
71,072,504
|
|
114,773,223
|
Share-based
compensation expense in general and administrative
expenses
|
5,116,584
|
|
7,504,515
|
|
9,674,356
|
|
15,113,099
|
Non-GAAP general
and administrative expenses
|
32,376,156
|
|
53,838,878
|
|
61,398,148
|
|
99,660,124
|
|
|
|
|
|
|
|
|
Operating costs
and expenses
|
136,738,157
|
|
221,842,539
|
|
246,540,446
|
|
399,883,208
|
Share-based
compensation expense in operating costs and expenses
|
5,675,848
|
|
8,282,774
|
|
10,741,369
|
|
16,675,063
|
Non-GAAP operating
costs and expenses
|
131,062,309
|
|
213,559,765
|
|
235,799,077
|
|
383,208,145
|
|
|
|
|
|
|
|
|
Income from
operations
|
39,200,883
|
|
51,525,548
|
|
58,801,084
|
|
69,094,774
|
Share based
compensation expenses
|
5,675,848
|
|
8,282,774
|
|
10,741,369
|
|
16,675,063
|
Non-GAAP income
from operations
|
44,876,731
|
|
59,808,322
|
|
69,542,453
|
|
85,769,837
|
|
|
|
|
|
|
|
|
Net income
attributable to TAL Education Group
|
63,481,058
|
|
55,740,267
|
|
82,434,678
|
|
68,976,413
|
Share based
compensation expenses
|
5,675,848
|
|
8,282,774
|
|
10,741,369
|
|
16,675,063
|
Non-GAAP net
income attributable to TAL Education Group
|
$
69,156,906
|
|
$
64,023,041
|
|
$
93,176,047
|
|
$
85,651,476
|
Net income per
ADS
|
|
Basic
|
$ 0.79
|
|
$ 0.69
|
|
$ 1.03
|
|
$ 0.85
|
Diluted
|
0.72
|
|
0.61
|
|
0.94
|
|
0.78
|
Non-GAAP Net
income per ADS (note 3)
|
|
|
|
|
|
|
|
Basic
|
$ 0.87
|
|
$ 0.79
|
|
$ 1.17
|
|
$ 1.06
|
Diluted
|
0.78
|
|
0.70
|
|
1.06
|
|
0.95
|
ADSs used in
calculating net income per ADS
|
|
|
|
|
|
|
|
Basic
|
79,949,196
|
|
81,079,231
|
|
79,931,567
|
|
80,980,998
|
Diluted
|
91,303,141
|
|
94,098,750
|
|
91,242,985
|
|
93,770,950
|
Note 3: The Non-GAAP
adjusted net income per ADS is computed using Non-GAAP adjusted net
income and the same number of ADSs used in GAAP basic and
diluted EPS calculation.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/tal-education-group-announces-unaudited-financial-results-for-the-second-fiscal-quarter-ended-august-31-2016-300352388.html
SOURCE TAL Education Group