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TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and Fiscal Year 2012 Ended February 29, 2012
PR Newswire
Apr 25, 2012
BEIJING, April 25, 2012 /PRNewswire-Asia/ -- 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 fourth quarter and fiscal year 2012 ended February 29, 2012.
Financial Highlights for the Fourth Fiscal Quarter Ended February 29, 2012
-- Net revenues increased by 55.2% year-over-year to US$52.2 million from
US$33.7 million in the same period of the prior fiscal year.
-- Net income from continuing operations decreased by 9.5% year-over-year
to US$7.6 million from US$8.4 million in the same period of the prior
fiscal year.
-- Net income attributable to TAL decreased by 10.2 % year-over-year to
US$7.6 million from US$8.4 million in the same period of the prior
fiscal year.
-- Non-GAAP(1) net income attributable to TAL, which excluded share-based
compensation expenses, decreased by 17.4 % year-over-year to US$9.0
million from US$10.9 million in the same period of the prior fiscal
year.
-- Basic and diluted net income per American Depositary Share ("ADS")(2)
were US$0.10 and US$0.10, respectively. Non-GAAP basic and diluted net
income per ADS, in each case excluding share-based compensation
expenses, were US$0.12 and US$0.12, respectively.
-- Total student enrollments during the fourth quarter of fiscal year 2012
increased by 47.0% year-over-year to approximately 228,500.
-- Total physical network decreased to 270 learning centers as of February
29, 2012 from 275 learning centers as of November 30, 2011.
Financial Highlights for the Fiscal Year Ended February 29, 2012
-- Net revenues increased by 60.5% year-over-year to US$177.5 million from
US$110.6 million in the prior fiscal year.
-- Net income from continuing operations decreased by 0.3% year-over-year
to US$24.3 million from US$24.4 million in the prior fiscal year.
-- Net income attributable to TAL increased by 1.1% year-over-year to
US$24.3 million from US$24.0 million in the prior fiscal year.
-- Non-GAAP net income attributable to TAL, which excluded share-based
compensation expenses, increased by 9.8% year-over-year to US$32.2
million from US$29.3 million in the prior fiscal year.
-- Basic and diluted net income per ADS were US$0.32 and US$0.31,
respectively. Non-GAAP basic and diluted net incomes per ADS, in each
case excluded share-based compensation expenses, were US$0.42 and
US$0.41, respectively.
-- Total student enrollments during the fiscal year ended February 29, 2012
increased by 41.9% year-over-year to approximately 690,300.
-- Total physical network grew to 270 learning centers as of February 29,
2012 from 132 learning centers as of February 28, 2011.
(1) As used in this press release,
non-GAAP operating costs and
expenses, non-GAAP cost of
revenues, non-GAAP selling and
marketing expenses, non-GAAP
general and administrative
expenses, non-GAAP income from
operations, non-GAAP net income
attributable to TAL, non-GAAP
basic and non-GAAP diluted net
income per ADS are defined to
exclude share-based compensation
expense from operating costs and
expenses, cost of revenues,
selling and marketing expenses,
general and administrative
expenses, income from operations,
net income attributable to TAL and
earnings per ADS, respectively.
See "About Non-GAAP Financial
Measures" and "Reconciliation of
Non-GAAP Measures To The Most
Comparable GAAP Measures" at the
end of this press release.
(2) Each ADS represents two Class A
common shares.
Financial and Operating Data--the Fourth Fiscal Quarter and Fiscal Year 2012 Ended February 29, 2012
(in US$ thousands, except per ADS data, student enrollments and percentages)
Three Months Ended
February 28/29,
2011 2012 Pct. Change
---- ---- -----------
Net revenues 33,654 52,216 55.2%
Net income attributable to
TAL 8,446 7,582 (10.2)%
Non-GAAP net income
attributable to TAL 10,924 9,019 (17.4)%
Operating income 8,161 6,321 (22.6)%
Non-GAAP operating income 10,640 7,758 (27.1)%
Net income per ADS
attributable to TAL - basic 0.11 0.10 (11.6)%
Net income per ADS
attributable to TAL -
diluted 0.11 0.10 (10.6)%
Non-GAAP net income per ADS
attributable to TAL - basic 0.14 0.12 (18.7)%
Non-GAAP net income per ADS
attributable to TAL -
diluted 0.14 0.12 (19.3)%
Total student enrollments in
small class, one-on-one
and online courses 155,400 228,500 47.0%
Three Months Ended
February 28/29,
2011 2012 Pct. Change
-----------
Net revenues 110,588 177,520 60.5%
Net income attributable to
TAL 24,041 24,314 1.1%
Non-GAAP net income
attributable to TAL 29,348 32,215 9.8%
Operating income 25,574 21,025 (17.8)%
Non-GAAP operating income 30,881 28,926 (6.3)%
Net income per ADS
attributable to TAL - basic 0.36 0.32 (11.3)%
Net income per ADS
attributable to TAL -
diluted 0.35 0.31 (11.5)%
Non-GAAP net income per ADS
attributable to TAL - basic 0.43 0.42 (3.7)%
Non-GAAP net income per ADS
attributable to TAL -
diluted 0.43 0.41 (3.9)%
Total student enrollments in
small class, one-on-one
and online courses 486,400 690,300 41.9%
"I am pleased to report that in our fourth fiscal quarter revenue growth once again exceeded our guidance and student enrollments continued to show strong momentum. Fiscal 2012 as a whole was a year of successful business expansion and enlarged market presence. We more than doubled the number of learning centers in our network and rolled out to eight new cities during the year. We also continued to enhance our product offering in our core small class business, made significant progress in online courses, and introduced a new tutoring format branded 'Mobby' to address the highly complementary pre-K market. In addition, we began to put into place a multi-level business unit structure with headquarters functions as the organizational foundation for our long-term growth and scaling," said TAL's Chairman and Chief Executive Officer, Mr. Bangxin Zhang.
"In fiscal year 2013, we aim to balance growth opportunities with our ambition to further solidify the basis of our leading and innovative education brand. We believe the time is right to build upon the traction we have established over the course of the last fiscal year in the 14 cities in which we now have learning centers. At the same time, we will continue to enhance our competitive strengths, particularly the top quality content and curriculum and outstanding teacher resources of our proven small-class business model," Mr. Zhang commented.
Mr. Joseph Kauffman, Chief Financial Officer, continued, "For our one-on-one business, our primary objective is not market share but managing the growth for continued profitability. On the back of ongoing strong topline performance, we maintained our efforts begun in the previous quarter to increase learning center utilization and implement cost and expense controls. As a result, our one-on-one business was again profitable in the fourth quarter."
"In the quarters ahead, we will continue to focus on the long-term health of our business. We will invest aggressively in our core assets and the operational support and systems required to sustain our successful business expansion. At the same time, we will look for cost and expense optimization opportunities and increased scalability in our business model," Mr. Kauffman added.
Financial Results for the Fourth Fiscal Quarter Ended February 29, 2012
Net Revenues
For the fourth quarter of fiscal year 2012, TAL reported net revenues of US$52.2 million, representing a 55.2% increase from US$33.7 million for the fourth quarter of fiscal year 2011. The increase was mainly driven by an increased number of total student enrollments combined with higher average selling prices (ASPs). Total student enrollments increased by 47.0% to approximately 228,500 from approximately 155,400 in the same period of the prior fiscal year. The increase in student enrollments was driven primarily by small class and online courses enrollments, and to a lesser extent by one-on-one tutoring services. ASPs increased by 5.5% to US$229 in the fourth quarter of fiscal year 2012 from US$217 in the same quarter of fiscal year 2011, mainly driven by foreign exchange rate fluctuation and hourly rate increases in a portion of our small class course offerings.
Operating Costs and Expenses
Operating costs and expenses were US$45.9 million, a 79.0% increase from US$25.6 million in the fourth quarter of fiscal year 2011. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$44.5 million, a 91.9% increase from US$23.2 million in the fourth quarter of fiscal year 2011.
Cost of revenues increased by 76.4% to US$28.5 million, from US$16.2 million in the fourth quarter of fiscal year 2011. The increase in cost of revenues was primarily due to an increase in teacher compensation and rental costs associated with the business expansion that took place during fiscal year 2012, as well as other staff costs to support the larger number of learning centers in operation. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 77.6% to US$28.4 million, from US$16.0 million in the fourth quarter of fiscal year 2011.
Selling and marketing expenses increased by 82.4% to US$5.5 million, from US$3.0 million in the fourth quarter of fiscal year 2011. The increase was primarily due to an increase in sales and marketing staff expenses to support a greater number of program and service offerings and larger learning center network, and increased advertising expenses for marketing promotion. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 104.3% to US$5.2 million, from US$2.5 million in the fourth quarter of fiscal year 2011.
General and administrative expenses increased by 83.9% to US$11.9 million, from US$6.4 million in the fourth quarter of fiscal year 2011. The increase was mainly due to an increase in general and administrative staff expenses to support expanded operations and related rental and office expenses, as well as consulting fees incurred in the quarter. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 134.9% to US$10.8 million, from US$4.6 million in the fourth quarter of fiscal year 2011.
Total share-based compensation expenses that were allocated to related operating costs and expenses amounted to US$1.4 million in the fourth quarter of fiscal year 2012, as compared to US$2.5 million in the fourth quarter of fiscal year 2011.
Gross Profit
Gross profit increased by 35.5% to US$23.7 million, from US$17.5 million in the fourth quarter of fiscal year 2011.
Income from Operations
Income from operations decreased by 22.6% to US$6.3 million, from US$8.2 million in the fourth quarter of fiscal year 2011. Non-GAAP income from operations, which excluded share-based compensation expenses, decreased by 27.1% to US$7.8 million, from US$10.6 million in the fourth quarter of fiscal year 2011.
Income Tax Expense
Income tax expense was US$0.9 million in the fourth quarter of fiscal year 2012, as compared to US$0.7 million in the fourth quarter of fiscal year 2011, mainly because the income tax exemption period of one of TAL's entities expired in calendar year 2010 and this entity has become subject to a still preferential, but higher tax rate from calendar year 2011.
Net Income from Continuing Operations
Net income from continuing operations decreased by 9.5% to US$7.6 million, from US$8.4 million in the fourth quarter of fiscal year 2011.
Net Income Attributable to TAL Education Group
Net income attributable to TAL decreased 10.2% to US$ 7.6 million, from US$8.4 million in the fourth quarter of fiscal year 2011. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, decreased by 17.4% to US$9.0 million, from US$10.9 million in the fourth quarter of fiscal year 2011.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were US$0.10 and US$0.10, respectively, in the fourth quarter of fiscal year 2012. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.12 and US$0.12, respectively.
Financial Results for the Fiscal Year Ended February 29, 2012
Net Revenues
For the fiscal year 2012, TAL reported net revenues of US$177.5 million, representing a 60.5% increase from US$110.6 million in the fiscal year 2011. The increase was primarily due to an increase in the number of total student enrollments and higher ASP. Total student enrollments increased by 41.9% to approximately 690,300 from approximately 486,400 in the fiscal year ended February 28, 2011. ASPs increased by 13.1% to US$257 per enrollment in fiscal year 2012 from US$227 per enrollment in fiscal year 2011 mainly driven by an increase in the hourly rate of a portion of small class offerings in the first quarter of fiscal year 2012.
Operating Costs and Expenses
Operating costs and expenses were US$156.7 million, an 84.0% increase from US$85.2 million in fiscal year 2011. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$148.8 million, an 86.3% increase from US$79.9 million in fiscal year 2011.
Cost of revenues increased by 70.3% to US$95.6 million, from US$56.1 million in fiscal year 2011. The increase in cost of revenues was primarily due to an increase in teacher compensation, rental costs associated with the business expansion, as well as staff costs to support the larger number of learning centers in operation. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 71.1% to US$95.2 million, from US$55.6 million in fiscal year 2011.
Selling and marketing expenses increased by 133.2% to US$23.2 million, from US$9.9 million in fiscal year 2011. The increase was primarily due to an increase in sales and marketing staff expenses to support a greater number of program and service offerings and larger learning center network, and increased advertising expenses for marketing promotion. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 141.8% to US$21.7 million, from US$9.0 million in fiscal year 2011.
General and administrative expenses increased by 98.1% to US$37.8 million, from US$19.1 million in fiscal year 2011. The increase was mainly due to an increase in general and administrative staff expenses to support expanded operations and related rental and office expenses, and also consulting fees incurred in the second half year of fiscal year 2012. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 108.4% to US$31.8 million, from US$15.3 million in fiscal year 2011.
Total share-based compensation expenses that were allocated to related operating costs and expenses amounted to US$7.9 million in fiscal year 2012, as compared to US$5.3 in fiscal year 2011.
Gross Profit
Gross profit increased by 50.5% to US$81.9 million, from US$54.4 million in fiscal year 2011.
Income from Operations
Income from operations decreased by 17.8% to US$21.0 million, from US$25.6 million in fiscal year 2011. Non-GAAP income from operations, which excluded share-based compensation expenses, decreased by 6.3% to US$28.9 million, from US$30.9 million in fiscal year 2011.
Income Tax Expense
Income tax expense was US$4.2 million in fiscal year 2012, as compared to US$2.6 million in fiscal year 2011, mainly because the exemption period of one of TAL's entities expired in calendar year 2010 and this entity has become subject to a still preferential, but higher tax rate from calendar year 2011.
Net Income from Continuing Operations
Net income from continuing operations decreased by 0.3% to US$24.3 million, from US$ 24.4 million in fiscal year 2011.
Net Income Attributable to TAL Education Group
Net income attributable to TAL increased by 1.1% to US$24.3 million, from US$24.0 million in fiscal year 2011. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 9.8% to US$32.2 million, from US$29.3 million in fiscal year 2011.
Basic and Diluted Net Income per ADS
Basic and diluted net income per ADS were US$0.32 and US$0.31, respectively, in the fiscal year 2012. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.42 and US$0.41, respectively.
Capital Expenditures
Capital expenditures for fiscal year 2012 were US$74.3 million, driven largely by the purchase of office space for which the Company paid $62.5 million
Cash and Cash Equivalents
As of February 29, 2012, the Company had US$188.6 million of cash and cash equivalents and US$10.3 million of term deposits, as compared to US$173.2 million of cash and cash equivalents and US$25.9 million of term deposit as of February 28, 2011.
Deferred Revenue
As of February 29, 2012, the Company's deferred revenue balance was US$85.6 million compared to US$50.7 million as of February 28, 2011, representing an increase of 68.9% versus the same period of the previous year.
Business Outlook
Based on the Company's current estimates, total net revenues for the fiscal quarter ending May 31, 2012 are expected to be between US$44.2 million and US$45.8 million, representing an increase of 33% to 38% on a year-over-year basis. This estimate reflects the Company's current expectation, which is subject to change.
For fiscal year ending February 28,2013, the Company expects total net revenues to be in the estimated range of US$230.8 million to US$239.7 million, representing an increase of 30% to 35% year-over-year, assuming no material change in exchange rates.
Conference Call
The Company will host a conference call and live webcast to discuss its financial results for the fourth fiscal quarter and fiscal year 2012 ended February 29, 2012 at 8:00 am Eastern Time on April 25, 2012 (8:00 pm Beijing time on April 25, 2012).
The dial-in details for the live conference call are as follows:
International: +656-723-9381
U.S.: +1-718-354-1231
China: 800-819-0121
Conference ID: 67174146
A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at en.xueersi.org.
A telephone replay of the call will be available after the conclusion of the conference call through May 2, 2012.
The dial-in details for the replay are as follows:
International: +61-2-8235-5000
U.S. : +1-718-354-1232
China: 400-692-0026
Conference ID: 67174146
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 first quarter and full year of fiscal year 2013 and 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: its ability to continue to attract students to enroll in its courses; its ability to continue to recruit, train and retain qualified teachers; its ability to improve the content of its existing course offerings and to develop new courses; its ability to maintain and enhance its brand; its ability to maintain and continue to improve its teaching results; and its 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 Securities and Exchange Commission. TAL Education Group does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release, and TAL Education Group undertakes no duty to update such information, except as required under applicable law.
About TAL Education Group
TAL Education Group, which operates under the brand "Xueersi," is a leading K-12 after-school tutoring service provider in China associated with high teaching quality and outstanding student academic performance. Its tutoring services cover the core subjects in China's school curriculum, including mathematics, English, Chinese, physics, chemistry and biology, and are delivered through three formats: small class, one-on-one, and online courses. The Company's network includes 270 physical learning centers as of February 29, 2012, located in 14 key cities in China: Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Wuhan, Xi'an, Chengdu, Nanjing, Hangzhou, Taiyuan, Zhengzhou, Chongqing, and Suzhou. It also operates www.eduu.com, a leading online education platform in China. The Company's 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 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 charge that has 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:
For Investors:
Fei Li
Investor Relations
TAL Education Group
Tel: +86-10-5292-6658
Email: ir@xueersi.com
For Media:
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 As of
February 28, February 29,
2011 2012
---- ----
ASSETS
Current assets
Cash and cash equivalents $173,165,661 $188,579,767
Term deposits 25,870,071 10,328,116
Available-for-sale securities 465,709 361,803
Inventory 117,827 223,611
Deferred tax assets-current 1,082,932 1,729,758
Prepaid expenses and other current assets 4,746,929 9,011,975
--------- ---------
Total current assets 205,449,129 210,235,030
----------- -----------
Property and equipment, net 7,515,325 76,726,219
Deferred tax assets-non-current 668,096 490,222
Rental deposit 2,818,126 4,545,605
Intangible assets, net 656,785 183,523
Goodwill 662,583 548,825
Long-term prepayments - 1,923,481
--- ---------
Total assets $217,770,044 $294,652,905
============ ============
LIABILITIES AND EQUITY
Current liabilities
Accounts payable (including accounts payable of the consolidated $911,254 $2,863,596
VIEs without recourse to TAL Education Group of 736,655 and
1,993,297 as of February 28, 2011,and February 29, 2012,
respectively)
Deferred revenue (including deferred revenue of the consolidated 50,678,025 85,594,032
VIEs without recourse to TAL Education Group of 34,169,473
and 50,395,945 as of February 28, 2011,and February 29, 2012,
respectively)
Amounts due to related parties (including amounts due to related 79,893 -
parties of the consolidated VIEs without recourse to TAL
Education Group of 79,893 and nil as of February 28, 2011,
and February 29, 2012 ,respectively)
Accrued expenses and other current liabilities (including accrued 8,053,980 15,284,190
expenses and other current liabilities without recourse to TAL
Education Group of 5,729,657 and 9,546,915 as of February 28,
2011, and February 29, 2012, respectively)
Income tax payable (including income tax payable of the 2,877,887 637,302
consolidated VIEs without recourse to TAL Education Group
of 2,650,269 and 2,206,266 as of February 28, 2011, and
February 29, 2012, respectively)
Total current liabilities 62,601,039 104,379,120
---------- -----------
Deferred tax liabilities-non-current (including deferred tax 117,781 156,494
liabilities-non-current of the consolidated VIEs without
recourse to TAL Education Group of 85,248 and 45,881
as of February 28, 2011, and February 29, 2012, respectively)
Total liabilities 62,718,820 104,535,614
---------- -----------
TAL Education Group Shareholders' Equity
Class A common shares 27,600 45,277
Class B common shares 125,000 109,681
Additional paid-in capital 112,055,718 119,769,989
Statutory reserve 8,240,697 10,502,713
Retained earnings 32,727,630 54,779,267
Accumulated other comprehensive income 1,874,579 4,910,364
--------- ---------
Total TAL Education Group's equity 155,051,224 190,117,291
----------- -----------
Total liabilities and equity $217,770,044 $294,652,905
============ ============
TAL Education Group
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. dollars, except shares, ADS, per share and per ADS data)
For the Three Months Ended For the Fiscal Year Ended
February 28/29, February 28/29,
2011 2012 2011 2012
---- ---- ---- ----
Net revenues $33,653,533 $52,215,556 $110,588,299 $177,519,672
Cost of revenues 16,164,293 28,510,837 56,142,838 95,587,218
---------- ---------- ---------- ----------
Gross profit 17,489,240 23,704,719 54,445,461 81,932,454
---------- ---------- ---------- ----------
Operating expenses (note 1)
Selling and marketing 3,033,166 5,533,211 9,934,938 23,166,231
General and administrative 6,443,234 11,850,869 19,085,014 37,814,962
Impairment loss on goodwill - - - 139,660
--- --- --- -------
Total operating expenses 9,476,400 17,384,080 29,019,952 61,120,853
--------- ---------- ---------- ----------
Government Subsidies 148,537 - 148,537 213,270
------- --- ------- -------
Income from operations 8,161,377 6,320,639 25,574,046 21,024,871
--------- --------- ---------- ----------
Interest income 773,592 909,394 1,346,284 3,499,926
Interest expense (270) - (59,212) -
Other (expenses)/ income (36,926) 1,214,199 1,718 3,945,306
Gain from sales of available-for-sale securities - - 6,429 -
Gain on extinguishment of liabilities 134,370 - 134,370 -
------- --- ------- ---
Income before income tax provision 9,032,143 8,444,232 27,003,635 28,470,103
Provision for income tax (656,545) (862,055) (2,628,090) (4,156,450)
-------- -------- ---------- ----------
Net income from continuing operations 8,375,598 7,582,177 24,375,545 24,313,653
--------- --------- ---------- ----------
Net income/(loss) from discontinued operations, net of taxes 70,674 - (334,395) -
------ --- -------- ---
Net income 8,446,272 7,582,177 24,041,150 24,313,653
--------- --------- ---------- ----------
Total net income attributable to TAL Education Group $8,446,272 $7,582,177 $24,041,150 $24,313,653
========== ========== =========== ===========
TAL Education Group
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. dollars, except shares, ADS, per share and per ADS data)
For the Three Months Ended For the Fiscal Year Ended
February 28/29, February 28/29,
2011 2012 2011 2012
---- ---- ---- ----
Net income per common share
Basic continuing operations $0.05 $0.05 $0.18 $0.16
Basic from discontinued operations 0 - 0 -
--- --- --- ---
Basic 0.05 0.05 0.18 0.16
==== ==== ==== ====
Diluted from continuing operations 0.05 0.05 0.18 0.16
Diluted from discontinued operations 0 - 0 -
--- --- --- ---
Diluted 0.05 0.05 0.18 0.16
==== ==== ==== ====
Net income per ADS (note 2)
Basic from continuing operations 0.11 0.1 0.36 0.32
Basic from discontinued operations 0 - 0 -
--- --- --- ---
Basic 0.11 0.1 0.36 0.32
==== === ==== ====
Diluted from continuing operations 0.11 0.1 0.35 0.31
Diluted from discontinued operations 0 - 0 -
--- --- --- ---
Diluted $0.11 $0.10 $0.35 $0.31
===== ===== ===== =====
Weighted average shares used in
calculating net income per common share
Basic 152,600,000 154,958,044 131,911,539 154,000,219
Diluted 155,591,537 156,151,875 136,445,635 155,874,381
Notes:
Note 1: Share-based compensation
expenses are included in the
operating costs and expenses as
follows:
For the Three Months For the Fiscal Year
Ended February 28/29 Ended February 28/29
-------------------- --------------------
2011 2012 2011 2012
---- ---- ---- ----
Cost of revenues
$151,096 $71,359 $521,387 $417,984
Selling and marketing 502,139 361,164 975,114 1,497,266
General and administrative 1,824,959 1,004,448 3,809,971 5,985,993
Total $2,478,194 $1,436,971 $5,306,472 $7,901,243
========== ========== ========== ==========
Note 2: Each ADS represents
two Class A common shares.
TAL Education Group
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures
(In U.S. dollar, except share, ADS, per share and per ADS data)
For the Three Months For the Fiscal Year
Ended February 28/29, Ended February 28/29,
--------------------- ---------------------
2011 2012 2011 2012
---- ---- ---- ----
Cost of revenues $16,164,293 $28,510,837 $56,142,838 $95,587,218
Share-based
compensation expense in
cost of revenues 151,096 71,359 521,387 417,984
Non-GAAP cost of
revenues 16,013,197 28,439,478 55,621,451 95,169,234
========== ========== ========== ==========
Selling and marketing
expenses 3,033,166 5,533,211 9,934,938 23,166,231
Share-based
compensation expense in
selling and marketing
expenses 502,139 361,164 975,114 1,497,266
Non-GAAP selling and
marketing expenses 2,531,027 5,172,047 8,959,824 21,668,965
========= ========= ========= ==========
General and
administrative expenses 6,443,234 11,850,869 19,085,014 37,814,962
Share-based
compensation expense in
general and
administrative expenses 1,824,959 1,004,448 3,809,971 5,985,993
Non-GAAP general and
administrative expenses 4,618,275 10,846,421 31,828,969
15,275,043
Operating costs and
expenses 25,640,693 45,894,917 85,162,790 156,708,071
Share-based
compensation expense in
operating costs and
expenses 2,478,194 1,436,971 5,306,472 7,901,243
Non-GAAP operating
costs and expenses 23,162,499 44,457,946 148,806,828
79,856,318
Income from operations 8,161,377 6,320,639 25,574,046 21,024,871
Share based compensation
expenses 2,478,194 1,436,971 5,306,472 7,901,243
Non-GAAP income from
operations 10,639,571 7,757,610 30,880,518 28,926,114
========== ========= ========== ==========
GAAP net income
attributable to TAL
Education Group 8,446,272 7,582,177 24,041,150 24,313,653
Share based compensation
expenses 2,478,194 1,436,971 5,306,472 7,901,243
Non-GAAP net income
attributable to TAL
Education Group $10, 924,466 $9,019,148 $32,214,896
$29,347,622
For the Three Months For the Fiscal Year Ended
Ended February 28/29, February 28/29,
--------------------- ---------------
2011 2012 2011 2012
---- ---- ---- ----
Net income per ADS
- Basic $0.11 $0.10 $0.36 $0.32
- Diluted 0.11 0.10 0.35 0.31
Non-GAAP net income per ADS
- Basic 0.14 0.12 0.43 0.42
- Diluted $0.14 $0.12 $0.43 $0.41
ADSs used in calculating net income per ADS
- Basic 76,300,000 77,479,022 65,955,769 77,000,109
- Diluted 77,795,768 78,075,937 68,222,817 77,937,191
Note:
(1) The Non-GAAP adjusted
net income per share and per
ADS are computed using Non-
GAAP adjusted net income and
the same number of shares
and ADSs used in GAAP basic
and diluted EPS calculation.
SOURCE TAL Education Group
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