Home > Overseas Investment News > TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and the Fiscal Year 2019
TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and the Fiscal Year 2019
2019-04-25

- Quarterly Results:
     Net Revenues up by 44.1% Year-Over-Year
     Income from Operations up by 71.5% Year-Over-Year
     Non-GAAP Income from Operations up by 72.4% Year-Over-Year
     Total Student Enrollments up by 71.2% Year-Over-Year
- Fiscal Year Results:
     Net Revenues up by 49.4%
     Income from Operations up by 63.7%
     Non-GAAP Income from Operations up by 63.8%
     
Average Student Enrollments up by 87.8% Year-Over-Year

BEIJING, April 25, 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 fourth quarter and the fiscal year ended February 28, 2019.

Highlights for the Fourth Quarter of Fiscal Year 2019

  • Net revenues increased by 44.1% year-over-year to US$726.6 million from US$504.1 million in the same period of the prior year.
  • Income from operations increased by 71.5% to US$114.7 million from US$66.9 million in the same period of the prior year.
  • Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 72.4% to US$137.0 million from US$79.5 million in the same period of the prior year.
  • Net income attributable to TAL increased by 43.2% to US$99.6 million from US$69.5 million in the same period of the prior year.
  • Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 48.4% to US$121.9 million from US$82.1 million in the same period of the prior year.
  • Basic and diluted net income per American Depositary Share ("ADS") were both US$0.17. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.21 and US$0.20, respectively. Three ADSs represent one Class A common share.
  • Cash, cash equivalents and short-term investments totaled US$1,515.6 million as of February 28, 2019, compared to US$1,498.9 million as of February 28, 2018.
  • Total student enrollments increased by 71.2% year-over-year to approximately 4,478,730 from approximately 2,615,760 in the same period of the prior year.

Highlights for the Fiscal Year Ended February 28, 2019

  • Net revenues increased by 49.4% year-over-year to US$2,563.0 million from US$1,715.0 million in fiscal year 2018.
  • Income from operations increased by 63.7% to US$341.6 million from US$208.6 million in fiscal year 2018.
  • Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 63.8% to US$418.9 million from US$255.8 million in fiscal year 2018.
  • Net income attributable to TAL increased by 85.1% year-over-year to US$367.2 million from US$198.4 million in fiscal year 2018.
  • Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 81.0% year-over-year to US$444.5 million from US$245.6 million in fiscal year 2018.
  • Basic and diluted net income per ADS were US$0.64 and US$0.61, respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, were US$0.78 and US$0.74, respectively.
  • Average student enrollments per quarter in fiscal year 2019 increased by 87.8% year-over-year to approximately 3,498,040 from approximately 1,862,410 in fiscal year 2018.
  • Total physical network increased from 594 learning centers in 42 cities as of February 28, 2018 to 676 learning centers in 56 cities as of February 28, 2019.

Financial and Operating Data——Fourth Quarter and Fiscal Year 2019

(In US$ thousands, except per ADS data, student enrollments and percentages)



Three Months Ended


February 28,


2018

2019

Pct. Change

Net revenues

504,098

726,561

44.1%

Operating income

66,876

114,706

71.5%

Non-GAAP operating income

79,475

136,981

72.4%

Net income attributable to TAL

69,539

99,612

43.2%

Non-GAAP net income attributable
to TAL

 

82,138

 

121,887

 

48.4%

Net income per ADS attributable to
TAL – basic

 

0.13

 

0.17

 

38.9%

Net income per ADS attributable to
TAL – diluted

 

0.12

 

0.17

 

40.6%

Non-GAAP net income per ADS
attributable to TAL – basic

 

0.15

 

0.21

 

43.8%

Non-GAAP net income per ADS
attributable to TAL – diluted

 

0.14

 

0.20

 

45.7%

Total student enrollments

2,615,760

4,478,730

71.2%

 


Fiscal Year Ended


February 28,


2018

2019

Pct. Change

Net revenues

1,715,016

2,562,984

49.4%

Operating income

208,604

341,582

63.7%

Non-GAAP operating income

255,754

418,859

63.8%

Net income attributable to TAL

198,440

367,236

85.1%

Non-GAAP net income attributable to
TAL

 

245,590

 

444,513

 

81.0%

Net income per ADS attributable to
TAL – basic

 

0.38

 

0.64

 

70.5%

Net income per ADS attributable to
TAL – diluted

 

0.34

 

0.61

 

77.5%

Non-GAAP net income per ADS
attributable to TAL – basic

 

0.47

 

0.78

 

66.7%

Non-GAAP net income per ADS
attributable to TAL – diluted

 

0.43

 

0.74

 

74.0%

Average student enrollments per
quarter

1,862,410

3,498,040

87.8%

"We are pleased to report solid financial and operational progress in the fiscal fourth quarter as well as in fiscal year 2019. Our overall education program is proceeding as planned with healthily paced growth in online business and measured capacity expansion in our learning center and geographic network," said Mr. Rong Luo, TAL's Chief Financial Officer.

"Looking ahead, we will continue to invest in new education technology and develop more diversified course offerings to combine growth with improved efficiencies and better meet the demand from students in different tiers of cities. Ongoing innovations of our online and offline education programs enable us to train more students in smarter ways, in a shorter time and therefore at reduced cost, and with quality results," Mr. Luo explained.

Financial Results for the Fourth Quarter of Fiscal Year 2019

Net Revenues

In the fourth quarter of fiscal year 2019, TAL reported net revenues of US$726.6 million, representing a 44.1% increase from US$504.1 million in the fourth quarter of fiscal year 2018. The increase was mainly driven by an increase in total student enrollments, which increased by 71.2% to approximately 4,478,730 from approximately 2,615,760 in the same period of the prior year. The increase in total student enrollments was driven primarily by promotions in small class and online courses.

Operating Costs and Expenses

In the fourth quarter of fiscal year 2019, operating costs and expenses were US$611.9 million, a 39.9% increase from US$437.4 million in the fourth quarter of fiscal year 2018. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$589.6 million, a 38.8% increase from US$424.8 million in the fourth quarter of fiscal year 2018.

Cost of revenues increased by 24.1% to US$306.2 million, from US$246.7 million in the fourth quarter of fiscal year 2018. The increase in cost of revenues was mainly due to an increase in teacher compensation and rental costs. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 24.1% to US$306.0 million from US$246.6 million in the fourth quarter of fiscal year 2018.

Selling and marketing expenses increased by 73.8% to US$136.2 million from US$78.3 million in the fourth quarter of fiscal year 2018. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 72.5% to US$132.9 million from US$77.0 million in the fourth quarter of fiscal year 2018. The increase in selling and marketing expenses in the fourth quarter of fiscal year 2019 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 50.9% to US$169.6 million from US$112.3 million in the fourth quarter of fiscal year 2018. 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 49.0% to US$150.8 million from US$101.2 million in the fourth quarter of fiscal year 2018.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 76.8% to US$22.3 million in the fourth quarter of fiscal year 2019 from US$12.6 million in the same period of fiscal year 2018.

Gross Profit                                                                                                                                 

Gross profit increased by 63.3% to US$420.4 million from US$257.4 million in the fourth quarter of fiscal year 2018.

Income from Operations

Income from operations increased by 71.5% to US$114.7 million from US$66.9 million in the fourth quarter of fiscal year 2018. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 72.4% to US$137.0 million from US$79.5 million in the fourth quarter of fiscal year 2018.

Other income 

Other income was US$24.7 million in the fourth quarter of fiscal year 2019, mainly due to gains from the fair value change of an equity security with readily determinable fair value and remeasuring the fair value of the previously held equity interests during a business combination achieved in stages.

Impairment loss on long-term investments

Impairment loss on long-term investments was US$7.2 million in the fourth quarter of fiscal year 2019, compared to nil in the fourth quarter of fiscal year 2018. 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

Income tax expense was US$33.2 million in the fourth quarter of fiscal year 2019, compared to US$8.7 million in the fourth quarter of fiscal year 2018.

Net Income Attributable to TAL Education Group

Net income attributable to TAL increased by 43.2% to US$99.6 million from US$69.5 million in the fourth quarter of fiscal year 2018. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 48.4% to US$121.9 million from US$82.1 million in the fourth quarter of fiscal year 2018.

Basic and Diluted Net Income per ADS

Basic and diluted net income per ADS were both US$0.17 in the fourth quarter of fiscal year 2019. Non-GAAP basic and Non-GAAP diluted net income per ADS, which excluded share-based compensation expenses, were US$0.21 and US$0.20, respectively.

Capital Expenditures

Capital expenditures for the fourth quarter of fiscal year 2019 were US$209.1 million, an increase of US$178.3 million from US$30.8 million in the fourth quarter of fiscal year 2018. The increase was mainly due to the purchase of land use rights, 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 activities.

Cash, Cash Equivalents and Short-Term Investments

As of February 28, 2019, the Company had US$1,247.1 million of cash and cash equivalents and US$268.4 million of short-term investments, compared to US$711.5 million of cash and cash equivalents and US$787.4 million of short-term investments as of February 28, 2018.

Deferred Revenue

As of February 28, 2019, the Company's deferred revenue balance was US$436.1 million, compared to US$842.3 million as of February 28, 2018, representing a year-over-year decrease of 48.2% mainly due to the change of tuition fees collection schedule to meet certain regulatory requirement and the adoption of Revenue from Contracts with Customers ("Topic 606") beginning on March 1, 2018.

Financial Results for the Fiscal Year Ended February 28, 2019

Net Revenues

For fiscal year 2019, TAL reported net revenues of US$2,563.0 million, representing a 49.4% increase from US$1,715.0 million in fiscal year 2018. The increase was mainly driven by an increase in total student enrollments. Average student enrollments per quarter increased by 87.8% to approximately 3,498,040 from approximately 1,862,410 in 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 fiscal year 2019, operating costs and expenses were US$2,228.1 million, a 47.5% increase from US$1,511.1 million in fiscal year 2018. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$2,150.8 million, a 46.9% increase from US$1,463.9 million in fiscal year 2018.

Cost of revenues increased by 32.0% to US$1,164.5 million from US$882.3 million in fiscal year 2018. The increase in cost of revenues was mainly due to an increase in teacher compensation and rental costs. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 32.0% to US$1,163.7 million from US$882.0 million in fiscal year 2018.

Selling and marketing expenses increased by 99.9% to US$484.0 million from US$242.1 million in fiscal year 2018. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 99.8% to US$473.5 million from US$237.1 million in fiscal year 2018. The increase in selling and marketing expenses in fiscal year 2019 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 50.1% to US$579.7 million from US$386.3 million in fiscal year 2018. 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 49.1% to US$513.6 million from US$344.5 million in fiscal year 2018.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 63.9% to US$77.3 million in fiscal year 2019 from US$47.1 million in fiscal year 2018.

Gross Profit

Gross profit increased by 68.0% to US$1,398.5 million from US$832.7 million in fiscal year 2018.

Income from Operations

Income from operations increased by 63.7% to US$341.6 million from US$208.6 million in fiscal year 2018. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 63.8% to US$418.9 million from US$255.8 million in fiscal year 2018.

Other income

Other income was US$131.7 million for fiscal year 2019, compared to other income of US$17.4 million for fiscal year 2018. Other income of fiscal year 2019 was mainly from the fair value changes of a long-term investment. The fair value changes of the long-term investment were transferred from accumulated other comprehensive income to other income as the investment was reclassified from available-for-sale investment to equity security with readily determinable fair value upon listing on the Hong Kong Exchange in November 2018.

Impairment loss on long-term investments

Impairment loss on long-term investments was US$58.1 million in fiscal year 2019, compared to US$2.2 million in fiscal year 2018. Impairment loss on long-term investments was mainly due to the other-than-temporary declines in the value of long-term investments in several investees.

Income Tax Expense

Income tax expense was US$76.5 million in fiscal year 2019, compared to US$44.7 million in fiscal year 2018.

Net Income Attributable to TAL Education Group

Net income attributable to TAL increased by 85.1% to US$367.2 million from US$198.4 million in fiscal year 2018. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 81.0% to US$444.5 million from US$245.6 million in fiscal year 2018.

Basic and Diluted Net Income per ADS

Basic and diluted net income per ADS were US$0.64 and US$0.61, respectively, in fiscal year 2019. Non-GAAP basic and Non-GAAP diluted net income per ADS, which excluded share-based compensation expenses, were US$0.78 and US$0.74, respectively.

Capital Expenditures

Capital expenditures for fiscal year 2019 were US$353.3million, an increase of US$227.0 million from US$126.3 million in fiscal year 2018. The increase was mainly due to the purchase of land use rights, 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 activities.

Business Outlook

Based on the Company's current estimates, total net revenues for the first quarter of fiscal year 2020 are expected to be between US$ 699.3 million and US$ 710.3 million, representing an increase of 27% to 29% 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 33% to 35% for the first 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 fourth fiscal quarter and the fiscal year ended February 28, 2019 at 8:00 a.m. Eastern Time on April 25, 2019 (8:00 p.m. Beijing time on April 25, 2019).

The dial-in details for the live conference call are as follows:

- U.S. toll free:                        

- Hong Kong toll free:           

- International toll:                 

Conference ID:                      

7357907

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 9:59 a.m. U.S. Eastern time, May 3, 2019 (9:59 p.m. Beijing time, May 3, 2019).

The dial-in details for the replay are as follows:

- U.S. toll free:               

- Hong Kong toll free:            

- International toll:                  

Conference ID:                      

7357907

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 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 over 50 key cities in China.

We also operate , 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 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:

Echo Yan
Investor Relations
TAL Education Group
Tel: +86 10 5292 6658
Email:

Caroline Straathof
IR Inside
Tel: +31 6 5462 4301
Email:

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)






As of

February 28,
2018


As of

February 28,
2019

ASSETS








Current assets




  Cash and cash equivalents

$ 711,519


$ 1,247,140

  Restricted cash-current

6,267


9,227

  Short-term investments

787,391


268,424

  Inventory

5,272


7,750

  Amounts due from related parties-current

3,229


3,341

  Income tax receivables

15,093


7,204

  Prepaid expenses and other current assets

133,235


202,630

Total current assets

1,662,006


1,745,716

  Restricted cash-non-current

9,911


7,334

  Amounts due from related parties-non-current

-


1,747

  Property and equipment, net

247,266


287,877

  Deferred tax assets-non-current

17,361


29,179

  Rental deposits

47,333


56,135

  Intangible assets, net

43,505


74,776

  Goodwill

291,382


414,228

  Long-term investments

597,606


850,695

  Long-term prepayments and other non-current assets

138,190


267,404

Total assets

$ 3,054,560


$ 3,735,091





LIABILITIES AND EQUITY








Current liabilities




Accounts payable (including accounts payable of the 
consolidated VIEs without recourse to TAL Education 
Group of 51,809 and 98,436 as of February 28, 2018, and 
February 28, 2019, respectively)

$ 57,605


$ 106,493

Deferred revenue-current (including deferred revenue-
current of the consolidated VIEs without recourse to 
TAL Education Group of 772,642 and 401,027 as of 
February 28, 2018, and February 28, 2019, 
respectively)

824,276


433,610

Amounts due to related parties-current (including amounts 
due to related parties-current of the consolidated VIEs 
without recourse to TAL Education Group of 2,875 and 
18,504 as of February 28, 2018, and February 28, 2019, 
 respectively)

8,746


24,375

Accrued expenses and other current liabilities (including 
accrued expenses and other current liabilities of the
 
consolidated VIEs without recourse to TAL Education 
Group of 158,849 and 291,728 as of February 28, 2018, 
and February 28, 2019, respectively)

229,122


365,195

Income tax payable (including income tax payable of the 
consolidated VIEs without recourse to TAL Education 
Group of 12,106 and 36,670 as of February 28, 2018, and 
February 28, 2019, respectively)

13,638


38,743

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, 
2018, and February 28, 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, 
2018, and February 28, 2019, respectively)

 

-


5,275

Total current liabilities

1,133,387


1,183,718

Deferred revenue-non-current (including deferred revenue-
non-current of the consolidated VIEs without recourse to 
TAL Education Group of 17,980 and 2,497 as of February 
28, 2018, and February 28, 2019, respectively)

17,980


2,497

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 nil and 106 as of February 28, 2018, and
February 28, 2019, respectively)

 

 

271


 

 

196

Deferred tax liabilities-non-current (including deferred tax 
liabilities-non-current of the consolidated VIEs without
recourse to TAL Education Group of 19,867 and 16,951 as
of February 28, 2018, and February 28, 2019,
respectively)

 

 

20,039


 

 

17,738

Bond payable (including bond payable of the consolidated
VIEs without recourse to TAL Education Group of nil and
nil as of February 28, 2018, and February 28,2019,
respectively)

 

11,075


 

-

Long-term payable (including long-term payable of the
consolidated VIEs without recourse to TAL Education
Group of 4,660 and 465 as of February 28, 2018, and
February 28, 2019 respectively)

6,344


465

Long-term debt (including long-term debt of the
consolidated VIEs without recourse to TAL Education Group of nil and
nil as of February 28, 2018, and February 28, 2019,
respectively)

225,000


-

Total liabilities

1,414,096


1,204,614

 

TAL Education Group Shareholders' Equity




Class A common shares

118


127

Class B common shares

71


71

Class A common shares issuable

-


1,977

Additional paid-in capital

884,717


1,485,521

Statutory reserve

38,315


58,690

Retained earnings

565,202


920,314

Accumulated other comprehensive income

132,325


17,047

Total TAL Education Group's equity

1,620,748


2,483,747

Noncontrolling interest

19,716


46,730

Total equity

1,640,464


2,530,477

Total liabilities and equity

$ 3,054,560


$ 3,735,091

 

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)






For the Three Months Ended
February 28,


For the Fiscal Year Ended
February 28,


2018


2019


2018


2019

Net revenues

$ 504,098


$ 726,561


$ 1,715,016


$ 2,562,984

Cost of revenues (note 1)

246,680


306,174


882,316


1,164,454

Gross profit

257,418


420,387


832,700


1,398,530

Operating expenses (note 1)








  Selling and marketing

78,347


136,196


242,102


484,000

  General and administrative

112,344


169,553


386,287


579,672

  Impairment loss on intangible
assets and goodwill

-


-


358


-

Total operating expenses

190,691


305,749


628,747


1,063,672

Government subsidies

149


68


4,651


6,724

Income from operations

66,876


114,706


208,604


341,582

Interest income

13,353


10,285


39,837


59,614

Interest expense

(3,639)


(5,747)


(16,640)


(17,628)

Other income  

3,230


24,706


17,406


131,727

Impairment loss on long-term 
   investments

-


(7,247)


(2,213)


(58,091)

Income before provision for
   income tax and loss from
   equity method investments

79,820


136,703


246,994


457,204

Provision for income tax

(8,711)


(33,236)


(44,653)


(76,504)

Loss from equity method
   investments

(2,640)


(5,114)


(7,678)


(16,186)

Net income

$ 68,469


$ 98,353


$ 194,663


$ 364,514

Add: Net loss attributable to
noncontrolling interest

1,070


1,259


3,777


2,722

Total net income attributable
  to TAL Education Group

$ 69,539


$ 99,612


$ 198,440


$ 367,236

 

Net income per common share








Basic

$ 0.38


$ 0.52


$ 1.13


$ 1.93

Diluted

0.35


0.50


1.03


1.83

Net income per ADS (note 2)








Basic

$ 0.13


$ 0.17


$ 0.38


$ 0.64

Diluted

0.12


0.17


0.34


0.61

 

Weighted average shares used in
calculating net income per
common share








  Basic

185,165,815


191,020,638


174,979,574


189,951,643

  Diluted

197,095,699


200,670,945


194,331,305


200,224,934









Note1: 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,

Ended February 28,


2018


2019


2018


2019

Cost of revenues

$ 112


 

$ 200


$ 366


 

$ 706

Selling and marketing

1,331


3,331


5,037


10,454

General and administrative

11,156


18,744


41,747


66,117

Total

$12,599


$ 22,275


$ 47,150


$ 77,277

















Note 2: Three ADSs represent one Class A common Share.

 

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME

(In thousands of U.S. dollars)



For the Three Months Ended

February 28,


For the Fiscal Year Ended

February 28,


2018


2019


2018


2019

















Net income

$ 68,469


$ 98,353


$ 194,663


$ 364,514

Other comprehensive
income/(loss), net of tax

59,597


53,507


77,780


(116,237)

Comprehensive income

128,066


151,860


272,443


248,277

Add: Comprehensive
(income) / loss attributable
to noncontrolling interest

(254)


694


2,453


3,681

Comprehensive income
attributable to TAL
Education Group

$127,812


$ 152,554


$ 274,896


$ 251,958


 

TAL EDUCATION GROUP

Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures

(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)



For the Three Months

Ended February 28,


For the Fiscal Year
Ended
February 28,


2018


2019


2018


2019









Cost of revenues

$ 246,680


$ 306,174


$ 882,316


$ 1,164,454

Share-based compensation 
  expense in cost of revenues

112


 

200


366


706

Non-GAAP cost of revenues

246,568


305,974


881,950


1,163,748









Selling and marketing expenses

78,347


136,196


242,102


484,000

Share-based compensation
  expense in selling and marketing
  expenses

 

 

1,331


 

 

3,331


5,037


10,454

Non-GAAP selling and
marketing expenses

 

77,016


 

132,865


237,065


473,546

 

General and administrative
expenses

112,344


169,553


386,287


579,672

Share-based compensation
  expense in general and
  administrative expenses

11,156


18,744


41,747


66,117

Non-GAAP general and
administrative expenses

101,188


150,809


344,540


513,555









Operating costs and expenses

437,371


611,923


1,511,063


2,228,126

Share-based compensation
  expense in operating costs and
  expenses

12,599


22,275


47,150


77,277

Non-GAAP operating costs and
expenses

424,772


589,648


1,463,913


2,150,849









Income from operations

66,876


114,706


208,604


341,582

Share based compensation
  expenses

12,599


22,275


47,150


77,277

Non-GAAP income from
operations

79,475


136,981


255,754


418,859









Net income attributable to TAL
Education Group

69,539


99,612


198,440


367,236

Share based compensation expenses

12,599


22,275


47,150


77,277

Non-GAAP net income
attributable to TAL Education

Group

$ 82,138


$ 121,887


$ 245,590


$ 444,513

Net income per ADS








Basic

$ 0.13


$ 0.17


$ 0.38


$ 0.64

Diluted

0.12


0.17


0.34


0.61

Non-GAAP net income per
ADS (Note 3)








Basic

$ 0.15


$ 0.21


$ 0.47


$ 0.78

Diluted

0.14


0.20


0.43


0.74









ADSs used in calculating net
income per ADS








Basic

555,497,445


573,061,914


524,938,722


569,854,929

Diluted

591,287,098


602,012,835


582,993,914


600,674,802

















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.

 

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