Actionable news
0
All posts from Actionable news
Actionable news in XRS: TAL EDUCATION GROUP,

Tal Education Group Announces Unaudited Financial Results For The

The following excerpt is from the company's SEC filing.

Second Fiscal Quarter Ended August 31, 2015

Quarterly Net Revenues up by 41.6% Year-Over-Year

Net Revenues for the First Six Months Increased by 43.2% Year-Over-Year

Quarterly Income from Operations up by 28.5% Year-Over-Year

Quarterly Non-GAAP Income from Operations up by 29.3% Year-Over-Year

(BeijingOctober 22, 2015)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 2016 ended August 31, 2015.

Highlights for t he Second Quarter of Fiscal Year 2016

Net revenues increased by 41.6% year-over-year to US$173.3 million from US$122.4 million in the same period of the prior year.

Income from operations increased by 28.5% to US$39.2 million from US$30.5 million in the same period of the prior year.

Non-GAAP income from operations increased by 29.3% to US$44.9 million from US$34.7 million in the same period of the prior year.

Net income attributable to TAL increased by 118.0% year-over-year to US$63.5 million from US$29.1 million in the same period of the prior year, taking into account US$3.7 million of exchange losses.

Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 107.6% year-over-year to US$69.2 million from US$33.3 million in the same period of the prior year, taking into account US$3.7 million of exchange losses.

Basic and diluted net income per American Depositary Share (ADS) were US$0.79 and US$0.72, respectively. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.87 and US$0.78, respectively. Each ADS represents two Class A common shares.

Cash, cash equivalents and term deposits totaled US$537.7 million as of August 31, 2015, compared to US$491.4 million as of February 28, 2015.

Total student enrollments increased by 54.8% year-over-year to approximately 631,430 from approximately 407,970 in the same period of the prior year.

Highlights for the Six Months Ended August 31, 2015

Net revenues increased by 43.2% year-over-year to US$302.7 million from US$211.4 million in the same period of the prior year.

Income from operations increased by 33.1% to US$58.8 million from US$44.2 million in the same period of fiscal year 2015.

Non-GAAP income from operations increased by 32.7% to US$69.5 million from US$52.4 million in the same period of the prior year.

Net income attributable to TAL increased by 94.1% year-over-year to US$82.4 million from US$42.5 million in the same period of the prior year, taking into account US$2.2 million of exchange losses.

Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 83.8% year-over-year to US$93.2 million from US$50.7 million in the same period of the prior year, taking into account US$2.2 million of exchange losses.

Basic and diluted net income per ADS were US$1.03 and US$0.94, respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, were US$1.17 and US$1.06, respectively.

Total student enrollments during the first six months of fiscal year 2016 increased by 51.9% year-over-year to approximately 1,043,550.

Total physical network increased to 300 learning centers as of August 31, 2015 from 289 learning centers as of February 28, 2015.

Financial and Operating DataSecond Quarter of Fiscal Year 2016

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

Three Months Ended

Pct. Change

122,371

173,330

Net income attributable to TAL

29,118

63,481

Non-GAAP net income attributable to TAL

33,310

69,157

Operating income

30,508

39,201

Non-GAAP operating income

34,700

44,877

Net income per ADS attributable to TAL basic

Net income per ADS attributable to TAL diluted

Non-GAAP net income per ADS attributable to TAL basic

Non-GAAP net income per ADS attributable to TAL diluted

Total student enrollments in small class, one-on-one, and online courses

Six Months Ended

211,397

302,717

42,468

82,435

50,700

93,176

44,174

58,801

52,406

69,542

687,170

Second quarter revenue again exceeded our expectation due to outstanding growth of our core small class business in cities other than Beijing. The widely spread growth momentum we saw in the first quarter continues, and we recorded triple-digit year-on-year growth in revenue in nine cities outside Beijing. Additionally, we are very pleased that our targeted summer class promotion in Beijing has begun to regenerate enrollment-driven growth for the fall term. We expect our organic business momentum to remain robust in the third quarter, mostly driven by enrollments, through our offline learning center network and deeper online engagement, said Mr. Rong Luo, TALs Chief Financial Officer.

We believe that in addition to our solid organic business development, we have made sound third-party investments and acquisitions in recent months, which will bring long-term value to our shareholders. These investments and acquisitions have been well coordinated and aligned with our overall strategic plan of being strongly leveraged in future education business models. All of these investments and acquisitions share a common focus on education in the K-12 segment, which is complementary to our organic growth, Mr. Luo added.

Financial Results for the Second Quarter of Fiscal Year 2016

In the second quarter of fiscal year 2016, TAL reported net revenues of US$173.3 million, representing a 41.6% increase from US$122.4 million in the second quarter of fiscal year 2015. The increase was mainly driven by an increase in total student enrollments, which increased by 54.8% to approximately 631,430 from approximately 407,970 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, as well as more offering of the small-group class

as a supplement to one-on-one tutoring. Average selling price (ASP) decreased by 8.5% from US$300 in the second quarter of fiscal year 2015 to US$275 in the same quarter of fiscal year 2016. The decrease in ASP was mainly attributable to our small class summer promotion in Beijing, more offering of the small-group class and more enrollment contribution from online courses, and was partially offset by the increase in the hourly rate of the small class course offerings.

Operating Costs and Expenses

In the second quarter of fiscal year 2016, operating costs and expenses were US$136.7 million, a 48.8% increase from US$91.9 million in the second quarter of fiscal year 2015. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$131.1 million, a 49.4% increase from US$87.7 million in the second quarter of fiscal year 2015.

Cost of revenues increased by 51.1% to US$80.5 million from US$53.2 million in the second quarter of fiscal year 2015. The increase in cost of revenues was mainly due to an increase in teacher compensation and rental costs, as well as increases in wages and teacher fees. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 51.1% to US$80.4 million, from US$53.2 million in the second quarter of fiscal year 2015.

Selling and marketing expenses increased by 42.8% to US$18.8 million from US$13.2 million in the second quarter of fiscal year 2015. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 45.1% to US$18.2 million from US$12.6 million in the second quarter of fiscal year 2015. The increase of selling and marketing expenses in the second quarter of fiscal year 2016 was primarily a result of an increase in 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 46.9% to US$37.5 million from US$25.5 million in the second quarter of fiscal year 2015. 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. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 47.7% to US$32.4 million, from US$21.9 million in the second quarter of fiscal year 2015.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 35.4% to US$5.7 million in the second quarter of fiscal year 2016 from US$4.2 million in the same period of fiscal year 2015.

Gross Profit

Gross profit increased by 34.3% to US$92.9 million from US$69.1 million in the second quarter of fiscal year 2015.

Income from operations increased by 28.5% to US$39.2 million from US$30.5 million in the second quarter of fiscal year 2015. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 29.3% to US$44.9 million from US$34.7 million in the second quarter of fiscal year 2015.

Other Income / (Expense)

Other expense was US$4.1 million for the second quarter of fiscal year 2016, compared to other income of US$1.4 million in the second quarter of fiscal year 2015. Other expense in this quarter was mainly due to exchange losses. As the Company holds a significant portion of cash balance in RMB and reports in U.S. Dollars, it benefits from exchange gains in times of relative strength of the RMB and incurs exchange losses in times of relative strength of the U.S. Dollar.

Impairment loss on long-term investments

Impairment loss on long-term investments was $7.5 million, mainly because there were other-than-temporary declines in the value of long-term investments in several investees...


More