BEIJING, July 27,
2023 /PRNewswire/ -- TAL Education Group (NYSE: TAL)
("TAL" or the "Company"), a smart learning solutions provider in
China, today announced its
unaudited financial results for the first quarter of fiscal year
2024 ended May 31, 2023.
Highlights for the First Quarter of Fiscal Year 2024
- Net revenues was US$275.4
million, compared to net revenues of US$224.0 million in the same period of the prior
year.
- Loss from operations was US$57.8
million, compared to loss from operations of US$28.3 million in the same period of the prior
year.
- Non-GAAP loss from operations, which excluded share-based
compensation expenses, was US$32.3
million, compared to non-GAAP loss from operations of
US$1.8 million in the same period of
the prior year.
- Net loss attributable to TAL was US$45.0
million, compared to net loss attributable to TAL of
US$43.8 million in the same period of
the prior year.
- Non-GAAP net loss attributable to TAL, which excluded
share-based compensation expenses, was US$19.5 million, compared to non-GAAP net
loss attributable to TAL of US$17.4 million in the same period of the
prior year.
- Basic and diluted net loss per American Depositary Share
("ADS") were both US$0.07. Non-GAAP
basic and diluted net loss per ADS, which excluded share-based
compensation expenses, were both US$0.03. Three ADSs represent one Class A
common share.
- Cash, cash equivalents and short-term investments totaled
US$3,044.7 million as of May 31, 2023, compared to US$3,171.5 million as of February 28, 2023.
Financial
Data --
First Quarter of Fiscal Year 2024
|
(In US$ thousands,
except per ADS data and percentages)
|
|
|
Three Months
Ended
|
|
May
31,
|
|
2022
|
2023
|
Pct.
Change
|
Net revenues
|
224,045
|
275,440
|
22.9 %
|
Loss from
operations
|
(28,323)
|
(57,773)
|
104.0 %
|
Non-GAAP
loss from operations
|
(1,844)
|
(32,260)
|
1,649.5 %
|
Net loss attributable
to TAL
|
(43,829)
|
(45,037)
|
2.8 %
|
Non-GAAP net loss
attributable to TAL
|
(17,350)
|
(19,524)
|
12.5 %
|
Net loss per ADS
attributable to TAL – basic
|
(0.07)
|
(0.07)
|
4.6 %
|
Net loss per ADS
attributable to TAL –
diluted
|
(0.07)
|
(0.07)
|
4.6 %
|
Non-GAAP net loss per
ADS attributable to
TAL – basic
|
(0.03)
|
(0.03)
|
14.5 %
|
Non-GAAP net loss per
ADS attributable to
TAL – diluted
|
(0.03)
|
(0.03)
|
14.5 %
|
"In this quarter, amidst ongoing effort to fine-tune our core
offerings and optimize our operations, we also achieved progress in
some of our newer initiatives such as our smart device business."
said Alex Peng, TAL's President
& Chief Financial Officer.
Mr. Peng added: "We sought opportunities to create additional
shareholder value through stock repurchase. In the first quarter of
fiscal year 2024, we spent approximately US$
151.3 million and repurchased approximately 25.9 million
shares of ADSs."
Financial Results for the First Quarter of Fiscal Year
2024
Net Revenues
In the first quarter of fiscal year 2024, TAL reported net
revenues of US$275.4 million,
representing a 22.9% increase from US$224.0
million in the first quarter of fiscal year 2023.
Operating Costs and Expenses
In the first quarter of fiscal year 2024, operating costs and
expenses were US$342.1 million,
representing a 31.6% increase from US$260.0
million in the first quarter of fiscal year 2023. Non-GAAP
operating costs and expenses, which excluded share-based
compensation expenses, were US$316.6
million, representing a 35.5% increase from US$233.6 million in the first quarter of fiscal
year 2023.
Cost of revenues increased by 57.5% to US$139.5 million from US$88.6 million in the first quarter of fiscal
year 2023. Non-GAAP cost of revenues, which excluded share-based
compensation expenses, increased by 59.1% to US$137.1 million, from US$86.2 million in the first quarter of fiscal
year 2023.
Selling and marketing expenses increased by 62.7% to
US$97.7 million from US$60.0 million in the first quarter of fiscal
year 2023. Non-GAAP selling and marketing expenses, which excluded
share-based compensation expenses, increased by 73.7% to
US$90.2 million, from US$52.0 million in the first quarter of fiscal
year 2023.
General and administrative expenses decreased by 5.9% to
US$104.9 million from US$111.5 million in the first quarter of fiscal
year 2023. Non-GAAP general and administrative expenses, which
excluded share-based compensation expenses, decreased by 6.5% to
US$89.2 million, from US$95.4 million in the first quarter of fiscal
year 2023.
Total share-based compensation expenses allocated to the related
operating costs and expenses decreased by 3.6% to US$25.5 million in the first quarter of fiscal
year 2024 from US$26.5 million in the
same period of fiscal year 2023.
Gross
Profit
Gross profit increased by 0.3% to US$135.9 million from US$135.5 million in the first quarter of fiscal
year 2023.
Loss from Operations
Loss from operations was US$57.8
million in the first quarter of fiscal year 2024, compared
to loss from operations of US$28.3
million in the first quarter of fiscal year 2023. Non-GAAP
loss from operations, which excluded share-based compensation
expenses, was US$32.3 million,
compared to Non-GAAP loss from operations of US$1.8 million in the same period of the prior
year.
Other Expense
Other expense was US$6.8
million for the first quarter of fiscal year 2024, compared
to other expense of US$26.8
million in the first quarter of fiscal year 2023.
Income Tax expense
Income tax expense was US$3.5
million in the first quarter of fiscal year 2024, compared
to US$2.3 million of income tax
expense in the first quarter of fiscal year 2023.
Net Loss Attributable to TAL Education Group
Net loss attributable to TAL was US$45.0
million in the first quarter of fiscal year 2024, compared
to net loss attributable to TAL of US$43.8
million in the first quarter of fiscal year 2023. Non-GAAP
net loss attributable to TAL, which excluded share-based
compensation expenses, was US$19.5
million, compared to Non-GAAP net loss attributable to TAL
of US$17.4 million in the first
quarter of fiscal year 2023.
Basic and Diluted Net Loss per ADS
Basic and diluted net loss per ADS were both US$0.07 in the first quarter of fiscal year 2024.
Non-GAAP basic and diluted net loss per ADS, which excluded
share-based compensation expenses, were both US$0.03 in the first quarter of fiscal year
2024.
Cash Flow
Net cash provided by operating activities for the
first quarter of fiscal year 2024 was US$125.5 million.
Cash, Cash Equivalents, and Short-Term
Investments
As of May 31, 2023, the Company
had US$2,085.4 million of cash and
cash equivalents and US$959.3 million
of short-term investments, compared to US$2,021.9 million of cash and cash equivalents
and US$1,149.6 million of short-term
investments as of February 28,
2023.
Deferred Revenue
As of May 31, 2023, the Company's
deferred revenue balance was US$387.7
million, compared to US$237.4
million as of February 28,
2023.
Share Repurchase
In April 2023, the Company's board
of directors authorized to extend its share repurchase program
launched in April 2021 by 12 months.
Pursuant to the extended share repurchase program, the Company may
repurchase up to approximately US$737.4
million of its common shares through April 30, 2024. As of May 31, 2023, the Company has repurchased
8,645,334 common shares at an aggregate consideration of
approximately US$151.3 million under
the share repurchase program.
Conference Call
The Company will host a conference call and live webcast to
discuss its financial results for the first fiscal quarter of
fiscal year 2024 ended May 31, 2023
at 8:00 a.m. Eastern Time on
July 27, 2023 (8:00 p.m. Beijing time on July
27, 2023).
Please note that you will need to pre-register for conference
call participation at
https://register.vevent.com/register/BI8b810989c152424eb1977de06a51b744.
Upon registration, you will receive an email containing
participant dial-in numbers and unique Direct Event Passcode. This
information will allow you to gain immediate access to the call.
Participants may pre-register at any time, including up to and
after the call start time.
A live and archived webcast of the conference call will be
available on the Investor Relations section of TAL's website at
https://ir.100tal.com/.
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,
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
provide competitive learning services and products; the Company's
ability to continue to recruit, train and retain talents; the
Company's ability to improve the content of current course
offerings and 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 smart learning solutions provider
in China. The acronym "TAL" stands
for "Tomorrow Advancing Life", which reflects our vision to promote
top learning opportunities for 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 learning services to students from
all ages through diversified class formats. Our learning services
mainly cover enrichment learnings programs and some academic
subjects in and out of China. Our
ADSs trade on the New York Stock Exchange under the
symbol "TAL".
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following
measures defined as non-GAAP financial measures by the SEC as
supplemental metrics to review and assess its operating
performance: non-GAAP operating costs and expenses, non-GAAP cost
of revenues, non-GAAP selling and marketing expenses, non-GAAP
general and administrative expenses, non-GAAP loss from operations,
non-GAAP net loss attributable to TAL, non-GAAP basic and non-GAAP
diluted net loss per ADS. To present each of these non-GAAP
measures, the Company excludes share-based compensation expenses,
the related tax effect of which has been nil. The presentation of
these non-GAAP financial measures is not intended to be considered
in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP. For more
information on these non-GAAP financial measures, please see the
table captioned "Reconciliations of non-GAAP measures to the most
comparable GAAP measures" set forth at the end of this release.
TAL believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and
liquidity by excluding share-based expenses that may not be
indicative of its operating performance from a cash perspective.
TAL believes that both management and investors benefit from these
non-GAAP financial measures in assessing its performance and when
planning and forecasting future periods. These non-GAAP financial
measures also facilitate management's internal comparisons to TAL's
historical performance and liquidity. TAL computes its non-GAAP
financial measures using the same consistent method from quarter to
quarter and from period to period. TAL believes these non-GAAP
financial measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using non-GAAP measures is that these non-GAAP
measures exclude share-based compensation charges that have been
and will continue to be for the foreseeable future a significant
recurring expense in the Company's business. Management compensates
for these limitations by providing specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables have more details on the reconciliations
between GAAP financial measures that are most directly comparable
to non-GAAP financial measures.
For further information, please contact:
Jackson Ding
Investor Relations
TAL Education Group
Tel: +86 10 5292 6669-8809
Email: ir@tal.com
TAL EDUCATION
GROUP
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands of
U.S. dollars)
|
|
|
As of
February 28,
2023
|
|
As of
May 31,
2023
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$ 2,021,927
|
|
$ 2,085,411
|
Restricted
cash-current
|
126,891
|
|
204,353
|
Short-term
investments
|
1,149,607
|
|
959,310
|
Inventory
|
39,002
|
|
57,790
|
Amounts due from
related parties-current
|
423
|
|
409
|
Income tax
receivables
|
5,071
|
|
3,874
|
Prepaid expenses
and other current assets
|
125,486
|
|
136,038
|
Total current
assets
|
3,468,407
|
|
3,447,185
|
Restricted
cash-non-current
|
146,089
|
|
135,827
|
Property and
equipment, net
|
288,877
|
|
297,382
|
Deferred tax
assets
|
5,973
|
|
6,678
|
Rental
deposits
|
12,734
|
|
11,638
|
Intangible
assets, net
|
485
|
|
386
|
Land use right,
net
|
193,878
|
|
187,998
|
Long-term
investments
|
453,375
|
|
464,265
|
Long-term
prepayments and other non-current assets
|
5,534
|
|
6,396
|
Operating lease
right-of-use assets
|
149,002
|
|
156,492
|
Total
assets
|
$ 4,724,354
|
|
$ 4,714,247
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$ 59,991
|
|
$ 70,887
|
Deferred
revenue-current
|
234,889
|
|
380,091
|
Amounts due to related
parties-current
|
100
|
|
98
|
Accrued expenses and
other current liabilities
|
446,711
|
|
462,630
|
Operating lease
liabilities, current portion
|
42,174
|
|
45,679
|
Total current
liabilities
|
783,865
|
|
959,385
|
Deferred
revenue-non-current
|
2,465
|
|
7,576
|
Deferred tax
liabilities
|
1,563
|
|
1,981
|
Operating lease
liabilities, non-current portion
|
115,548
|
|
119,161
|
Total
liabilities
|
903,441
|
|
1,088,103
|
|
|
|
|
Equity
|
|
|
|
Class A common
shares
|
169
|
|
170
|
Class B common
shares
|
49
|
|
49
|
Treasury
Stock
|
(6)
|
|
(15)
|
Additional paid-in
capital
|
4,400,656
|
|
4,274,935
|
Statutory
reserve
|
160,353
|
|
159,570
|
Accumulated
deficit
|
(685,912)
|
|
(730,166)
|
Accumulated other
comprehensive loss
|
(30,666)
|
|
(55,130)
|
Total TAL Education
Group's equity
|
3,844,643
|
|
3,649,413
|
Noncontrolling
interest
|
(23,730)
|
|
(23,269)
|
Total
equity
|
3,820,913
|
|
3,626,144
|
Total liabilities
and equity
|
$ 4,724,354
|
|
$ 4,714,247
|
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
May
31,
|
|
|
2022
|
|
2023
|
Net revenues
|
|
$ 224,045
|
|
$ 275,440
|
Cost
of revenues (note
1)
|
|
88,558
|
|
139,513
|
Gross
profit
|
|
135,487
|
|
135,927
|
Operating expenses (note 1)
|
|
|
|
|
Selling and marketing
|
|
60,039
|
|
97,657
|
General and administrative
|
|
111,450
|
|
104,923
|
Total
operating expenses
|
|
171,489
|
|
202,580
|
Government
subsidies
|
|
7,679
|
|
8,880
|
Loss
from operations
|
|
(28,323)
|
|
(57,773)
|
Interest
income
|
|
13,063
|
|
22,981
|
Other
expense
|
|
(26,789)
|
|
(6,845)
|
Loss
before income tax
expense and
income/(loss)
from equity method
investments
|
|
(42,049)
|
|
(41,637)
|
Income
tax expense
|
|
(2,316)
|
|
(3,519)
|
Income/(loss)
from equity method
investments
|
|
1,453
|
|
(71)
|
Net loss
|
|
$ (42,912)
|
|
$ (45,227)
|
Add:
Net (income)/loss attributable
to noncontrolling interest
|
|
(917)
|
|
190
|
Total net loss attributable to TAL Education
Group
|
|
$ (43,829)
|
|
$ (45,037)
|
Net loss per common share
|
|
|
|
|
Basic
|
|
$ (0.20)
|
|
$ (0.21)
|
Diluted
|
|
(0.20)
|
|
(0.21)
|
Net loss per ADS (note 2)
|
|
|
|
|
Basic
|
|
$ (0.07)
|
|
$ (0.07)
|
Diluted
|
|
(0.07)
|
|
(0.07)
|
Weighted
average shares used
in calculating net loss
per common share
|
|
|
|
|
Basic
|
|
215,062,603
|
|
211,319,973
|
Diluted
|
|
215,062,603
|
|
211,319,973
|
Note1: Share-based compensation expenses are included in the
operating costs and expenses as follows:
|
|
For the Three Months
|
|
|
Ended May 31,
|
|
|
2022
|
|
2023
|
Cost
of revenues
|
|
$ 2,393
|
|
$ 2,409
|
Selling
and marketing expenses
|
|
8,081
|
|
7,428
|
General
and administrative expenses
|
|
16,005
|
|
15,676
|
Total
|
|
$ 26,479
|
|
$ 25,513
|
Note 2: Three ADSs
represent one Class A common Share.
TAL EDUCATION GROUP
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
|
COMPREHENSIVE LOSS
|
(In thousands of U.S. dollars)
|
|
|
|
For the Three Months Ended
|
|
|
May 31,
|
|
|
2022
|
|
2023
|
|
|
|
|
|
Net loss
|
|
$ (42,912)
|
|
$ (45,227)
|
Other
comprehensive loss, net of
tax
|
|
(60,826)
|
|
(23,813)
|
Comprehensive loss
|
|
(103,738)
|
|
(69,040)
|
Add:
Comprehensive loss attributable
to
noncontrolling interest
|
|
(2,514)
|
|
(461)
|
Comprehensive loss attributable to
TAL Education Group
|
|
$ (106,252)
|
|
$ (69,501)
|
TAL EDUCATION
GROUP
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF
|
CASH
FLOWS
|
(In thousands of
U.S. dollars)
|
|
|
|
For the Three Months
Ended
|
|
|
May 31,
|
|
|
2022
|
|
2023
|
|
|
|
|
|
Net cash (used
in)/provided by operating activities
|
|
$ (44,880)
|
|
$ 125,516
|
Net cash (used
in)/provided by investing activities
|
|
(51,335)
|
|
160,915
|
Net cash used in
financing activities
|
|
(49,768)
|
|
(151,237)
|
Effect of exchange rate
changes
|
|
(18,737)
|
|
(4,510)
|
|
|
|
|
|
Net (decrease)/increase
in cash, cash equivalents and restricted cash
|
|
(164,720)
|
|
130,684
|
Cash, cash
equivalents and restricted cash at the beginning of
period
|
|
2,681,786
|
|
2,294,907
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at the end of period
|
|
$
2,517,066
|
|
$
2,425,591
|
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
May 31,
|
|
|
2022
|
|
2023
|
|
|
|
|
|
Cost of revenues
|
|
$ 88,558
|
|
$ 139,513
|
Share-based
compensation expense in
cost of
revenues
|
|
2,393
|
|
2,409
|
Non-GAAP cost of revenues
|
|
86,165
|
|
137,104
|
|
|
|
|
|
Selling and marketing expenses
|
|
60,039
|
|
97,657
|
Share-based
compensation expense in
selling and
marketing
expenses
|
|
8,081
|
|
7,428
|
Non-GAAP selling and marketing expenses
|
|
51,958
|
|
90,229
|
General and administrative expenses
|
|
111,450
|
|
104,923
|
Share-based
compensation expense in
general and
administrative
expenses
|
|
16,005
|
|
15,676
|
Non-GAAP general and administrative expenses
|
|
95,445
|
|
89,247
|
|
|
|
|
|
Operating costs and expenses
|
|
260,047
|
|
342,093
|
Share-based
compensation expense in
operating
costs
and expenses
|
|
26,479
|
|
25,513
|
Non-GAAP operating costs and expenses
|
|
233,568
|
|
316,580
|
|
|
|
|
|
Loss from operations
|
|
(28,323)
|
|
(57,773)
|
Share
based compensation expenses
|
|
26,479
|
|
25,513
|
Non-GAAP loss from operations
|
|
(1,844)
|
|
(32,260)
|
Net loss attributable to TAL Education Group
|
|
(43,829)
|
|
(45,037)
|
Share
based compensation expenses
|
|
26,479
|
|
25,513
|
Non-GAAP net loss attributable to TAL
Education Group
|
|
$ (17,350)
|
|
$ (19,524)
|
Net loss per ADS
|
|
|
Basic
|
|
$ (0.07)
|
|
$ (0.07)
|
Diluted
|
|
(0.07)
|
|
(0.07)
|
Non-GAAP Net loss per ADS
|
|
|
|
|
Basic
|
|
$ (0.03)
|
|
$ (0.03)
|
Diluted
|
|
(0.03)
|
|
(0.03)
|
ADSs used in calculating net loss per ADS
|
|
|
|
|
Basic
|
|
645,187,809
|
|
633,959,919
|
Diluted
|
|
645,187,809
|
|
633,959,919
|
ADSs used in calculating Non-GAAP net loss
per ADS
|
|
|
|
|
Basic
|
|
645,187,809
|
|
633,959,919
|
Diluted
|
|
645,187,809
|
|
633,959,919
|
View original
content:https://www.prnewswire.com/news-releases/tal-education-group-announces-unaudited-financial-results-for-the-first-fiscal-quarter-ended-may-31-2023-301887154.html
SOURCE TAL Education Group