omniture

TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and the Fiscal Year Ended February 29, 2016

- Quarterly Net Revenues up by 42.1% Year-Over-Year
- Quarterly Non-GAAP Income from Operations up by 25.2% Year-Over-Year
- Fiscal Year Net Revenues up by 42.9%
- Fiscal Year Non-GAAP Income from Operations up by 29.4% Year-Over-Year
- Fiscal Year Net Income Attributable to TAL up by 53.2%
2016-04-28 16:00 2173

BEIJING, April 28, 2016 /PRNewswire/ -- TAL Education Group (NYSE: XRS) ("TAL" or the "Company"), a leading K-12 after-school tutoring services provider in China, today announced its unaudited financial results for the fourth quarter and the fiscal year ended February 29, 2016.

Highlights for the Fourth Quarter of Fiscal Year 2016

  • Net revenues increased by 42.1% year-over-year to US$175.0 million from US$123.2 million in the same period of the prior year.
  • Income from operations increased by 12.1% to US$16.6 million from US$14.9 million in the same period of the prior year.
  • Non-GAAP income from operations increased by 25.2% to US$25.2 million from US$20.2 million in the same period of the prior year.
  • Net income attributable to TAL was US$10.9 million, compared to US$13.7 million in the same period of the prior year.
  • Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$19.5 million, compared to US$19.0 million in the same period of the prior year.
  • Basic and diluted net income per American Depositary Share ("ADS") were US$0.14 and US$0.13, respectively. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were US$0.24 and US$0.23, respectively. Each ADS represents two Class A common shares.
  • Total student enrollments increased by 56.9% year-over-year to approximately 788,320 from approximately 502,350 in the same period of the prior year.
  • Total physical network increased from 301 in 24 cities as of November 30, 2015 to 363 learning centers in 25 cities as of February 29, 2016, including 41 learning centers in 5 cities from the new business acquisition of Firstleap Education ("Firstleap").

Highlights for the Fiscal Year Ended February 29, 2016

  • Net revenues increased by 42.9% year-over-year to US$619.9 million from US$434.0 million in fiscal year 2015.
  • Income from operations increased by 26.5% to US$85.1 million from US$67.2 million in fiscal year 2015.
  • Non-GAAP income from operations increased by 29.4% to US$110.9 million from US$85.7 million in fiscal year 2015.
  • Net income attributable to TAL increased by 53.2% year-over-year to US$102.9 million from US$67.2 million in fiscal year 2015.
  • Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 50.4% year-over-year to US$128.7 million from US$85.6 million in fiscal year 2015.
  • Basic and diluted net income per ADS were US$1.29 and US$1.21, respectively. Non-GAAP basic and diluted net income per ADS, excluding share-based compensation expenses, were US$1.61 and US$1.49, respectively.
  • Total student enrollments in fiscal year 2016 increased by 54.6% year-over-year to 2,309,830 from approximately 1,494,430 in the same period of the prior year.
  • Total physical network increased from 289 learning centers in 19 cities as of February 28, 2015 to 363 learning centers in 25 cities as of February 29, 2016, including 41 learning centers in 5 cities from the new business acquisition of Firstleap.

Financial and Operating Data -- Fourth Quarter and Fiscal Year 2016

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



Three Months Ended


February 28/29,


2015

2016

Pct. Change

Net revenues

123,205

175,049

42.1%

Net income attributable to TAL

13,729

10,859

-20.9%

Non-GAAP net income attributable to
TAL

19,037

19,455

2.2%

Operating income

14,855

16,647

12.1%

Non-GAAP operating income

20,162

25,243

25.2%

Net income per ADS attributable to
TAL - basic

0.17

0.14

-21.7%

Net income per ADS attributable to
TAL - diluted

0.17

0.13

-22.8%

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

0.24

0.24

1.2%

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

0.23

0.23

-0.1%

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

502,350

788,320

56.9%


Fiscal Year Ended


February 28/29,


2015

2016

Pct. Change

Net revenues

433,970

619,949

42.9%

Net income attributable to
TAL

67,157

102,879

53.2%

Non-GAAP net income attributable to
TAL

85,598

128,726

50.4%

Operating income

67,248

85,052

26.5%

Non-GAAP operating income

85,689

110,899

29.4%

Net income per ADS attributable to
TAL - basic

0.85

1.29

51.5%

Net income per ADS attributable to
TAL - diluted

0.82

1.21

46.9%

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

1.08

1.61

48.8%

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

1.03

1.49

44.3%

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

1,494,430

2,309,830

54.6%

"We are pleased with our fourth quarter and full fiscal year results, which reflect the continuous strong growth momentum for small class in the outer cities. Due to high demand for our tutoring services, we expanded small class classroom capacity by over 50% in fiscal year 2016 compared to the previous year and managed higher utilization rates throughout the year," said Mr. Rong Luo, TAL's Chief Financial Officer.

"During fiscal year 2016, we continued to make solid progress in bringing together the technology, community and education resources to become a leading technology-focused education services provider in China, through both in-house development and strategic investments." Mr. Luo added, "Our outlook for further enrollment-driven growth in fiscal year 2017 is positive. We plan to maintain a healthy pace of demand-based expansion of our learning center network while we continue to invest in O2O business and other new initiatives."

Financial Results for the Fourth Quarter of Fiscal Year 2016

Net Revenues

In the fourth quarter of fiscal year 2016, TAL reported net revenues of US$175.0 million, representing a 42.1% increase from US$123.2 million in the fourth quarter of fiscal year 2015. The increase was mainly driven by an increase in total student enrollments, which increased by 56.9% to approximately 788,320 from approximately 502,350 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. Average selling price (ASP) decreased by 9.4% from US$245 in the fourth quarter of fiscal year 2015 to US$222 in the same quarter of fiscal year 2016. The decrease in ASP was mainly attributable to more enrollment contribution from small class and online courses offerings, as well as foreign exchange rate fluctuation.

Operating Costs and Expenses

In the fourth quarter of fiscal year 2016, operating costs and expenses were US$158.5 million, a 45.9% increase from US$108.6 million in the fourth quarter of fiscal year 2015. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$149.9 million, a 45.1% increase from US$103.3 million in the fourth quarter of fiscal year 2015.

Cost of revenues increased by 50.0% to US$88.8 million, from US$59.2 million in the fourth 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 50.0% to US$88.8 million from US$59.2 million in the fourth quarter of fiscal year 2015.

Selling and marketing expenses increased by 41.1% to US$22.3 million from US$15.8 million in the fourth quarter of fiscal year 2015. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 40.5% to US$21.5 million from US$15.3 million in the fourth quarter of fiscal year 2015. The increase of selling and marketing expenses in the fourth 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 40.9% to US$47.4 million from US$33.6 million in the fourth 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 37.4% to US$39.6 million from US$28.8 million in the fourth quarter of fiscal year 2015.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 62.0% to US$8.6 million in the fourth quarter of fiscal year 2016 from US$5.3 million in the same period of fiscal year 2015. The increase was mainly due to new grants of non-vested shares and options to directors and employees by the Company in fiscal year 2016.

Gross Profit

Gross profit increased by 34.8% to US$86.3 million from US$64.0 million in the fourth quarter of fiscal year 2015.

Income from Operations

Income from operations increased by 12.1% to US$16.6 million from US$14.9 million in the fourth quarter of fiscal year 2015. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 25.2% to US$25.2 million from US$20.2 million in the fourth quarter of fiscal year 2015.

Other (expenses)/income

Other income was US$0.2 million in the fourth quarter of fiscal year 2016, compared to other expense of US$2.9 million in the fourth quarter of fiscal year 2015. Other income for the fourth quarter of fiscal year 2016 was mainly due to a gain from transfer of a nonfinancial asset and a gain on re-measurement of fair value of a noncontrolling equity investment in connection with a business acquisition, partially offset by realized exchange losses arising from the conversion of the majority of the holding company's cash denominated in RMB into cash in U.S. Dollars.

Net Income Attributable to TAL Education Group

Net income attributable to TAL decreased by 20.9% to US$10.9 million from US$13.7 million in the fourth quarter of fiscal year 2015. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 2.2% to US$19.5 million from US$19.0 million in the fourth quarter of fiscal year 2015.

Basic and Diluted Net Income per ADS

Basic and diluted net income per ADS were US$0.14 and US$0.13, respectively, in the fourth quarter of fiscal year 2016. Non-GAAP basic and Non-GAAP diluted net income per ADS, which excluded share-based compensation expenses, were US$0.24 and US$0.23, respectively.

Capital Expenditures

Capital expenditures for the fourth quarter of fiscal year 2016 were US$11.6 million, an increase of US$1.5 million from US$10.1 million in the fourth quarter of fiscal year 2015. The increase was mainly due to leasehold improvements and the purchase of servers, computers, software systems and other hardware for the Company's teaching facilities and mobile network research and development.

Financial Results for the Fiscal Year Ended February 29, 2016

Net Revenues

For fiscal year 2016, TAL reported net revenues of US$619.9 million, representing a 42.9% increase from US$434.0 million in fiscal year 2015. The increase was mainly driven by an increase in total student enrollments. Total student enrollments increased by 54.6% to approximately 2,309,830 from approximately 1,494,430 in the prior year. The increase in total student enrollments resulted primarily from increases of enrollments in the small class offerings and online courses. ASP was US$268 in fiscal year 2016, a decrease from US$290 in fiscal year 2015. The decrease of ASP was mainly due to more enrollment contribution from online courses and small class offerings and the foreign exchange rate fluctuation, and was partially offset by the increase in the hourly rate of the small class course offerings.

Operating Costs and Expenses

In fiscal year 2016, operating costs and expenses were US$538.2 million, a 46.6% increase from US$367.2 million in fiscal year 2015. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$512.4 million, a 46.9% increase from US$348.7 million in fiscal year 2015.

Cost of revenues increased by 49.5% to US$303.6 million from US$203.1 million in 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 49.5% to US$303.6 million from US$203.0 million in fiscal year 2015.

Selling and marketing expenses increased by 36.5% to US$73.6 million from US$53.9 million in fiscal year 2015. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 37.2% to US$71.1 million from US$51.8 million in fiscal year 2015. The increase of selling and marketing expenses in 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 46.1% to US$161.0 million from US$110.2 million in 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 46.6% to US$137.7 million from US$93.9 million in fiscal year 2015.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 40.2% to US$25.8 million in fiscal year 2016 from US$18.4 million in fiscal year 2015. The increase was mainly due to new grants of non-vested shares and options to directors and employees by the Company in fiscal year 2016.

Gross Profit

Gross profit increased by 37.0% to US$316.3 million from US$230.9 million in fiscal year 2015.

Income from Operations

Income from operations increased by 26.5% to US$85.1 million from US$67.2 million in fiscal year 2015. Non-GAAP income from operations, which excluded share-based compensation expenses, increased by 29.4% to US$110.9 million from US$85.7 million in fiscal year 2015.

Other (expenses)/income

Other expense was US$2.5 million for fiscal year 2016, compared to US$2.0 million for fiscal year 2015. The increase was mainly due to the increase in exchange losses arising from the more significant depreciation of RMB against U.S. Dollar in fiscal year 2016, partially offset by a gain from transfer of a nonfinancial asset and a gain on re-measurement of fair value of a noncontrolling equity investment in connection with a business acquisition. As the holding company had been holding a significant portion of cash balance denominated in RMB and reported in US Dollars, until the majority of the cash in RMB were converted into U.S. Dollar in the fourth quarter of fiscal year 2016, it had been benefiting from exchange gains in times of relative strength of the RMB and incurring 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 US$7.5 million, because there were other-than-temporary declines in the value of long-term investments in several investees, primarily due to significant deteriorations in their operations, earnings performance and abilities to continue as a going concern.

Gain from disposal of components

Gain from disposal of components were US$50.4 million, which was mainly derived from a transaction in which the Company transferred its one-on-one business component in Guangzhou in exchange for noncontrolling equity interest in a third party. US$12.6 million of income tax expense was accrued in connection to the gain from disposal of components by applying applicable Enterprise Income Tax ("EIT") rates.

Income Tax Expense

Income tax expense was US$33.5 million in fiscal year 2016, compared to US$9.4 million in fiscal year 2015. The increase was mainly due to accrued one-off income tax expense of US$12.5 million related to gain from disposal of one-on-one business in Guangzhou and an increase of US$7.3 million in income tax expense due to the expiration of an EIT exemption period for one of TAL's subsidiaries, Beijing Xintang Sichuang Education Technology Co., Ltd., upon which the subsidiary became subject to an EIT rate of 12.5%.

Net Income Attributable to TAL Education Group

Net income attributable to TAL increased by 53.2% to US$102.9 million from US$67.2 million in fiscal year 2015. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, increased by 50.4% to US$128.7 million from US$85.6 million in fiscal year 2015.

Basic and Diluted Net Income per ADS

Basic and diluted net income per ADS were US$1.29 and US$1.21, respectively, in fiscal year 2016. Non-GAAP basic and Non-GAAP diluted net income per ADS, which excluded share-based compensation expenses, were US$1.61 and US$1.49, respectively.

Capital Expenditures

Capital expenditures for fiscal year 2016 were US$35.1 million, an increase of US$4.5 million from US$30.6 million in fiscal year 2015. The increase was mainly due to leasehold improvements and the purchase of servers, computers, software systems and other hardware for the Company's teaching facilities and mobile network research and development.

Cash, Cash Equivalents, and Term Deposits

As of February 29, 2016, the Company had US$434.0 million of cash and cash equivalents and US$17.3 million of term deposits, compared to US$470.2 million of cash and cash equivalents and US$21.2 million of term deposits as of February 28, 2015.

Deferred Revenue

As of February 29, 2016, the Company's deferred revenue balance was US$289.3 million, compared to US$177.6 million as of February 28, 2015, representing a year-over-year increase of approximately 62.8%, mainly due to the acquisition of Firstleap.

Business Outlook

Taking into consideration the recent significant change in RMB exchange rate against the U.S. dollar, based on the Company's current estimates, total net revenues for the first quarter of fiscal year 2017 are expected to be between US$181.1 million and US$183.2 million, representing an increase of 40% to 42% on a year-over-year basis. If not including the impact from the recent depreciation of RMB against the U.S. Dollar, the projected revenue growth rate is expected to be in the range of 45% to 47% for the first quarter of fiscal year 2017.

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 29, 2016 at 8:00 a.m. Eastern Time on April 28, 2016 (8:00 p.m. Beijing time on April 28, 2016).

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

- U.S. toll free:

+1-866-519-4004

- Hong Kong toll free:

800-906-601

- Mainland China toll free:

400-620-8038

- International toll:

+65-6713-5090

Conference ID:

69723231

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 11:59 p.m. U.S. Eastern time, May 6, 2016 (11:59 a.m. Beijing time, May 7, 2016).

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

- U.S. toll free:

+1-855-452-5696

- Hong Kong toll free:

800-963-117

- Mainland China toll free:

400-602-2065

- International toll:

+61-2-8199-0299

Conference ID:

69723231

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 2017 and the fiscal year ending February 28, 2017, quotations from management in this announcement, as well as TAL Education Group's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's ability to continue to attract students to enroll in its courses; the Company's ability to continue to recruit, train and retain qualified teachers; the Company's ability to improve the content of its existing course offerings and to develop new courses; the Company's ability to maintain and enhance its brand; the Company's ability to maintain and continue to improve its teaching results; and the Company's ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company's reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and TAL Education Group undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.

About TAL Education Group

TAL Education Group is a leading K-12 after-school tutoring services provider in China. The acronym "TAL" stands for "Tomorrow Advancing Life," which reflects our vision to promote top learning opportunities for Chinese students through both high-quality teaching and content, as well as leading edge application of technology in the education experience. TAL Education Group offers comprehensive tutoring services to students from pre-school to the twelfth grade through three flexible class formats: small classes, personalized premium services, and online courses. Our tutoring services cover the core academic subjects in China's school curriculum including mathematics, English, Chinese, physics, chemistry, and biology. The Company's learning center network includes 363 physical learning centers as of February 29, 2016, located in 25 key cities in China: Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Wuhan, Xi`an, Chengdu, Nanjing, Hangzhou, Taiyuan, Zhengzhou, Chongqing, Suzhou, Shenyang, Jinan, Shijiazhuang, Qingdao, Changsha, Luoyang, Nanchang, Ningbo, Wuxi, Fuzhou and Hefei. We also operate www.jzb.com, a leading online education platform in China. Our ADSs trade on the New York Stock Exchange under the symbol "XRS."

About Non-GAAP Financial Measures

In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission as supplemental metrics to review and assess its operating performance: non-GAAP operating costs and expenses, non-GAAP cost of revenues, non-GAAP selling and marketing expenses, non-GAAP general and administrative expenses, non-GAAP income from operations, non-GAAP net income attributable to TAL, non-GAAP basic and non-GAAP diluted net income per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release.

TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. TAL believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to TAL's historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

For further information, please contact:

Mei Li
Investor Relations
TAL Education Group
Tel: +86 10 5292 6658
Email: ir@100tal.com

Caroline Straathof
IR Inside
Tel: +31 6 5462 4301
Email: info@irinside.com


TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In U.S. dollars)



As of

February 28,
2015


As of

February 29,
2016

ASSETS








Current assets




Cash and cash equivalents

$ 470,157,430


$ 434,042,036

Term deposits

21,229,763


17,292,636

Restricted cash-current

606,169


1,083,787

Short-term investments

765,611


27,470,431

Inventory

544,085


600,441

Amounts due from related parties-current

159,502


2,594,430

Deferred tax assets-current

4,562,034


738,406

Income tax receivable

3,222,529


-

Prepaid expenses and other current assets

38,185,411


32,037,407

Total current assets

539,432,534


515,859,574

Restricted cash-non-current

3,773,302


3,881,858

Property and equipment, net

93,575,648


114,629,683

Deferred tax assets-non-current

1,708,212


6,654,778

Rental deposit

11,034,812


17,114,552

Intangible assets, net

3,687,255


15,194,421

Goodwill

12,330,326


87,022,517

Amounts due from related parties-non-current

319,005


1,342,999

Long-term investments

97,359,075


274,356,960

Long-term prepayments and other non-current assets

9,194,468


25,321,691

Total assets

$ 772,414,637


$ 1,061,379,033





LIABILITIES AND EQUITY








Current liabilities




Accounts payable (including accounts payable of the
consolidated VIEs without recourse to TAL Education
Group of 4,115,254 and 9,371,013 as of February 28,
2015, and February 29, 2016, respectively)

$ 4,705,492


$ 10,404,047

Deferred revenue-current (including deferred
revenue-current of the
consolidated VIEs without
recourse to TAL Education Group of 154,982,001 and
260,137,064 as of February 28, 2015, and February 29,
2016, respectively)

177,639,939


280,934,750

Amounts due to related parties (including amounts due to
related parties of the consolidated VIEs without recourse
to TAL Education Group of 22,077 and 4,277,896 as of
February 28, 2015, and February 29, 2016, respectively)

22,077


4,277,896

Accrued expenses and other current liabilities (including

accrued expenses and other current liabilities of the

consolidated VIEs without recourse to TAL Education
Group of 30,106,008 and 51,183,663 as of February 28,
2015, and February 29, 2016, respectively)

43,988,602


70,267,551

Income tax payable (including income tax payable of the
consolidated VIEs without recourse to TAL Education
Group of 4,193,507 and 15,525,069 as of February 28,
2015, and February 29, 2016, respectively)

6,136,813


17,187,453

Deferred tax liabilities-current (including deferred tax
liabilities-current of the consolidated VIEs without
recourse to TAL Education Group of nil and 57,230
as of February 28, 2015, and February 29, 2016, respectively)

62,100


91,730

Total current liabilities

232,555,023


383,163,427

Deferred revenue-non-current (including deferred
revenue-non-current of the consolidated VIEs without
recourse to TAL Education Group of nil and 8,346,457 as
of February 28, 2015, and February 29, 2016, respectively)

-


8,346,457

Deferred tax liabilities-non-current (including deferred tax
liabilities-non-current of the consolidated VIEs without
recourse to TAL Education Group of 215,764 and
1,164,389 as of February 28, 2015, and February 29, 2016,
respectively)

226,792


1,304,361

Bond payable (including bond payable of the consolidated
VIEs without recourse to TAL Education Group of nil and
nil as of February 28, 2015, and February 29, 2016,
respectively)

226,062,006


227,827,301

Total liabilities

458,843,821


620,641,546

TAL Education Group Shareholders' Equity




Class A common shares

88,372


90,310

Class B common shares

71,456


71,456

Additional paid-in capital

82,479,806


108,404,873

Statutory reserve

18,961,627


22,981,900

Retained earnings

207,522,766


306,381,011

Accumulated other comprehensive income

4,168,548


(949,647)

Total TAL Education Group's equity

313,292,575


436,979,903

Noncontrolling interest

278,241


3,757,584

Total equity

313,570,816


440,737,487

Total liabilities and equity

$ 772,414,637


$ 1,061,379,033





TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



For the Three Months Ended

February 28/29,


For the Fiscal Year Ended

February 28/29,


2015


2016


2015


2016

Net revenues

$ 123,204,551


$ 175,048,674


$ 433,969,569


$ 619,948,777

Cost of revenues (note 1)

59,185,331


88,774,459


203,073,957


303,634,829

Gross profit

64,019,220


86,274,215


230,895,612


316,313,948

Operating expenses (note 1)








Selling and marketing

15,796,961


22,295,986


53,881,815


73,567,617

General and administrative

33,627,409


47,393,529


110,230,010


161,021,637

Total operating expenses

49,424,370


69,689,515


164,111,825


234,589,254

Government subsidies

260,002


62,535


464,327


3,327,169

Income from operations

14,854,852


16,647,235


67,248,114


85,051,863

Interest income

4,967,407


4,184,001


16,613,656


17,732,879

Interest expense

(1,872,138)


(1,886,730)


(5,811,288)


(7,499,323)

Other (expenses)/income

(2,856,183)


247,820


(2,010,109)


(2,522,253)

Gain from disposal of components

-


-


-


50,377,126

Gain on fair value change
from long-term investments

199,000


134,852


1,202,000


1,265,852

Impairment loss on long-term
investments

-


-


-


(7,503,944)

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

15,292,938


19,327,178


77,242,373


136,902,200

Provision for income tax

(1,129,266)


(8,229,596)


(9,368,541)


(33,482,744)

Loss from equity method investments

(423,225)


(342,325)


(729,811)


(663,256)

Net income

13,740,447


10,755,257


67,144,021


102,756,200

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

(11,226)


103,973


12,554


122,318

Total net income attributable
to TAL Education Group

$ 13,729,221


$ 10,859,230


$ 67,156,575


$ 102,878,518

Net income per common share








Basic

$ 0.09


$ 0.07


$ 0.42


$ 0.64

Diluted

0.08


0.06


0.41


0.60

Net income per ADS (note 2)








Basic

$ 0.17


$ 0.14


$ 0.85


$ 1.29

Diluted

0.17


0.13


0.82


1.21

Weighted average shares used in calculating
net income per common share








Basic

159,085,889


160,693,380


158,381,576


160,109,169

Diluted

164,156,582


168,185,267


163,589,649


183,056,255


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 28/29,

Ended February 28/29,


2015


2016


2015


2016

Cost of revenues

$ 13,272


$ 9,414


$ 47,808


$ 42,679

Selling and marketing

509,161


819,275


2,072,742


2,479,864

General and administrative

4,784,931


7,766,622


16,320,526


23,324,954

Total

$ 5,307,364


$ 8,595,311


$ 18,441,076


$ 25,847,497


Note 2: Each ADS represents two Class A common shares.


TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In U.S. dollars)



For the Three Months Ended

February 28/29,


For the Fiscal Year Ended

February 28/29,


2015


2016


2015


2016









Net income

$ 13,740,447


$ 10,755,257


$ 67,144,021


$ 102,756,200

Other comprehensive loss,
net of tax

(4,131,675)


(4,589,245)


(3,678,886)


(5,116,019)

Comprehensive income

9,608,772


6,166,012


63,465,135


97,640,181

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

(5,512)


96,926


13,576


120,142

Comprehensive income
attributable to TAL
Education Group

$ 9,603,260


$ 6,262,938


$ 63,478,711


$ 97,760,323

TAL EDUCATION GROUP

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

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



For the Three Months

Ended February 28/29,


For the Fiscal Year
Ended
February 28/29,


2015


2016


2015


2016









Cost of revenues

$ 59,185,331


$ 88,774,459


$ 203,073,957


$ 303,634,829

Share-based compensation
expense in cost of revenues

13,272


9,414


47,808


42,679

Non-GAAP cost of revenues

59,172,059


88,765,045


203,026,149


303,592,150









Selling and marketing expenses

15,796,961


22,295,986


53,881,815


73,567,617

Share-based compensation
expense in selling and marketing
expenses

509,161


819,275


2,072,742


2,479,864

Non-GAAP selling and
marketing expenses

15,287,800


21,476,711


51,809,073


71,087,753

General and administrative
expenses

33,627,409


47,393,529


110,230,010


161,021,637

Share-based compensation
expense in general and
administrative expenses

4,784,931


7,766,622


16,320,526


23,324,954

Non-GAAP general and
administrative expenses

28,842,478


39,626,907


93,909,484


137,696,683









Operating costs and expenses

108,609,701


158,463,974


367,185,782


538,224,083

Share-based compensation
expense in operating costs and
expenses

5,307,364


8,595,311


18,441,076


25,847,497

Non-GAAP operating costs and
expenses

103,302,337


149,868,663


348,744,706


512,376,586









Income from operations

14,854,852


16,647,235


67,248,114


85,051,863

Share based compensation
expenses

5,307,364


8,595,311


18,441,076


25,847,497

Non-GAAP income from
operations

20,162,216


25,242,546


85,689,190


110,899,360









Net income attributable to TAL
Education Group

13,729,221


10,859,230


67,156,575


102,878,518

Share based compensation
expenses

5,307,364


8,595,311


18,441,076


25,847,497

Non-GAAP net income
attributable to TAL Education

Group

$ 19,036,585


$ 19,454,541


$ 85,597,651


$ 128,726,015

Net income per ADS








Basic

$ 0.17


$ 0.14


$ 0.85


$ 1.29

Diluted

0.17


0.13


0.82


1.21

Non-GAAP net income per
ADS








Basic

$ 0.24


$ 0.24


$ 1.08


$ 1.61

Diluted

0.23


0.23


1.03


1.49









ADSs used in calculating net
income per ADS








Basic

79,542,945


80,346,690


79,190,788


80,054,585

Diluted

82,078,291


84,092,634


81,794,824


91,528,128

ADSs used in calculating
Non-GAAP net income per
ADS








Basic

79,542,945


80,346,690


79,190,788


80,054,585

Diluted

90,828,196


92,842,539


88,602,970


91,528,128









To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/tal-education-group-announces-unaudited-financial-results-for-the-fourth-fiscal-quarter-and-the-fiscal-year-ended-february-29-2016-300259202.html

Source: TAL Education Group
collection