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New Oriental Announces Results for the Fourth Quarter and Fiscal Year Ended May 31, 2009 and Adoption of Share Repurchase Program
BEIJING and HONG KONG, July 21 /PRNewswire-Asia/ --
-- Quarterly Net Revenues Increased by 47.9% Year-Over-Year
-- Quarterly Non-GAAP Net Income Increased by 58.0% Year-Over-Year
-- Quarterly GAAP Net Income Increased by 49.8% Year-Over-Year
-- Fiscal Year Net Revenues Increased by 45.6% Year-Over-Year
-- Fiscal Year Non-GAAP Net Income Increased by 34.6% Year-Over-Year
-- Fiscal Year GAAP Net Income Increased by 24.5% Year-Over-Year
New Oriental Education and Technology Group Inc. (the "Company" or "New
Oriental") (NYSE: EDU), the largest provider of private educational services
in
Highlights for the Fourth Fiscal Quarter Ended May 31, 2009
-- Total net revenues increased by 47.9% year-over-year to US$59.4 million
from US$40.2 million in the same period of the prior fiscal year.
-- Non-GAAP net income, which excludes share-based compensation expenses,
increased by 58.0% year-over-year to US$7.1 million from US$4.5 million
in the same period of the prior fiscal year. GAAP net income increased
by 49.8% year-over-year to US$2.6 million from US$1.8 million in the
same period of the prior fiscal year.
-- Non-GAAP income from operations, which excludes share-based
compensation expenses, increased by 175.1% year-over-year to US$7.0
million from US$2.5 million in the same period of the prior fiscal
year. GAAP income from operations increased to US$2.5 million from a
loss of US$0.2 million in the same period of the prior fiscal year.
-- Non-GAAP basic and diluted earnings per ADS, which excludes share-based
compensation expenses, were US$0.19 and US$0.19, respectively. GAAP
basic and diluted earnings per ADS were US$0.07 and US$0.07,
respectively. Each ADS represents four common shares of the Company.
-- Total student enrollments in language training and test preparation
courses increased by 8.2% year-over-year to approximately 330,200 from
approximately 305,200 in the same period of the prior fiscal year.
Highlights for the Fiscal Year Ended May 31, 2009
-- Total net revenues for the fiscal year increased by 45.6%
year-over-year to US$292.6 million from US$201.0 million.
-- Non-GAAP net income for the fiscal year increased by 34.6%
year-over-year to US$77.8 million from US$57.8 million. GAAP net income
increased by 24.5% year-over-year to US$61.0 million from US$49.0
million.
-- Non-GAAP income from operations for the fiscal year increased by 43.6%
year-over-year to US$77.7 million from US$54.1 million. GAAP income
from operations increased by 34.4% year-over-year to US$60.9 million
from US$45.3 million.
-- Non-GAAP basic and diluted earnings per ADS for the fiscal year were
US$2.09 and US$2.03, respectively. GAAP basic and diluted earnings per
ADS were US$1.64 and US$1.59, respectively. Each ADS represents four
common shares of the Company.
-- Total student enrollments in language training and test preparation
courses increased by 19.5% year-over-year to approximately 1,519,500
from approximately 1,271,700 in the prior fiscal year.
-- The total number of schools and learning centers increased to 270 as of
May 31, 2009, up from 207 as of May 31, 2008. One new school was opened
in the fourth quarter, bringing the total number of schools to 48 as of
May 31, 2009, up from 47 as of February 28, 2009. The number of
learning centers increased by 12 in the quarter to 222 as of May 31,
2009, up from 210 as of February 28, 2009.
Financial and Student Enrollments Summary - Fourth Quarter and Fiscal Year
2009
(US$ in thousands, except per ADS data and student enrollments)
Q4 of FY2009 Q4 of FY2008 Pct. Change
Net revenues 59,426 40,168 47.9%
Non-GAAP net income (1) 7,122 4,507 58.0%
GAAP net income 2,640 1,762 49.8%
Non-GAAP operating income (1) 6,979 2,537 175.1%
GAAP operating income 2,497 (208) 1300.5%
Non-GAAP net income per ADS
basic (1)(2) 0.19 0.12 58.4%
Non-GAAP net income per ADS
diluted (1)(2) 0.19 0.12 60.5%
GAAP net income per ADS
basic (2) 0.07 0.05 50.2%
GAAP net income per ADS
diluted (2) 0.07 0.05 52.2%
Total student enrollments
in language training and
test preparation courses 330,200 305,200 8.2%
FY2009 FY2008 Pct. Change
Net revenues 292,567 201,003 45.6%
Non-GAAP net income (1) 77,766 57,755 34.6%
GAAP net income 61,016 49,013 24.5%
Non-GAAP operating income (1) 77,670 54,077 43.6%
GAAP operating income 60,920 45,335 34.4%
Non-GAAP net income per ADS
basic (1)(2) 2.09 1.54 35.5%
Non-GAAP net income per ADS
diluted (1)(2) 2.03 1.48 37.2%
GAAP net income per ADS
basic (2) 1.64 1.31 25.2%
GAAP net income per ADS
diluted (2) 1.59 1.25 26.9%
Total student enrollments
in language training and
test preparation courses 1,519,500 1,271,700 19.5%
(1) New Oriental provides net income, operating income, net income per
ADS on a Non-GAAP basis that excludes share-based compensation
expenses to reflect meaningful supplemental information regarding its
performance and liquidity. 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.
(2) Each ADS represents four common shares.
"We are pleased to finish our 2009 fiscal year with a strong fourth fiscal
quarter, recording revenue growth of 47.9% and even higher non-GAAP operating
income growth of 175%," said
"New Oriental's objective is to be the lifelong education partner of Chinese students from age five through adulthood. To accomplish this goal, we strive to provide the best quality language training and test preparation programs to meet the needs of Chinese families," concluded Mr. Yu.
New Oriental's president and chief financial officer,
Mr. Hsieh continued, "We have rolled out U-Can all-subjects middle and
high school training program in more than 30 cities throughout
Recent Developments -- Adoption of Share Repurchase Program
On
Under this share repurchase program, the ADSs will be purchased from time to time on the open market at prevailing market prices, in negotiated transactions off the market, in block trades, pursuant to a 10b5-1 plan (which allows New Oriental to repurchase its ADSs during periods in which it may be in possession of material non-public information) or otherwise, subject to any restrictions under applicable law. The timing and extent of any purchases will depend upon market conditions, the trading price of ADSs and other factors.
New Oriental expects to implement this share repurchase program in a manner consistent with market conditions and the interests of the shareholders. New Oriental's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size accordingly. New Oriental plans to fund repurchases made under this program from available cash balance.
Financial Results for the Fiscal Quarter Ended
For the fourth fiscal quarter of 2009, New Oriental reported net revenues
of
Net revenues from educational programs and services for the fourth fiscal
quarter were
Non-GAAP operating costs and expenses for the quarter were
Cost of revenues increased by 45.9% year-over-year to
Selling and marketing expenses increased by 36.8% year-over-year to
Non-GAAP general and administrative expenses were
Total share-based compensation expenses, which were allocated to related
operating costs and expenses, increased by 63.3% to
Non-GAAP income from operations for the quarter was
Non-GAAP operating margin for the quarter was 11.7%, compared to 6.3% in the same period of the prior fiscal year. GAAP operating margin for the quarter was 4.2%, compared to negative 0.5% in the same period of the prior fiscal year. This rise was primarily due to improved operating efficiency as revenue growth outpaced the growth in operating cost and expenses.
Non-GAAP net income was
GAAP net income for the quarter was
Capital expenditures for the quarter were
As of
The deferred revenue balance, which is cash collected from registered
students for courses and recognized proportionally as revenue as the
instructions are delivered, at the end of the fourth quarter of fiscal year
2009 was
Financial Results for the Fiscal Year Ended
For the fiscal year ended
Net revenues from educational programs and services for the fiscal year
ended
Non-GAAP income from operations for the fiscal year ended
Non-GAAP operating margin for the fiscal year ended
Non-GAAP net income for the fiscal year ended
GAAP net income for the fiscal year ended
Outlook for First Quarter of Fiscal Year 2010
New Oriental expects its total net revenues in the first quarter of fiscal
year 2010 (
Conference Call Information
New Oriental's management will host an earnings conference call at
Dial-in details for the earnings conference call are as follows:
US: +1.617.213.8838
Hong Kong: +852.3002.1672
UK: +44.207.365.8426
Please dial-in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "New Oriental earnings call."
A replay of the conference call may be accessed by phone at the following
number until
International: +1.617.801.6888
Passcode: 74420799
Additionally, a live and archived webcast of the conference call will be available at http://investor.neworiental.org .
About New Oriental
New Oriental is the largest provider of private educational services in
For more information about New Oriental, please visit http://english.neworiental.org .
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 2010 and
quotations from management in this announcement, as well as New Oriental's
strategic and operational plans, contain forward-looking statements. New
Oriental may also make written or oral forward-looking statements in its
periodic reports to the U.S. Securities and Exchange Commission, in its annual
report 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 New
Oriental'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: our growth strategies; our future business development, results of
operations and financial condition; our ability to attract students without a
significant decrease in course fees; our ability to continue to hire, train
and retain qualified teachers; our ability to maintain and enhance our "New
Oriental" brand; our ability to effectively and efficiently manage the
expansion of our school network and successfully execute our growth strategy;
the outcome of ongoing, or any future, litigation or arbitration, including
those relating to copyright and other intellectual property rights;
competition in the private education sector in
About Non-GAAP Financial Measures
To supplement New Oriental's consolidated financial results presented in accordance with GAAP, New Oriental uses the following measures defined as non-GAAP financial measures by the SEC: net income excluding share-based compensation expenses, operating income excluding share-based compensation expenses, operating costs and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, operating margin excluding share-based compensation expenses, and basic and diluted net income per ADS and per share excluding share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release.
New Oriental believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based compensation expenses that may not be indicative of its operating performance from a cash perspective. New Oriental believes that both management and investors benefit from referring to 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 New Oriental's historical performance and liquidity. New Oriental computes its non-GAAP financial measures using the same consistent method from quarter to quarter. New Oriental 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 these non-GAAP measures is that they exclude share-based compensation charge that has been and will continue to be for the foreseeable future a significant recurring expense in our 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.
NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
As of May 31 As of February 28
2009 2009
(Unaudited) (Unaudited)
USD USD
ASSETS:
Current assets:
Cash and cash equivalents 254,772 223,955
Restricted cash 540 531
Term deposits 59,845 62,549
Accounts receivable, net 1,539 1,375
Inventory 15,188 14,514
Deferred tax assets-Current 1,621 1,141
Prepaid expenses and other current assets 14,222 16,053
Total current assets 347,727 320,118
Property, plant and equipment, net 109,785 109,373
Land use right, net 3,485 3,499
Amounts due from related parties 396 395
Deferred tax assets 1,077 1,833
Long term deposit 2,021 --
Long term prepaid rent 1,331 1,439
Intangible assets 866 909
Goodwill 2,712 2,159
Long term investment 2 2
Total assets 469,402 439,727
LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable-trade 9,295 9,194
Accrued expenses and other current
liabilities 29,815 28,426
Income tax payable 3,728 4,962
Amount due to related parties 141 54
Deferred revenue 74,782 55,423
Total current liabilities 117,761 98,059
Deferred tax liabilities 157 --
Total long-term liabilities 157 --
Total liabilities 117,918 98,059
Minority interest 238 --
Total shareholders' equity 351,246 341,668
Total liabilities, minority interest
and shareholders' equity 469,402 439,727
NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for per share and per ADS amounts)
For the Three Months Ended May 31
2009 2008
(Unaudited) (Unaudited)
USD USD
Net Revenues:
Educational Programs and services 51,337 35,226
Books and others 8,089 4,942
Total net revenues 59,426 40,168
Operating costs and expenses (note 1):
Cost of revenues 25,771 17,669
Selling and marketing 10,250 7,492
General and administrative 20,908 15,215
Total operating costs and expenses 56,929 40,376
Operating income (loss) 2,497 (208)
Other income, net 794 1,119
Provision for income taxes (413) 806
Minority interest, net of taxes (238) 45
Net Income 2,640 1,762
Net income per share-basic 0.02 0.01
Net income per share-diluted 0.02 0.01
Net income per ADS-basic (note 2) 0.07 0.05
Net income per ADS-diluted (note 2) 0.07 0.05
Notes:
Note 1: Share-based compensation expenses (in thousands) are included in
the operating costs and expenses as follows:
For the Three Months Ended May 31
2009 2008
(Unaudited) (Unaudited)
USD USD
Cost of revenues 138 206
Selling and marketing 63 41
General and administrative 4,281 2,498
Total 4,482 2,745
Note 2: Each ADS represents four common shares.
NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES
(In thousands except share and per ADS amounts)
For the Three Months Ended May 31
2009 2008
(Unaudited) (Unaudited)
USD USD
General and administrative expenses 20,908 15,215
Share-based compensation expense in
general and administrative expenses 4,281 2,498
Non-GAAP general and administrative
expenses 16,627 12,717
Total operating costs and expenses 56,929 40,376
Share-based compensation expenses 4,482 2,745
Non-GAAP operating costs and expenses 52,447 37,631
Operating income (loss) 2,497 (208)
Share-based compensation expenses 4,482 2,745
Non-GAAP operating income 6,979 2,537
Operating margin 4.2% -0.5%
Non-GAAP operating margin 11.7% 6.3%
Net income 2,640 1,762
Share-based compensation expense 4,482 2,745
Non-GAAP net income 7,122 4,507
Net income per ADS - basic (note 1) 0.07 0.05
Net income per ADS - diluted (note 1) 0.07 0.05
Non-GAAP net income per ADS - basic
(note 1) 0.19 0.12
Non-GAAP net income per ADS - diluted
(note 1) 0.19 0.12
Weighted average shares used in
calculating basic net income per ADS
(note 1) 149,633,634 149,975,585
Weighted average shares used in
calculating diluted net income per
ADS (note 1) 153,578,336 155,980,034
Note 1: Each ADS represents four common shares.
NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for per share and per ADS amounts)
For the Year Ended May 31
2009 2008
(Unaudited) (Unaudited)
USD USD
Net Revenues:
Educational Programs and services 266,389 183,917
Books and others 26,178 17,086
Total net revenues 292,567 201,003
Operating costs and expenses (note 1):
Cost of revenues 112,011 77,219
Selling and marketing 38,947 25,617
General and administrative 80,689 52,832
Total operating costs and expenses 231,647 155,668
Operating income 60,920 45,335
Other income, net 7,189 7,149
Provision for income taxes (7,256) (3,644)
Minority interest, net of taxes 163 173
Net Income 61,016 49,013
Net income per share-basic 0.41 0.33
Net income per share-diluted 0.40 0.31
Net income per ADS-basic (note 2) 1.64 1.31
Net income per ADS-diluted (note 2) 1.59 1.25
Notes:
Note 1: Share-based compensation expenses (in thousands) are included in
the operating costs and expenses as follows:
For the Year Ended May 31
2009 2008
(Unaudited) (Unaudited)
USD USD
Cost of revenues 316 707
Selling and marketing 225 226
General and administrative 16,209 7,809
Total 16,750 8,742
Note 2: Each ADS represents four common shares.
NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES
(In thousands except share and per ADS amounts)
For the Year Ended May 31
2009 2008
(Unaudited) (Unaudited)
USD USD
General and administrative expenses 80,689 52,832
Share-based compensation expense in
general and administrative expenses 16,209 7,809
Non-GAAP general and administrative
expenses 64,480 45,023
Total operating costs and expenses 231,647 155,668
Share-based compensation expenses 16,750 8,742
Non-GAAP operating costs and expenses 214,897 146,926
Operating income 60,920 45,335
Share-based compensation expenses 16,750 8,742
Non-GAAP operating income 77,670 54,077
Operating margin 20.8% 22.6%
Non-GAAP operating margin 26.5% 26.9%
Net income 61,016 49,013
Share-based compensation expense 16,750 8,742
Non-GAAP net income 77,766 57,755
Net income per ADS - basic (note 1) 1.64 1.31
Net income per ADS - diluted (note 1) 1.59 1.25
Non-GAAP net income per ADS - basic
(note 1) 2.09 1.54
Non-GAAP net income per ADS - diluted
(note 1) 2.03 1.48
Weighted average shares used in
calculating basic net income per ADS
(note 1) 149,090,088 149,992,200
Weighted average shares used in
calculating diluted net income per
ADS (note 1) 153,528,173 156,449,101
Note 1: Each ADS represents four common shares.
For investor and media inquiries, please contact:
In China:
Ms. Sisi Zhao
New Oriental Education and Technology Group Inc.
Tel: +86-10-6260-5566 x8203
Email: zhaosisi@staff.neworiental.org
Ms. Cynthia He
Brunswick Group LLC
Tel: +86-10-6566-9504
Email: che@brunswickgroup.com
In the U.S.:
Ms. Kate Tellier
Brunswick Group LLC
Tel: +1-212-333-3810
Email: ktellier@brunswickgroup.com
SOURCE New Oriental Education and Technology Group Inc.