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TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and Fiscal Year 2011 Ended February 28, 2011

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BEIJING, April 28, 2011 /PRNewswire-Asia/ --

  • Quarterly Net Revenues Increased by 66.8% Year-Over-Year
  • Quarterly Net Income from Continuing Operations Increased by 244.4% Year-Over-Year
  • Quarterly Net Income Increased by 249.4% Year-Over-Year
  • Quarterly Non-GAAP Net Income Increased by 352.0% Year-Over-Year

  • Fiscal year Net Revenues Increased by 59.6% Year-Over-Year
  • Fiscal year Net Income from Continuing Operations Increased by 71.6% Year-Over-Year
  • Fiscal year Net Income Increased by 68.8% Year-Over-Year
  • Fiscal year Non-GAAP Net Income Increased by 106.0% Year-Over-Year

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 fiscal year 2011 ended February 28, 2011.  

Financial Highlights for the Fourth Fiscal Quarter Ended February 28, 2011

  • Net revenues increased by 66.8% year-over-year to US$33.7 million from US$20.2 million in the same period of the prior fiscal year.
  • Net income from continuing operations increased by 244.4% year-over-year to US$8.4 million from US$2.4 million in the same period of the prior fiscal year.
  • Net income attributable to TAL increased by 249.4% year-over-year to US$8.4 million from US$2.4 million in the same period of the prior fiscal year.
  • Non-GAAP(1) net income attributable to TAL, which excluded share-based compensation expenses, increased by 352.0 % year-over-year to US$10.9million from US$2.4 million in the same period of the prior fiscal year.
  • Basic and diluted net income per American Depositary Share ("ADS")(2) were US$0.11 and US$0.11, respectively. Non-GAAP basic and diluted net income per ADS, in each case excluding share-based compensation expenses, were US$0.14 and US$0.14, respectively.  
  • Total student enrollments during the fourth quarter of fiscal year 2011 increased by 18.1% year-over-year to approximately 155,400.
  • Total physical network grew to 132 learning centers as of February 28, 2011 from 98 learning centers as of February 28, 2010.

(1) As used in this press release, 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 are defined to exclude share-based compensation expense from operating costs and expenses, cost of revenues, selling and marketing expenses, general and administrative expenses, income from operations, net income attributable to TAL and earnings per ADS, respectively.  See “About Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Measures To The Most Comparable GAAP Measures” at the end of this press release.

(2) Each ADS represents two Class A common shares.



Financial Highlights for the Fiscal Year Ended February 28, 2011

  • Net revenues increased by 59.6% year-over-year to US$110.6 million from US$69.3 million in the prior fiscal year.
  • Net income from continuing operations increased by 71.6% year-over-year to US$24.4 million from US$14.2 million in the prior fiscal year.
  • Net income attributable to TAL increased by 68.8% year-over-year to US$24.0 million from US$14.2 million in the prior fiscal year. Non-GAAP net income attributable to TAL, which excludes share-based compensation expenses, increased by 106.0% year-over-year to US$29.3 million from US$14.2 million in the prior fiscal year.
  • Basic and diluted net income per ADS were US$0.36 and US$0.35, respectively.  Non-GAAP basic and diluted net incomes per ADS in each case, excluding share-based compensation expenses, were US$0.43 and US$0.43, respectively.
  • Total student enrollments during the fiscal year ended February 28, 2011 increased by 27.2% year-over-year to approximately 486,400.

Financial and Operating Data -- the Fourth Fiscal Quarter and Fiscal Year 2011 Ended February 28, 2011

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



Three Months Ended



February 28,



2010

2011

Pct. Change

Net revenues

20,182

33,654

66.8%

Net income attributable to TAL

2,417

8,446

249.4%

Non-GAAP net income attributable to TAL

2,417

10,924

352.0%

Operating income

2,598

8,013

208.4%

Non-GAAP operating income

2,598

10,491

303.8%

Net income per ADS attributable to TAL – basic

0.04

0.11

186.2%

Net income per ADS attributable to TAL – diluted

0.04

0.11

180.7%

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

0.04

0.14

270.2%

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

0.04

0.14

263.1%

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

131,600

155,400

18.1%






FY2010

FY2011

Pct. Change

Net revenues

69,289

110,588

59.6%

Net income attributable to TAL

14,245

24,041

68.8%

Non-GAAP net income attributable to TAL

14,245

29,348

106.0%

Operating income

15,410

25,426

65.0%

Non-GAAP operating income

15,410

30,732

99.4%

Net income per ADS attributable to TAL – basic

0.23

0.36

56.2%

Net income per ADS attributable to TAL – diluted

0.23

0.35

54.6%

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

0.23

0.43

90.6%

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

0.23

0.43

88.7%

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

382,500

486,400

27.2%




"We ended the fiscal year 2011 with another strong quarter of execution against our growth strategy," said TAL's Chairman and Chief Executive Officer, Mr. Bangxin Zhang. "Our total student enrollments grew by 18.1% from the same period last fiscal year. This solid enrollment growth in the quarter allowed us to end fiscal year 2011 with 27.2% enrollment growth, significantly above our full year enrollment growth target of 22%."    

"During the quarter we added 18 new learning centers, which brought our total number of learning centers to 132 for fiscal year 2011, well exceeding our full-year target of 120.  While continuing to increase our learning center penetration in existing markets, we also began pre-marketing and continued the build-out of our local websites in the four new cities we plan to enter in the first quarter of fiscal year 2012: Hangzhou, Nanjing, Xi'an, and Chengdu."

"The roll-out of our one-on-one business is also right on-track. To complement our fast-growing Beijing business, we began offering our one-on-one classes in Shanghai in the second half of last fiscal year and are now prepared for further expansion into new cities. By the end of fiscal year 2012, we intend to be in ten Chinese cities for each of our two core business segments: small class and one-on-one."

"I am delighted with our strong business results in fiscal year 2011 and, as importantly, with the preparation measures we have taken over the last fiscal year, particularly in the enhancement of our content and organizational capabilities to support our continued business expansion in fiscal year 2012," Mr. Zhang commented.

Mr. Joseph Kauffman, Chief Financial Officer, continued, "In the fourth quarter of fiscal year 2011, we exceeded our previously offered guidance by delivering strong revenues from both our small class and one-on-one businesses. The attractive unit economics of our leading small class format combined with our ongoing roll-out of one-on-one classes together contributed to both rapid top-line growth and sustained profitability for our company. In the fourth quarter, we delivered revenue growth of 66.8% while at the same time growing GAAP net income by 249.4% and non-GAAP net income, which excludes share based compensation, by 352.0% compared to the same period of the last fiscal year. "  

"I am particularly pleased with the operating leverage that our business model has demonstrated in fiscal year 2011. For the full year we achieved gross margins of 49.2% and gross margin expansion of over 300 basis points versus the prior fiscal year, putting ourselves in an excellent position to increase investment in accelerating the pace of our center expansion in fiscal year 2012."

Financial Results for the Fourth Fiscal Quarter Ended February 28, 2011

Net Revenues

For the fourth quarter of fiscal year 2011, TAL reported net revenues of US$33.7 million, representing a 66.8% increase from US$20.2 million in the fourth quarter of fiscal year 2010.  The increase was mainly driven by higher average selling price and an increased number of total student enrollments. Average selling prices (ASPs), defined as total net revenue divided by total student enrollments, increased by 41.8% from US$153 in the fourth quarter of fiscal year 2010 to US$217 in the same quarter of fiscal year 2011 mainly driven by an increase in the hourly rate and the number of hours per enrollment. Total student enrollments increased by 18.1% to approximately 155,400 from approximately 131,600 in the same period one year ago.

Operating Costs and Expenses

Operating costs and expenses were US$25.6 million, a 45.8% increase from US$17.6 million in the fourth quarter of fiscal year 2010. Non-GAAP operating costs and expenses, which excludes share-based compensation expenses, were US$23.2 million, a 31.7% increase from US$17.6 million in the fourth quarter of fiscal year 2010.

Cost of revenues increased by 30.4% to US$16.2 million, from US$12.4 million in the fourth quarter of fiscal year 2010. The increase in cost of revenues was primarily due to an increase in teachers' costs to support a greater number of courses opened and the increased rental and other staff costs to support the greater number of learning centers in operation.   Non-GAAP cost of revenues, which excludes share-based compensation expenses, increased by 29.1% to US$16.0 million, from US$12.4 million in the fourth quarter of fiscal year 2010.

Selling and marketing expenses increased by 52.0% to US$3.0 million, from US$2.0 million in the fourth quarter of fiscal year 2010. The increase was primarily due to an increase in sales and marketing staff to support our expanded program and service offering and an increase in share-based compensation of our sales and marketing staff. Non-GAAP selling and marketing expenses, which excludes share-based compensation expenses, increased by 26.9% to US$2.5 million, from US$2.0 million in the fourth quarter of fiscal year 2010.  

General and administrative expenses increased by 102.1% to US$6.4 million, from US$3.2 million in the fourth quarter of fiscal year 2010. The increase was mainly due to an increase in share-based compensation expenses for our general and administrative staff and an increase in the total number of general and administrative staff to support our expanded operations. Non-GAAP general and administrative expenses, which excludes share-based compensation expenses, increased by 44.8% to US$4.6 million, from US$3.2 million in the fourth quarter of fiscal year 2010.

Total share-based compensation expenses that were allocated to related operating costs and expenses amounted to US$2.5 million in the fourth quarter of fiscal year 2011. The Company did not incur share-based compensation expenses in the corresponding period of the previous fiscal year.

Gross Profit

Gross profit increased by 124.7% to US$17.5 million, from US$7.8 million in the fourth quarter of fiscal year 2010.

Income from Operations

Income from operations increased by 208.4% to US$8.0 million, from US$2.6 million in the fourth quarter of fiscal year 2010. Non-GAAP income from operations, which excludes share-based compensation expenses, increased by 303.8% to US$10.5 million, from US$2.6 million in the fourth quarter of fiscal year 2010.

Income Tax Expense

Income tax expense was US$0.7 million in the fourth quarter of fiscal year 2011, as compared to US$0.2 million in the fourth quarter of fiscal year 2010.  

Net Income from Continuing Operations

Net income from continuing operations increased by 244.4% to US$8.4 million, from US$2.4 million in the fourth quarter of fiscal year 2010.  

Net Income Attributable to TAL Education Group

Net income attributable to TAL increased 249.4% to US$ 8.4 million, from US$2.4 million in the fourth quarter of fiscal year 2010. Non-GAAP net income attributable to TAL, which excludes share-based compensation expenses, increased by 352.0% to US$10.9 million, from US$2.4 million in the fourth quarter of fiscal year 2010.

Basic and Diluted Net Income per ADS

Basic and diluted net income per ADS were US$0.11 and US$0.11, respectively, in the fourth quarter of fiscal year 2011. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.14 and US$0.14, respectively.

Profit from Discontinued Operations

Profit from the discontinued operations in Qianjiang and Jianli in Hubei province, was US$0.07 million for the fourth quarter of fiscal year 2011. The profit from discontinued operations was due to an exemption of income tax liabilities of prior fiscal years granted by tax bureau.

Cash and Cash Equivalents

As of February 28, 2011, the Company had US$199.0 million of cash and cash equivalents, as compared to US$178.6 million as of November 30, 2010.

Deferred Revenue

As of February 28, 2011, the Company's deferred revenue balance was US$50.7 million versus US$38.0 million as of November 30, 2010.

Financial Results for the Fiscal Year Ended February 28, 2011

Net Revenues

For the fiscal year 2011, TAL reported net revenues of US$110.6 million, representing a 59.6% increase from US$69.3 million in the fiscal year 2010. The increase was primarily due to an increase in the number of total student enrollments and higher average selling price.  Total student enrollments increased by 27.2% to approximately 486,400 from approximately 382,500 in the fiscal year ended February 28, 2010. Average selling prices (ASPs) increased by 24.7% from US$182 per enrollment in fiscal year 2010 to US$227 per enrollment in fiscal year 2011.  

Operating Costs and Expenses

Operating costs and expenses were US$85.2 million, a 58.1% increase from US$53.9 million in fiscal year 2010. Non-GAAP operating costs and expenses, which excludes share-based compensation expenses, were US$79.9 million, a 48.2% increase from US$53.9 million in fiscal year 2010.

Cost of revenues increased by 50.0% to US$56.1 million, from US$37.4 million in fiscal year 2010. The increase in cost of revenues was primarily due to the increased number of courses and related teachers' costs, the greater number of learning centers in operation and the additional staff required to support our expanded operation. Non-GAAP cost of revenues, which excludes share-based compensation expenses, increased by 48.6% to US$55.6 million, from US$37.4 million in fiscal year 2010.

Selling and marketing expenses increased by 77.7% to US$9.9 million, from US$5.6 million in fiscal year 2010. The increase was primarily due to an increase in sales and marketing staff to support our expanded program and service offerings and an increase in share-based compensation of our sales and marketing staff. Non-GAAP selling and marketing expenses, which excludes share-based compensation expenses, increased by 60.2% to US$9.0 million, from US$5.6 million in fiscal year 2010.

General and administrative expenses increased by 75.8% to US$19.1 million, from US$10.9 million in fiscal year 2010. The increase was primarily due to an increase in share-based compensation expenses for our general and administrative staff, an increase in general and administrative staff to support our expanded program and service offerings and corresponding rental and depreciation. Non-GAAP general and administrative expenses, which excludes share-based compensation expenses, increased by 40.7% to US$15.3 million, from US$10.9 million in fiscal year 2010.

Total share-based compensation expenses that were allocated to related operating costs and expenses amounted to US$5.3 million in fiscal year 2011. The Company did not incur share-based compensation expenses in the previous fiscal year.

Gross Profit

Gross profit increased by 70.9% to US$54.4 million, from US$31.9 million in the fiscal year 2010.

Income from Operations

Income from operations increased by 65.0% to US$25.4 million, from US$15.4 million in fiscal year 2010. Non-GAAP income from operations, which excludes share-based compensation expenses, increased by 99.4% to US$30.7 million, from US$15.4 million in fiscal year 2010.

Income Tax Expense

Income tax expense was US$2.6 million in fiscal year 2011, as compared to US$1.4 million in fiscal year 2010.  

Net Income from Continuing Operations

Net income from continuing operations increased by 71.6% to US$24.4 million, from US$14.2 million in fiscal year 2010.  

Net Income Attributable to TAL Education Group

Net income attributable to TAL increased by 68.8% to US$24.0 million, from US$14.2 million in fiscal year 2010. Non-GAAP net income attributable to TAL, which excludes share-based compensation expenses, increased by 106.0% to US$29.3 million, from US$14.2 million in fiscal year 2010.

Basic and Diluted Net Income per ADS

Basic and diluted net incomes per ADS were US$0.36 and US$0.35, respectively, in the fiscal year 2011.  Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.43and US$0.43, respectively.

Loss from Discontinued Operations

Loss from the discontinued operations in Qianjiang and Jianli in Hubei province, was US$0.3 million for the fiscal year 2011.

Cash and Cash Equivalents

As of February 28, 2011, the Company had US$199.0 million of cash and cash equivalents, as compared to US$50.8 million as of February 28, 2010.

Deferred Revenue

As of February 28, 2011, the Company's deferred revenue balance was US$50.7 million versus US$29.4 million as of February 28, 2010.

Business Outlook

Based on the Company's current estimates, total revenues for the first quarter of fiscal year 2012 are expected to be between US$29.0 million and US$30.5 million, representing an increase of 41% to 49% on a year-over-year basis. This estimate reflects 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 fiscal year 2011 ended February 28, 2011 at 8:00 am Eastern Daylight Time on April 28, 2011 (8:00 pm Beijing time on April 28, 2011).

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

- U.S. Toll Free Number:

1-866-510-0708

- International Dial-in Number:

1-617-597-5377

- Mainland China Toll Free Number (North):                  

10-800-852-1490

- Mainland China Toll Free Number (South):

10-800-130-0399

- Hong Kong Toll Free Number:

800-96-3844

- U.K. Toll Free Number:

080-8234-7616

Conference ID:

XRS



A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at en.xueersi.org.

A telephone replay of the call will be available after the conclusion of the conference call through May 5, 2011.

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

- U.S. Toll Free Number

1-888-286-8010

- International Dial-in Number                              

1-617-801-6888

Conference ID:

62416586



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 2012 and 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: its ability to continue to attract students to enroll in its courses; its ability to continue to recruit, train and retain qualified teachers; its ability to improve the content of its existing course offerings and to develop new courses; its ability to maintain and enhance its brand; its ability to maintain and continue to improve its teaching results; and its 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 Securities and Exchange Commission. TAL Education Group does not undertake any obligation to update any forward-looking statement, except as required under applicable law. 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, except as required under applicable law.

About TAL Education Group

TAL Education Group, which operates under the brand "Xueersi," is a leading K-12 after-school tutoring service provider in China associated with high teaching quality and outstanding student academic performance. Its tutoring services cover the core subjects in China's school curriculum, including mathematics, English, Chinese, physics, chemistry and biology, and are delivered through three formats: small class, one-on-one, and online courses.  The Company's network includes 132 physical learning centers as of February, 28, 2011, located in six key cities in China: Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin and Wuhan. It also operates www.eduu.com, a leading online education platform in China.  The Company's 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 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 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 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 charge that has 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:


For Investors:

Willow Wu

Investor Relations

TAL Education Group

Tel: +86-10-5292-6658

Email: wuliuying@xueersi.com


For Media:

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

As of


February 28,

February 28,


2010

2011

ASSETS






Current assets



  Cash and cash equivalents

$50,752,481

$199,035,732

  Available-for-sale securities

1,918,156

465,709

  Inventory

121,819

117,827

  Deferred tax assets-current

831,297

1,082,932

  Prepaid expenses and other current assets

2,280,941

4,746,929

Total current assets

55,904,694

205,449,129

  Property and equipment, net

4,991,490

7,515,325

  Deferred tax assets-non-current

283,968

668,096

  Rental deposit

2,170,548

2,818,126

  Intangible assets, net

1,389,160

656,785

  Goodwill

763,802

662,583

Total assets

$65,503,662

$217,770,044

Liabilities, Convertible Redeemable Preferred Shares and Equity



Current liabilities



Accounts payable (including accounts payable of the 
consolidated VIEs without recourse to TAL 
Education Group of 915,408 and 736,655 as of 
February 28, 2010,and February 28, 2011, 
respectively)

$987,742

$911,254


Deferred revenue (including deferred revenue of the 
consolidated VIEs without recourse to TAL 
Education Group of 24,631,648 and 34,169,473 as of 
February 28,2010 and February 28, 2011, 
respectively)

29,407,994

50,678,025


Amounts due to related parties (including amounts 
due to related parties of the consolidated VIEs 
without recourse to TAL Education Group of 
108,204 and 79,893 as of February 28, 2010 and 
February 28, 2011, respectively)

108,204

79,893


Accrued expenses and other current liabilities 
(including accrued expenses and other current 
liabilities without recourse to TAL Education Group 
of 6,588,552 and 5,729,657 as of February 28, 2010 
and February 28, 2011, respectively)

6,817,816

8,053,980


Income tax payable (including income tax payable of 
the consolidated VIEs without recourse to TAL 
Education Group of 2,653,324 and 2,650,269 as of 
February 28, 2010, and February 28, 2011, 
respectively)

580,225

2,877,887

Total current liabilities

37,901,981

62,601,039

  Convertible loan

500,000

-

  Deferred tax liabilities-non-current

175,610

117,781

Total liabilities

38,577,591

62,718,820


Series A convertible redeemable preferred shares

9,000,000

-


TAL Education Group Shareholders' Equity



  Class A common shares

-

27,600

  Class B common shares

120,000

125,000

  Class B common shares subscription receivable

(120,000)

-

  Additional paid-in capital

779,641

112,055,718

 Statutory reserve

4,857,443

8,240,697

 Retained earnings

12,069,734

32,727,630

  Accumulated other comprehensive income

219,253

1,874,579

Total TAL Education Group's Equity

17,926,071

155,051,224

Total liabilities, convertible redeemable preferred 
shares and equity

$65,503,662

$217,770,044




TAL Education Group

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



For the Three Months Ended


For the Fiscal Year Ended


February 28,


February 28,


2010


2011


2010


2011









Net revenues

20,181,550


33,653,533


69,288,547


110,588,299

Cost of revenues

12,399,243


16,164,293


37,433,811


56,142,838

Gross profit

7,782,307


17,489,240


31,854,736


54,445,461

Operating expenses (note 1)

 


 


 


 

  Selling and marketing

1,995,137


3,033,166


5,591,218


9,934,938

  General and administrative

3,188,912


6,443,234


10,853,565


19,085,014

Total operating expenses

5,184,049


9,476,400


16,444,783


29,019,952

Income from operations

2,598,258


8,012,840


15,409,953


25,425,509

Interest income

94,395


773,592


323,801


1,346,284

Interest expense

(40,643)


(270)


(40,643)


(59,212)

Other expenses, net

(201)


111,611


(124,839)


150,255

Gain from sales of available-
for-sale securities

-


-


-


6,429

Gain on extinguishment of 
liabilities

-


134,370


-


134,370

Income before income tax 
provision

2,651,809


9,032,143


15,568,272


27,003,635

Provision for income tax

220,180


656,545


1,364,635


2,628,090

Net income from continuing 
operations

2,431,629


8,375,598


14,203,637


24,375,545

Net income/(loss) from 
discontinued operations, net of 
taxes

(14,471)


70,674


41,322


(334,395)

Net income

2,417,158


8,446,272


14,244,959


24,041,150

Total net income attributable 
to TAL Education Group

2,417,158


8, 446,272


14,244,959


24,041,150




TAL Education Group

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



For the Three Months Ended


For the Fiscal Year Ended


February 28,


February 28,


2010


2011


2010


2011









Net income per common share
















  Basic from continuing operations

0.02


0.05


0.11


0.18

  Basic from discontinued operations

(0.00)


0.00


0.00


(0.00)

Basic

0.02


0.05


0.11


0.18









  Diluted from continuing operations

0.02


0.05


0.11


0.18

  Diluted from discontinued operations

(0.00)


0.00


0.00


(0.00)

Diluted

0.02


0.05


0.11


0.18


 




 


 

Net income per ADS (note 2)








  Basic from continuing operations

0.04


0.11


0.23


0.36

  Basic from discontinued operations

(0.00)


0.00


0.00


(0.00)

Basic

0.04


0.11


0.23


0.36









  Diluted from continuing operations

0.04


0.11


0.23


0.35

  Diluted from discontinued operations

(0.00)


0.00


0.00


(0.00)

Diluted

0.04


0.11


0.23


0.35


 




 


 

Weighted average shares used in 
calculating net income per common 
share








  Basic

120,000,000


152,600,000


120,000,000


131,911,539

  Diluted

125,000,000


155,591,537


125,000,000


136,445,635



Notes:


Note 1: 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


2010


2011


2010


2011


US$


US$


US$


US$








 

Cost of revenues

-


151,096


-


521,387

Selling and marketing

-


502,139


-


975,114

General and administrative

-


1,824,959


-


3,809,971

Total

-


2,478,194


-


5,306,472


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



TAL Education Group

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

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



For the Three Months Ended
February 28,


For the Fiscal Year ended
February 28,


2010


2011


2010


2011


US$


US$


US$


US$

Cost of revenues

12,399,243


16,164,293


37,433,811


56,142,838

Share-based compensation expense in 
cost of revenues

-


151,096


-


521,387

Non-GAAP cost of revenues

12,399,243


16,013,197


37,433,811


55,621,451


Selling and marketing expenses

1,995,137


3,033,166


5,591,218


9,934,938

Share-based compensation expense in 
selling and marketing expenses

-


502,139


-


975,114

Non-GAAP selling and marketing 
expenses

1,995,137


2,531,027


5,591,218


8,959,824









General and administrative expenses

3,188,912


6,443,234


10,853,565


19,085,014

Share-based compensation expense in 
general and administrative expenses

-


1,824,959


-


3,809,971

Non-GAAP general and administrative 
expenses

3,188,912


4,618,275


10,853,565


15,275,043


Operating costs and expenses

17,583,292


25,640,693


53,878,594


85,162,790

Share-based compensation expense in 
operating costs and expenses

-


2,478,194


-


5,306,472

Non-GAAP operating costs and 
expenses

17,583,292


23,162,499


53,878,594


79,856,318









Income from operations

2,598,258


8,012,840


15,409,953


25,425,509

Share based compensation expenses

-


2,478,194


-


5,306,472

Non-GAAP income from operations 

2,598,258


10,491,034


15,409,953


30,731,981









GAAP net income attributable to TAL 
Education Group

2,417,158


8,446,272


14,244,959


24,041,150

Share based compensation expenses

-


2,478,194


-


5,306,472

Non-GAAP net income attributable to 
TAL Education Group

2,417,158


10,924,466


14,244,959


29,347,622









Net income per ADS 








   - Basic

0.04


0.11


0.23


0.36

   - Diluted

0.04


0.11


0.23


0.35









Non-GAAP net income per ADS 








   - Basic

0.04


0.14


0.23


0.43

   - Diluted

0.04


0.14


0.23


0.43









ADSs used in calculating net income 
per ADS








   - Basic

60,000,000


76,300,000


60,000,000


65,955,769

   - Diluted

62,500,000


77,795,768


62,500,000


68,222,817


Note:


(1) The Non-GAAP adjusted net income per share and per ADS are computed using Non-GAAP adjusted net income and the same number of shares and ADSs used in GAAP basic and diluted EPS calculation.



SOURCE TAL Education Group



RELATED LINKS
http://en.xueersi.org
http://www.eduu.com

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