6-K
TAL Education Group (TAL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2023
Commission File Number: 001-34900
TAL EDUCATION GROUP
5/F, Tower B, Heying Center
Xiaoying West Street, Haidian District
Beijing 100085
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TAL Education Group | |
|---|---|
| By: | /s/ Alex Zhuangzhuang Peng |
| Name: Alex Zhuangzhuang Peng | |
| Title: President and Chief Financial Officer |
Date: October 26, 2023
Exhibit Index
Exhibit 99.1
TALEducation Group Announces Unaudited Financial Results for the
Second****Fiscal Quarter Ended August 31, 2023
(Beijing–October 26, 2023)—TAL Education Group (NYSE: TAL) (“TAL” or the “Company”), a smart learning solutions provider in China, today announced its unaudited financial results for the second quarter of fiscal year 2024 ended August 31, 2023.
Highlights for the Second Quarterof Fiscal Year 2024
| - | Net<br> revenues was US$411.9 million, compared to net revenues of US$294.1 million in the same period<br> of the prior year. |
|---|---|
| - | Income<br> from operations was US$31.8 million, compared to income from operations of US$14.9 million<br> in the same period of the prior year. |
| --- | --- |
| - | Non-GAAP<br> income from operations, which excluded share-based compensation<br> expenses, was US$52.7 million, compared to non-GAAP income from operations of US$42.3 million<br> in the same period of the prior year. |
| --- | --- |
| - | Net<br> income attributable to TAL was US$37.9 million, compared to net loss attributable to TAL<br> of US$0.8 million in the same period of the prior year. |
| --- | --- |
| - | Non-GAAP<br> net income attributable to TAL, which excluded share-based compensation expenses, was US$58.8<br> million, compared to non-GAAP net income attributable to TAL of US$26.6 million in the same<br> period of the prior year. |
| --- | --- |
| - | Basic<br> and diluted net income per American Depositary Share (“ADS”) were both US$0.06.<br> Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses,<br> were both US$0.10. Three ADSs represent one Class A common share. |
| --- | --- |
| - | Cash,<br> cash equivalents and short-term investments totaled US$2,963.5 million as of August 31,<br> 2023, compared to US$3,171.5 million as of February 28, 2023. |
| --- | --- |
| - | Highlights for the Six Months Ended August 31, 2023 |
| --- | --- |
| - | Net<br> revenues was US$687.4 million, compared to net revenues of US$518.1 million in the same period<br> of the prior year. |
| --- | --- |
| - | Loss<br> from operations was US$26.0 million, compared to loss from operations of US$13.4 million<br> in the same period of the prior year. |
| --- | --- |
| - | Non-GAAP<br> income from operations, which excluded share-based compensation expenses, was US$20.4 million,<br> compared to non-GAAP income from operations of US$40.5 million in the same period of the<br> prior year. |
| --- | --- |
| - | Net<br> loss attributable to TAL was US$7.1 million, compared to net loss attributable to TAL of<br> US$44.6 million in the same period of the prior year. |
| --- | --- |
| - | Non-GAAP<br> net income attributable to TAL, which excluded share-based compensation expenses, was US$39.3<br> million, compared to non-GAAP net income attributable to TAL of US$9.3 million in the same<br> period of the prior year. |
| --- | --- |
| - | Basic<br> and diluted net loss per ADS were both US$0.01. Non-GAAP basic and diluted net income per<br> ADS, which excluded share-based compensation expenses, were both US$0.06. |
| --- | --- |
**FinancialData——**Second Quarter and First Six Months of Fiscal Year 2024
(In US$ thousands, except per ADS data and percentages)
| Three Months<br> Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| August 31, | |||||||||
| 2022 | 2023 | Pct.<br> Change | |||||||
| Net revenues | 294,060 | 411,931 | 40.1 | % | |||||
| Income from operations | 14,891 | 31,790 | 113.5 | % | |||||
| Non-GAAP income from operations | 42,315 | 52,673 | 24.5 | % | |||||
| Net (loss)/income attributable<br> to TAL | (787 | ) | 37,902 | (4,916.0 | )% | ||||
| Non-GAAP net income attributable<br> to TAL | 26,637 | 58,785 | 120.7 | % | |||||
| Net (loss)/income per ADS attributable<br> to TAL – basic | (0.00 | ) | 0.06 | (5,181.5 | )% | ||||
| Net (loss)/income per ADS attributable<br> to TAL – diluted | (0.00 | ) | 0.06 | (5,099.4 | )% | ||||
| Non-GAAP net income per ADS<br> attributable to TAL – basic | 0.04 | 0.10 | 132.9 | % | |||||
| Non-GAAP net income per ADS<br> attributable to TAL – diluted | 0.04 | 0.10 | 131.7 | % | |||||
| Six Months<br> Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| August 31, | |||||||||
| 2022 | 2023 | Pct.<br> Change | |||||||
| Net revenues | 518,105 | 687,371 | 32.7 | % | |||||
| Loss from operations | (13,432 | ) | (25,983 | ) | 93.4 | % | |||
| Non-GAAP income from operations | 40,471 | 20,413 | (49.6 | )% | |||||
| Net loss attributable to TAL | (44,616 | ) | (7,135 | ) | (84.0 | )% | |||
| Non-GAAP net income attributable<br> to TAL | 9,287 | 39,261 | 322.8 | % | |||||
| Net loss per ADS attributable<br> to TAL – basic | (0.07 | ) | (0.01 | ) | (83.4 | )% | |||
| Net loss per ADS attributable<br> to TAL – diluted | (0.07 | ) | (0.01 | ) | (83.4 | )% | |||
| Non-GAAP net income per ADS<br> attributable to TAL – basic | 0.01 | 0.06 | 337.9 | % | |||||
| Non-GAAP net income per ADS<br> attributable to TAL – diluted | 0.01 | 0.06 | 332.8 | % |
“In this quarter, our major business lines delivered material development, both in terms of product offerings and operational capabilities. Our posted financial results are a manifestation of such development,” said Alex Peng, TAL’s President & Chief Financial Officer.
Mr. Peng added: "We have been observing customers’ diversified needs in their learning journeys and intend to serve them through a variety of products in our Learning Services and Content Solutions portfolio.”
Financial Results for the SecondQuarter of Fiscal Year 2024
Net Revenues
In the second quarter of fiscal year 2024, TAL reported net revenues of US$411.9 million, representing a 40.1% increase from US$294.1 million in the second quarter of fiscal year 2023.
OperatingCosts and Expenses
In the second quarter of fiscal year 2024, operating costs and expenses were US$382.8 million, representing a 30.9% increase from US$292.4 million in the second quarter of fiscal year 2023. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$361.9 million, representing a 36.6% increase from US$265.0 million in the second quarter of fiscal year 2023.
Cost of revenues increased by 44.6% to US$169.4 million from US$117.1 million in the second quarter of fiscal year 2023. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 46.1% to US$167.3 million, from US$114.5 million in the second quarter of fiscal year 2023.
Selling and marketing expenses increased by 48.9% to US$116.3 million from US$78.1 million in the second quarter of fiscal year 2023. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 57.8% to US$110.1 million, from US$69.8 million in the second quarter of fiscal year 2023.
General and administrative expenses decreased by 0.1% to US$97.1 million from US$97.2 million in the second quarter of fiscal year 2023. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 4.7% to US$84.4 million, from US$80.7 million in the second quarter of fiscal year 2023.
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 23.9% to US$20.9 million in the second quarter of fiscal year 2024 from US$27.4 million in the same period of fiscal year 2023.
Gross Profit
Gross profit increased by 37.1% to US$242.5 million from US$176.9 million in the second quarter of fiscal year 2023.
Income from Operations
Income from operations was US$31.8 million in the second quarter of fiscal year 2024, compared to income from operations of US$14.9 million in the second quarter of fiscal year 2023. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$52.7 million, compared to Non-GAAP income from operations of US$42.3 million in the same period of the prior year.
Other (expense)/Income
Other income was US$5.0 million for the second quarter of fiscal year 2024, compared to other expense of US$25.7 million in the second quarter of fiscal year 2023.
Impairment Loss on Long-term Investments
Impairment loss on Long-term investment was US$30.8 million for the second quarter of fiscal year 2024, compared to US$6.6 million for the same period of fiscal year 2023.
Income Tax (Expense)/Income
Income tax income was US$10.0 million in the second quarter of fiscal year 2024, compared to US$4.5 million of income tax expense in the second quarter of fiscal year 2023.
Net (Loss)/Income attributableto TAL
Net income attributable to TAL was US$37.9 million in the second quarter of fiscal year 2024, compared to net loss attributable to TAL of US$0.8 million in the second quarter of fiscal year 2023. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$58.8 million, compared to Non-GAAP net income attributable to TAL of US$26.6 million in the second quarter of fiscal year 2023.
Basic and Diluted Net (Loss)/Income per ADS
Basic and diluted net income per ADS were both US$0.06 in the second quarter of fiscal year 2024. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.10 in the second quarter of fiscal year 2024.
Cash Flow
Net cash used in operating activities for the second quarter of fiscal year 2024 was US$42.7 million.
Cash, Cash Equivalents, and Short-TermInvestments
As of August 31, 2023, the Company had US$2,195.9 million of cash and cash equivalents and US$767.6 million of short-term investments, compared to US$2,021.9 million of cash and cash equivalents and US$1,149.6 million of short-term investments as of February 28, 2023.
Deferred Revenue
As of August 31, 2023, the Company’s deferred revenue balance was US$325.4 million, compared to US$237.4 million as of February 28, 2023.
Financial Results for the First SixMonths of Fiscal Year 2024
Net Revenues
For the first six months of fiscal year 2024, TAL reported net revenues of US$687.4 million, representing a 32.7% increase from US$518.1 million in the first six months of fiscal year 2023.
Operating Costs and Expenses
In the first six months of fiscal year 2024, operating costs and expenses were US$724.8 million, representing a 31.2% increase from US$552.5 million in the first six months of fiscal year 2023. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$678.5 million, representing a 36.1% increase from US$498.6 million in the first six months of fiscal year 2023.
Cost of revenues increased by 50.2% to US$308.9 million from US$205.7 million in the first six months of fiscal year 2023. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 51.7% to US$304.4 million from US$200.7 million in the first six months of fiscal year 2023.
Selling and marketing expenses increased by 54.9% to US$213.9 million from US$138.1 million in the first six months of fiscal year 2023. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 64.6% to US$200.4 million from US$121.7 million in the first six months of fiscal year 2023.
General and administrative expenses decreased by 3.2% to US$202.0 million from US$208.7 million in the first six months of fiscal year 2023. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, decreased by 1.4% to US$173.7 million from US$176.1 million in the first six months of fiscal year 2023.
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 13.9% to US$46.4 million in the first six months of fiscal year 2024 from US$53.9 million in the same period of fiscal year 2023.
Gross Profit
Gross profit increased by 21.1% to US$378.5 million from US$312.4 million in the first six months of fiscal year 2023.
(Loss)/Income from Operations
Loss from operations was US$26.0 million in the first six months of fiscal year 2024, compared to loss from operations of US$13.4 million in the same period of the prior year. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$20.4 million, compared to US$40.5 million Non-GAAP income from operations in the same period of the prior year.
Other (Expense)/Income
Other expense was US$1.8 million for the first six months of fiscal year 2024, compared to other expense of US$52.5 million in the same period of the prior year.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US$30.8 million for the first six months of fiscal year 2024, compared to US$6.6 million for the first six months of fiscal year 2023.
Income Tax (Expense)/Income
Income tax income was US$6.5 million in the first six months of fiscal year 2024, compared to US$6.8 million of income tax expense in the first six months of fiscal year 2023.
Net (Loss)/Income Attributableto TAL Education Group
Net loss attributable to TAL was US$7.1 million in the first six months of fiscal year 2024, compared to net loss attributable to TAL of US$44.6 million in the first six months of fiscal year 2023. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$39.3 million, compared to US$9.3 million Non-GAAP income attributable to TAL in the same period of the prior year.
Cash Flow
Net cash provided in operating activities for the first six months of fiscal year 2024 was US$82.8 million.
Basic and Diluted Net (Loss)/Incomeper ADS
Basic and diluted net loss per ADS were both US$0.01 in the first six months of fiscal year 2024. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.06.
Share Repurchase
In April 2023, the Company’s board of directors authorized to extend its share repurchase program launched in April 2021 by 12 months. Pursuant to the extended share repurchase program, the Company may repurchase up to approximately US$737.4 million of its common shares through April 30, 2024. As of August 31, 2023, the Company has repurchased 13,385,764 common shares at an aggregate consideration of approximately US$233.6 million under the share repurchase program.
Conference Call
The Company will host a conference call and live webcast to discuss its financial results for the second fiscal quarter of fiscal year 2024 ended August 31, 2023 at 8:00 a.m. Eastern Time on October 26, 2023 (8:00 p.m. Beijing time on October 26, 2023).
Please note that you will need to pre-register for conference call participation at https://register.vevent.com/register/BIfec8b407406d47eda1ed641a4a3386d0.
Upon registration, you will receive an email containing participant dial-in numbers and unique Direct Event Passcode. This information will allow you to gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.
A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at https://ir.100tal.com/.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, TAL Education Group’s strategic and operational plans contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s ability to continue to provide competitive learning services and products; the Company’s ability to continue to recruit, train and retain talents; the Company’s ability to improve the content of current course offerings and develop new courses; the Company’s ability to maintain and enhance its brand; the Company’s ability to maintain and continue to improve its teaching results; and the Company’s ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company’s reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and TAL Education Group undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.
About TAL Education Group
TAL Education Group is a smart learning solutions provider in China. The acronym “TAL” stands for “Tomorrow Advancing Life”, which reflects our vision to promote top learning opportunities for students through both high-quality teaching and content, as well as leading edge application of technology in the education experience. TAL Education Group offers comprehensive learning services to students from all ages through diversified class formats. Our learning services mainly cover enrichment learnings programs and some academic subjects in and out of China. Our ADSs trade on the New York Stock Exchange under the symbol “TAL”.
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP operating costs and expenses, non-GAAP cost of revenues, non-GAAP selling and marketing expenses, non-GAAP general and administrative expenses, non-GAAP loss from operations, non-GAAP net loss attributable to TAL, non-GAAP basic and non-GAAP diluted net loss per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses, the related tax effect of which has been nil. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” set forth at the end of this release.
TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. TAL believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to TAL’s historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company’s business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
For further information, please contact:
Jackson Ding
Investor Relations
TAL Education Group
Tel: +86 10 5292 6669-8809
Email: ir@tal.com
TAL EDUCATIONGROUP
UNAUDITED CONDENSEDCONSOLIDATED BALANCE SHEETS
(In thousandsof U.S. dollars)
| As of <br> February 28,<br><br> 2023 | As of<br> August 31,<br><br> 2023 | |||||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Current<br> assets | ||||||
| Cash<br> and cash equivalents | $ | 2,021,927 | $ | 2,195,883 | ||
| Restricted<br> cash-current | 126,891 | 177,732 | ||||
| Short-term<br> investments | 1,149,607 | 767,614 | ||||
| Inventory | 39,002 | 65,504 | ||||
| Amounts<br> due from related parties-current | 423 | 401 | ||||
| Income<br> tax receivables | 5,071 | - | ||||
| Prepaid<br> expenses and other current assets | 125,486 | 163,545 | ||||
| Total<br> current assets | 3,468,407 | 3,370,679 | ||||
| Restricted<br> cash-non-current | 146,089 | 103,465 | ||||
| Property<br> and equipment, net | 288,877 | 318,038 | ||||
| Deferred<br> tax assets | 5,973 | 2,825 | ||||
| Rental<br> deposits | 12,734 | 12,076 | ||||
| Intangible<br> assets, net | 485 | 2,748 | ||||
| Land<br> use right, net | 193,878 | 183,141 | ||||
| Long-term<br> investments | 453,375 | 418,585 | ||||
| Long-term<br> prepayments and other non-current assets | 5,534 | 5,915 | ||||
| Operating<br> lease right-of-use assets | 149,002 | 164,941 | ||||
| Total<br> assets | $ | 4,724,354 | $ | 4,582,413 | ||
| LIABILITIES<br> AND EQUITY | ||||||
| Current<br> liabilities | ||||||
| Accounts<br> payable | $ | 59,991 | $ | 73,393 | ||
| Deferred<br> revenue-current | 234,889 | 313,607 | ||||
| Amounts due<br> to related parties-current | 100 | 105 | ||||
| Accrued expenses<br> and other current liabilities | 446,711 | 427,052 | ||||
| Operating<br> lease liabilities, current portion | 42,174 | 47,610 | ||||
| Total<br> current liabilities | 783,865 | 861,767 | ||||
| Deferred<br> revenue-non-current | 2,465 | 11,769 | ||||
| Deferred<br> tax liabilities | 1,563 | 2,084 | ||||
| Operating<br> lease liabilities, non-current portion | 115,548 | 124,985 | ||||
| Total<br> liabilities | 903,441 | 1,000,605 | ||||
| Equity | ||||||
| Class A<br> common shares | 169 | 163 | ||||
| Class B<br> common shares | 49 | 49 | ||||
| Treasury<br> stock | (6 | ) | (12 | ) | ||
| Additional<br> paid-in capital | 4,400,656 | 4,213,551 | ||||
| Statutory<br> reserve | 160,353 | 158,604 | ||||
| Accumulated<br> deficit | (685,912 | ) | (691,298 | ) | ||
| Accumulated<br> other comprehensive loss | (30,666 | ) | (76,432 | ) | ||
| Total<br> TAL Education Group's equity | 3,844,643 | 3,604,625 | ||||
| Noncontrolling<br> interest | (23,730 | ) | (22,817 | ) | ||
| Total<br> equity | 3,820,913 | 3,581,808 | ||||
| Total<br> liabilities and equity | $ | 4,724,354 | $ | 4,582,413 |
TAL EDUCATIONGROUP
UNAUDITED CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
(In thousandsof U.S. dollars, except share, ADS, per share and per ADS data)
| For the Three<br> Months Ended<br><br> August 31, | For the Six Months Ended August 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2023 | |||||||||
| Net<br> revenues | $ | 294,060 | $ | 411,931 | $ | 518,105 | $ | 687,371 | ||||
| Cost<br> of revenues (note 1) | 117,132 | 169,382 | 205,690 | 308,895 | ||||||||
| Gross<br> profit | 176,928 | 242,549 | 312,415 | 378,476 | ||||||||
| Operating<br> expenses (note 1) | ||||||||||||
| Selling<br> and marketing | 78,087 | 116,268 | 138,126 | 213,925 | ||||||||
| General<br> and administrative | 97,206 | 97,106 | 208,656 | 202,029 | ||||||||
| Total<br> operating expenses | 175,293 | 213,374 | 346,782 | 415,954 | ||||||||
| Government<br> subsidies | 13,256 | 2,615 | 20,935 | 11,495 | ||||||||
| Income/(loss)<br> from operations | 14,891 | 31,790 | (13,432 | ) | (25,983 | ) | ||||||
| Interest<br> income | 12,445 | 20,976 | 25,508 | 43,957 | ||||||||
| Other<br> (expense)/income | (25,715 | ) | 5,032 | (52,504 | ) | (1,813 | ) | |||||
| Gain<br> from disposal of a subsidiary | 9,550 | - | 9,550 | - | ||||||||
| Impairment<br> loss on long-term investments | (6,610 | ) | (30,761 | ) | (6,610 | ) | (30,761 | ) | ||||
| Income/(loss)<br> before income tax expense and (loss)/income from equity method investments | 4,561 | 27,037 | (37,488 | ) | (14,600 | ) | ||||||
| Income<br> tax (expense)/income | (4,487 | ) | 10,018 | (6,803 | ) | 6,499 | ||||||
| (Loss)/income<br> from equity method investments | (932 | ) | 779 | 521 | 708 | |||||||
| Net<br> (loss)/income | (858 | ) | 37,834 | (43,770 | ) | (7,393 | ) | |||||
| Add:<br> Net loss/(income) attributable to noncontrolling interest | 71 | 68 | (846 | ) | 258 | |||||||
| Total<br> net (loss)/income attributable to TAL Education Group | $ | (787 | ) | $ | 37,902 | $ | (44,616 | ) | $ | (7,135 | ) | |
| Net<br> (loss)/income per common share | ||||||||||||
| Basic | $ | (0.00 | ) | $ | 0.19 | $ | (0.21 | ) | $ | (0.03 | ) | |
| Diluted | (0.00 | ) | 0.19 | (0.21 | ) | (0.03 | ) | |||||
| Net<br> (loss)/income per ADS (note 2) | ||||||||||||
| Basic | $ | (0.00 | ) | $ | 0.06 | $ | (0.07 | ) | $ | (0.01 | ) | |
| Diluted | (0.00 | ) | 0.06 | (0.07 | ) | (0.01 | ) | |||||
| Weighted<br> average shares used in calculating net (loss)/income per common share | ||||||||||||
| Basic | 211,620,275 | 200,565,383 | 213,341,439 | 205,942,678 | ||||||||
| Diluted | 211,620,275 | 203,859,192 | 213,341,439 | 205,942,678 |
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows:
| For the Three<br> Months Ended | For the Six<br> Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| August 31, | August 31, | |||||||
| 2022 | 2023 | 2022 | 2023 | |||||
| Cost of revenues | $ | 2,587 | $ | 2,081 | $ | 4,980 | $ | 4,490 |
| Selling and marketing expenses | 8,296 | 6,134 | 16,377 | 13,562 | ||||
| General<br> and administrative expenses | 16,541 | 12,668 | 32,546 | 28,344 | ||||
| Total | $ | 27,424 | $ | 20,883 | $ | 53,903 | $ | 46,396 |
Note 2: Three ADSs represent one Class A common Share.
TAL EDUCATIONGROUP
UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF
Comprehensive(loss)/income
(In thousandsof U.S. dollars)
| Forthe Three Months EndedAugust 31, | Forthe Six Months Ended August 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2023 | |||||||||
| Net<br>(loss)/income | $ | (858 | ) | $ | 37,834 | $ | (43,770 | ) | $ | (7,393 | ) | |
| Other<br>comprehensive loss, net of tax | (55,912 | ) | (20,782 | ) | (116,738 | ) | (44,595 | ) | ||||
| Comprehensive<br>(loss)/income | (56,770 | ) | 17,052 | (160,508 | ) | (51,988 | ) | |||||
| Add:<br>Comprehensive income attributable to noncontrolling interest | (882 | ) | (452 | ) | (3,396 | ) | (913 | ) | ||||
| Comprehensive<br>(loss)/income attributable to TAL Education Group | $ | (57,652 | ) | $ | 16,600 | $ | (163,904 | ) | $ | (52,901 | ) |
TALEDUCATION GROUP
UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF
Cashflows
(In thousandsof U.S. dollars)
| Forthe Three Months EndedAugust 31, | Forthe Six Months Ended August 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2023 | |||||||||
| Net<br>cash (used in)/provided by operating activities | (2,698 | ) | (42,721 | ) | (47,578 | ) | 82,795 | |||||
| Net<br>cash (used in)/provided by investing activities | (372,650 | ) | 181,887 | (423,985 | ) | 342,802 | ||||||
| Net<br>cash used in financing activities | (4,536 | ) | (82,271 | ) | (54,304 | ) | (233,508 | ) | ||||
| Effect<br>of exchange rate changes | (11,720 | ) | (5,406 | ) | (30,457 | ) | (9,916 | ) | ||||
| Net<br>(decrease)/increase in cash, cash equivalents and restricted cash | (391,604 | ) | 51,489 | (556,324 | ) | 182,173 | ||||||
| Cash,<br>cash equivalents and restricted cash at the beginning of period | $ | 2,517,066 | $ | 2,425,591 | $ | 2,681,786 | $ | 2,294,907 | ||||
| Cash,<br>cash equivalents and restricted cash at the end of period | $ | 2,125,462 | $ | 2,477,080 | $ | 2,125,462 | $ | 2,477,080 |
TAL EDUCATIONGROUP
Reconciliationof Non-GAAP Measures to the Most Comparable GAAP Measures
(In thousandsof U.S. dollars, except share, ADS, per share and per ADS data)
| For<br> the Three Months Ended<br><br> August 31, | For<br> the Six Months Ended<br><br> August 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2023 | ||||||||
| Cost<br> of revenues | $ | 117,132 | $ | 169,382 | $ | 205,690 | $ | 308,895 | |||
| Share-based<br> compensation expense in cost of revenues | 2,587 | 2,081 | 4,980 | 4,490 | |||||||
| Non-GAAP<br> cost of revenues | 114,545 | 167,301 | 200,710 | 304,405 | |||||||
| Selling<br> and marketing expenses | 78,087 | 116,268 | 138,126 | 213,925 | |||||||
| Share-based<br> compensation expense in selling and marketing expenses | 8,296 | 6,134 | 16,377 | 13,562 | |||||||
| Non-GAAP<br> selling and marketing expenses | 69,791 | 110,134 | 121,749 | 200,363 | |||||||
| General<br> and administrative expenses | 97,206 | 97,106 | 208,656 | 202,029 | |||||||
| Share-based<br> compensation expense in general and administrative expenses | 16,541 | 12,668 | 32,546 | 28,344 | |||||||
| Non-GAAP<br> general and administrative expenses | 80,665 | 84,438 | 176,110 | 173,685 | |||||||
| Operating<br> costs and expenses | 292,425 | 382,756 | 552,472 | 724,849 | |||||||
| Share-based<br> compensation expense in operating costs and expenses | 27,424 | 20,883 | 53,903 | 46,396 | |||||||
| Non-GAAP<br> operating costs and expenses | 265,001 | 361,873 | 498,569 | 678,453 | |||||||
| Income/(loss)<br> from operations | 14,891 | 31,790 | (13,432 | ) | (25,983 | ) | |||||
| Share<br> based compensation expenses | 27,424 | 20,883 | 53,903 | 46,396 | |||||||
| Non-GAAP<br> income from operations | 42,315 | 52,673 | 40,471 | 20,413 | |||||||
| Net<br> (loss)/income attributable to TAL Education Group | (787 | ) | 37,902 | (44,616 | ) | (7,135 | ) | ||||
| Share<br> based compensation expenses | 27,424 | 20,883 | 53,903 | 46,396 | |||||||
| Non-GAAP<br> net income attributable to TAL Education Group | $ | 26,637 | $ | 58,785 | $ | 9,287 | $ | 39,261 | |||
| Net<br> (loss)/income per ADS | |||||||||||
| Basic | $ | (0.00 | ) | $ | 0.06 | $ | (0.07 | ) | $ | (0.01 | ) |
| Diluted | (0.00 | ) | 0.06 | (0.07 | ) | (0.01 | ) | ||||
| Non-GAAP<br> Net income per ADS | |||||||||||
| Basic | $ | 0.04 | $ | 0.10 | $ | 0.01 | $ | 0.06 | |||
| Diluted | 0.04 | 0.10 | 0.01 | 0.06 | |||||||
| ADSs<br> used in calculating net (loss)/income per ADS | |||||||||||
| Basic | 634,860,825 | 601,696,149 | 640,024,317 | 617,828,034 | |||||||
| Diluted | 634,860,825 | 611,577,576 | 640,024,317 | 617,828,034 | |||||||
| ADSs<br> used in calculating Non-GAAP net income per ADS | |||||||||||
| Basic | 634,860,825 | 601,696,149 | 640,024,317 | 617,828,034 | |||||||
| Diluted | 642,251,238 | 611,577,576 | 642,521,076 | 627,500,331 |