BEIJING, Jan. 22, 2019 /PRNewswire/ -- New Oriental
Education & Technology Group Inc. (the "Company" or "New
Oriental") (NYSE: EDU), the largest provider of private educational
services in China, today announced
its unaudited financial results for the second fiscal quarter ended
November 30, 2018, which is the
second quarter of New Oriental's fiscal year
2019.
Financial Highlights for the Second Fiscal Quarter Ended
November 30, 2018
- Total net revenues increased by 27.8% year-over-year to
US$597.1 million for the second
fiscal quarter of 2019.
- Operating loss increased by 118.5% year-over-year to
US$28.6 million for the second fiscal
quarter of 2019.
- Non-GAAP operating loss, which excludes share-based
compensation expenses, was US$14.9
million, an increase of 295.7% year-over-year compared to
US$3.8 million in the same period of
the prior fiscal year.
- Net loss attributable to New Oriental was US$25.8 million for the second fiscal quarter of
2019, compared to an income of US$4.3
million in the same period of the prior fiscal year.
- Non-GAAP net income attributable to New Oriental, which
excludes share-based compensation expenses and loss from fair value
change of long-term investments, was US$23.0
million, an increase of 69.2% year-over-year compared to
US$13.6 million in the same period of
the prior fiscal year.
Key Financial Results
(in thousands US$,
except per ADS(1) data)
|
2Q
FY2019
|
2Q
FY2018
|
% of
change
|
Net
revenues
|
597,072
|
467,183
|
27.8%
|
Operating
loss
|
28,553
|
13,070
|
118.5%
|
Non-GAAP operating
loss (2)(3)
|
14,866
|
3,757
|
295.7%
|
Net (loss) /
income attributable to New Oriental
|
(25,826)
|
4,279
|
-
|
Non-GAAP net income
attributable to New Oriental (2)(3)
|
22,996
|
13,592
|
69.2%
|
Net (loss) /
income per ADS attributable to New Oriental -
basic
|
(0.16)
|
0.03
|
-
|
Net (loss) /
income per ADS attributable to New Oriental -
diluted
|
(0.16)
|
0.03
|
-
|
Non-GAAP net income
per ADS attributable to New Oriental -
basic(3)(4)
|
0.14
|
0.09
|
68.6%
|
Non-GAAP net income
per ADS attributable to New Oriental -
diluted(3)(4)
|
0.14
|
0.09
|
68.4%
|
(in thousands US$,
except per ADS(1) data)
|
1H
FY2019
|
1H
FY2018
|
% of
change
|
Net
revenues
|
1,456,918
|
1,128,348
|
29.1%
|
Operating
income
|
132,782
|
148,007
|
-10.3%
|
Non-GAAP operating
income(2)(3)
|
160,389
|
160,446
|
0.0%
|
Net
income attributable to New Oriental
|
97,406
|
162,672
|
-40.1%
|
Non-GAAP net income
attributable to New Oriental(2)(3)
|
207,132
|
175,111
|
18.3%
|
Net income per ADS
attributable to New Oriental - basic
|
0.61
|
1.03
|
-40.3%
|
Net income per ADS
attributable to New Oriental - diluted
|
0.61
|
1.03
|
-40.4%
|
Non-GAAP net income
per ADS attributable to New Oriental -
basic(3)(4)
|
1.31
|
1.11
|
17.9%
|
Non-GAAP net income
per ADS attributable to New Oriental -
diluted(3)(4)
|
1.30
|
1.11
|
17.7%
|
(1)
|
Each ADS represents
one common share.
|
(2)
|
GAAP represents
Generally Accepted Accounting Principles in the United States of
America.
|
(3)
|
New Oriental provides
net (loss) / income attributable to New Oriental,
operating (loss) / income and net (loss) / income
per ADS attributable to New Oriental on a non-GAAP basis that
excludes share-based compensation expenses and loss from fair value
change of long-term investments to provide supplemental information
regarding its operating performance. For more information on these
non-GAAP financial measures, please see the section captioned
"About Non-GAAP Financial Measures" and the tables captioned
"Reconciliations of Non-GAAP Measures to the Most Comparable GAAP
Measures" set forth at the end of this release.
|
(4)
|
The Non-GAAP net
income per ADS is computed using Non-GAAP net income and the same
number of shares and ADSs used in GAAP basic and diluted EPS
calculation.
|
Operating Highlights for the Second Fiscal Quarter Ended
November 30, 2018
- Total student enrollments in academic subjects tutoring and
test preparation courses increased by 23.6% year-over-year to
approximately 2,320,800 for the second fiscal quarter of 2019.
- The total number of schools and learning centers was 1,125 as
of November 30, 2018, an increase of
185 compared to 940 as of November 30,
2017, and an increase of 25 compared to 1,100 as of
August 31, 2018. The total number of
schools was 89 as of November 30,
2018.
Michael Minhong Yu, New
Oriental's Executive Chairman, commented, "We are pleased to see
our overall business continue its strong momentum in the second
quarter of fiscal year 2019 and achieve a top line growth of 27.8%,
or 33.6% if computed in Renminbi. This was driven largely by our
key business unit, K-12 all-subjects after-school tutoring, which
recorded a remarkable year-over-year revenue growth of
approximately 38%, or 44% if computed in Renminbi, reflecting a
combination of a solid high-quality product portfolio and a
sustained market demand. Furthermore, our U-Can middle and high
school all-subjects after-school tutoring business grew by
approximately 39%, or 46% if computed in Renminbi, and the POP Kids
program achieved a growth of approximately 35%, or 41% if computed
in Renminbi."
Chenggang Zhou, New Oriental's
Chief Executive Officer, added, "As we execute our well-proven
'Optimize the Market' strategy', we continued to progress our
capacity expansion plan in this quarter. We added a net of 24
learning centers in existing cities, and opened a new training
school in the city of Jinhua. Altogether, this increased the total
square meters of classroom area by approximately 30% year-over-year
and 5% quarter-over-quarter by the end of this quarter. At the same
time, we continued to refine and leverage our online and offline
integrated standardized teaching system for the K-12 business
across the nation, and particularly in some of the larger cities
for our overseas test preparation business. Starting from the
fiscal year 2019, we initiated a pilot program to standardize
teaching content and methodology in the U-Can middle and high
school tutoring business, which has started to bear fruit as we
achieved a remarkable increase of customer retention. As we develop
best practices gradually, we will begin to roll out the pilot
program in our online and offline K-12 tutoring business to further
improve teaching quality. We believe this will in turn boost our
competitive advantages as we offer the best learning experience to
our students. Moreover, we continued to make strategic investments
in our dual-teacher model classes and new initiatives for K-12
tutoring on our pure online education platform, Koolearn.com, which
is expected to see increasing demand in cities of lower tiers and
in remote areas."
Stephen Zhihui Yang, New
Oriental's Chief Financial Officer, commented, "In this quarter we
continued to see a healthy ramping up of the new facilities we
built in the previous fiscal year, which is highly encouraging. Our
Non-GAAP operating margin and the utilization rate in the offline
language training and test preparation business remained flattish
year-over-year in the second quarter. Going forward, we will remain
focused on improving our operational efficiency and ensuring
consistently-high quality of education across all business lines,
through a standardized, modular and systematic approach. We believe
that, altogether, these will enable us to leverage our existing
capability to capture growth opportunities and generate sustainable
long-term value for our customers and shareholders."
Recent Development
In December 2018, New Oriental
entered into a 3-year US$200 million
term and revolving facilities agreement with a group of arrangers
led by Credit Suisse AG, Singapore
Branch. The facilities consist of a US$100
million 3-year bullet maturity term loan and a US$100 million 3-year revolving facility. The use
of proceeds of the facilities is for the Company's existing share
repurchase program and other general corporate
purposes.
Financial Results for the Second Fiscal Quarter Ended
November 30, 2018
Net Revenues
For the second fiscal quarter of 2019, New Oriental reported net
revenues of US$597.1 million,
representing a 27.8% increase year-over-year. Net revenues from
educational programs and services for the second fiscal quarter
were US$543.6 million, representing a
28.6% increase year-over-year. The growth was mainly driven by
increases in student enrollments in K-12 after-school tutoring
courses.
Total student enrollments in academic subjects tutoring and test
preparation courses in the second fiscal quarter of 2019 increased
by 23.6% year-over-year to approximately 2,320,800.
Operating Cost and Expenses
Operating cost and expenses for the quarter were US$627.3 million, representing a 30.6% increase
year-over-year. Non-GAAP operating cost and expenses for the
quarter, which exclude share-based compensation expenses, were
US$613.7 million, representing a
30.3% increase year-over-year.
- Cost of revenues increased by 32.1% year-over-year to
US$300.1 million, primarily due to
increases in teachers' compensation for more teaching hours and
rental cost for increased number of schools and learning centers in
operation.
- Selling and marketing expenses increased by 27.1%
year-over-year to US$91.6 million,
primarily due to increases in brand promotion expenses and selling
and marketing staff's compensation.
- General and administrative expenses for the quarter
increased by 30.3% year-over-year to US$235.6 million. Non-GAAP general and
administrative expenses, which exclude share-based compensation
expenses, were US$222.0 million,
representing a 29.4% increase year-over-year. The increase was
primarily due to increased headcount as the Company expanded its
network of schools and learning centers, as well as increases in
R&D expenses and human resources expenses related to the
development of the Company's online and offline integrated
education ecosystem.
Total share-based compensation expenses, which were allocated to
related operating cost and expenses, increased by 47.0% to
US$13.7 million in the second fiscal
quarter of 2019.
Operating Loss and Operating
Margin
Operating loss for the quarter was US$28.6 million, representing a 118.5%
increase year-over-year. Non-GAAP loss operating loss for the
quarter was US$14.9
million, representing a 295.7% increase
year-over-year.
Operating margin for the quarter was negative 4.8%, compared to
negative 2.8% in the same period of the prior fiscal year. Non-GAAP
operating margin, which excludes share-based compensation expenses,
for the quarter was negative 2.5%, compared to negative 0.8% in the
same period of the prior fiscal year.
Loss from Fair Value Change of Long-Term Investments
Loss from fair value change of long term investments for the
quarter was US$35.1 million.
Net (Loss) / Income and EPS
Net loss attributable to New Oriental for the quarter was
US$25.8 million, compared to an
income of US$4.3 million. Basic and
diluted loss per ADS attributable to New Oriental were US$0.16 and US$0.16, respectively.
Non-GAAP Net Income and Non-GAAP EPS
Non-GAAP net income attributable to New Oriental, which excludes
share-based compensation expenses and loss from fair value change
of long-term investments, for the quarter was US$23.0 million, representing a 69.2% increase
from the same period of the prior fiscal year. Non-GAAP basic and
diluted earnings per ADS attributable to New Oriental were
US$0.14 and US$0.14, respectively.
Cash Flow
Net operating cash flow for the second fiscal quarter of 2019
was approximately US$125.3 million.
Capital expenditures for the quarter were US$43.1 million, which were primarily
attributable to the opening of 48 facilities and renovations at
existing learning centers.
Balance Sheet
As of November 30, 2018, New
Oriental had cash and cash equivalents of US$842.9 million, compared to US$983.3 million as of May
31, 2018. In addition, the Company had US$94.6 million in term deposits, US$1,700.7 million in short-term investments.
New Oriental's 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
second quarter of fiscal year 2019 was US$1,250.3 million, an increase of 9.9% from
US$1,137.3 million at the end of the
second quarter of fiscal year 2018. The lower than usual increase
is due to the change of tuition fees collection schedule for
K-12 after-school tutoring courses.
Financial Results for the Six Months Ended November 30, 2018
For the first six months of fiscal year 2019, New Oriental
reported net revenues of US$1,456.9
million, representing a 29.1% increase year-over-year.
Total student enrollments in academic subjects tutoring and test
preparation courses in the first six months of fiscal year 2019
increased by 18.9% to approximately 4,056,100.
Income from operations for the first six months of fiscal year
2019 was US$132.8 million,
representing a 10.3% decrease year-over-year. Non-GAAP income from
operations for the first six months of fiscal year 2019 was
US$160.4 million, representing a
0.04% decrease year-over-year.
Operating margin for the first six months of fiscal year 2019
was 9.1%, compared to 13.1% for the same period of the prior fiscal
year. Non-GAAP operating margin, which excludes share-based
compensation expenses for the first six months of fiscal year 2019,
was 11.0%, compared to 14.2% for the same period of the prior
fiscal year.
Net income attributable to New Oriental for the first six months
of fiscal year 2019 was US$97.4
million, representing a 40.1% decrease year-over-year. Basic
and diluted net income per ADS attributable to New Oriental for the
first six months of fiscal year 2019 amounted to US$0.61 and US$0.61, respectively.
Non-GAAP net income attributable to New Oriental for the first
six months of fiscal year 2019 was US$207.1
million, representing an 18.3% increase year-over-year.
Non-GAAP basic and diluted net income per ADS attributable to New
Oriental for the first six months of fiscal year 2019 amounted to
US$1.31 and US$1.30, respectively.
Outlook for Third Quarter of Fiscal Year 2019
New Oriental expects total net revenues in the third quarter of
fiscal year 2019 (December 1, 2018 to
February 28, 2019) to be in the range
of US$769.9 million to
US$793.2 million, representing
year-over-year growth in the range of 25% to 28%.
The projected growth rate of revenue in Renminbi is expected to
be in the range of 32% to 36% for the third quarter of fiscal year
2019.
This forecast reflects New Oriental's current and preliminary
view, which is subject to change.
Conference Call Information
New Oriental's management will host an earnings conference call
at 8 AM on January 22, 2019, U.S. Eastern Time (9 PM on January 22,
2019, Beijing/Hong Kong
Time).
Dial-in details for the earnings conference call are as
follows:
US:
|
+1-845-675-0437
|
Hong
Kong:
|
+852-3018-6771
|
UK:
|
+44-20-3621-4779
|
Please dial in 10 minutes before the call is scheduled to begin
and provide the passcode to join the call. The passcode is
"3990216".
A replay of the conference call may be accessed by phone at the
following number until January 31,
2019:
International:
|
+61-2-8199-0299
|
Passcode:
|
3990216
|
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 China based on the
number of program offerings, total student enrollments and
geographic presence. New Oriental offers a wide range of
educational programs, services and products consisting primarily of
language training and test preparation, primary and secondary
school education, online education, content development and
distribution, overseas study consulting services, pre-school
education and study tour. New Oriental's ADSs, each of which
represents one common share, currently trade on the New York Stock
Exchange under the symbol "EDU."
For more information about New Oriental, please visit
http://www.neworiental.org/english/.
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 third quarter of fiscal year 2019, 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 reports filed 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 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 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 China; changes in our revenues and certain cost
or expense items as a percentage of our revenues; the expected
growth of the Chinese private education market; Chinese
governmental policies relating to private educational services and
providers of such services; health epidemics and other outbreaks in
China; and general economic conditions in China. Further
information regarding these and other risks is included in our
annual report on Form 20-F and other documents filed with the
Securities and Exchange Commission. New Oriental 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 New Oriental undertakes no duty to update such
information, except as required under applicable law.
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
(loss) / income excluding share-based compensation expenses and
loss from fair value change of long-term investments, operating
income excluding share-based compensation expenses, operating cost
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 and loss from fair
value change of long-term investments. 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 tables 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 and loss from fair value of long-term investments 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 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 and loss from fair value change of
long-term investments 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.
Contacts
For investor and media inquiries, please contact:
Ms. Joyce Wu
FTI Consulting
Tel: +852-3768-4548
Email: NewOriental@fticonsulting.com
Ms. Sisi Zhao
New Oriental Education and Technology Group Inc.
Tel: +86-10-6260-5568
Email: zhaosisi@xdf.cn
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
As of November
30
|
|
As of May
31
|
2018
|
|
2018
|
(Unaudited)
|
|
(Audited)
|
|
USD
|
|
USD
|
ASSETS:
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
842,860
|
|
983,319
|
Restricted
cash
|
43
|
|
47
|
Term
deposits
|
94,569
|
|
107,741
|
Short-term
investments
|
1,700,650
|
|
1,623,763
|
Accounts receivable,
net
|
5,351
|
|
3,179
|
Inventory,
net
|
35,141
|
|
40,175
|
Prepaid expenses and
other current assets, net
|
207,768
|
|
182,095
|
Amounts due from
related parties, current
|
20,261
|
|
1,595
|
Total current
assets
|
2,906,643
|
|
2,941,914
|
|
|
|
|
Restricted cash,
non-current
|
3,683
|
|
3,399
|
Property and
equipment, net
|
488,941
|
|
449,592
|
Land use rights,
net
|
12,941
|
|
3,785
|
Amounts due from
related parties, non-current
|
2,006
|
|
2,226
|
Long-term
deposits
|
44,431
|
|
40,099
|
Long-term prepaid
rents
|
535
|
|
191
|
Intangible assets,
net
|
12,921
|
|
8,544
|
Goodwill,
net
|
66,365
|
|
31,729
|
Long-term
investments, net
|
391,334
|
|
433,333
|
Deferred tax assets,
non-current, net
|
47,175
|
|
43,323
|
Other non-current
assets
|
25,668
|
|
19,577
|
Total
assets
|
4,002,643
|
|
3,977,712
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
(including accounts payable of the
consolidated variable interest entities without recourse to New
Oriental of US$39,279 and US$35,450 as of May 31, 2018 and
November30, 2018, respectively)
|
36,126
|
|
39,889
|
Accrued expenses and
other current liabilities (including accrued
expenses and other current liabilities of the consolidated
variable
interest entities without recourse to New Oriental of
US$335,955
and US$414,654 as of May 31, 2018 and November30, 2018,
respectively)
|
456,406
|
|
373,537
|
Income taxes payable
(including income tax payable of the
consolidated variable interest entities without recourse to New
Oriental of US$54,844 and US$69,305 as of May 31, 2018 and
November30, 2018, respectively)
|
66,610
|
|
67,233
|
Amounts due to
related parties (including amounts due to related
parties of the consolidated variable interest entities without
recourse to New Oriental of US$30 and US$393 as of May 31,
2018 andNovember30, 2018, respectively)
|
393
|
|
30
|
Deferred revenue
(including deferred revenue of the
consolidated variable interest entities without recourse to New
Oriental of US$1,244,748 and US$1,244,039 as of May 31, 2018
and November 30, 2018, respectively)
|
1,250,262
|
|
1,270,195
|
|
|
|
|
Total current
liabilities
|
1,809,797
|
|
1,750,884
|
|
|
|
|
Deferred tax
liabilities, non-current (including deferred tax
liabilities of the consolidated variable interest entities
without
recourse to New Oriental of US$13,782 and US$7,745 as of May
31, 2018 and November30, 2018, respectively)
|
18,170
|
|
12,133
|
|
|
|
|
Total
liabilities
|
1,827,967
|
|
1,763,017
|
|
|
|
|
Mezzanine
equity
|
|
|
|
Redeemable
non-controlling interests
|
206,624
|
|
206,624
|
Equity
|
|
|
|
New Oriental
Education & Technology Group Inc. shareholders'
equity
|
1,951,653
|
|
1,991,589
|
Non-controlling interests
|
16,399
|
|
16,482
|
Total
equity
|
1,968,052
|
|
2,008,071
|
|
|
|
|
Total liabilities,
mezzanine equity and equity
|
4,002,643
|
|
3,977,712
|
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 November 30
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
Net
revenues
|
597,072
|
|
467,183
|
|
|
|
|
Operating cost and
expenses (note 1)
|
|
|
|
Cost of
revenues
|
300,105
|
|
227,258
|
Selling and
marketing
|
91,597
|
|
72,091
|
General and
administrative
|
235,647
|
|
180,904
|
Total operating
cost and expenses
|
627,349
|
|
480,253
|
Gain on disposal of a
subsidiary
|
1,724
|
|
-
|
Operating
loss
|
(28,553)
|
|
(13,070)
|
Loss from fair value
change of long-term investments
|
(35,135)
|
|
-
|
Other income,
net
|
35,783
|
|
23,578
|
Provision for income
taxes
|
(11)
|
|
(2,973)
|
Income from equity
method investments
|
1,575
|
|
224
|
|
|
|
|
Net (loss)
income
|
(26,341)
|
|
7,759
|
Add: Net loss
(income) attributable to non-controlling interests
|
515
|
|
(3,480)
|
|
|
|
|
Net (loss) income
attributable to New Oriental
Education & Technology Group Inc.'s shareholders
|
(25,826)
|
|
4,279
|
|
|
|
|
Net (loss) income
per common share
|
|
|
|
-
Basic
|
(0.16)
|
|
0.03
|
-
Diluted
|
(0.16)
|
|
0.03
|
|
|
|
|
Net (loss) income
per ADS (note 2)
|
|
|
|
-
Basic
|
(0.16)
|
|
0.03
|
-
Diluted
|
(0.16)
|
|
0.03
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
RECONCILIATION OF
NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP
MEASURES
|
(In thousands
except for per share and per ADS amounts)
|
|
|
|
For the Three
Months Ended November 30
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
|
|
|
|
General and
administrative expenses
|
235,647
|
|
180,904
|
Less: Share-based
compensation expenses in
general and administrative expenses
|
13,687
|
|
9,313
|
Non-GAAP general and
administrative
expenses
|
221,960
|
|
171,591
|
|
|
|
|
Total operating cost
and expenses
|
627,349
|
|
480,253
|
Less: Share-based
compensation expenses
|
13,687
|
|
9,313
|
Non-GAAP operating
cost and expenses
|
613,662
|
|
470,940
|
|
|
|
|
Operating
loss
|
(28,553)
|
|
(13,070)
|
Add: Share-based
compensation expenses
|
13,687
|
|
9,313
|
Non-GAAP operating
loss
|
(14,866)
|
|
(3,757)
|
|
|
|
|
Operating
margin
|
-4.8%
|
|
-2.8%
|
Non-GAAP operating
margin
|
-2.5%
|
|
-0.8%
|
|
|
|
|
Net (loss) income
attributable to New Oriental
|
(25,826)
|
|
4,279
|
Add: Share-based
compensation expenses
|
13,687
|
|
9,313
|
Add: Loss from fair
value change of long-
term investments
|
35,135
|
|
-
|
Non-GAAP net income
attributable to New
Oriental
|
22,996
|
|
13,592
|
|
|
|
|
Net (loss) income per
ADS attributable to
New Orienta l- Basic (note 2)
|
(0.16)
|
|
0.03
|
Net (loss) income per
ADS attributable to
New Oriental - Diluted (note 2)
|
(0.16)
|
|
0.03
|
|
|
|
|
Non-GAAP net income
per ADS
attributable to New Oriental - Basic (note 2)
|
0.14
|
|
0.09
|
Non-GAAP net income
per ADS
attributable to New Oriental - Diluted (note 2)
|
0.14
|
|
0.09
|
|
|
|
|
Weighted average
shares used in calculating
basic net income per ADS (note 2)
|
158,690,714
|
|
158,119,910
|
Weighted average
shares used in calculating
diluted net income per ADS (note 2)
|
159,030,698
|
|
158,322,404
|
|
|
|
|
Non-GAAP income per
share - basic
|
0.14
|
|
0.09
|
Non-GAAP income per
share - diluted
|
0.14
|
|
0.09
|
Notes:
|
|
|
|
|
Note 1: Share-based
compensation expenses (in thousands) are included in the operating
cost
and expenses as follows:
|
|
|
|
|
|
For the Three
Months Ended November 30
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
General and
administrative expenses
|
13,687
|
|
9,313
|
Total
|
13,687
|
|
9,313
|
|
|
|
|
Note 2: Each ADS
represents one common share.
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands
except for per share and per ADS amounts)
|
|
|
|
|
For the Six Months
Ended November 30
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
|
Net
Revenues:
|
1,456,918
|
|
1,128,348
|
|
|
|
|
Operating cost and
expenses (note 1):
|
|
|
|
Cost of
revenues
|
667,504
|
|
497,452
|
Selling and
marketing
|
190,898
|
|
145,994
|
General and
administrative
|
469,309
|
|
336,895
|
Total operating
cost and expenses
|
1,327,711
|
|
980,341
|
Gain on disposal of a
subsidiary
|
3,575
|
|
-
|
Operating
income
|
132,782
|
|
148,007
|
Loss from fair value
change of long-term investments
|
(82,119)
|
|
-
|
|
|
|
|
Other income,
net
|
69,292
|
|
48,511
|
Provision for income
taxes
|
(25,695)
|
|
(29,851)
|
Income from equity
method investments
|
522
|
|
249
|
|
|
|
|
Net
income
|
94,782
|
|
166,916
|
|
|
|
|
Add: Net loss
(income) attributable to non-controlling interests
|
2,624
|
|
(4,244)
|
|
|
|
|
Net income
attributable to New Oriental Education &
Technology Group Inc.
|
97,406
|
|
162,672
|
|
|
|
|
|
|
|
|
Net income per
share attributable to New Oriental -
Basic
|
0.61
|
|
1.03
|
|
|
|
|
Net income per
share attributable to New Oriental -
Diluted
|
0.61
|
|
1.03
|
|
|
|
|
Net income per ADS
attributable to New Oriental -
Basic (note 2)
|
0.61
|
|
1.03
|
|
|
|
|
Net income per ADS
attributable to New Oriental -
Diluted (note 2)
|
0.61
|
|
1.03
|
NEW ORIENTAL
EDUCATION & TECHNOLOGY GROUP INC.
|
RECONCILIATION OF
NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP
MEASURES
|
(In thousands
except for per share and per ADS amounts)
|
|
|
|
For the Six Months
Ended November 30
|
|
2018
|
|
2017
|
|
USD
|
|
USD
|
|
|
|
|
General and
administrative expenses
|
469,309
|
|
336,895
|
Share-based
compensation expense in
general and administrative expenses
|
27,607
|
|
12,439
|
Non-GAAP general and
administrative
expenses
|
441,702
|
|
324,456
|
|
|
|
|
Total operating cost
and expenses
|
1,327,711
|
|
980,341
|
Share-based
compensation expenses
|
27,607
|
|
12,439
|
Non-GAAP operating
cost and
expenses
|
1,300,104
|
|
967,902
|
|
|
|
|
Operating
income
|
132,782
|
|
148,007
|
Share-based
compensation expenses
|
27,607
|
|
12,439
|
Non-GAAP operating
income
|
160,389
|
|
160,446
|
|
|
|
|
Operating
margin
|
9.1%
|
|
13.1%
|
Non-GAAP operating
margin
|
11.0%
|
|
14.2%
|
|
|
|
|
Net income
attributable to New Oriental
|
97,406
|
|
162,672
|
Share-based
compensation expenses
|
27,607
|
|
12,439
|
Add: Loss from fair
value change of
long-term investments
|
82,119
|
|
-
|
Non-GAAP net income
to New Oriental
|
207,132
|
|
175,111
|
|
|
|
|
Net income per ADS
attributable to
New Oriental - Basic (note 2)
|
0.61
|
|
1.03
|
Net income per ADS
attributable to
New Oriental - Diluted (note 2)
|
0.61
|
|
1.03
|
|
|
|
|
Non-GAAP net income
per ADS
attributable to New Oriental - Basic
(note 2)
|
1.31
|
|
1.11
|
Non-GAAP net income
per ADS
attributable to New Oriental - Diluted
(note 2)
|
1.30
|
|
1.11
|
|
|
|
|
Weighted average
shares used in
calculating basic net income per ADS
(note 2)
|
158,631,953
|
|
158,051,290
|
Weighted average
shares used in
calculating diluted net income per ADS
(note 2)
|
159,111,883
|
|
158,277,981
|
|
|
|
|
Non-GAAP income per
share - basic
|
1.31
|
|
1.11
|
Non-GAAP income per
share - diluted
|
1.30
|
|
1.11
|
Notes:
|
|
|
|
|
|
|
|
Note 1: Share-based
compensation expenses (in thousands) are included in the
operating
cost and expenses as follows:
|
|
|
|
|
|
For the Six Months
Ended November 30
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
|
USD
|
|
USD
|
General and
administrative expense
|
27,607
|
|
12,439
|
Total
|
27,607
|
|
12,439
|
|
|
|
|
Note 2: Each ADS
represents one common share.
|
View original
content:http://www.prnewswire.com/news-releases/new-oriental-announces-results-for-the-second-fiscal-quarter-ended-november-30-2018-300781866.html
SOURCE New Oriental Education and Technology Group Inc.