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New Oriental Announces Results for the Third Fiscal Quarter Ended February 28, 2021
|
Financial Highlights for the Third Fiscal Quarter Ended
- Total net revenues increased by 29.0% year-over-year to
US$1,190.5 million for the third fiscal quarter of 2021. - Operating income decreased by 13.5% year-over-year to
US$101.5 million for the third fiscal quarter of 2021. - Net income attributable to New Oriental increased by 9.9% year-over-year to
US$151.3 million for the third fiscal quarter of 2021.
Key Financial Results
(in thousands US$, except per ADS(1) data) |
3Q FY2021 |
3Q FY2020 |
% of change |
Net revenues |
1,190,498 |
923,221 |
29.0% |
Operating income |
101,470 |
117,253 |
-13.5% |
Non-GAAP operating income (2)(3) |
115,892 |
134,802 |
-14.0% |
Net income attributable to New Oriental |
151,326 |
137,715 |
9.9% |
Non-GAAP net income attributable to New Oriental (2)(3) |
163,236 |
148,502 |
9.9% |
Net income per ADS attributable to New Oriental - basic(5) |
0.09 |
0.09 |
3.1% |
Net income per ADS attributable to New Oriental - diluted(5) |
0.09 |
0.09 |
3.4% |
Non-GAAP net income per ADS attributable to New Oriental - basic(3)(4)(5) |
0.10 |
0.09 |
3.1% |
Non-GAAP net income per ADS attributable to New Oriental - diluted(3)(4)(5) |
0.10 |
0.09 |
3.4% |
(in thousands US$, except per ADS(1) data) |
9M FY2021 |
9M FY2020 |
% of change |
Net revenues |
3,064,553 |
2,780,209 |
10.2% |
Operating income |
219,628 |
388,748 |
-43.5% |
Non-GAAP operating income (2)(3) |
268,363 |
428,532 |
-37.4% |
Net income attributable to New Oriental |
379,880 |
400,142 |
-5.1% |
Non-GAAP net income attributable to New Oriental (2)(3) |
416,902 |
435,650 |
-4.3% |
Net income per ADS attributable to New Oriental - basic(5) |
0.23 |
0.25 |
-7.8% |
Net income per ADS attributable to New Oriental - diluted(5) |
0.23 |
0.25 |
-7.5% |
Non-GAAP net income per ADS attributable to New Oriental - basic(3)(4)(5) |
0.26 |
0.28 |
-7.0% |
Non-GAAP net income per ADS attributable to New Oriental - diluted(3)(4)(5) |
0.25 |
0.27 |
-6.7% |
(1) Each ADS represents one common share. The |
(2) GAAP represents Generally Accepted Accounting Principles in |
(3) New Oriental provides net income attributable to New Oriental, operating income and net income per ADS attributable to New Oriental on a non-GAAP basis that excludes share-based compensation expenses and gain / (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 attributable to New Oriental is computed using Non-GAAP net income attributable to New Oriental and the same number of shares and ADSs used in GAAP basic and diluted EPS calculation. |
(5) For the quarter and 9 months ended |
Operating Highlights for the Third Fiscal Quarter Ended
- Total student enrollments in academic subjects tutoring and test preparation courses increased by 43% year-over-year to approximately 2,296,800 for the third fiscal quarter of 2021.
- The total number of schools and learning centers was 1,625 as of
February 28, 2021 , an increase of 209 compared to 1,416 as ofFebruary 29, 2020 , and an increase of 107 compared to 1,518 as ofNovember 30, 2020 . The total number of schools was 118 as ofFebruary 28, 2021 .
Financial Results for the Third Fiscal Quarter Ended
Net Revenues
For the third fiscal quarter of 2021, New Oriental reported net revenues of
Total student enrollments in academic subjects tutoring and test preparation courses in the third fiscal quarter of 2021 increased by 43.0% year-over-year to approximately 2,296,800.
Operating Costs and Expenses
Operating costs and expenses for the quarter were
- Cost of revenues increased by 35.3% year-over-year to
US$539.5 million , primarily due to increases in teachers' compensation for more teaching hours and higher rental costs for the increased number of schools and learning centers in operation. - Selling and marketing expenses increased by 32.0% year-over-year to
US$156.1 million , primarily due to the addition of marketing staffs with the aim of executing our OMO (online merging offline) strategy to capture the new market opportunity post the COVID. - General and administrative expenses for the quarter increased by 36.1% year-over-year to
US$393.4 million . Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, wereUS$383.3 million , representing a 40.3% increase year-over-year. The increase was primarily due to increased headcount as the Company grew its network of schools and learning centers, as well as increases in R&D expenses and human resources expenses related to the development of the Company's online and offline integrated education ecosystem.
Total share-based compensation expenses, which were allocated to related operating costs and expenses, decreased by 17.8% year-over-year to US$ 14.4 million.
Operating Income and Operating Margin
Operating income was
Operating margin for the quarter was 8.5%, compared to 12.7% in the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses, for the quarter was 9.7%, compared to 14.6% in the same period of the prior fiscal year.
Net Income and EPS
Net income attributable to New Oriental for the quarter was
Non-GAAP Net Income and Non-GAAP EPS
Non-GAAP net income attributable to New Oriental for the quarter was
Cash Flow
Net operating cash flow for the third fiscal quarter of 2021 was approximately
Balance Sheet
As of
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 third quarter of fiscal year 2021 was
Financial Results for the Nine Months Ended
For the first nine months of fiscal year 2021, New Oriental reported net revenues of
Total student enrollments in academic subjects tutoring and test preparation courses in the first nine months of fiscal year 2021 increased by 17.9% to approximately 9,441,000.
Operating income for the first nine months of fiscal year 2021 was
Operating margin for the first nine months of fiscal year 2021 was 7.2%, compared to 14.0% for the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses for the first nine months of fiscal year 2021, was 8.8%, compared to 15.4% for the same period of the prior fiscal year.
Net income attributable to New Oriental for the first nine months of fiscal year 2021 was
Non-GAAP net income attributable to New Oriental for the first nine months of fiscal year 2021 was
Outlook for Fourth Quarter of Fiscal Year 2021
New Oriental expects total net revenues in the fourth quarter of fiscal year 2021 (
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
Dialling-in to the conference call:
Please register in advance of the conference, using the link provided below. Upon registering, you will be provided with participant dial-in numbers, passcode and unique registrant ID.
Conference call registration link: https://apac.directeventreg.com/registration/event/8491538. It will automatically direct you to the registration page of "New Oriental Third Fiscal Quarter 2021 Earnings Conference Call" where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter "8491538".
In the 10 minutes prior to the call start time, you may use the conference access information (including dial in number(s), direct event passcode and registrant ID) provided in the confirmation email received at the point of registering.
Joining the conference call via a live webcast:
Additionally, a live and archived webcast of the conference call will be available at http://investor.neworiental.org.
Listening to the conference call replay:
A replay of the conference call may be accessed by phone at the following number until
International: |
+61 2 8199 0299 |
Passcode: |
8491538 |
About New Oriental
New Oriental is the largest provider of private educational services in
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
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
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 gain / (loss) from fair value change 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 expenses and gain / (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. Rita Fong |
Ms. |
FTI Consulting |
|
Tel: +852 3768 4548 |
Tel: +86-10-6260-5568 |
Email: rita.fong@fticonsulting.com |
Email: zhaosisi@xdf.cn |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(In thousands) |
|||
As of |
As of |
||
2021 |
2020 |
||
(Unaudited) |
(Audited) |
||
USD |
USD |
||
ASSETS: |
|||
Current assets: |
|||
Cash and cash equivalents |
1,569,841 |
915,057 |
|
Term deposits |
1,147,787 |
284,793 |
|
Short-term investments |
3,360,737 |
2,318,280 |
|
Accounts receivable, net |
7,985 |
4,178 |
|
Inventory, net |
35,716 |
31,324 |
|
Prepaid expenses and other current assets, net |
247,721 |
199,404 |
|
Amounts due from related parties, current |
4,431 |
3,384 |
|
Total current assets |
6,374,218 |
3,756,420 |
|
Restricted cash, non-current |
16,351 |
4,367 |
|
Property and equipment, net |
817,010 |
672,455 |
|
Land use rights, net |
13,851 |
6,037 |
|
Amounts due from related parties, non-current |
3,888 |
22,709 |
|
Long-term deposits |
70,136 |
62,116 |
|
Intangible assets, net |
9,425 |
10,246 |
|
|
99,545 |
80,366 |
|
Long-term investments, net |
554,913 |
431,101 |
|
Deferred tax assets, non-current, net |
70,447 |
63,324 |
|
Right-of-use assets |
1,722,258 |
1,425,466 |
|
Other non-current assets |
25,213 |
22,278 |
|
Total assets |
9,777,255 |
6,556,885 |
|
LIABILITIES AND EQUITY |
|||
Current liabilities: |
|||
Accounts payable (including accounts payable of the consolidated variable interest entities without |
30,234 |
33,147 |
|
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities |
690,562 |
634,619 |
|
Income taxes payable (including income tax payable of the consolidated variable interest entities |
108,525 |
101,385 |
|
Amounts due to related parties (including amounts due to related parties of the consolidated variable |
73 |
1,590 |
|
Deferred revenue (including deferred revenue of the consolidated variable interest entities without |
1,865,734 |
1,324,384 |
|
Operating lease liability-current (including operating lease liabilities-current of the consolidated |
481,056 |
384,239 |
|
Total current liabilities |
3,176,184 |
2,479,364 |
|
Deferred tax liabilities, non-current (including deferred tax liabilities of the consolidated variable |
19,150 |
11,906 |
|
Long term loan (including Long term loan of the consolidated variable interest entities without |
- |
117,881 |
|
Unsecured senior notes (including unsecured senior notes of the consolidated variable interest entities |
297,476 |
- |
|
Operating lease liabilities (including operating lease liabilities of the consolidated variable interest |
1,239,753 |
1,077,923 |
|
Total long-term liabilities |
1,556,379 |
1,207,710 |
|
Total liabilities |
4,732,563 |
3,687,074 |
|
Equity |
|||
|
4,915,339 |
2,733,295 |
|
Non-controlling interests |
129,353 |
136,516 |
|
Total equity |
5,044,692 |
2,869,811 |
|
Total liabilities and equity |
9,777,255 |
6,556,885 |
|
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||
(In thousands except for per share and per ADS amounts) |
|||
For the Three Months |
For the Three Months |
||
2021 |
2020 |
||
(Unaudited) |
(Unaudited) |
||
USD |
USD |
||
Net revenues |
1,190,498 |
923,221 |
|
Operating cost and expenses (note 1) |
|||
Cost of revenues |
539,499 |
398,628 |
|
Selling and marketing |
156,084 |
118,233 |
|
General and administrative |
393,445 |
289,107 |
|
Total operating cost and expenses |
1,089,028 |
805,968 |
|
Operating income |
101,470 |
117,253 |
|
(Loss)/gain from fair value change of long-term investments |
(2,443) |
4,083 |
|
Other income, net |
68,077 |
30,387 |
|
Provision for income taxes |
(46,971) |
(33,255) |
|
Gain/(loss) from equity method investments |
6,509 |
(1,244) |
|
Net income |
126,642 |
117,224 |
|
Add: Net loss attributable to non-controlling interests |
24,684 |
20,491 |
|
Net income attributable to New Oriental Education & |
151,326 |
137,715 |
|
Net income per common share / ADS |
|||
- Basic |
0.09 |
0.09 |
|
- Diluted |
0.09 |
0.09 |
|
|||
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 |
For the Three Months Ended |
||
2021 |
2020 |
||
(Unaudited) |
(Unaudited) |
||
USD |
USD |
||
General and administrative expenses |
393,445 |
289,107 |
|
Less: Share-based compensation expenses in general and administrative |
10,108 |
15,852 |
|
Non-GAAP general and administrative expenses |
383,337 |
273,255 |
|
Total operating cost and expenses |
1,089,028 |
805,968 |
|
Less: Share-based compensation expenses |
14,422 |
17,549 |
|
Non-GAAP operating cost and expenses |
1,074,606 |
788,419 |
|
Operating income |
101,470 |
117,253 |
|
Add: Share-based compensation expenses |
14,422 |
17,549 |
|
Non-GAAP operating income |
115,892 |
134,802 |
|
Operating margin |
8.5% |
12.7% |
|
Non-GAAP operating margin |
9.7% |
14.6% |
|
Net income attributable to New Oriental |
151,326 |
137,715 |
|
Add: Share-based compensation expenses |
9,467 |
14,870 |
|
Less: (Loss)/gain from fair value change of long-term investments |
(2,443) |
4,083 |
|
Non-GAAP net income attributable to New Oriental |
163,236 |
148,502 |
|
Net income per ADS attributable to New Oriental- Basic (note 2) |
0.09 |
0.09 |
|
Net income per ADS attributable to New Oriental- Diluted (note 2) |
0.09 |
0.09 |
|
Non-GAAP net income per ADS attributable to New Oriental - Basic |
0.10 |
0.09 |
|
Non-GAAP net income per ADS attributable to New Oriental - Diluted |
0.10 |
0.09 |
|
Weighted average shares used in calculating basic net income per ADS |
1,689,712,150 |
1,585,034,866 |
|
Weighted average shares used in calculating diluted net income per ADS |
1,695,315,497 |
1,595,291,869 |
|
Non-GAAP income per share - basic |
0.10 |
0.09 |
|
Non-GAAP income per share - diluted |
0.10 |
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 |
For the Three Months Ended F |
||
2021 |
2020 |
||
(Unaudited) |
(Unaudited) |
||
USD |
USD |
||
Cost of revenues |
2,393 |
593 |
|
Selling and marketing |
1,921 |
1,104 |
|
General and administrative |
10,108 |
15,852 |
|
Total |
14,422 |
17,549 |
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
(In thousands) |
||||
For the Three Months |
For the Three Months |
|||
2021 |
2020 |
|||
(Unaudited) |
(Unaudited) |
|||
USD |
USD |
|||
Net cash provided by operating activities |
23,314 |
39,657 |
||
Net cash used in investing activities |
(1,122,254) |
(33,101) |
||
Net cash provided by/(used in) financing activities |
13,364 |
(2,385) |
||
Effect of exchange rate changes |
23,644 |
5,068 |
||
Net change in cash, cash equivalents and restricted cash |
(1,061,932) |
9,239 |
||
Cash, cash equivalents and restricted cash at beginning of period |
2,648,124 |
1,051,365 |
||
Cash, cash equivalents and restricted cash at end of period |
1,586,192 |
1,060,604 |
|
|||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||
(In thousands except for per share and per ADS amounts) |
|||
For the Nine Months |
For the Nine Months |
||
2021 |
2020 |
||
(Unaudited) |
(Unaudited) |
||
USD |
USD |
||
Net revenues |
3,064,553 |
2,780,209 |
|
Operating costs and expenses (note 1): |
|||
Cost of revenues |
1,458,028 |
1,197,819 |
|
Selling and marketing |
406,555 |
327,273 |
|
General and administrative |
980,342 |
866,369 |
|
Total operating costs and expenses |
2,844,925 |
2,391,461 |
|
Operating income |
219,628 |
388,748 |
|
Loss from fair value change of long-term investments |
(4,597) |
(486) |
|
Other income, net |
195,578 |
77,556 |
|
Provision for income taxes |
(112,910) |
(98,168) |
|
Gain from equity method investments |
7,556 |
2,385 |
|
Net income |
305,255 |
370,035 |
|
Add: Net loss attributable to non-controlling interests |
74,625 |
30,107 |
|
Net income attributable to New Oriental Education & Technology |
379,880 |
400,142 |
|
Net income per share attributable to New Oriental-Basic |
0.23 |
0.25 |
|
Net income per share attributable to New Oriental-Diluted |
0.23 |
0.25 |
|
Net income per ADS attributable to New Oriental-Basic (note 2) |
0.23 |
0.25 |
|
Net income per ADS attributable to New Oriental-Diluted (note 2) |
0.23 |
0.25 |
|
||||||
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES |
||||||
(In thousands except for per share and per ADS amounts) |
||||||
For the Nine Months Ended |
For the Nine Months Ended |
|||||
2021 |
2020 |
|||||
(Unaudited) |
(Unaudited) |
|||||
USD |
USD |
|||||
General and administrative expenses |
980,342 |
866,369 |
||||
Less: Share-based compensation expenses in general and administrative |
34,655 |
37,459 |
||||
Non-GAAP general and administrative expenses |
945,687 |
828,910 |
||||
Total operating costs and expenses |
2,844,925 |
2,391,461 |
||||
Less: Share-based compensation expenses |
48,735 |
39,784 |
||||
Non-GAAP operating costs and expenses |
2,796,190 |
2,351,677 |
||||
Operating income |
219,628 |
388,748 |
||||
Add: Share-based compensation expenses |
48,735 |
39,784 |
||||
Non-GAAP operating income |
268,363 |
428,532 |
||||
Operating margin |
7.2% |
14.0% |
||||
Non-GAAP operating margin |
8.8% |
15.4% |
||||
Net income attributable to New Oriental |
379,880 |
400,142 |
||||
Add: Share-based compensation expenses |
32,425 |
35,022 |
||||
Less: Loss from fair value change of long-term investments |
(4,597) |
(486) |
||||
Non-GAAP net income to New Oriental |
416,902 |
435,650 |
||||
Net income per ADS attributable to New Oriental- Basic (note 2) |
0.23 |
0.25 |
||||
Net income per ADS attributable to New Oriental- Diluted (note 2) |
0.23 |
0.25 |
||||
Non-GAAP net income per ADS attributable to New Oriental - Basic (note 2) |
0.26 |
0.28 |
||||
Non-GAAP net income per ADS attributable to New Oriental - Diluted (note 2) |
0.25 |
0.27 |
||||
Weighted average shares used in calculating basic net income per ADS (note 2) |
1,630,427,098 |
1,583,924,719 |
||||
Weighted average shares used in calculating diluted net income per ADS (note 2) |
1,637,074,362 |
1,595,232,352 |
||||
Non-GAAP income per share - basic |
0.26 |
0.28 |
||||
Non-GAAP income per share - diluted |
0.25 |
0.27 |
||||
Notes: |
||||||
Note 1: Share-based compensation expenses (in thousands) are included in the operating costs and expenses as follows: |
||||||
For the Nine Months Ended |
For the Nine Months Ended |
|||||
2021 |
2020 |
|||||
(Unaudited) |
(Unaudited) |
|||||
USD |
USD |
|||||
Cost of revenues |
6,229 |
650 |
||||
Selling and marketing |
7,851 |
1,675 |
||||
General and administrative |
34,655 |
37,459 |
||||
Total |
48,735 |
39,784 |
||||
Note 2: Each ADS represents one common share. |
||||||
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
(In thousands) |
||||
For the Nine |
For the Nine |
|||
2021 |
2020 |
|||
(Unaudited) |
(Unaudited) |
|||
USD |
USD |
|||
Net cash provided by operating activities |
825,590 |
695,983 |
||
Net cash used in investing activities |
(1,919,054) |
(1,033,307) |
||
Net cash provided by/(used in) financing activities |
1,654,835 |
(7,004) |
||
Effect of exchange rate changes |
105,397 |
(13,295) |
||
Net change in cash, cash equivalents and restricted cash |
666,768 |
(357,623) |
||
Cash, cash equivalents and restricted cash at beginning of period |
919,424 |
1,418,227 |
||
Cash, cash equivalents and restricted cash at end of period |
1,586,192 |
1,060,604 |
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