Form 6-K

 

 

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 April 2015

 

 

Commission File Number: 001-32993

 

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

 

 

No. 6 Hai Dian Zhong Street

Haidian District

Beijing 100080, 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  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

 

 

 


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.

 

New Oriental Education & Technology Group Inc.
By:

/s/ Stephen Zhihui Yang

Name: Stephen Zhihui Yang
Title: Chief Financial Officer

Date: April 22, 2015


Exhibit Index

Exhibit 99.1 – Press Release

Exhibit 99.2 – Press Release

EX-99.1

Exhibit 99.1

New Oriental Announces Results for the Third Fiscal Quarter Ended February 28, 2015

Quarterly Net Revenues Increased by 13.1% Year-Over-Year

BEIJING, April 21, 2015 /PRNewswire/ — New Oriental Education and 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 fiscal quarter ended February 28, 2015, which is the third quarter of New Oriental’s fiscal year 2015.

Financial Highlights for the Third Fiscal Quarter Ended February 28, 2015

 

    Total net revenues increased by 13.1% year-over-year to US$287.7 million for the third fiscal quarter of 2015. Total net revenues would have increased 14.6% if including US$3.7 million of temporarily deferred revenue resulting from the Company’s new customer loyalty programs[1].

 

    Income from operations increased by 2.4% year-over-year to US$31.4 million for the third fiscal quarter of 2015. Income from operations would have been approximately US$35.1 million if not for the accounting effects of the Company’s new customer loyalty programs.

 

    Net income attributable to New Oriental decreased by 2.6% year-over-year to US$41.0 million for the third fiscal quarter of 2015.

 

[1] Beginning in the second quarter of fiscal year 2015, the Company started implementing customer loyalty programs to encourage repeat business. Under the new programs, when customers purchase academic subjects tutoring and test preparation courses, they will be able to earn points equivalent to 2-5% of their total spending, which can be used to pay for future tuition fees over the next two years. The Company uses the deferred revenue method to recognize revenues for customer loyalty programs under U.S. GAAP. The portion of revenues associated with the issued points is deferred until the points are redeemed or expired. The revenues deferred are expected to be recognized when the points are redeemed and the associated classes are taken or when expired after two years.

Key Financial Results

 

(in thousands US$, except per ADS(1) data)

   3Q FY2015      3Q FY2014      % of change  

Net revenues

     287,733         254,407         13.1

Operating income

     31,387         30,655         2.4

Non-GAAP operating income(2)

     35,854         36,015         -0.4

Net income attributable to New Oriental

     40,967         42,080         -2.6

Non-GAAP net income attributable to New Oriental(2)

     45,434         47,440         -4.2

Net income per ADS attributable to New Oriental - basic

     0.26         0.27         -2.5

Net income per ADS attributable to New Oriental - diluted

     0.26         0.27         -1.7

Non-GAAP net income per ADS attributable to New Oriental - basic(2)(3)

     0.29         0.30         -4.0

Non-GAAP net income per ADS attributable to New Oriental - diluted(2)(3)

     0.29         0.30         -2.9

(in thousands US$, except per ADS(1) data)

   9M FY2015      9M FY2014      % of change  

Net revenues

     917,958         851,400         7.8

Operating income

     128,926         166,787         -22.7

Non-GAAP operating income(2)

     141,500         182,912         -22.6

Net income attributable to New Oriental

     155,717         172,822         -9.9

Non-GAAP net income attributable to New Oriental(2)

     168,291         188,947         -10.9

Net income per ADS attributable to New Oriental - basic

     0.99         1.11         -10.5

Net income per ADS attributable to New Oriental - diluted

     0.99         1.10         -9.8

Non-GAAP net income per ADS attributable to New Oriental - basic(2)(3)

     1.07         1.21         -11.5

Non-GAAP net income per ADS attributable to New Oriental - diluted(2)(3)

     1.06         1.20         -11.2

 

(1) Each ADS represents one common share.


(2) 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 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.
(3) 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 Third Fiscal Quarter Ended February 28, 2015

 

    Total student enrollments in academic subjects tutoring and test preparation courses increased slightly to 603,000 for the third fiscal quarter of 2015.

 

    The total number of schools and learning centers was 722 as of February 28, 2015, an increase of 22 compared to 700 as of February 28, 2014, and an increase of 9 compared to 713 as of November 30, 2014. New Oriental built a net of 6 learning centers in the quarter. In addition, the Company acquired a kindergarten chain, which has 3 schools in the city of Qingdao. The total number of schools increased to 60 and the total number of learning centers to 662 as of February 28, 2015.

Michael Minhong Yu, New Oriental’s Chairman and Chief Executive Officer, commented, “We are pleased to report solid results for the third quarter with sustained top-line growth of 13.1%. Revenue growth would have been as high as 14.6% if including temporarily deferred revenue resulting from our customer loyalty programs launched in the second quarter of 2015. Strong momentum continued in our K-12 after-school tutoring business with year-over-year gross revenue growth of approximately 22% to US$143 million, contributing to almost half of our revenues. Our U-Can middle and high school all-subjects after-school tutoring business recorded gross revenue growth of approximately 29%. Of particular importance, since its nationwide roll-out in the second quarter, our revamped POP Kids program has begun a noteworthy turnaround with gross revenue growth of about 7% and enrollment growth of 16%, reversing previous declines. We expect this program’s positive performance to accelerate as the new offerings have been well received by both our students and the market. Total enrollments for the third quarter were flat year-over-year but mainly due to the timing of Chinese New Year in 2015. The holiday occurred later this year, delaying enrollments for Spring classes and resulting in a shift to the fourth quarter. In the first six weeks of the fourth quarter there have been a significant 35.8% uplift in enrollments and a 43% increase in cash receipts versus the same period last year. Looking at the aggregated third fiscal quarter and first six weeks of fourth quarter will be most accurate to understand the business trend.”

Mr. Yu continued, “During the third quarter we also made encouraging progress in executing our “Optimize the Market” strategy. To further penetrate into the existing markets, we added a net of six learning centers and expanded some existing learning centers by adding a total of over 2,500 square meters of additional classroom area. Further, we made solid progress in building our online and offline integrated education ecosystem. We are rolling out the O2O Two-way Interactive Education System for our K-12 after-school tutoring program in most of our existing cities. Also, our online business continued to expand rapidly as evidenced by revenue growth of approximately 39% in koolearn.com, our pure online education platform, as well as registered users growth of more than 200% and paid users growth of more than 110%.”

Stephen Zhihui Yang, New Oriental’s Chief Financial Officer, commented, “As mentioned previously, fiscal 2015 is an important investment year. During the third quarter we continued to allocate capital to the development of digitalized educational content and supplementary online education products and services for all business lines, and as a result our operating margin and net margin have been facing short term pressure as expected. However, we are very confident that these efforts will further differentiate New Oriental in a competitive market and it will allow our student customers access to fresh, new online offerings, greater efficiencies and a better overall learning experience. This is essential to our continuous effort to create long-term growth and sustainable profitability for our shareholders.”


Recent Developments

In a separate press release issued today the Company announced a transition in the role of Chief Financial Officer. Mr. Stephen Zhihui Yang, the current Vice President of Finance who has been with the Company since 2006, will be promoted to Chief Financial Officer, effective April 21, 2015. Mr. Louis T. Hsieh, the current Chief Financial Officer, will remain as the Company’s President overseeing overall corporate strategy and business development and will continue to serve as a member of the board of directors. The Company expects a smooth transition as Mr. Hsieh and Mr. Yang have worked together for more than nine years in their current roles.

Completion of Share Repurchase Program

In July 2014, New Oriental’s board of directors authorized the repurchase of up to US$120 million of the Company’s common shares during the period from July 28, 2014 through March 31, 2015. The share repurchase program has now been completed. As of March 31, 2015, the Company has repurchased 2,800,849 ADSs, each representing one common share of the Company, in the open market, at an average price of US$21.2 per ADS, for an aggregate consideration of US$59.4 million.

Financial Results for the Third Fiscal Quarter Ended February 28, 2015

Net Revenues

For the third fiscal quarter of 2015, New Oriental reported net revenues of US$287.7 million, representing a 13.1% increase year-over-year. Net revenues from educational programs and services for the third fiscal quarter were US$262.0 million, representing a 14.8% increase year-over-year. The growth was mainly driven by increases in student enrollments in K-12 after-school tutoring courses and in average selling price of test preparation courses.

Total student enrollments in academic subjects tutoring and test preparation courses in the third fiscal quarter of 2015 increased slightly to approximately 603,000.

Operating Costs and Expenses

Operating costs and expenses for the quarter were US$256.3 million, representing a 14.6% increase year-over-year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were US$251.9 million, representing a 15.3% increase year-over-year.

 

    Cost of revenues increased by 17.0% year-over-year to US$126.1 million, primarily due to increases in teachers’ compensation for more teaching hours.

 

    Selling and marketing expenses increased by 10.0 % year-over-year to US$41.7 million, primarily due to an increase in selling and marketing staff’s compensation.

 

    General and administrative expenses for the quarter increased by 13.4% year-over-year to US$88.5 million. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, were US$84.2 million, representing a 15.8% increase year-over-year, primarily due to increases in R&D expenses and human resources expenses related to the development of our online and offline integrated education ecosystem.

Total share-based compensation expenses, which were allocated to related operating costs and expenses, decreased by 16.7% to US$4.5 million in the third fiscal quarter of 2015.


Operating Income and Operating Margin

Income from operations was US$31.4 million, a 2.4% increase from US$30.7 million in the same period of the prior fiscal year. Non-GAAP income from operations for the quarter was US$35.9 million, a 0.4% decrease from US$36.0 million in the same period of the prior fiscal year.

Operating margin for the quarter was 10.9%, compared to 12.0% in the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses, for the quarter was 12.5%, compared to 14.2% in the same period of the prior fiscal year.

Net Income and EPS

Net income attributable to New Oriental for the quarter was US$41.0 million, representing a 2.6% decrease from the same period of the prior fiscal year. Basic and diluted earnings per ADS attributable to New Oriental were US$0.26 and US$0.26, respectively.

Non-GAAP Net Income and Non-GAAP EPS

Non-GAAP net income attributable to New Oriental for the quarter was US$45.4 million, representing a 4.2% decrease from the same period of the prior fiscal year. Non-GAAP basic and diluted earnings per ADS attributable to New Oriental were US$0.29 and US$0.29, respectively.

Cash Flow

Net operating cash flow for the third fiscal quarter of 2015 was approximately US$64.7 million. Capital expenditures for the quarter were US$16.9 million, which were primarily attributable to the opening of 20 new learning centers and renovations at existing learning centers.

Balance Sheet

As of February 28, 2015, New Oriental had cash and cash equivalents of US$411.9 million, as compared to US$451.7 million as of November 30, 2014. In addition, the Company had US$64.4 million in term deposits, US$583.5 million in short-term investment and US$248.9 million in long-term held-to-maturity investments consisting of trusts guaranteed by a bank with the maturity date more than one year from the date of purchase as of February 28, 2015.

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 2015 was US$424.9 million, an increase of 11.4% as compared to US$381.4 million at the end of the third quarter of fiscal year 2014.

Financial Results for the Nine Months Ended February 28, 2015

For the first nine months of fiscal year 2015, New Oriental reported net revenues of US$918.0 million, representing a 7.8% increase year-over-year.

Total student enrollments in academic subjects tutoring and test preparation courses in the first nine months of fiscal year 2015 increased by 1.2% to approximately 2,112,900.

Income from operations for the first nine months of fiscal year 2015 was US$128.9 million, representing a 22.7% decrease year-over-year. Non-GAAP income from operations for the first nine months of fiscal year 2015 was US$141.5 million, representing a 22.6% decrease year-over-year.

Operating margin for the first nine months of fiscal year 2015 was 14.0%, compared to 19.6% 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 2015, was 15.4%, compared to 21.5% for the same period of the prior fiscal year.


Net income attributable to New Oriental for the first nine months of fiscal year 2015 was US$155.7 million, representing a 9.9% decrease year-over-year. Basic and diluted net income per ADS attributable to New Oriental for the first nine months of fiscal year 2015 amounted to US$0.99 and US$0.99, respectively.

Non-GAAP net income attributable to New Oriental for the first nine months of fiscal year 2015 was US$168.3 million, representing a 10.9% decrease year-over-year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental for the first nine months of fiscal year 2015 amounted to US$1.07 and US$1.06, respectively.

Outlook for Fourth Quarter of Fiscal Year 2015

New Oriental expects total net revenues in the fourth quarter of fiscal year 2015 (March 1, 2015 to May 31, 2015) to be in the range of US$322.0 million to US$333.5 million, representing year-over-year growth in the range of 12% to 16%.

If not including the deduction of approximately US$5 million revenue that will be deferred resulting from the Company’s customer loyalty programs, the projected revenue growth rate is expected to be in the range of 14% to 18% for the fourth quarter of fiscal year 2015.

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 April 21, 2015, U.S. Eastern Time (8 PM on April 21, 2015, 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: +44-20-3059-8139

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is “New Oriental Earnings Call.”

A replay of the conference call may be accessed by phone at the following number until April 29, 2015:

 

International: +61-2-8199-0299
Passcode: 16179094

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 English and other foreign language training, test preparation courses for major admissions and assessment tests in the United States, the PRC and Commonwealth countries, primary and secondary school education, development and distribution of educational content, software and other technology, and online education. 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://english.neworiental.org.


Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the outlook for the fourth quarter of fiscal year 2015, 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 income excluding share-based compensation expenses, operating income excluding share-based compensation expenses, operating costs and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, operating margin excluding share-based compensation expenses, and basic and diluted net income per ADS and per share excluding share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the 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 that may not be indicative of its operating performance from a cash perspective. New Oriental believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to New Oriental’s historical performance and liquidity. New Oriental computes its non-GAAP financial measures using the same consistent method from quarter to quarter. New Oriental believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP measures is that they exclude share-based compensation charge that has been and will continue to be for the foreseeable future a significant recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

Contacts

For investor and media inquiries, please contact:

In China:

Ms. Cara O’Brien

FTI Consulting

Tel: +852-3768-4537
Email: cara.obrien@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 February 28
2015
     As of November 30
2014
 
     (Unaudited)
USD
     (Unaudited)
USD
 

ASSETS:

     

Current assets:

     

Cash and cash equivalents

     411,929         451,686   

Restricted cash, current

     1,284         497   

Term deposits

     64,396         65,404   

Short term investments

     583,456         541,435   

Accounts receivable, net

     4,085         5,827   

Inventory

     24,694         24,676   

Deferred tax assets, current

     11,348         9,827   

Prepaid expenses and other current assets

     85,018         80,294   

Amounts due from related parties, current

     2,693         2,748   
  

 

 

    

 

 

 

Total current assets

  1,188,903      1,182,394   

Property, plant and equipment, net

  232,370      231,320   

Land use rights, net

  4,243      4,359   

Amounts due from related parties, non-current

  2,370      2,334   

Deferred tax assets, non-current

  4,254      3,377   

Long term deposit

  14,514      12,334   

Long term prepaid rent

  543      742   

Restricted cash, non-current

  1,995      1,701   

Intangible assets

  4,196      716   

Goodwill

  11,067      3,755   

Long term investments

  301,468      305,822   

Prepayment of an acquisition

  —        1,883   

Other non-current assets

  —        3,581   
  

 

 

    

 

 

 

Total assets

  1,765,923      1,754,318   
  

 

 

    

 

 

 

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable (including accounts payable of the consolidated VIE without recourse to New Oriental of US$11,596 and US$15,710 as of November 30, 2014 and February 28, 2015, respectively)

  15,737      11,689   

Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to New Oriental of US$125,228 and US$121,962 as of November 30, 2014 and February 28, 2015, respectively)

  147,268      139,790   

Income taxes payable (including income tax payable of the consolidated VIE without recourse to New Oriental of US$22,237 and US$17,278 as of November 30, 2014 and February 28, 2015, respectively)

  23,521      22,934   

Amounts due to related party (including amounts due to related parties of the consolidated VIE without recourse to New Oriental of nil and US$861 as of November 30, 2014 and February 28, 2015, respectively)

  874      14   

Deferred revenue (including deferred revenue of the consolidated VIE without recourse to New Oriental of US$438,042 and US$422,181 as of November 30, 2014 and February 28, 2015, respectively)

  424,906      440,746   
  

 

 

    

 

 

 

Total current liabilities

  612,306      615,173   

Deferred tax liabilities (including deferred tax liabilities of the consolidated VIE without recourse to New Oriental of US$1,703 and US$1,602 as of November 30, 2014 and February 28, 2015, respectively)

  2,530      1,703   
  

 

 

    

 

 

 

Total long-term liabilities

  2,530      1,703   

Total liabilities

  614,836      616,876   
  

 

 

    

 

 

 

Noncontrolling interests

  3,704      —     

Total New Oriental Education & Technology Group Inc. shareholders’ equity

  1,147,383      1,137,442   
  

 

 

    

 

 

 

Total shareholder’s equity

  1,151,087      1,137,442   

Total liabilities and shareholder’s equity

  1,765,923      1,754,318   
  

 

 

    

 

 

 


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 February 28  
     2015     2014  
     (Unaudited)
USD
    (Unaudited)
USD
 

Net Revenues:

    

Educational programs and services

     262,041        228,191   

Books and others

     25,692        26,216   
  

 

 

   

 

 

 

Total net revenues

  287,733      254,407   
  

 

 

   

 

 

 

Operating costs and expenses (note 1):

Cost of revenues

  126,111      107,767   

Selling and marketing

  41,730      37,922   

General and administrative

  88,505      78,063   
  

 

 

   

 

 

 

Total operating costs and expenses

  256,346      223,752   
  

 

 

   

 

 

 

Operating income (loss)

  31,387      30,655   
  

 

 

   

 

 

 

Other income, net

  16,318      11,689   

Benefits (Provision) for income taxes

  (6,333   192   

Loss from equity method investment

  (453   (456

Income from continuing operations

  40,919      42,080   
  

 

 

   

 

 

 

Net income

  40,919      42,080   

Net loss attributable to the noncontrolling interests

  48      —     
  

 

 

   

 

 

 

Net income attributable to New Oriental Education & Technology Group Inc.

  40,967      42,080   
  

 

 

   

 

 

 

Net income per share attributable to New Oriental-Basic

  0.26      0.27   

Net income per share attributable to New Oriental-Diluted

  0.26      0.27   

Net income per ADS attributable to New Oriental-Basic (note 2)

  0.26      0.27   

Net income per ADS attributable to New Oriental-Diluted (note 2)

  0.26      0.27   

Other comprehensive (loss) income, net of tax

  (19,183   (5,513
  

 

 

   

 

 

 

Comprehensive income

  21,784      36,567   
  

 

 

   

 

 

 

Comprehensive income attributable to New Oriental Education & Technology Group Inc.

  21,784      36,567   
  

 

 

   

 

 

 

Notes:

Note 1: Share-based compensation expenses (in thousands) are included in the operating costs and expenses as follows:

 

     For the Three Months Ended February 28  
     2015      2014  
     (Unaudited)
USD
     (Unaudited)
USD
 

Cost of revenues

     96         —     

Selling and marketing

     83         —     

General and administrative

     4,288         5,360   
  

 

 

    

 

 

 

Total

  4,467      5,360   
  

 

 

    

 

 

 

Note 2: Each ADS represents one common share.


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 February 28  
     2015     2014  
     (Unaudited)
USD
    (Unaudited)
USD
 

General and administrative expenses

     88,505        78,063   

Share-based compensation expense in general and administrative expenses

     4,288        5,360   
  

 

 

   

 

 

 

Non-GAAP general and administrative expenses

  84,217      72,703   

Total operating costs and expenses

  256,346      223,752   

Share-based compensation expenses

  4,467      5,360   
  

 

 

   

 

 

 

Non-GAAP operating costs and expenses

  251,879      218,392   

Operating income

  31,387      30,655   

Share-based compensation expenses

  4,467      5,360   
  

 

 

   

 

 

 

Non-GAAP operating income

  35,854      36,015   

Operating margin

  10.9   12.0

Non-GAAP operating margin

  12.5   14.2

Net income attributable to New Oriental

  40,967      42,080   

Share-based compensation expenses

  4,467      5,360   
  

 

 

   

 

 

 

Non-GAAP net income

  45,434      47,440   

Net income per ADS attributable to New Oriental - Basic (note 1)

  0.26      0.27   

Net income per ADS attributable to New Oriental - Diluted (note 1)

  0.26      0.27   

Non-GAAP net income per ADS attributable to New Oriental - Basic (note 1)

  0.29      0.30   

Non-GAAP net income per ADS attributable to New Oriental - Diluted (note 1)

  0.29      0.30   

Weighted average shares used in calculating basic net income per ADS (note 1)

  155,993,002      156,297,278   

Weighted average shares used in calculating diluted net income per ADS (note 1)

  156,874,791      158,378,574   

Non-GAAP income per share - basic

  0.29      0.30   

Non-GAAP income per share - diluted

  0.29      0.30   

Note 1: 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 Nine Months Ended February 28  
     2015     2014  
     (Unaudited)
USD
    (Unaudited)
USD
 

Net Revenues:

    

Educational programs and services

     835,363        769,959   

Books and others

     82,595        81,441   
  

 

 

   

 

 

 

Total net revenues

  917,958      851,400   
  

 

 

   

 

 

 

Operating costs and expenses (note 1):

Cost of revenues

  389,188      337,850   

Selling and marketing

  135,450      117,396   

General and administrative

  264,394      229,367   
  

 

 

   

 

 

 

Total operating costs and expenses

  789,032      684,613   
  

 

 

   

 

 

 

Operating income

  128,926      166,787   
  

 

 

   

 

 

 

Other income, net

  49,226      31,618   
  —     

Provision for income taxes

  (21,751   (24,130

Loss from equity method investment

  (732   (1,453

Income from continuing operations

  155,669      172,822   

Loss on discontinued operations, net of tax

  —        —     
  

 

 

   

 

 

 

Net income (loss)

  155,669      172,822   

Net loss attributable to the noncontrolling interests

  48      —     
  

 

 

   

 

 

 

Net income attributable to New Oriental Education & Technology Group Inc.

  155,717      172,822   
  

 

 

   

 

 

 

Net income per share attributable to New Oriental-Basic

  0.99      1.11   

Net income per share attributable to New Oriental-Diluted

  0.99      1.10   

Net income per ADS attributable to New Oriental-Basic (note 2)

  0.99      1.11   

Net income per ADS attributable to New Oriental-Diluted (note 2)

  0.99      1.10   

Other comprehensive income, net of tax

  5,599      2,400   
  

 

 

   

 

 

 

Comprehensive income

  161,316      175,222   
  

 

 

   

 

 

 

Comprehensive income attributable to New Oriental Education & Technology Group Inc.

  161,316      175,222   
  

 

 

   

 

 

 

Notes:

Note 1: Share-based compensation expenses (in thousands) are included in the operating costs and expenses as follows:

 

     For the Nine Months Ended February 28  
     2015      2014  
     (Unaudited)
USD
     (Unaudited)
USD
 

Cost of revenues

     295         —     

Selling and marketing

     253         —     

General and administrative

     12,026         16,125   
  

 

 

    

 

 

 

Total

  12,574      16,125   
  

 

 

    

 

 

 

Note 2: Each ADS represents one common share.


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 Nine Months Ended February 28  
     2015     2014  
     (Unaudited)
USD
    (Unaudited)
USD
 

General and administrative expenses

     264,394        229,367   

Share-based compensation expense in general and administrative expenses

     12,026        16,125   
  

 

 

   

 

 

 

Non-GAAP general and administrative expenses

  252,368      213,242   

Total operating costs and expenses

  789,032      684,613   

Share-based compensation expenses

  12,574      16,125   
  

 

 

   

 

 

 

Non-GAAP operating costs and expenses

  776,458      668,488   

Operating income

  128,926      166,787   

Share-based compensation expenses

  12,574      16,125   
  

 

 

   

 

 

 

Non-GAAP operating income

  141,500      182,912   

Operating margin

  14.0   19.6

Non-GAAP operating margin

  15.4   21.5

Net income attributable to New Oriental

  155,717      172,822   

Share-based compensation expenses

  12,574      16,125   
  

 

 

   

 

 

 

Non-GAAP net income

  168,291      188,947   

Net income per ADS attributable to New Oriental - Basic (note 1)

  0.99      1.11   

Net income per ADS attributable to New Oriental - Diluted (note 1)

  0.99      1.10   

Non-GAAP net income per ADS attributable to New Oriental - Basic (note 1)

  1.07      1.21   

Non-GAAP net income per ADS attributable to New Oriental - Diluted (note 1)

  1.06      1.20   

Weighted average shares used in calculating basic net income per ADS (note 1)

  156,745,702      155,752,666   

Weighted average shares used in calculating diluted net income per ADS (note 1)

  157,615,286      157,773,251   

Non-GAAP income per share - basic

  1.07      1.21   

Non-GAAP income per share - diluted

  1.06      1.20   

Note 1: Each ADS represents one common share.

EX-99.2

Exhibit 99.2

New Oriental Announces Chief Financial Officer Appointment

Beijing, April 21, 2015 – New Oriental Education and Technology Group Inc. (the “Company” or “New Oriental”) (NYSE: EDU), the largest provider of private educational services in China, today announced a transition in the role of the Company’s Chief Financial Officer.

Mr. Stephen Zhihui Yang, the current Vice President of Finance, will be promoted to Chief Financial Officer of the Company, effective April 21, 2015. Mr. Louis T. Hsieh, the current Chief Financial Officer, will remain as the Company’s President, overseeing overall corporate strategy and business development, and will continue to serve as a member of the board of directors. The Company expects a smooth transition as Mr. Hsieh and Mr. Yang have worked together at the Company for more than nine years.

Mr. Yang has been with New Oriental since 2006 and has held multiple positions since he joined the Company, including Vice President of Finance, Deputy Director of the President’s Office and Senior Financial Manager. Mr. Yang has 18 years of professional experience in accounting, financial management and corporate financial advisory services in various sectors. Prior to joining New Oriental, Mr. Yang served as the Financial Director of Beijing Hua De Xin Investment Co., Ltd. and was a Senior Auditor at PricewaterhouseCoopers. Mr. Yang received his bachelor degree in economics from Guanghua School of Management of Peking University.

Michael Minhong Yu, New Oriental’s Chairman and Chief Executive Officer, commented, “We warmly welcome Stephen as our new Chief Financial Officer. With his significant breath of experience and in-depth knowledge of New Oriental and China’s education services industry, we are confident that Stephen will make important contributions to New Oriental’s financial management and overall growth going forward.”

“We also would like to extend our sincere gratitude to Louis for his exemplary service as CFO and invaluable contributions to New Oriental, including leading the Company’s very successful IPO on the New York Stock Exchange in 2006 and helping to shape and manage our rapidly expanding business in China. We are delighted that Louis will continue to be a key member of our senior management team, helping guide the Company’s evolution and expansion in what is a very competitive market. Our full management team’s focus will be on fostering a culture of continuous improvement, which will help drive sustainable and profitable growth over the long-term.”

Separately, New Oriental also announced its results for the third quarter of fiscal year 2015 today.

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 English and other foreign language training, test preparation courses for major admissions and assessment tests in the United States, the PRC and Commonwealth countries, primary and secondary school education, development and distribution of educational content, software and other technology, and online education. 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://english.neworiental.org.


Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confidence” and similar 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. 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. All information provided in this press release 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.

Contacts

For investor and media inquiries, please contact:

In China:

Ms. Cara O’Brien

FTI Consulting

Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com

Ms. Sisi Zhao

New Oriental Education and Technology Group Inc.

Tel: +86-10-6260-5568
Email: zhaosisi@xdf.cn