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 July 2018
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 ☒ 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: July 25, 2018
Exhibit Index
Exhibit 99.1 – Press Release
Exhibit 99.1
New Oriental Announces Results for the Fourth Fiscal Quarter and Fiscal Year Ended May 31, 2018
Quarterly Net Revenues Increased by 44.1% Year-Over-Year
Quarterly Student Enrollments Increased by 44.9% Year-Over-Year
Fiscal Year Net Revenues Increased by 36% Year-Over-Year
Fiscal Year Student Enrollments Increased by 30.3 % Year-Over-Year
Beijing, July 24, 2018 – 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 fourth fiscal quarter ended May 31, 2018.
Financial Highlights for the Fourth Fiscal Quarter Ended May 31, 2018
| • | Total net revenues increased by 44.1% year-over-year to US$701.0 million for the fourth fiscal quarter of 2018. |
| • | Operating income increased by 9.2% year-over-year to US$56.6 million for the fourth fiscal quarter of 2018. |
| • | Non-GAAP operating income, which excludes share-based compensation expenses, increased by 29.6% year-over-year to US$78.8 million for the fourth fiscal quarter of 2018. |
| • | Net income attributable to New Oriental increased by 17.4% year-over-year to US$65.1 million for the fourth fiscal quarter of 2018. |
| • | Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 35.6% year-over-year to US$87.3 million for the fourth fiscal quarter of 2018. |
Key Financial Results
| (in thousands US$, except per ADS(1) data) |
4Q FY2018 | 4Q FY2017 | % of change | |||||||||
| Net revenues |
701,001 | 486,353 | 44.1 | % | ||||||||
| Operating income |
56,585 | 51,836 | 9.2 | % | ||||||||
| Non-GAAP operating income (2)(3) |
78,800 | 60,808 | 29.6 | % | ||||||||
| Net income attributable to New Oriental |
65,082 | 55,416 | 17.4 | % | ||||||||
| Non-GAAP net income attributable to New Oriental (2)(3) |
87,297 | 64,388 | 35.6 | % | ||||||||
| Net income per ADS attributable to New Oriental - basic |
0.41 | 0.35 | 17.0 | % | ||||||||
| Net income per ADS attributable to New Oriental - diluted |
0.41 | 0.35 | 16.9 | % | ||||||||
| Non-GAAP net income per ADS attributable to New Oriental - basic(3)(4) |
0.55 | 0.41 | 35.0 | % | ||||||||
| Non-GAAP net income per ADS attributable to New Oriental - diluted(3)(4) |
0.55 | 0.41 | 35.0 | % | ||||||||
| (in thousands US$, except per ADS(1) data) |
FY2018 | FY2017 | % of change | |||||||||
| Net revenues |
2,447,430 | 1,799,509 | 36.0 | % | ||||||||
| Operating income |
262,959 | 262,149 | 0.3 | % | ||||||||
| Non-GAAP operating income(2)(3) |
320,402 | 282,436 | 13.4 | % | ||||||||
| Net income attributable to New Oriental |
296,130 | 274,457 | 7.9 | % | ||||||||
| Non-GAAP net income attributable to New Oriental(2)(3) |
353,573 | 294,744 | 20.0 | % | ||||||||
| Net income per ADS attributable to New Oriental - basic |
1.87 | 1.74 | 7.5 | % | ||||||||
| Net income per ADS attributable to New Oriental - diluted |
1.87 | 1.74 | 7.5 | % | ||||||||
| Non-GAAP net income per ADS attributable to New Oriental - basic(3)(4) |
2.24 | 1.87 | 19.5 | % | ||||||||
| Non-GAAP net income per ADS attributable to New Oriental - diluted(3)(4) |
2.23 | 1.87 | 19.5 | % | ||||||||
| (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 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. |
| (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 Fourth Fiscal Quarter Ended May 31, 2018
| • | Total student enrollments in academic subjects tutoring and test preparation courses increased by 44.9% year-over-year to approximately 2,058,000 for the fourth fiscal quarter of 2018. |
| • | The total number of schools and learning centers was 1,081 as of May 31, 2018, an increase of 226 compared to 855 as of May 31, 2017, and an increase of 81 compared to 1,000 as of February 28, 2018. The total number of schools was 87 as of May 31, 2018. |
Michael Minhong Yu, New Oriental’s Executive Chairman, commented, “We are pleased to conclude the final quarter of fiscal year 2018 with sustained acceleration in our top line growth as well as student enrollments. In the fourth quarter, we recorded a top line growth of 44.1%, while student enrollments were up approximately 44.9% during the period. The strong top line performance was driven by the continued momentum of our K-12 after-school tutoring business with enrollment and revenue growth of approximately 52% and 52% year-over-year, respectively. For the full fiscal year, net revenues grew by 36%, with total enrollments up by 30.3%. Our key growth driver, K-12 after-school tutoring business, achieved approximately 46% increase in revenue in fiscal year 2018, contributing approximately 59% of our total revenue. Furthermore, our U-Can middle and high school all-subjects after-school tutoring business had a revenue growth of approximately 44%, while the POP Kids program grew by approximately 51% year-over-year. It is particularly encouraging that we have achieved consistent increase in our customer retention rate this year, which is a clear testament to our consistent high quality of service. We are confident about the overall market prospect, and well-placed to continue gaining market share over the long term.”
Chenggang Zhou, New Oriental’s Chief Executive Officer, added, “During the fiscal year, we continued to implement our ‘Optimize the Market’ strategy and step up our capacity expansion efforts in cities with robust growth momentum, while maintaining high operational efficiency. This enabled us to seize tremendous market opportunities with our standardized online and offline integrated education system. During the quarter, we added a net total of 81 learning centers in 37 existing cities. For fiscal year 2018, we added a total of 226 new facilities, including 200 new learning centers in existing cities, 11 offline training facilities in three new cities, 14 dual-teacher model facilities in six low-tier cities, and one kindergarten in Hong Kong. Altogether, our total square meters of classroom area by the end of fiscal 2018 increased by approximately 40% year-over-year. Furthermore, we proved highly successful in leveraging our online and offline integrated standardized teaching system in our core offline business including K-12 tutoring and overseas test preparation businesses.”
Stephen Zhihui Yang, New Oriental’s Chief Financial Officer, commented, “We are encouraged by the fact that even with the increase in our overall capacity by approximately 40% year-over-year, we had a constant year-over-year operating margin in our language training and test preparation business in this quarter, indicating that the margin pressure in the previous three quarters has eased off. Looking ahead into fiscal year 2019, we aim to add approximately 20-25% new teaching facilities in existing cities mainly in our K-12 after-school tutoring business. In addition, we will continue to expand our businesses into remote areas in China through the rolling out of dual-teacher model schools and new initiatives in our pure online K-12 after-school tutoring. We will continue to uphold the healthy balance between our strong growth momentum and cost control with our efforts in improving the utilization rate of our facilities. With these strategies in place, we are confident in our endeavor in delivering sustainable long-term value to our customers and shareholders.”
Financial Results for the Fourth Fiscal Quarter Ended May 31, 2018
Net Revenues
For the fourth fiscal quarter of 2018, New Oriental reported net revenues of US$701.0 million, representing a 44.1% increase year-over-year. Net revenues from educational programs and services for the fourth fiscal quarter were US$573.3 million, representing a 40.6% 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 fourth fiscal quarter of 2018 increased by 44.9% year-over-year to approximately 2,058,000.
Operating Costs and Expenses
Operating costs and expenses for the quarter were US$644.4 million, representing a 48.3% increase year-over-year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were US$622.2 million, representing a 46.2% increase year-over-year.
| • | Cost of revenues increased by 50.3% year-over-year to US$299.5 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 52.4% year-over-year to US$101.0 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 44.4% year-over-year to US$243.9 million. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, were US$221.7 million, representing a 38.6% increase year-over-year. |
Total share-based compensation expenses, which were allocated to related operating costs and expenses, increased by 147.6% to US$22.2 million in the fourth fiscal quarter of 2018.
Operating Income and Operating Margin
Operating income was US$56.6 million, a 9.2% increase from US$51.8 million in the same period of the prior fiscal year. Non-GAAP income from operations for the quarter was US$78.8 million, a 29.6% increase from US$60.8 million in the same period of the prior fiscal year.
Operating margin for the quarter was 8.1%, compared to 10.7% in the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses, for the quarter was 11.2%, compared to 12.5% in the same period of the prior fiscal year.
Net Income and EPS
Net income attributable to New Oriental for the quarter was US$65.1 million, representing a 17.4% increase from the same period of the prior fiscal year. Basic and diluted earnings per ADS attributable to New Oriental were US$0.41 and US$0.41, respectively.
Non-GAAP Net Income and Non-GAAP EPS
Non-GAAP net income attributable to New Oriental for the quarter was US$87.3 million, representing a 35.6% increase from the same period of the prior fiscal year. Non-GAAP basic and diluted earnings per ADS attributable to New Oriental were US$0.55 and US$0.55, respectively.
Cash Flow
Net operating cash flow for the fourth fiscal quarter of 2018 was approximately US$294.7 million. Capital expenditures for the quarter were US$54.4 million, which were primarily attributable to the opening of 96 learning centers and renovations at existing learning centers.
Balance Sheet
As of May 31, 2018, New Oriental had cash and cash equivalents of US$983.3 million, compared to US$641.0 million as of May 31, 2017. In addition, the Company had US$107.7 million in term deposits, US$1,623.8 million in short-term investment.
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 fourth quarter of fiscal year 2018 was US$1,270.2 million, an increase of 46.6% from US$866.6 million at the end of the fourth quarter of fiscal year 2017.
Financial Results for the Fiscal Year Ended May 31, 2018
For the fiscal year 2018 ended May 31, 2018, New Oriental reported net revenues of US$2,447.4 million, representing a 36.0% increase year-over-year.
Total student enrollments in academic subjects tutoring and test preparation courses in the fiscal year 2018 increased by 30.3% to approximately 6,329,500.
Operating income for the fiscal year 2018 was US$263.0 million, representing a 0.3% increase year-over-year. Non-GAAP income from operations for the fiscal year 2018 was US$320.4 million, representing a 13.4% increase year-over-year.
Operating margin for the fiscal year 2018 was 10.7%, compared to 14.6% for the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses for the fiscal year 2018, was 13.1%, compared to 15.7% for the same period of the prior fiscal year.
Net income attributable to New Oriental for the fiscal year 2018 was US$296.1 million, representing a 7.9% increase year-over-year. Basic and diluted net income per ADS attributable to New Oriental for the fiscal year 2018 amounted to US$1.87 and US$1.87, respectively.
Non-GAAP net income attributable to New Oriental for the fiscal year 2018 was US$353.6 million, representing a 20.0% increase year-over-year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental for the fiscal year 2018 amounted to US$2.24 and US$2.23, respectively.
Outlook for First Quarter of Fiscal Year 2019
New Oriental expects total net revenues in the first quarter of fiscal year 2019 (June 1, 2018 to August 31, 2018) to be in the range of US$829.9 million to US$850.0 million, representing year-over-year growth in the range of 26% to 29%. The growth rate tends to be the slowest in the first quarter as compared to the other quarters due to seasonality. In view of this, we anticipate an upward trend to emerge throughout the year.
The projected growth rate of revenue, when calculated in our functional currency Renminbi, is expected to be in the range of 24% to 27% for the first quarter of fiscal year 2019. The conversion between Renminbi and US dollars, where applicable, is made at the rate of RMB6.6672 to US$1.00 for the first 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 July 24, 2018, U.S. Eastern Time (8 PM on July 24, 2018, 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 “6276139.”
A replay of the conference call may be accessed by phone at the following number until August 1, 2018:
| International: | +61-2-8199-0299 | |
| Passcode: | 6276139 |
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 fourth quarter of fiscal year 2018, 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:
Ms. Nan Dong
FTI Consulting
Tel: +852-3768-4569
Email: nan.dong@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 May 31 | As of May 31 | |||||||
| 2018 | 2017 | |||||||
| (Unaudited) | (Audited) | |||||||
| USD | USD | |||||||
| ASSETS: |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
983,319 | 641,018 | ||||||
| Restricted cash, current |
47 | 44 | ||||||
| Term deposits |
107,741 | 195,085 | ||||||
| Short-term investments |
1,623,763 | 1,312,942 | ||||||
| Accounts receivable, net |
3,179 | 3,343 | ||||||
| Inventory |
40,175 | 31,742 | ||||||
| Prepaid expenses and other current assets, net |
182,095 | 119,397 | ||||||
| Amounts due from related parties, current |
1,595 | 5,948 | ||||||
| Long-term investments due within one year |
— | 16,743 | ||||||
|
|
|
|
|
|||||
| Total current assets |
2,941,914 | 2,326,262 | ||||||
|
|
|
|
|
|||||
| Property and equipment, net |
449,592 | 282,800 | ||||||
| Land use rights, net |
3,785 | 3,668 | ||||||
| Amounts due from related parties, non-current |
2,226 | 1,748 | ||||||
| Deferred tax assets, net |
43,323 | 28,858 | ||||||
| Long-term deposit |
40,099 | 24,023 | ||||||
| Long-term prepaid rent |
191 | 849 | ||||||
| Restricted cash, non-current |
3,399 | 3,608 | ||||||
| Intangible assets, net |
8,544 | 4,005 | ||||||
| Goodwill, net |
31,729 | 14,083 | ||||||
| Long-term investments, net |
433,333 | 217,259 | ||||||
| Other non-current assets |
19,577 | 17,816 | ||||||
|
|
|
|
|
|||||
| Total assets |
3,977,712 | 2,924,979 | ||||||
|
|
|
|
|
|||||
| LIABILITIES, MEZZANINE EQUITY AND EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable (including accounts payable of the consolidated VIE without recourse to New Oriental of US$24,138 and US$39,279 as of May 31, 2017 and May 31, 2018, respectively) |
39,889 | 24,258 | ||||||
| Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to New Oriental of US$238,864 and US$335,955 as of May 31, 2017 and May 31, 2018, respectively) |
373,537 | 260,700 | ||||||
| Income taxes payable (including income tax payable of the consolidated VIE without recourse to New Oriental of US$40,306 and US$54,844 as of May 31, 2017 and May 31, 2018, respectively) |
67,233 | 51,045 | ||||||
| Amounts due to related parties (including amounts due to related parties of the consolidated VIE without recourse to New Oriental of US$48 and US$30 as of May 31, 2017 and May 31, 2018, respectively) |
30 | 48 | ||||||
| Deferred revenue (including deferred revenue of the consolidated VIE without recourse to New Oriental of US$833,932 and US$1,244,748 as of May 31, 2017 and May 31, 2018, respectively) |
1,270,195 | 866,630 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
1,750,884 | 1,202,681 | ||||||
|
|
|
|
|
|||||
| Deferred tax liabilities (including deferred tax liabilities of the consolidated VIE without recourse to New Oriental of US$2,174 and US$12,629 as of May 31, 2017 and May 31, 2018, respectively) |
20,773 | 2,220 | ||||||
|
|
|
|
|
|||||
| Total long-term liabilities |
20,773 | 2,220 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
1,771,657 | 1,204,901 | ||||||
|
|
|
|
|
|||||
| Mezzanine Equity |
||||||||
|
|
|
|
|
|||||
| Redeemable non-controlling interests |
206,624 | — | ||||||
|
|
|
|
|
|||||
| Shareholders’ Equity |
||||||||
| New Oriental Education & Technology Group Inc. shareholders’ equity |
1,982,718 | 1,680,948 | ||||||
| Non-controlling interests |
16,713 | 39,130 | ||||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
1,999,431 | 1,720,078 | ||||||
|
|
|
|
|
|||||
| Total liabilities, mezzanine equity and shareholders’ equity |
3,977,712 | 2,924,979 | ||||||
|
|
|
|
|
|||||
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 May 31 | ||||||||
| 2018 | 2017 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| USD | USD | |||||||
| Net Revenues: |
||||||||
| Educational programs and services |
573,323 | 407,657 | ||||||
| Books and others |
127,678 | 78,696 | ||||||
|
|
|
|
|
|||||
| Total net revenues |
701,001 | 486,353 | ||||||
|
|
|
|
|
|||||
| Operating costs and expenses (note 1): |
||||||||
| Cost of revenues |
299,465 | 199,257 | ||||||
| Selling and marketing |
101,046 | 66,307 | ||||||
| General and administrative |
243,905 | 168,953 | ||||||
|
|
|
|
|
|||||
| Total operating costs and expenses |
644,416 | 434,517 | ||||||
|
|
|
|
|
|||||
| Operating income |
56,585 | 51,836 | ||||||
|
|
|
|
|
|||||
| Other income, net |
23,652 | 18,879 | ||||||
| Provision for income taxes |
(16,148 | ) | (14,460 | ) | ||||
| Loss from equity method investments |
(370 | ) | (346 | ) | ||||
| Net income |
63,719 | 55,909 | ||||||
|
|
|
|
|
|||||
| Add: Net loss (income) attributable to the non-controlling interests |
1,363 | (493 | ) | |||||
|
|
|
|
|
|||||
| Net income attributable to New Oriental Education & Technology Group Inc. |
65,082 | 55,416 | ||||||
|
|
|
|
|
|||||
| Net income per share attributable to New Oriental-Basic |
0.41 | 0.35 | ||||||
| Net income per share attributable to New Oriental-Diluted |
0.41 | 0.35 | ||||||
| Net income per ADS attributable to New Oriental-Basic (note 2) |
0.41 | 0.35 | ||||||
| Net income per ADS attributable to New Oriental-Diluted (note 2) |
0.41 | 0.35 | ||||||
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 May 31 | ||||||||
| 2018 | 2017 | |||||||
| USD | USD | |||||||
| General and administrative expenses |
243,905 | 168,953 | ||||||
| Share-based compensation expense in general and administrative expenses |
22,215 | 8,972 | ||||||
|
|
|
|
|
|||||
| Non-GAAP general and administrative expenses |
221,690 | 159,981 | ||||||
|
|
|
|
|
|||||
| Total operating costs and expenses |
644,416 | 434,517 | ||||||
| Share-based compensation expenses |
22,215 | 8,972 | ||||||
|
|
|
|
|
|||||
| Non-GAAP operating costs and expenses |
622,201 | 425,545 | ||||||
|
|
|
|
|
|||||
| Operating income |
56,585 | 51,836 | ||||||
| Share-based compensation expenses |
22,215 | 8,972 | ||||||
|
|
|
|
|
|||||
| Non-GAAP operating income |
78,800 | 60,808 | ||||||
|
|
|
|
|
|||||
| Operating margin |
8.1 | % | 10.7 | % | ||||
| Non-GAAP operating margin |
11.2 | % | 12.5 | % | ||||
| Net income attributable to New Oriental |
65,082 | 55,416 | ||||||
| Share-based compensation expenses |
22,215 | 8,972 | ||||||
|
|
|
|
|
|||||
| Non-GAAP net income attributable to New Oriental |
87,297 | 64,388 | ||||||
|
|
|
|
|
|||||
| Net income per ADS attributable to New Oriental- Basic (note 2) |
0.41 | 0.35 | ||||||
| Net income per ADS attributable to New Oriental- Diluted (note 2) |
0.41 | 0.35 | ||||||
| Non-GAAP net income per ADS attributable to New Oriental - Basic (note 2) |
0.55 | 0.41 | ||||||
| Non-GAAP net income per ADS attributable to New Oriental - Diluted (note 2) |
0.55 | 0.41 | ||||||
| Weighted average shares used in calculating basic net income per ADS (note 2) |
158,319,910 | 157,679,354 | ||||||
| Weighted average shares used in calculating diluted net income per ADS (note 2) |
158,934,539 | 158,211,421 | ||||||
| Non-GAAP income per share - basic |
0.55 | 0.41 | ||||||
| Non-GAAP income per share - diluted |
0.55 | 0.41 | ||||||
Notes:
Note 1: Share-based compensation expenses (in thousands) are included in the operating costs and expenses as follows:
| For the Three Months Ended May 31 | ||||||||
| 2018 | 2017 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| USD | USD | |||||||
| General and administrative expense |
22,215 | 8,972 | ||||||
|
|
|
|
|
|||||
| Total |
22,215 | 8,972 | ||||||
|
|
|
|
|
|||||
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 Year Ended May 31 | ||||||||
| 2018 | 2017 | |||||||
| (Unaudited) | (Audited) | |||||||
| USD | USD | |||||||
| Net Revenues: |
||||||||
| Educational programs and services |
2,165,152 | 1,608,954 | ||||||
| Books and others |
282,278 | 190,555 | ||||||
|
|
|
|
|
|||||
| Total net revenues |
2,447,430 | 1,799,509 | ||||||
|
|
|
|
|
|||||
| Operating costs and expenses (note 1): |
||||||||
| Cost of revenues |
1,065,740 | 749,586 | ||||||
| Selling and marketing |
324,249 | 232,826 | ||||||
| General and administrative |
794,482 | 554,948 | ||||||
|
|
|
|
|
|||||
| Total operating costs and expenses |
2,184,471 | 1,537,360 | ||||||
|
|
|
|
|
|||||
| Operating income |
262,959 | 262,149 | ||||||
|
|
|
|
|
|||||
| Other income, net |
94,065 | 68,560 | ||||||
| Provision for income taxes |
(59,408 | ) | (50,624 | ) | ||||
| Loss from equity method investments |
(379 | ) | (3,289 | ) | ||||
| Net income |
297,237 | 276,796 | ||||||
|
|
|
|
|
|||||
| Add: Net (income) attributable to the non-controlling interests |
(1,107 | ) | (2,339 | ) | ||||
|
|
|
|
|
|||||
| Net income attributable to New Oriental Education & Technology Group Inc. |
296,130 | 274,457 | ||||||
|
|
|
|
|
|||||
| Net income per share attributable to New Oriental-Basic |
1.87 | 1.74 | ||||||
| Net income per share attributable to New Oriental-Diluted |
1.87 | 1.74 | ||||||
| Net income per ADS attributable to New Oriental-Basic (note 2) |
1.87 | 1.74 | ||||||
| Net income per ADS attributable to New Oriental-Diluted (note 2) |
1.87 | 1.74 | ||||||
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 Year Ended May 31 | ||||||||
| 2018 | 2017 | |||||||
| USD | USD | |||||||
| General and administrative expenses |
794,482 | 554,948 | ||||||
| Share-based compensation expense in general and administrative expenses |
57,443 | 20,287 | ||||||
|
|
|
|
|
|||||
| Non-GAAP general and administrative expenses |
737,039 | 534,661 | ||||||
|
|
|
|
|
|||||
| Total operating costs and expenses |
2,184,471 | 1,537,360 | ||||||
| Share-based compensation expenses |
57,443 | 20,287 | ||||||
|
|
|
|
|
|||||
| Non-GAAP operating costs and expenses |
2,127,028 | 1,517,073 | ||||||
|
|
|
|
|
|||||
| Operating income |
262,959 | 262,149 | ||||||
| Share-based compensation expenses |
57,443 | 20,287 | ||||||
|
|
|
|
|
|||||
| Non-GAAP operating income |
320,402 | 282,436 | ||||||
|
|
|
|
|
|||||
| Operating margin |
10.7 | % | 14.6 | % | ||||
| Non-GAAP operating margin |
13.1 | % | 15.7 | % | ||||
| Net income attributable to New Oriental |
296,130 | 274,457 | ||||||
| Share-based compensation expenses |
57,443 | 20,287 | ||||||
|
|
|
|
|
|||||
| Non-GAAP net income to New Oriental |
353,573 | 294,744 | ||||||
|
|
|
|
|
|||||
| Net income per ADS attributable to New Oriental- Basic (note 2) |
1.87 | 1.74 | ||||||
| Net income per ADS attributable to New Oriental- Diluted (note 2) |
1.87 | 1.74 | ||||||
| Non-GAAP net income per ADS attributable to New Oriental - Basic (note 2) |
2.24 | 1.87 | ||||||
| Non-GAAP net income per ADS attributable to New Oriental - Diluted (note 2) |
2.23 | 1.87 | ||||||
| Weighted average shares used in calculating basic net income per ADS (note 2) |
158,168,794 | 157,551,320 | ||||||
| Weighted average shares used in calculating diluted net income per ADS (note 2) |
158,556,500 | 157,986,394 | ||||||
| Non-GAAP income per share - basic |
2.24 | 1.87 | ||||||
| Non-GAAP income per share - diluted |
2.23 | 1.87 | ||||||
Notes:
Note 1: Share-based compensation expenses (in thousands) are included in the operating costs and expenses as follows:
| For the Year Ended May 31 | ||||||||
| 2018 | 2017 | |||||||
| (Unaudited) | (Audited) | |||||||
| USD | USD | |||||||
| General and administrative expense |
57,443 | 20,287 | ||||||
|
|
|
|
|
|||||
| Total |
57,443 | 20,287 | ||||||
|
|
|
|
|
|||||
Note 2: Each ADS represents one common share.