PR Newswire
BEIJING, July 23, 2019
BEIJING, July 23, 2019 /PRNewswire/ -- New Oriental Education & Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU), the largest provider of private educational services in China, today announced its unaudited financial results for the fourth fiscal quarter ended May 31, 2019.
Financial Highlights for the Fourth Fiscal Quarter Ended May 31, 2019
Key Financial Results
(in thousands US$, except per ADS(1) data) | 4Q FY2019 | 4Q FY2018 | % of |
Net revenues | 842,851 | 701,001 | 20.2% |
Operating income | 76,972 | 56,585 | 36.0% |
Non-GAAP operating income (2)(3) | 102,712 | 78,800 | 30.3% |
Net income attributable to New Oriental | 43,248 | 65,082 | -33.5% |
Non-GAAP net income attributable to New Oriental (2)(3) | 95,075 | 87,297 | 8.9% |
Net income per ADS attributable to New Oriental - basic | 0.27 | 0.41 | -33.4% |
Net income per ADS attributable to New Oriental - diluted | 0.27 | 0.41 | -33.6% |
Non-GAAP net income per ADS attributable to New Oriental | 0.60 | 0.55 | 9.2% |
Non-GAAP net income per ADS attributable to New Oriental | 0.60 | 0.55 | 8.8% |
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(in thousands US$, except per ADS(1) data) | FY2019 | FY2018 | % of |
Net revenues | 3,096,491 | 2,447,430 | 26.5% |
Operating income | 305,534 | 262,959 | 16.2% |
Non-GAAP operating income(2)(3) | 376,870 | 320,402 | 17.6% |
Net income attributable to New Oriental | 238,065 | 296,130 | -19.6% |
Non-GAAP net income attributable to New Oriental(2)(3) | 411,080 | 353,573 | 16.3% |
Net income per ADS attributable to New Oriental - basic | 1.50 | 1.87 | -19.7% |
Net income per ADS attributable to New Oriental - diluted | 1.50 | 1.87 | -19.9% |
Non-GAAP net income per ADS attributable to New Oriental | 2.60 | 2.24 | 16.2% |
Non-GAAP net income per ADS attributable to New Oriental | 2.58 | 2.23 | 15.9% |
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(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 | |||
(4) The Non-GAAP net income per ADS is computed using Non-GAAP net income and the same number of |
Operating Highlights for the Fourth Fiscal Quarter Ended May 31, 2019
Michael Minhong Yu, New Oriental's Executive Chairman, commented, "We are delighted to conclude the fiscal year 2019 with continued robust growth on the top line as well as improvement in operating margin. In the fourth quarter, we recorded a top line growth of 20.2%, or 28.4% if computed in Renminbi. Our key growth driver, the K-12 after-school tutoring business, achieved a year-over-year revenue growth of approximately 28.5%, or 37.2% if computed in Renminbi. Furthermore, our U-Can middle and high school all-subjects after-school tutoring business grew by approximately 27.2%, or 35.9% if computed in Renminbi, while our POP Kids program achieved a growth of approximately 31.0%, or 39.9% if computed in Renminbi. Looking ahead, we will remain focused on enhancing the quality and standards of our educational products and services, and strive to deliver maximum value to our students."
Chenggang Zhou, New Oriental's Chief Executive Officer, added, "We once again delivered a strong set of results through our execution of the well-proven "Optimize the Market" strategy. During the quarter, we added a net total of 65 learning centers in existing cities and opened three new offline training schools and one learning center in the cities of Baotou, Changshu and Yuci. In the fiscal year 2019, we added a total of 152 new facilities, including 141 new learning centers in existing cities, nine offline training facilities in six new cities and two dual-teacher model facilities in two low-tier cities. Altogether, the total square meters of our classroom area by the end of the fiscal year 2019 increased by approximately 24% year-over-year. We also continued to strategically deepen our investment into the dual-teacher model classes and new initiatives for K-12 tutoring in our pure online education platform, Koolearn.com. With the innovative application of technology in our education services, we are well-placed to continue to capture new business opportunities in lower-tier cities and remote areas."
Stephen Zhihui Yang, New Oriental's Chief Financial Officer, commented, "Our capacity grew steadily throughout the entire fiscal year, in line with our expansion plan, while we continued to emphasize on improving our operational efficiency. Riding on last quarter's strong bottom line performance, we once again delivered another year-over-year operating margin expansion in this quarter. During the quarter, our non-GAAP operating income increased by 30.3% year over year to approximately US$102.7 million, and non-GAAP operating margin rose by 100 basis points to 12.2% from 11.2% a year ago. As we enter the fiscal year 2020, we will continue to leverage our online and offline integrated education system across all business lines, and improve efficiency by using standardized, modularized and systemized operating process. We are confident that we will be able to deliver continued margin expansion, and generate sustainable long-term value to our customers and shareholders."
Financial Results for the Fourth Fiscal Quarter Ended May 31, 2019
Net Revenues
For the fourth fiscal quarter of 2019, New Oriental reported net revenues of US$842.9 million, representing a 20.2% increase year-over-year. Net revenues from educational programs and services for the fourth fiscal quarter were US$717.0 million, representing a 25.1% 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 2019 increased by 33.9% year-over-year to approximately 2,756,000.
Operating Costs and Expenses
Operating costs and expenses for the quarter were US$765.9 million, representing an 18.9% increase year-over-year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were US$740.2 million, representing a 19.0% increase year-over-year.
Total share-based compensation expenses, which were allocated to related operating costs and expenses, increased by 15.9% to US$25.7 million in the fourth fiscal quarter of 2019.
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