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 New Oriental (NYSE:EDU)

Tuesday, January 21, 2014
Comments & Business Outlook

Second Quarter 2014 Financial Results

  • Total net revenues increased by 25.6% year-over-year to US$208.3 million from US$165.9 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS were US$0.03 and US$0.03, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.06 and US$0.06, respectively.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "We celebrated the 20th anniversary of New Oriental's establishment on November 16, 2013 at the Great Hall of the People, and I'm very pleased that we're capping this important milestone with a stellar set of quarterly financial results. We experienced robust revenue growth of 25.6% and continued strong net income growth of 127.1% year-over-year. Our student enrollments grew by 11.8% year-over-year to about 565,100, mostly driven by our K-12 all-subjects after-school tutoring business which achieved 16% year-over-year growth to about 308,800 enrollments. Our solid quarterly top-line and student enrollment growth is particularly impressive considering we ended the second fiscal quarter with 711 schools and learning centers, 33 fewer than the year-ago period total of 744. This demonstrates strong organic growth and operating efficiency gains in our learning centers. We opened 11 new learning centers in 9 fast growing and high profit markets and closed 13 learning centers, including 6 underperforming ones, during the quarter. To meet the seasonally higher market demand for K-12 after-school tutoring in the coming winter and spring quarters, we will continue to open new learning centers in fast growing cities over the rest of this fiscal year."

Outlook for Third Quarter of Fiscal Year 2014

New Oriental expects its total net revenues in the third quarter of fiscal year 2014 (December 1, 2013 to February 28, 2014) to be in the range of US$260.0 million to US$270.9 million, representing year-over-year growth in the range of 19% to 24%. This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Wednesday, October 23, 2013
Comments & Business Outlook

First Quarter 2013 Financial Results

  • Total net revenues increased by 15.7% year-over-year to US$388.7 million from US$335.8 million in the same period of the prior fiscal year.
  • Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.85 and US$0.84, respectively vs. last year US$0.66 and US$0.65.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "We are pleased to report strong financial results for the first quarter of fiscal year 2014 that further validate our 'Harvest the Market' strategy. We substantially improved profitability during the quarter, with net income growth of 31.9% year-over-year to approximately US$126.5 million, operating income growth of 33.4% year-over-year to approximately US$135.5 million, and operating cash flow growth of 55.9% year-over-year to approximately US$167.4 million. In the quarters ahead, we will continue to focus on improving operating efficiency to drive long-term healthy growth and deliver sustained shareholder value."

Mr. Yu continued, "We maintained a healthy top-line growth rate of 15.7% year-over-year in the first fiscal quarter. While this was slightly below our initial target, we achieved this revenue growth rate despite recording lower-than-normal growth in student enrollments and closing 18 underperforming learning centers. Student enrollments in the quarter increased 2.3% year-over-year to approximately 919,400, with a number of factors dampening the growth rate. First, we continue to experience a slowdown in our legacy adult English and domestic college English test preparation business lines, which saw enrollments decrease by 14% and 6%, respectively, year-on-year. Second, we closed 18 underperforming learning centers in the quarter while opening just five new learning centers. By comparison, in the same period last year we added a net of 62 learning centers. Third, we continue to see market demand shifting towards smaller classes and VIP formats. As a result, enrollments in our large class formats declined by about 80,600 from 429,900 (or approximately 45% of our total enrollments) in the first fiscal quarter of 2013 to about 349,300 (or approximately 36% of our total enrollments) in the first fiscal quarter of 2014. Finally, our Shanghai school continued to underperform during the first quarter, with enrollments declining by about 12%."

Mr. Yu added, "Our first fiscal quarter is the seasonally strongest quarter for our most profitable overseas test preparation business but is not a peak quarter for our rapidly growing K-12 after-school tutoring business. Looking ahead, we expect revenues and enrollments to improve considerably in the next several quarters driven by growth in K-12 after-school tutoring enrollments as students prepare for final examinations at the end of the Autumn and Spring semesters, and for the critical gaokao (college entrance examination) and zhongkao (high school entrance examination) administered in early June of each year. Furthermore, we expect to open a net of approximately 20 to 30 new learning centers for the remainder of this fiscal year, starting from this month. These will be located in certain fast growing, high profit markets and will enable us to cater to strong demand for our K-12 after-school tutoring classes in these regions."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "We are very pleased with the substantial operating efficiency gains achieved since our successful pivot from our "Occupy the Market" to our "Harvest the Market" strategy last November, as we built on our leading position as China's preeminent language training and test preparation training school for K-College students. While we recorded slower top line growth in June, we experienced a nice rebound in demand in July and August. This has contributed to a strong deferred revenue balance of US$323.7 million at the end of the first quarter of fiscal year 2014. This represents an increase of 32.9% as compared to US$243.6 million at the end of the first quarter of fiscal year 2013. This pick-up in demand has continued into September and the first half of October where we have recorded a noticeable 8.3% increase in student enrollments year-over-year and an approximately 23% increase year-over-year in cash receipts, or cash collected in advance for enrollments, for this six-week period. As a result of this pick-up in demand, we have raised our outlook for revenue growth for the second fiscal quarter 2014 to a range of 22% to 27%."

Mr. Hsieh continued, "In this first fiscal quarter of 2014 we also successfully improved gross margins by 110 basis points to 65.9% from 64.8% in the year ago period, while achieving operating income growth of 33.4% year-over-year and GAAP operating margin improvement of 470 basis points year-over-year to 34.9%. As a result of this stronger-than-expected performance, we have raised our GAAP operating margin target for this 2014 fiscal year to a range of 16% to 17%, representing a 320 to 420 basis point improvement from the year ago period. This compares to our previous target of 15% to 16%, or a 220 to 320 basis point improvement."

Outlook for Second Quarter of Fiscal Year 2014

New Oriental expects its total net revenues in the second quarter of fiscal year 2014 (September 1, 2013, to November 30, 2013) to be in the range of US$202.4 million to US$210.7 million, representing year-over-year growth in the range of 22% to 27%. This forecast reflects New Oriental's current and preliminary view, which is subject to change.

 

 

 

 

 

 


Tuesday, July 23, 2013
Comments & Business Outlook

Fourth Quarter Financial Results

  • Total net revenues increased by 26.6% year-over-year to US$239.6 million from US$189.2 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental increased by 73.4% year-over-year to US$28.2 million from US$16.3 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 48.4% year-over-year to US$35.2 million from US$23.7 million in the same period of the prior fiscal year.
  • Operating income increased by 122.5% year-over-year to US$24.4 million from US$11.0 million in the same period of the prior fiscal year.
  • Non-GAAP operating income, which excludes share-based compensation expenses, increased by 70.5% year-over-year to US$31.4 million from US$18.4 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS were US$0.18 and US$0.18, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.23 and US$0.22, respectively. Each ADS represents one common share of the Company.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "We are pleased to finish our 2013 fiscal year by recording strong revenue growth of 26.6% and substantial operating income growth of 122.5% in the fourth fiscal quarter. We are particularly encouraged that operating margin from continuing operations for the fourth fiscal quarter improved dramatically to 10.2% from 5.8% in the same period a year ago, which is an advance of 440 basis points year-on-year. Our stellar financial results in the third and fourth fiscal quarters demonstrate how we have successfully pivoted from our 'Occupy the Market' strategy towards our 'Harvest the Market' strategy. Since commencing this strategic transition in November 2012, we have driven improvements in bottom line performance by slowing our pace of expansion and closing over 50 underperforming learning centers. We have also reduced total headcount by over 3,600 in the last three quarters to approximately 30,700 by the end of our fiscal year from 34,300 at the end of the first fiscal quarter. Heading into fiscal year 2014, we will continue to focus on implementing the 'Harvest the Market' strategy, and we are confident that this will enable us to continue delivering improvements in operational efficiency and overall profitability."

Mr. Yu added, "New Oriental is recognized as the market leader in teaching quality and course content, as demonstrated by our dominance in brand awareness and preference surveys in large Chinese cities in K-12 after school tutoring and overseas test preparation, and we will continue to invest heavily in extending our market leading position. For example, we are rapidly moving our content platform online and enhancing its functionality so that it can be easily accessed from mobile devices and personal computers. As a result of this multi-year initiative, our Koolearn.com online platform is already the leading education website among K-College learners, with over 8.5 million registered users in China. Consistent with the saying "Content is King" our strategy is to become the content provider of choice for online education platforms in China."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "In the full fiscal year 2013, we recorded total net revenues of US$959.9 million, representing a 27.4% increase year-over-year. This excellent top line performance was driven by continued strong growth in our two main business lines. Our overseas test preparation and overseas study consulting businesses recorded combined year-over-year gross revenue growth of about 28% to approximately US$350 million during the fiscal year, while our K-12 all-subjects after-school tutoring business recorded year-over-year gross revenue growth of about 40% to approximately US$411 millionin fiscal year 2013."

Mr. Hsieh continued, "Student enrollments grew by 6.1% to approximately 559,000 in the fourth fiscal quarter and by 5.7% to approximately 2,540,000 for the full fiscal year 2013. This was in line with our expectation for the period, as we transitioned towards the 'Harvest the Market' strategy. The deceleration in student enrollment growth rate compared to the previous fiscal year was largely due to two factors. First, we have strictly controlled the pace of expansion and closed or disposed of 73 underperforming learning centers during fiscal year 2013. Second, we continue to see a shift in market demand towards smaller classes and VIP formats, which have one teacher to a maximum of five students. As a result, enrollments in our large class formats have declined by about 200,000 from a peak of about 1.125 million in fiscal year 2011, when the large classes representing approximately 60% of educational services enrollments, to about 925,000 for fiscal year 2013, representing approximately 40% of educational services enrollments. Nevertheless, overall enrollment growth remains healthy and for the full fiscal year 2014 we are targeting continued strong revenue growth of approximately 18% to 22% driven by growth in enrollment and ASPs, and the continued shift in demand toward more expensive, smaller-size classes. Furthermore, we expect that the enrollment growth rate will pick up once again in the second half of fiscal year 2014 when we plan to open between 20 and 50 new learning centers in rapidly growing markets to take advantage of the busy Winter and Spring seasons. These are the peak periods for our classes aimed at students taking the Chinese college entrance exam, gaokao, and high school entrance exam,zhongkao, both of which are administered in early June each year.

Outlook for First Quarter of Fiscal Year 2014

The Company plans to continue its 'Harvest the Market' strategy in fiscal year 2014, focusing on high-quality, high-margin revenues to aggressively drive continued margin expansion and bottom line growth and to position the business for long term success.

Consistent with this strategy, in fiscal year 2014 New Oriental forecasts revenues to grow by 18% to 22% year-on-year, GAAP operating margins to improve between 200 and 300 basis points to between 15% and 16% compared to 12.8% in fiscal year 2013, and non-GAAP operating margins to increase to between 18% and 19% compared to 15.6% in fiscal year 2013.

With respect to the first quarter, New Oriental expects total net revenues in the first quarter of fiscal year 2014 (June 1, 2013, to August 31, 2013) to be in the range of US$389.6 million to US$406.4 million, representing year-over-year growth in the range of 16% to 21%. This lower than normal projected revenue growth rate reflects the anticipated impact on the Company's top-line performance of efficiency and margin expansion initiatives as well as certain macroeconomic factors. More specifically, it reflects:

  1. The closure or disposal of 73 underperforming learning centers during fiscal year 2013.
  2. The fact that no new learning centers have been opened to date in the first fiscal quarter through July 22, 2013, compared to the 89 new learning centers opened in the first quarter of fiscal year 2013.
  3. Intensifying local competition particularly in large cities such as Beijing and Shanghai.
  4. The slowing Chinese economy which has adversely affected discretionary consumer purchases notwithstanding the fact that high end educational services remain more resilient than most other discretionary consumer categories.

This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Special Dividend

Declaration of Special Cash Dividend

New Oriental's board of directors has declared a special cash dividend in the amount of US$0.35 per ADS. This represents a 17% increase from the special dividend of US$0.30 paid in September 2012. The cash dividend will be paid on October 7, 2013, to shareholders of record at the close of business on September 6, 2013. The ex-dividend date will be September 4, 2013. The aggregate amount of cash dividends to be paid is approximatelyUS$54 million, which will be funded by surplus cash on the Company's balance sheet.


Tuesday, June 18, 2013
Notable Share Transactions

BEIJING, June 18, 2013 /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 the completion of the US$50 million share repurchase program authorized by its board of directors in April 2013.

Under the program, the Company repurchased 2,445,500 shares, representing approximately 1.6% of its outstanding shares as at June 18, 2013, at an average price of US$20.40 per share during the period from April 29 to June 14, 2013.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented,  "The successful execution of this share repurchase program demonstrates both our continued commitment to returning value to our shareholders and our confidence in the long-term potential of the company. Given our strong cash position, we believe that the program represented a good investment at this time. We continue to execute our 'Harvest the Market' strategy, which is focused on improving operational efficiency and increasing profitability, and we are confident that this approach will deliver sustained margin improvement and drive long-term growth."


Wednesday, April 24, 2013
Comments & Business Outlook

 Third Fiscal Quarter 2013 Financial Results

  • Net Revenues of US$218.5 million, representing a 28.6% increase year-over-year.
  • Non-GAAP net income attributable to New Oriental for the quarter was US$34.7 million, representing a 23.9% increase from the same period of the prior fiscal year. Non-GAAP basic and diluted earnings per ADS attributable to New Oriental were US$0.22 and US$0.22, respectively. 

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "We are pleased to report solid results for the third fiscal quarter with sustained top-line growth of 28.6%, which was well above the guidance range of 22% to 27% growth, as well as stronger than expected operating income growth of 35.9%, and profit growth of 25% year-over-year. Further, during the quarter we achieved notable progress in a number of important areas. For instance, we experienced encouraging improvements at our two largest schools in Beijing andShanghai. As a result of an effective restructuring program over the past few months, these two schools recorded a combined increase in revenues of 17% and a combined increase in net income of 9% year-over-year. Moreover, we are encouraged by the year-on-year improvement in overall operating margin this quarter, following margin compression in the previous five quarters when we focused on rapid expansion of our learning center network. During the period, we continued to transition to our 'Harvest the Market' strategy and, as a result, recorded GAAP operating margin of 10.8%, compared to 10.2% in the same period a year ago."

Mr. Yu continued, "At the core of our 'Harvest the Market' strategy is an emphasis on improving operational efficiency and increasing profitability. We imposed strict top-down control over learning center openings and closed some underperforming learning centers in a few cities. We closed a total of 22 learning centers in the quarter and opened 11 learning centers in fast growing markets. We also reduced our total headcount by about 1,200 during the quarter. The 'Harvest the Market' strategy and accompanying operating discipline translated into healthy operating margin expansion in the third quarter and we expect continued improvement in operational efficiency in the coming quarters as we increase the utilization and class offerings in our existing facilities. While we have slowed our pace of expansion considerably, given the significant potential of the Chinese market, our strong presence in the key markets, and our outstanding brand advantage nationwide, we are confident that we can continue to maintain healthy top-line growth."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "The slight year-over-year decrease in enrollments this quarter was largely due to the closing of approximately 30 underperforming learning centers in the past two quarters and the late timing of Chinese New Year ("CNY") in 2013. CNY occurred on February 10 this year compared to January 23 last year, which meant that the winter holiday for most public schools fell approximately 10 days later in 2013 than in 2012. This shift, in turn, delayed a significant portion of student enrollment for our Spring semester classes, pushing sign-up from February to March this year. We have seen that spillover reflected in our early results for the fourth fiscal quarter. In the first six weeks of our fourth quarter, we recorded a noticeable 14% increase in enrollments year-over-year and a 34% increase year-over-year in cash receipts, or cash collected in advance for enrollments."

Mr. Hsieh continued, "To the best of our knowledge, as of the date of this earnings release we have not experienced a material negative impact on enrollments or revenues from the spread of the avian virus H7N9 inChina. We are hopeful that so long as the H7N9 outbreak can be contained, and there are no documented instances of human-to-human transmission, the Chinese government will not close education facilities or ban large gatherings of people."

Outlook for Fourth Quarter of Fiscal Year 2013

New Oriental expects its total net revenues in the fourth quarter of fiscal year 2013 (March 1, 2013, to May 31, 2013) to be in the range of US$232.8 million to US$242.2 million. Compared to the Company's reported net revenues for the fourth quarter of fiscal year 2012, which included revenues from ELITE English, year-over-year revenue growth is expected to be in the range of 20% to 25%. If the impact from the disposal of the ELITE English business is excluded, year-over-year revenue growth is expected to be in the range of 23% to 28%. This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Notable Share Transactions

Adoption of Share Repurchase Program

On April 23, 2013, New Oriental's board of directors authorized the repurchase of up to US$50 million of the Company's shares during the period from April 29, 2013, through July 31, 2013.


Tuesday, January 29, 2013
Comments & Business Outlook

Second Quarter 2013 Results

  • Total net revenues increased by 30.4% year-over-year to US$165.9 million from US$127.2 million in the same period of the prior fiscal year.
  • Loss from operations was US$26.9 million, compared to a loss of US$3.2 million in the same period of the prior fiscal year.
  • Non-GAAP loss from operations, which excludes share-based compensation expenses, was US$20.1 million, compared to non-GAAP income from operations of US$1.0 million in the same period of the prior fiscal year.
  • Net loss attributable to New Oriental was US$15.8 million, compared to net income attributable to New Oriental of US$3.3 million in the same period of the prior fiscal year.
  • Non-GAAP net loss attributable to New Oriental, which excludes share-based compensation expenses, was US$9.0 million, compared to non-GAAP net income attributable to New Oriental of US$7.5 million in the same period of the prior fiscal year.
  • Basic and diluted net loss attributable to New Oriental per ADS were US$0.10 and US$0.10, respectively. Non-GAAP basic and diluted net loss per ADS, which excludes share-based compensation expenses, were US$0.06 and US$0.06, respectively vs earnings per ADS of US$0.05 in the prior year period.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "We maintained healthy year-over-year top-line growth of 30.4% in the second fiscal quarter, and our revenue from second- and third-tier cities outside Beijing and Shanghai continued to grow significantly, by 40% year-over-year. While we slowed down our network expansion in the second quarter to focus on utilization, over the last four quarters we added a net of over 200 new learning centers, compared to just 80 over the four preceding quarters up to November 30, 2011, and this has put significant pressure on cost and expenses. These added pressures, combined with the seasonally low utilization, produced a net loss of US$15.8 million in the second quarter. The loss this quarter was also partly attributable to the expenses incurred in this quarter from the internal investigation and regulatory proceedings. Furthermore, our most profitable schools, in Beijing and Shanghai, continued to underperform, with revenues increasing by only 20% and net income falling over 50%. Our overseas test preparation business in Beijing, Shanghai and some other cities is facing growing competition as we reduce class sizes in accordance with market needs. Our overseas test preparation programs recorded a 7% year-over-year enrollment decrease and 22% year-over-year gross revenue growth."

Mr. Yu continued, "On the positive side, the execution of our 'Harvest the Market' strategy is making good progress. We slowed down our expansion considerably by only adding a net of 18 schools and learning centers during this quarter. We opened a new school in Shiyan city, integrated the newly acquired China Management Software Institute in Beijing, and added a net of 16 learning centers in around 10 second- and third-tier cities. Meanwhile, our total headcount was reduced by about 1,500 during the quarter, following net headcount increases in the previous three quarters. In order to improve our long-term profitability, we will continue to execute this strategy in the coming quarters, and we expect to return to profitability in the current quarter and improve bottom-line margins in a couple of quarters."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "Our sustained top-line growth was driven by the good performance of a number of our key business lines. First, our K-12 all-subjects after-school tutoring business recorded over 14% year-over-year enrollment growth and over 50% year-over-year gross revenue growth. Second, our VIP personalized classes across the board recorded year-over-year enrollment growth of about 25% to over 25,100 and year-over-year cash revenue growth of over 38% to over US$62 million in this quarter. Finally, our 'Vision Overseas Study Consulting' business continued its outstanding performance, with year-over-year revenue growth of over 97% to about US$7.5 million in the quarter."

Outlook for Third quarter of Fiscal Year 2013

New Oriental expects its total net revenues in the third quarter of fiscal year 2013 (December 1, 2012, to February 28, 2013) to be in the range of US$212.4 million to US$220.9 million, representing year-over-year growth in the range of 25% to 30%, excluding the impact from the disposal of the ELITE English business. Compared to the Company's reported net revenues for the third quarter of fiscal year 2012, which included revenues from ELITE English, the growth is in the range of 22% to 27%. This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Thursday, December 6, 2012
Comments & Business Outlook
BEIJING, December 6, 2012 /PRNewswire/ -- New Oriental Education and Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU) is the largest provider of private educational services in China. In view of the continued market activity in the Company's ADS, New Oriental would like to clarify that even though the Company's independent auditor is Deloitte Touche Tohmatsu CPA Ltd., the Company is not the Deloitte Touche Tohmatsu client referred to by the U.S. Securities and Exchange Commission in its proceedings initiated against the five accounting firms in China.

Monday, October 29, 2012
Comments & Business Outlook

Highlights for the Fiscal Quarter Ended August 31, 2012

  • Total net revenues increased by 25.8% year-over-year to US$335.8 million from US$266.9 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental increased by 5.7% year-over-year to US$95.9 million from US$90.7 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 5.2% year-over-year to US$102.6 million from US$97.5 million in the same period of the prior fiscal year.
  • Income from operations increased by 6.7% year-over-year to US$101.6 million from US$95.2 million in the same period of the prior fiscal year.
  • Non-GAAP income from operations, which excludes share-based compensation expenses, increased by 6.2% year-over-year to US$108.3 million from US$102.0 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS were US$0.62 and US$0.61, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.66 and US$0.65, respectively. Each ADS represents one common share of the Company.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "We are pleased to start our 2013 fiscal year with continued steady top-line growth, driven by our tremendous growth beyond tier-one cities. We opened 89 new learning centers, and closed 8 and disposed of 19 ELITE learning centers, with a net increase of 62 learning centers during the quarter. The majority of our new learning centers are located in second- and third-tier cities, as we work to achieve critical mass and economies of scale in these fast-growing markets. Revenue from these cities grew an impressive 35% as we were able to ramp up utilization quickly and efficiently. The rapid expansion of our learning-center network, however, had a negative impact on the bottom line, which was exacerbated by the weak performance of our Beijing and Shanghai schools and substantial expenses and diversion of management attention as a result of the SEC investigation and Muddy Waters' unfounded allegations against us.

"As we wind down our 'Occupy the Market' learning center expansion strategy where we nearly doubled our number of learning centers from 367 at May 31, 2010 to 726 as of August 31, 2012 in order to reach economies of scale in our 49 cities and to assist in attaining our goal of being number one or number two in every one of our 49 city markets within six years of establishment in each respective market, we will now shift our focus to substantially improving our profitability with our 'Harvest the Market' strategy. Our 'Harvesting the Market' strategy is comprised of: firstly, dramatically slowing down learning center growth and primarily opening centers in fast growing second-tier cities; secondly, increasing utilization rates at existing learning centers, closing down unprofitable learning centers and eliminating associated staff; thirdly, diligently controlling headcount, marketing and G&A expenses; and, finally, refraining from venturing into new business lines which require substantial upfront investments. We expect these monetization strategies to begin to pay off in our third fiscal quarter starting December 2012."

Mr. Yu continued, "We feel exonerated and vindicated by the findings of the Special Committee refuting and discrediting Muddy Waters' allegations. We hope to put this matter behind us and focus on running our business and improving the profitability of our operations through increasing learning center utilization and strict headcount and expense controls."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "We are pleased to see continued strong growth across our key business lines, with revenue from both our overseas test preparation programs and K-12 all-subjects after-school tutoring programs growing over 30% this quarter. Our VIP personalized classes continued their outstanding growth, with year-over-year cash revenue increasing by 85%. Our Vision Overseas Study Consulting business also continued to outperform, with year-over-year gross revenue growth of approximately 55% in the quarter."

Mr. Hsieh continued, "We are pleased to announce that four of our Chinese college entrance examination, or gaokao, students achieved the number one score in their respective provinces this year, and three of our students achieved the highest score in their respective cities. This exceeds last year's stellar performance in which four New Oriental students achieved the highest gaokaoscore in their respective provinces and one student achieved a number one score in his/her city. Our students' accolades and outstanding results demonstrate the excellent quality of New Oriental's education programs and further cement our position as the number one K-12 after school tutoring and gaokao test preparation school in China."

Outlook for Second quarter of Fiscal Year 2013

New Oriental expects its total net revenues in the second quarter of fiscal year 2013 (September 1, 2012, to November 30, 2012) to be in the range of US$165.0 million to US$171.6 million, representing year-over-year growth in the range of 25% to 30%. This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Monday, October 1, 2012
Company Rebuttal

BEIJING, October 1, 2012 /PRNewswire/ -- New Oriental Education and Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU), the largest provider of private educational services inChina, today announced that the Special Committee of the Board of Directors of the Company (the "Special Committee") has completed its review of certain allegations raised in a report issued by Muddy Waters on July 18, 2012 and has found no significant evidence to support these allegations. As previously announced, the Special Committee was formed on July 20, 2012, and is comprised of the three independent Directors of the Company, Mr. Denny Lee, Mr. Robin Yanhong Li, and Dr. John Zhuang Yang. The Special Committee retained Simpson Thacher & Bartlett LLP ("Simpson Thacher") to assist it in conducting an independent review of certain allegations contained in the Muddy Waters report; Simpson Thacher, in turn, has been assisted in its efforts by Ernst & Young (China) Advisory Limited and Commerce & Finance Law Offices.

Together with Simpson Thacher, the Special Committee focused its investigation on the three core allegations articulated in the Muddy Waters report, summarized as follows: (1) the allegation that some or all of the Company's schools are actually franchises-in-disguise and thus inaccurately inflate the Company's count of its own schools and its revenue said to be derived therefrom; (2) the allegation that the Company's financial statements do not accurately reflect enterprise income tax paid by the Beijing Haidian school; and (3) the allegation that the Company's consolidation of the financial results of the variable interest entity and its subsidiaries (collectively, the "VIE") into its own financials is improper because the Company does not have sufficient control over the VIE necessary for consolidation under U.S. GAAP. The scope of the Special Committee's investigation did not extend to examination of various general and un-particularized allegations for which the Muddy Waters report provided no specific detail.

The Special Committee's work on the "franchise" issue uncovered no significant evidence that supports the Muddy Waters allegation mentioned above. The evidence collected indicates that the Company does have ownership interests in its 55 schools and associated learning centers. The activity related to the 21 third parties with whom New Oriental has entered into brand "cooperation agreements" is entirely separate, is immaterial, and in any event is properly accounted for in the Company's financial statements.

The Special Committee's work on the tax issue uncovered no significant evidence that supports the Muddy Waters allegation mentioned above.

The Special Committee understands that the SEC's Division of Corporation Finance is engaged in a review of the Company's consolidation of the financial results of the VIE into the Company's consolidated financial statements. Accordingly, the Special Committee's work on that issue is likewise continuing.

The Company will continue to fully cooperate with the SEC on the issue concerning consolidation of the VIE. The Company will file a Form 12b-25 with the SEC to request an automatic extension for the filing of the Company's annual report on Form 20-F covering its fiscal year ended May 31, 2012, as permitted under Rule 12b-25 under the Securities Exchange Act of 1934, as amended.


Friday, July 20, 2012
Notable Share Transactions

BEIJING, July 20, 2012 /PRNewswire-Asia/ -- 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 that members of its senior management team, including its chairman and chief executive officer Michael Minhong Yu, director, president and chief financial officer Louis T. Hsieh, director and executive vice president Chenggang Zhou, executive president, domestic business Xiangdong Chen and senior vice president Yunlong Sha, have informed the Company of their intention to use their personal funds to purchase the Company's American depositary shares ("ADS") on the open market for an aggregate amount up to a maximum of $50 million within the next three months, in accordance with Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The senior management team who will participate in the share purchase plan has agreed not to sell any shares or ADS of the Company held by them or their affiliates for a period of six months commencing today.

Michael Minhong Yu, Chairman and Chief Executive Officer of New Oriental, commented, "We remain confident in the long-term prospects of New Oriental's business and this share purchase plan demonstrates our confidence."


Thursday, July 19, 2012
Company Rebuttal

BEIJING, July 19, 2012 /PRNewswire-Asia/ -- New Oriental Education and Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU), the largest provider of private educational services in China, today responded to the allegations raised in a report dated July 18, 2012 issued by Muddy Waters. New Oriental believes that the Muddy Waters report contains numerous errors of facts, misleading speculations and malicious interpretations of events.

As previously disclosed, New Oriental had 664 Company owned and operated schools and learning centers as of May 31, 2012. The Muddy Waters report alleged that a significant number of these schools and learning centers were instead operated by franchisees, and that the Company consolidates these franchisees' results of operations and assets as though they were the Company's own. The Muddy Waters report is wrong. New Oriental stands firmly by its statement that all of the 664 schools and learning centers as of May 31, 2012 were, and are, its own. Although New Oriental started a small pilot program beginning in fiscal year 2010 whereby it permits third parties in certain small cities to offer its "Pop Kids" English program and "New Oriental Star" kindergarten program under a brand name cooperation model, that pilot program is immaterial to the Company. Moreover, New Oriental has never included these cooperation facilities, which never exceeded 21 facilities in total, in the counts of its own schools and learning centers, nor has New Oriental included student enrollments from these cooperation facilities as its own student enrollments. New Oriental has properly recorded license and training fees paid to New Oriental by these cooperation facilities in New Oriental's revenues according to U.S. GAAP. For the fiscal years ended May 31, 2010 and 2011, New Oriental recognized revenues in an aggregate amount of US$35,000 and US$249,000, respectively, from license and training fees received from the cooperation facilities, representing 0.009% and 0.045% of New Oriental's total revenues, respectively.

New Oriental's Board of Directors has been informed of the allegations made by Muddy Waters and will consider and decide on the necessary and appropriate course of action in response to the allegations. New Oriental will release additional information concerning the allegations in due course. New Oriental is committed to providing full and accurate disclosure to investors and to rebutting any false claims that attempt to undermine confidence in New Oriental's business, management, operations and corporate structure


Tuesday, July 17, 2012
Investor Alert

SEC Investigation

On July 13, 2012, the Company was informed that the U.S. Securities & Exchange Commission (the "SEC") had issued a formal order of investigation captioned "In the Matter of New Oriental Education & Technology Group Inc." The Company believes that the investigation concerns whether there is a sufficient basis for the consolidation of Beijing New Oriental Education & Technology (Group) Co., Ltd., a variable interest entity of the Company, and its wholly-owned subsidiaries, into the Company's consolidated financial statements. The Company intends to fully cooperate with the SEC in its investigation.


Comments & Business Outlook

Highlights for the Fourth Fiscal Quarter Ended May 31, 2012

  • Total net revenues increased by 40.7% year-over-year to US$193.3 million from US$137.4 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental increased by 13.6% year-over-year to US$16.3 million from US$14.3 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 23.1% year-over-year to US$23.7 million from US$19.2 million in the same period of the prior fiscal year.
  • Income from operations decreased by 9.4% year-over-year to US$9.4 million from US$10.4 million in the same period of the prior fiscal year.
  • Non-GAAP income from operations, which excludes share-based compensation expenses, increased by 10.0% year-over-year to US$16.9 million from US$15.4 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS were US$0.10 and US$0.10, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.15 and US$0.15, respectively. Each ADS represents one common share of the Company.
  • Total student enrollments in academic subjects tutoring and test preparation courses increased by 7.7% year-over-year to approximately 527,000 from approximately 489,100 in the same period of the prior fiscal year.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "We are pleased to see strong revenue growth of 40.7% in the fourth fiscal quarter. We sustained a healthy top line growth trend in the full fiscal year 2012 with revenues of about US$771.7 million, up more than 38%, and student enrollments of over 2.4 million, up about 15%. Our student enrollment growth in the fourth fiscal quarter was 7.7%, below the average for the full fiscal year. The slower growth in student enrollment in the fourth fiscal quarter was primarily due to the early timing ofChinese New Year in 2012. Many students enrolled in New Oriental's Spring tutoring classes in February of the third fiscal quarter rather than in early March of the fourth fiscal quarter. As a result, we experienced strong enrollment growth of 21.6% in the third fiscal quarter and slower enrollment growth of 7.7% in the fourth fiscal quarter."

Mr. Yu continued, "During this quarter, we continued to execute on our plan for rapid expansion by adding another 56 new learning centers. Our total number of schools and learning centers increased from 487 as of the end of the last fiscal year to 664 as of the end of fiscal year 2012, representing a net addition of 177 for the fiscal year. Our total office and classroom space increased by more than 200,000 square meters in fiscal year 2012. In the quarters ahead, we will continue to add learning centers, albeit primarily smaller ones, particularly in the 48 cities outside of Beijing and Shanghai where we already have schools. In fiscal year 2012, our oldest and most mature schools in Beijing and Shanghai continued to experience a slowdown in combined top-line growth, which declined to about 29% in U.S. dollar terms. By comparison, our other schools saw top-line growth of about 43% in U.S. dollar terms. We continue to see enormous growth potential in our schools outside of Beijing and Shanghai and will maintain our expansion strategy to reach critical mass in these cities and secure our objective of being number one, or at least number two, in each of our city markets.

"Despite this heavy investment in our business, we still achieved our target of 30% growth on both the top and bottom lines in fiscal year 2012. However, non-GAAP operating margin declined to 18.3% in fiscal year 2012 from 20.1% in fiscal year 2011. In the coming fiscal year, we plan to carefully manage our facility and staff expansion, with a focus on balancing business growth with operational efficiency and profitability. By building more small-sized learning centers in existing cities, we will ensure that total office and classroom space increases at a lower rate compared to fiscal year 2012. We are confident that New Oriental's market leadership position combined with strong execution will ensure healthy growth and profitability in the long term."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "Our strong top-line performance in this fiscal year was led by sustained strong momentum for some key business lines. First, our overseas test preparation programs recorded year-over-year enrollment growth of about 7.3% to over 340,100, and year-over-year gross revenue growth of about 43% to about US$238 million in this fiscal year. Second, our K-12 all-subjects after-school tutoring business recorded year-over-year enrollment growth of over 25% to over 1,324,000 and year-over-year gross revenue growth of over 52% to about US$294 million in this fiscal year. Third, our VIP personalized classes recorded year-over-year enrollment growth of more than 61% to over 102,300 and year-over-year cash receipts growth of over 71% to about US$207 million in this fiscal year. Besides our language training and test preparation business, our Vision Overseas Study Consulting business recorded year-over-year gross revenue growth of approximately 85% to about US$42.5 million in this fiscal year."

Outlook for First Quarter of Fiscal Year 2013

New Oriental expects its total net revenues in the first quarter of fiscal year 2013 (June 1, 2012 toAugust 31, 2012) to be in the range of US$342.7 million to US$356.3 million, representing year-over-year growth in the range of 26% to 31%, respectively. The lower-than-normal projected revenue growth rate is primarily due to the following factors: (1) very challenging year-over-year comparisons with the first quarter of the fiscal year 2012 when revenue grew 41.4% and net income grew 45.5% year-over-year; (2) the negative impact from a slowing of Chinese consumer discretionary spending, even in traditionally resilient areas like education services; and (3) the expected lack of RMB currency translation benefit as RMB appreciation seems to have halted, and in some time periods reversed, its ascent vis--vis the U.S. Dollar, the Company's reporting currency. This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Wednesday, July 11, 2012
Corporate Structure Info.

BEIJING, July 11, 2012 /PRNewswire-Asia/ -- New Oriental Education and Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU), the largest provider of private educational services in China, is pleased to announce that it has further strengthened its corporate structure by simplifying the shareholding structure of Beijing New Oriental Education & Technology (Group) Co., Ltd. ("New Oriental China").

New Oriental China is a variable interest entity, or VIE, of the Company. Prior to the changes in the shareholding structure of New Oriental China that were initiated in December 2011, equity interests in New Oriental China had been held by eleven registered shareholders, including an entity controlled by Mr. Michael Minhong Yu, the founder, Chairman and Chief Executive Officer of the Company. These shareholders had entered into contractual arrangements to enable the Company to effectively control and be the primary beneficiary of New Oriental China. Except for the one shareholder, which is an entity controlled by Mr. Yu, all former ultimate shareholders of New Oriental China were former employees or shareholders of the Company who no longer work at the Company or ceased to have a meaningful stake in the Company. The Company believes that New Oriental China's equity interests should only be held by the shareholders whose interests are more closely aligned with those of the Company, and that the interests of Mr. Yu, who is the Company's founder, Chairman and Chief Executive Officer, are aligned with those of the Company, given the significant beneficial ownership Mr. Yu has in the Company and his continuing leadership position at the Company.

In light of the above and in an effort to further strengthen the Company's corporate structure and control over New Oriental China, the Company requested the ten former shareholders of New Oriental China to transfer all of their equity interests in New Oriental China to the one shareholder, which is an entity controlled by Mr. Yu, without consideration. These transfers began in December 2011 and were completed in January 2012 when the new shareholding structure was officially registered with the local administration for industry and commerce. Equity pledge agreements reflecting the new shareholding structure were executed in April 2012 and duly registered in May 2012. New Oriental China is now solely held by the entity controlled by Mr. Yu. Since 2005, this entity has been bound by the contractual arrangements it entered into with the Company's wholly-owned subsidiaries, which enable the Company to exercise effective control over and be the primary beneficiary of New Oriental China.

The aforementioned changes in New Oriental China's shareholding structure have had no adverse effect on the Company or its shareholders. They have not affected, and will not affect, the consolidation of New Oriental China in the Company's consolidated financial statements prepared in accordance with the U.S. GAAP throughout the period since 2005 and going forward.

The Company intends to continue to review and evaluate its corporate structure and make modifications to the existing contractual arrangements, if necessary and appropriate, for the purpose of enhancing the corporate structure and governance.


Tuesday, April 17, 2012
Comments & Business Outlook

Third Quarter 2011 Results

  • Total net revenues increased by 31.7% year-over-year to US$174.5 million from US$132.5 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental decreased by 3.7% year-over-year to US$22.4 million from US$23.3 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 5.3% year-over-year to US$28.0 million from US$26.6 million in the same period of the prior fiscal year.
  • Income from operations decreased by 21.8% year-over-year to US$16.6 million from US$21.2 million in the same period of the prior fiscal year.
  • Non-GAAP income from operations, which excludes share-based compensation expenses, decreased by 9.6% year-over-year to US$22.2 million from US$24.6 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS were US$0.14 and US$0.14, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.18 and US$0.18, respectively. Each ADS represents one common share of the Company.
  • Total student enrollments in academic subjects tutoring and test preparation courses increased by 21.6% year-over-year to approximately 596,100 from approximately 490,200 in the same period of the prior fiscal year.
  • The total number of schools and learning centers increased to 608 in the quarter ended February 29, 2012, up from 527 in the previous quarter. New Oriental built a net of 81 learning centers in the quarter.

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "Our key growth drivers continued their strong momentum this quarter. First, our overseas test preparation programs recorded year-over-year enrollment growth of about 10% to approximately 80,500, and year-over-year gross revenue growth of over 26% to approximately US$55 million in this quarter. Second, our K-12 all-subjects after-school tutoring business recorded year-over-year enrollment growth of about 30% to over 371,500 and year-over-year gross revenue growth of approximately 48% to over US$69 million in this quarter. Third, our VIP personalized classes recorded the most rapid pace of growth, with year-over-year enrollment growth of more than 62% to over 25,500 and year-over-year cash revenue growth of over 73% to about US$53.5 million in this quarter. Finally, our Vision Overseas Study Consulting business continued to outperform, with year-over-year gross revenue growth of approximately 55% to over US$7 million in the third quarter."

Declaration of Special Cash Dividend

New Oriental's board of directors has declared a special cash dividend in the amount of US$0.30 per ADS. The cash dividend will be paid on September 29, 2012 to shareholders of record at the close of business on August 31, 2012. The ex-dividend date will be August 29, 2012. The aggregate amount of cash dividends to be paid is approximately US$50 million, which will be funded by surplus cash on the New Oriental's balance sheet.


Tuesday, January 17, 2012
Comments & Business Outlook

Second Quarter 2011 Results

  • Total net revenues increased by 38.0% year-over-year to US$132.0 million from US$95.7 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental increased by 80.5% year-over-year to US$3.3 million from US$1.8 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 46.0% year-over-year to US$7.5 million from US$5.2 million in the same period of the prior fiscal year.
  • Loss from operations increased by 94.6% year-over-year to US$4.0 million from US$2.1 million in the same period of the prior fiscal year.
  • Non-GAAP income from operations, which excludes share-based compensation expenses, decreased by 81.2% year-over-year to US$0.2 million from US$1.3 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS were US$0.02 and US$0.02, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.05 and US$0.05, respectively. Each ADS represents one common share of the Company.
  • Total student enrollments in academic subjects tutoring and test preparation courses increased by 16.2% year-over-year to approximately 471,600 from approximately 405,800 in the same period of the prior fiscal year.
  • Total number of schools and learning centers increased to 527 in the quarter ended November 30, 2011, up from 488 in the previous quarter. New Oriental built a net of 39 learning centers in the quarter.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "In the second quarter of the fiscal year, which is our seasonally slowest quarter, we posted solid revenue growth of 38.0% and even higher profit growth of 80.5% year-over-year. This is particularly pleasing considering we had very challenging comparables against last year's fiscal second quarter when we experienced a strong bounce back from the negative effect on our business due to the Shanghai World Expo in the summer of 2010 and recorded exceptionally strong revenue growth of over 56% and student enrollment growth of over 32%. In this fiscal quarter, by comparison, our student enrollments grew by 16.2% to about 471,600. To meet the continued strong market demand, especially in the K-12 after-school tutoring segment, during this quarter we opened a net of 39 learning centers in about 20 existing cities. More than half of these are small facilities of approximately 500 square meters or less, which is in line with our strategy to "fill in" the convenient locations in markets where we have a strong presence."

Mr. Yu continued, "Although spending on educational services remains resilient and demand for New Oriental's educational services, in particular, continues to be very strong in the face of a slowing Chinese economy, we do expect the early timing of this year's Chinese New Year festival, which falls on January 23, to have a negative impact on our net revenues and profits for our third fiscal quarter ending February 28, 2012. Since the festival falls earlier this year, the 2012 Chinese New Year winter holiday for school-aged students has been shortened by up to a week in most provinces, leaving students with less time to attend New Oriental classes. We experienced a similar situation in 2009 when Chinese New Year also fell early, on January 26. However, in 2009 we saw a very strong bounce back in the fourth fiscal quarter ending May 31, with revenues up approximately 48% and net income up approximately 50% as Chinese students preparing to take the college and high school entrance exams in early June returned to New Oriental to make up for the test prep classes normally taken during the winter break. We anticipate a similar effect this year, and we are hopeful of a strong rebound in New Oriental's business in our fiscal fourth quarter this year."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "We are delighted to record solid performances across each of our key business lines this quarter. First, our overseas test preparation programs recorded year-over-year gross revenue growth of over 52% to over US$43 million and year-over-year enrollment growth of about 1% to 74,200, despite difficult comparisons to the second quarter of the previous fiscal year when the post-Expo rebound drove enrollments up by 39%. Second, our K-12 all-subjects after-school tutoring business recorded year-over-year gross revenue growth of about 45% to over US$44 million and year-over-year enrollment growth of more than 33% to over 232,900. Third, our VIP personalized classes experienced the most rapid pace of growth, with year-over-year cash revenue growing by more than 52% to over US$45 million and year-over-year enrollments increasing by about 42% to over 20,100. Finally, our Vision Overseas Study Consulting business maintained strong momentum, with year-over-year revenue growth of over 90% to about US$3.8 million."

Outlook for Third Quarter of Fiscal Year 2012

New Oriental expects its total net revenues in the third quarter of fiscal year 2012 (December 1, 2011, to February 29, 2012) to be in the range of US$168.3 million to US$176.2 million, representing year-over-year growth in the range of 27.0% to 33.0%. This revenue outlook reflects the anticipated negative impact on the Company's business of the early timing of Chinese New Year, which falls on January 23 this year. This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Tuesday, October 18, 2011
Comments & Business Outlook

First Quarter 2012 Results

  • Total net revenues increased by 41.4% year-over-year to US$272.0 million from US$192.3 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental increased by 45.5% year-over-year to US$90.7 million from US$62.4 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 44.9% year-over-year to US$97.5 million from US$67.3 million in the same period of the prior fiscal year.
  • Income from operations increased by 43.7% year-over-year to US$94.8 million from US$65.9 million in the same period of the prior fiscal year.
  • Non-GAAP income from operations, which excludes share-based compensation expenses, increased by 43.3% year-over-year to US$101.6 million from US$70.9 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS(1) were US$0.59 and US$0.58, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses, were US$0.63 and US$0.62, respectively. Each ADS represents one common share of the Company. First quarter 2011Non-GAAP diluted net income per ADS was $0.43
  • Total student enrollments in academic subjects tutoring and test preparation courses increased by 14.6% year-over-year to approximately 807,700 from approximately 704,500 in the same period of the prior fiscal year.

"We are pleased to start our 2012 fiscal year with solid financial results, recording strong year-over-year revenue growth of 41.4% and even higher profit growth of 45.5%," said Michael Yu, New Oriental's Chairman and Chief Executive Officer. "We continue to see very robust demand for New Oriental's high quality educational programs and service offerings despite the economic challenges facing China and the rest of the world. We had a strong deferred revenue balance of US$175 million at the end of this quarter, up over 73% year-over-year. Education spending is more resilient than other consumer discretionary categories in China, ranking only behind food and housing in priority among Chinese households. In fact, during the last global economic downturn caused by the financial crisis in late 2008 and the first half of 2009, New Oriental continued to experience strong demand with revenues growing by over 45% to more than US$292 million for our 2009 fiscal year ending in May 2009," added Mr. Yu.

Mr. Yu continued, "We executed our expansion plan in this quarter by opening two new schools in the cities of Tangshan and Urumqi, along with a net of 20 learning centers in about 15 existing cities. We had a total of 488 facilities in 49 cities as of August 31, 2011, consisting of 55 schools and 433 learning centers, excluding the one school and 20 learning centers we acquired from Newave Education in September 2010(2)."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, commented, "Our robust top-line performance was primarily driven by continued strong growth in several of our key business lines. First, our overseas test preparation programs recorded year-over-year enrollment growth of more than 19% to about 107,800 and year-over-year gross revenue growth of over 48% to over US$92 million in this quarter. Second, our K-12 all-subjects after-school tutoring business recorded year-over-year enrollment growth of more than 24% to over 436,600 and year-over-year gross revenue growth of over 50% to over US$94 million in this quarter. Among our different class-size formats, our VIP personalized classes continued the most rapid growth, with year-over-year enrollment growth of more than 46% to about 21,200 and year-over-year cash revenue growth of over 65% to over US$42 million in this quarter. Finally, our Vision Overseas Study Consulting business continued to outperform, with year-over-year gross revenue growth of approximately 110% to over US$13.4 million in this quarter."

Outlook for Second Quarter of Fiscal Year 2012

New Oriental expects its total net revenues in the second quarter of fiscal year 2012 (September 1, 2011, to November 30, 2011) to be in the range of US$124.4 million to US$129.1 million, representing year-over-year growth in the range of 30% to 35%. This forecast reflects New Oriental's current and preliminary view, which is subject to change.


Monday, July 18, 2011
Comments & Business Outlook

BEIJING and HONG KONG, July 18, 2011 /PRNewswire-Asia/ -- New Oriental Education and Technology Group Inc. (the "Company" or "New Oriental") (NYSE:EDU - News), the largest provider of private educational services in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended May 31, 2011. The Company also announced that it will change the ratio of its American depositary shares ("ADSs") to Common Shares from one (1) ADS representing four (4) Common Shares to one (1) ADS representing one (1) Common Share, effective on August 18, 2011.

Highlights for the Fourth Fiscal Quarter Ended May 31, 2011

 

     

  • Total net revenues increased by 58.7% year-over-year to US$137.4 million, from US$86.6 million in the same period of the prior fiscal year.

     

  • Net income attributable to New Oriental increased by 147.8% year-over-year to US$14.3 million, from US$5.8 million in the same period of the prior fiscal year; excluding the approximately US$1.54 million loss from the disposal of two subsidiaries, Mingshitang School and Tomorrow Oriental (described below) in the quarter ("Disposal Loss"), net income attributable to New Oriental would have increased by 174.4% year-over-year to US$15.8 million, from US$5.8 million in the same period of the prior fiscal year.

     

  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses and Disposal Loss, increased by 113.0% year-over-year to US$19.2 million, from US$9.0 million in the same period of the prior fiscal year.

     

  • Income from operations increased by 185.3% year-over-year to US$10.4 million, from US$3.7 million in the same period of the prior fiscal year; excluding the Disposal Loss, income from operations would have increased by 227.3% year-over-year to US$12.0 million, from US$3.7 million in the same period of the prior fiscal year.

     

  • Non-GAAP income from operations, which excludes share-based compensation expenses and the Disposal Loss, increased by 122.1% year-over-year to US$15.4 million, from US$6.9 million in the same period of the prior fiscal year.

     

  • Basic and diluted net income attributable to New Oriental per ADS were US$0.37 and US$0.37, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses and the Disposal Loss, were US$0.50 and US$0.49, respectively. Each ADS currently represents four common shares of the Company. Effective on August 18, 2011, New Oriental will adjust the ratio of its ADS representing common shares from one ADS for four common shares to one ADSs for one common share.

     

  • Total student enrollments in academic subjects tutoring and test preparation courses increased by 11.9% year-over-year to approximately 489,100, from approximately 437,200 in the same period of the prior fiscal year.

    BEIJING and HONG KONG, July 18, 2011 /PRNewswire-Asia/ -- New Oriental Education and Technology Group Inc. (the "Company" or "New Oriental") (NYSE:EDU - News), the largest provider of private educational services in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended May 31, 2011. The Company also announced that it will change the ratio of its American depositary shares ("ADSs") to Common Shares from one (1) ADS representing four (4) Common Shares to one (1) ADS representing one (1) Common Share, effective on August 18, 2011.

    Highlights for the Fourth Fiscal Quarter Ended May 31, 2011

     

       

    • Total net revenues increased by 58.7% year-over-year to US$137.4 million, from US$86.6 million in the same period of the prior fiscal year.

       

    • Net income attributable to New Oriental increased by 147.8% year-over-year to US$14.3 million, from US$5.8 million in the same period of the prior fiscal year; excluding the approximately US$1.54 million loss from the disposal of two subsidiaries, Mingshitang School and Tomorrow Oriental (described below) in the quarter ("Disposal Loss"), net income attributable to New Oriental would have increased by 174.4% year-over-year to US$15.8 million, from US$5.8 million in the same period of the prior fiscal year.

       

    • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses and Disposal Loss, increased by 113.0% year-over-year to US$19.2 million, from US$9.0 million in the same period of the prior fiscal year.

       

    • Income from operations increased by 185.3% year-over-year to US$10.4 million, from US$3.7 million in the same period of the prior fiscal year; excluding the Disposal Loss, income from operations would have increased by 227.3% year-over-year to US$12.0 million, from US$3.7 million in the same period of the prior fiscal year.

       

    • Non-GAAP income from operations, which excludes share-based compensation expenses and the Disposal Loss, increased by 122.1% year-over-year to US$15.4 million, from US$6.9 million in the same period of the prior fiscal year.

       

    • Basic and diluted net income attributable to New Oriental per ADS were US$0.37 and US$0.37, respectively. Non-GAAP basic and diluted net income per ADS, which excludes share-based compensation expenses and the Disposal Loss, were US$0.50 and US$0.49, respectively. Each ADS currently represents four common shares of the Company. Effective on August 18, 2011, New Oriental will adjust the ratio of its ADS representing common shares from one ADS for four common shares to one ADSs for one common share.

       

    • Total student enrollments in academic subjects tutoring and test preparation courses increased by 11.9% year-over-year to approximately 489,100, from approximately 437,200 in the same period of the prior fiscal year.

Wednesday, April 27, 2011
Comments & Business Outlook

Third Quarter Results:

  • Total net revenues increased by 48.6% year-over-year to US$132.5 million from US$89.2 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental increased by 68.1% year-over-year to US$23.3 million from US$13.8 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, increased by 42.4% year-over-year to US$26.6 million from US$18.7 million in the same period of the prior fiscal year.
  • Income from operations increased by 55.5% year-over-year to US$21.2 million from US$13.6 million in the same period of the prior fiscal year. Non-GAAP income from operations, which excludes share-based compensation expenses, increased by 32.8% year-over-year to US$24.6 million from US$18.5 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS was US$0.61 and US$0.60, respectively. Non-GAAP basic and diluted net income per ADS attributable to New Oriental, which excludes share-based compensation expenses, was US$0.69 and US$0.68, respectively. Each ADS represents four common shares of the Company.
  • Total student enrollments in academic subjects tutoring and test preparation courses increased by 17.8% year-over-year to approximately 490,200 from approximately 416,000 in the same period of the prior fiscal year.
  • Total number of schools and learning centers increased to 456 in the quarter ended February 28, 2011, up from 447 in the previous quarter. New Oriental established one school in Nantong city and a net of 8 learning centers in the quarter. The total number of schools increased to 52 and the total number of learning centers to 404 as of February 28, 2011.
  • New Oriental expects its total net revenues in the fourth quarter of fiscal year 2011 (March 1, 2011 to May 31, 2011) to be in the range of US$114.3 million to US$118.6 million, representing year-over-year growth in the range of 32% to 37%. This forecast reflects New Oriental's current and preliminary view, which is subject to change.

Louis T. Hsieh, New Oriental's President and Chief Financial Officer, stated, "Strong top line growth was primarily driven by the continued stellar performance of several key business lines, with year-over-year gross revenue growth rates of about 55% for overseas test preparation, about 133% for non-English U-Can all-subjects training and about 140% for VIP personalized instruction. First, our overseas test preparation segment maintained strong momentum with year-over-year enrollment growth of more than 33% to over 73,100 and year-over-year gross revenue growth of about 55% to about US$43.4 million in this quarter. We remain the dominant player in the overseas test preparation market in China with approximately US$152 million gross revenues and over 311,000 enrollments in the 12–month period ended February 28, 2011.


Tuesday, January 18, 2011
Comments & Business Outlook

BEIJING, Jan. 18, 2011 /PRNewswire-Asia/ -- New Oriental Education and Technology Group Inc. today announced its unaudited financial results for the fiscal quarter ended November 30, 2010, which is the second quarter of New Oriental's fiscal year 2011.

Highlights for the Second Fiscal Quarter Ended November 30, 2010 

  • Total net revenues increased by 56.3% year-over-year to US$95.7 million from US$61.2 million in the same period of the prior fiscal year.
  • Net income attributable to New Oriental increased by 65.9% year-over-year to US$1.8 million from US$1.1 million in the same period of the prior fiscal year.
  • Non-GAAP net income attributable to New Oriental, which excludes share-based compensation expenses, decreased by 5.5% year-over-year to US$5.2 million from US$5.5 million in the same period of the prior fiscal year.
  • Loss from operations increased by 125.0% year-over-year to US$2.1 million from US$0.9 million in the same period of the prior fiscal year. Non-GAAP income from operations, which excludes share-based compensation expenses, decreased by 62.9% year-over-year to US$1.3 million from US$3.5 million in the same period of the prior fiscal year.
  • Basic and diluted net income attributable to New Oriental per ADS was US$0.05 and US$0.05, respectively. Non-GAAP basic and diluted net income per ADS attributable to New Oriental, which excludes share-based compensation expenses, was US$0.13 and US$0.13, respectively. Each ADS represents four common shares of the Company.
  • Total student enrollments in academic subjects tutoring and test preparation courses increased by 32.2% year-over-year to approximately 405,800 from approximately 307,000 in the same period of the prior fiscal year.
  • Total number of schools and learning centers increased to 447 in the quarter ended November 30, 2010, up from 402 in the previous quarter. New Oriental built a net of 24 schools and learning centers in the quarter. In addition, we acquired Newave Education, which has 1 school and 20 learning centers. The total number of schools increased to 51 and the total number of learning centers to 396 as of November 30, 2010.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented, "As we predicted in last quarter's earnings call, we saw a strong bounce back from the negative effects on our business from the Shanghai World Expo, achieving year-over-year revenue growth of 56.3% to US$95.7 million and earnings growth of 65.9% to US$1.8 million. Our student enrollments grew by 32.2% to about 405,800 in the second quarter of fiscal year 2011, demonstrating strong market preference for our high quality educational programs, superior customer service and "one-stop" convenient offerings. We continue to extend our substantial market leading positions in our key business segments of overseas test preparation, K-12 all-subjects after-school tutoring and English language training. We have recorded over 1.1 million student enrollments in the first half of our fiscal year 2011 and are well on our way to passing the 2 million student enrollment milestone for this fiscal year, comprised of over 1 million adult enrollments and over 1 million K-12 enrollments."

 

Outlook for Third Quarter of Fiscal Year 2011

New Oriental expects its total net revenues in the third quarter of fiscal year 2011 (December 1, 2010 to February 28, 2011) to be in the range of US$116.8 million to US$121.3 million, representing year-over-year growth in the range of 31% to 36%. The year-over-year comparison growth forecast for the third fiscal quarter of 2011 has factored in a regular three-week winter holiday for students this year, compared to last year's longer-than-usual winter holidays for students in most Chinese provinces due to the late timing of Chinese New Year, which fell on February 14, 2010, allowing our students to study for longer periods and enroll in more sessions last year.


Friday, September 24, 2010
Financials

Preliminary Financial and Student Enrollments Results – First Quarter of Fiscal Year 2011

(US$ in Millions, except per ADS data, student enrollments and percentages)

Q1 of FY2011 Q1 of FY2010 Year-on-Year
Percentage
Increase (1)
Net revenues 191.4 - 192.9 149.4 29%
Cost of revenues 65.7 - 66.6 47.7 39%
Selling and marketing expenses 23.1 - 23.6 15.5 51%
General and administrative expenses 36.3 - 37.2 25.3 45%
Operating income 65.1 - 66.6 60.9 8%
Net income attributable to New Oriental 62.2 - 63.5 57.1 10%
Net income per ADS attributable to New Oriental - basic (2) 1.64 - 1.68 1.52 9%
Net income per ADS attributable to New Oriental - diluted (2) 1.60 - 1.64 1.47 10%
Total student enrollments in language training and test preparation courses 685,000 - 715,000 647,500 8%
________________
(1) Calculated based on mid-point of the range for Q1 FY2011.
(2) Each ADS represents four common shares.

GeoTeam® Note: Analysts had been exptecting EPS of $1.90

 "Although we experienced disappointing student enrollment growth of approximately 8% to approximately 700,000 enrollments for the summer quarter, we managed to achieve net revenues of approximately $192 million or revenue growth of approximately 29%, within our guidance range of 26% to 32% stated in the last earnings release," said Michael Yu, New Oriental's Chairman and Chief Executive Officer. "There are several reasons for the enrollments shortfall. Firstly, this year's summer break for Chinese students was about a week shorter than usual due to a relatively long winter break earlier this year to accommodate a late Chinese New Year. Secondly, the Shanghai World Expo adversely affected student enrollments in our Shanghai school which experienced a 6% decrease in enrollments, compared to an 11% increase in the summer of 2009, from approximately 68,000 enrollments last summer to approximately 64,000 enrollments this summer. We believe that thousands of students from outside Shanghai elected not to study in Shanghai this past summer in order to avoid the crowds visiting the Shanghai Expo and the associated elevated lodging and meal expenses. We further believe that of the estimated 20 million to 30 million school-aged students who did visit the Shanghai Expo this summer, many of them did so by deciding to spend their time and money at the Expo instead of enrolling in summer classes. Thirdly, we experienced a greater than expected decrease of 11% to approximately 110,000 in our adult English program enrollments this summer, compared to approximately 124,000 in the year ago period."


Tuesday, July 21, 2009
Comments & Business Outlook
1st  Quarter 2009 Guidance Ending August a

  1st Quarter 2009 Guidance 1st Quarter 2008 Reported Period Change
GAAP Revenue $146.6 to $152.6 million $118.2 million 24% to 29%

Source: See Release, July 21, 2009

a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

b Non-GAAP EPS figures generally exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.


Wednesday, June 24, 2009
Comments & Business Outlook

'During the third quarter, the economic slowdown in China had a greater than anticipated effect on our adult English courses. To reflect our revised expectations, in mid-February 2009, we issued a press release adjusting our third fiscal quarter 2009 revenue guidance downwards.  As it turns out, adult English enrollments for the quarter were approximately 50,300, up slightly from approximately 50,100 in the year ago period, but below our prior expectations,' said Michael Yu, New Oriental's Chairman and Chief Executive Officer. 'Furthermore, our financial results were negatively impacted by the early timing of Chinese New Year this year which occurred on January 26, 2009, almost two weeks earlier than last year. Despite these challenges, we are pleased to report revenue increased 36.1% year-over-year to $65.4 million, exceeding the top end of the revised guidance range. In addition, we are pleased that a strong bounce back in enrollments in February boosted total student enrollments in language training and test preparation courses for the quarter to about 351,700, an increase of 31% year-over-year.'

4th Quarter 2009 Guidance Ending May a

  4th Quarter 2009 Guidance 4th Quarter 2008 Reported Period Change
GAAP Revenue $50.5 to $53.5 million $40.18 million 25.7% to 33.2%

Source: See Release, April 21, 2009


a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.


Sunday, February 15, 2009
Comments & Business Outlook

Guidance Report:

Change in Third Quarter Fiscal 2009 Guidance Ending December

  2009 Guidance 2008 Reported Period Change
GAAP Revenue $62.0 million to $65.0 $48.09 million 28.9% to 35.1%
Previous GAAP Revenue $65.5 million to $67.5 $48.09 million 36.2% to 40.3%

'The economic downturn in China has had a greater than anticipated effect on New Oriental's cash proceeds (cash collected from students in advance for course enrollments) over the past several weeks and we are therefore revising our third fiscal quarter 2009 revenue guidance downwards to reflect current expectations,' said Louis T. Hsieh, New Oriental's chief financial officer. 'We believe that this is a short term effect, as Chinese families place a high priority on spending for their children's education, behind only food and housing. As the trusted leader in China's private education market New Oriental should continue to benefit from these strong underlying fundamentals.'

Source: PR Newswire (February 12, 2009)