Four Seasons Education (FEDU) Reports Q3 EPS of $0.04, Revenues Beat

Four Seasons Education (NYSE: FEDU) reported Q3 EPS of $0.04, versus $0.00 reported last year. Revenue for the quarter came in at $14.7 million versus the consensus estimate of $12.08 million.

Third Quarter Fiscal Year 2020 Financial and Operational Highlights

• Revenue increased by 13.5% to RMB103.5 million (US$14.7 million) from RMB91.2 million in the same period of last year.
• Gross profit increased by 10.2% to RMB53.0 million (US$7.5 million) from RMB48.1 million in the same period of last year.
• Operating income increased by 41.5% to RMB10.9 million (US$1.5 million) from RMB7.7 million in the same period of last year.
• Adjusted operating income(1) (non-GAAP) increased by 1.5% to RMB17.0 million (US$2.4 million) from RMB16.7 million in the same period of last year.
• Net income increased by 321.6% to RMB11.3 million (US$1.6 million) from RMB2.7 million in the same period of last year.
• Adjusted net income(2) (non-GAAP) increased by 6.0% to RMB14.5 million (US$2.1 million) from RMB13.7 million in the same period of last year.
• Basic and diluted net income per American Depositary Share (\"ADS\") attributable to ordinary shareholders were RMB0.24 (US$0.03) and RMB0.23 (US$0.03), respectively, compared with RMB0.06 and RMB0.05, respectively, for the same period of last year. Each two ADSs represent one ordinary share.
• Adjusted basic and diluted net income per ADS attributable to ordinary shareholders(3) (non-GAAP) were RMB0.31 (US$0.04) and RMB0.30 (US$0.04), respectively, compared with RMB0.28 and RMB0.27, respectively, for the same period of last year.
• Number of learning centers was 55 as of November 30, 2019.
• Total student enrollment(4) reached 67,714, representing an increase of 47.7% from 45,857 during the same period of last year.

"Our third quarter fiscal 2020 results demonstrate another quarter of solid operation," said Ms. Yi (Joanne) Zuo, Director and Chief Executive Officer of Four Seasons Education. \"In this quarter, we continued to carry out our strategy of enriching and diversifying our course offerings to students across broader age groups. We remained diligent in constructing and optimizing our learning center network in addition to constant dedication to curriculum development and cultivating innovative educational products and services. The introduction of our math lab project to regular K-12 schools has also received positive feedback from our school partners. Inspired by the robust growth of our online presence, we are proactively exploring new opportunities in the online education market. We believe all these efforts will keep strengthening our reputation as the go-to brand in the industry for academic improvement and interest development."

"We are pleased with our operating and financial performance in the third quarter. We maintained the profitable position and our growth momentum. With respect to our learning center network development, we opened two new learning centers in Jiangsu Province during the quarter. Operationally, we will remain prudent in our learning center network optimization as we explore better locations and more favorable rental terms.

"In the third quarter of fiscal 2020, our total revenue increased by 13.5% year over year to RMB103.5 million. This healthy top-line growth was in line with our expectations and reflected the on-track ramp-up of our existing learning centers. Coupled with our cost control and operational optimization, we realized an operating profit growth of 41.5% year over year. Consequently, our bottom-line yielded a growth of 321.6% year over year with a net profit margin of 10.9% in the third quarter. Our stable financial performance boosts our confidence in our development strategy. With our strong educational capability and rich industry experience, we are ready to propel forward our growth trajectory in the K-12 after school education market," Ms. Zuo concluded.

Business Outlook

For the fourth quarter of fiscal year 2020, the Company expects to generate revenue in the range of RMB80.9 million to RMB84.1 million, representing a year-over-year growth of approximately 25% to 30%.

For earnings history and earnings-related data on Four Seasons Education (FEDU) click here.

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