TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and the Fiscal Year 2023

BEIJING,April 27,2023 -- TAL Education Group (NYSE: TAL) ("TAL" or the "Company"),a smart learning solutions provider in China,today announced its unaudited financial results for the fourth quarter and the fiscal year ended February 28,2023.

Highlights for the Fourth Quarter of Fiscal Year 2023

Net revenues was US$269.0 million,compared to net revenues of US$541.2 million in the same period of the prior year.

Loss from operations was US$44.4 million,compared to income from operations of US$0.6 million in the same period of the prior year.

Non-GAAP loss from operations,which excluded share-based compensation expenses,was US$18.1 million,compared to non-GAAP income from operations of US$0.8 million in the same period of the prior year.

Net loss attributable to TAL was US$39.4 million,compared to net loss attributable to TAL of US$108.1 million in the same period of the prior year.

Non-GAAP net loss attributable to TAL,was US$13.1 million,compared to non-GAAP net loss attributable to TAL of US$108.0 million in the same period of the prior year.

Basic and diluted net loss per American Depositary Share ("ADS") were both US$0.06. Non-GAAP basic and diluted net loss per ADS,were both US$0.02. Three ADSs represent one Class A common share.

Cash,cash equivalents and short-term investments totaled US$3,171.5 million as of February 28,2023,compared to US$2,708.7 million as of February 28,2022.

Highlights for the Fiscal Year Ended February 28,2023

Net revenues was US$1,019.8 million,compared to net revenues of US$4,390.9 million in the same period of the prior year.

Loss from operations was US$90.7 million,compared to loss from operations of US$614.5 million in the same period of the prior year.

Non-GAAP income from operations,was US$17.8 million,compared to non-GAAP loss from operations of US$439.7 million in the same period of the prior year.

Net loss attributable to TAL was US$135.6 million,compared to net loss attributable to TAL of US$1,136.1 million in the same period of the prior year.

Non-GAAP net loss attributable to TAL,was US$27.0 million,compared to non-GAAP net loss attributable to TAL of US$961.3 million in the same period of the prior year.

Basic and diluted net loss per ADS were both US$0.21. Non-GAAP basic and diluted net loss per ADS,excluding share-based compensation expenses,were both US$0.04.

Financial Data——Fourth Quarter and Fiscal Year 2023

(In US$ thousands,except per ADS data and percentages)

Three Months Ended

February 28,

2022

2023

Pct. Change

Net revenues

541,152

268,986

(50.3%)

Income/(loss) from operations

644

(44,416)

(6996.9%)

Non-GAAP operating income/(loss)

779

(18,090)

(2422.2%)

Net loss attributable to TAL

(108,123)

(39,417)

(63.5%)

Non-GAAP net loss attributable to TAL

(107,988)

(13,091)

(87.9%)

Net loss per ADS attributable to TAL – basic

(0.17)

(0.06)

(62.9%)

Net loss per ADS attributable to TAL – diluted

(0.17)

(0.06)

(62.9%)

Non-GAAP net loss per ADS attributable to TAL

– basic

(0.17)

(0.02)

(87.7%)

Non-GAAP net loss per ADS attributable to TAL

– diluted

(0.17)

(0.02)

(87.7%)

Fiscal Year Ended

February 28,

2022

2023

Pct. Change

Net revenues

4,390,907

1,019,772

(76.8%)

Loss from operations

(614,516)

(90,730)

(85.2%)

Non-GAAP (loss)/income from operations

(439,684)

17,841

(104.1%)

Net loss attributable to TAL

(1,136,115)

(135,612)

(88.1%)

Non-GAAP net loss attributable to TAL

(961,283)

(27,041)

(97.2%)

Net loss per ADS attributable to TAL – basic

(1.76)

(0.21)

(87.9%)

Net loss per ADS attributable to TAL – diluted

(1.76)

(0.21)

(87.9%)

Non-GAAP net loss per ADS attributable to TAL

– basic

(1.49)

(0.04)

(97.2%)

Non-GAAP net loss per ADS attributable to TAL

– diluted

(1.49)

(0.04)

(97.2%)

"In fiscal year 2023,we underwent significant transformation. Some of our newer initiatives,such as enrichment learning,smart books and smart devices exhibited material development. While we are encouraged by the development,we continue to upgrade our product offerings and operational efficiency." said Alex Peng,TAL's President & Chief Financial Officer.

Mr. Peng added: " As the industry continues to evolve and technology advances,we will endeavor to explore and seize new opportunities in the new fiscal year."

Financial Results for the Fourth Quarter of Fiscal Year 2023

Net Revenues

In the fourth quarter of fiscal year 2023,TAL reported net revenues of US$269.0 million,representing a 50.3 % decrease from US$541.2 million in the fourth quarter of fiscal year 2022.

Operating Costs and Expenses

In the fourth quarter of fiscal year 2023,operating costs and expenses were US$314.4 million,representing a 42.4% decrease from US$546.3 million in the fourth quarter of fiscal year 2022. Non-GAAP operating costs and expenses,were US$288.1 million,representing a 47.3% decrease from US$546.2 million in the fourth quarter of fiscal year 2022.

Cost of revenues decreased by 35.5% to US$127.7 million from US$198.1 million in the fourth quarter of fiscal year 2022. Non-GAAP cost of revenues,decreased by 36.9% to US$124.9 million,from US$197.9 million in the fourth quarter of fiscal year 2022.

Selling and marketing expenses decreased by 28.0% to US$74.5 million from US$103.5 million in the fourth quarter of fiscal year 2022. Non-GAAP selling and marketing expenses,decreased by 40.9% to US$66.9 million,from US$113.1 million in the fourth quarter of fiscal year 2022.

General and administrative expenses decreased by 47.1% to US$112.2 million from US$212.1 million in the fourth quarter of fiscal year 2022. Non-GAAP general and administrative expenses,decreased by 52.5% to US$96.3 million,from US$202.5 million in the fourth quarter of fiscal year 2022.

Total share-based compensation expenses allocated to the related operating costs and expenses in the fourth quarter of fiscal year 2023 was US$26.3 million,compared to US$0.1 million for the fourth quarter of fiscal year 2022.

Impairment loss on intangible assets and goodwill was nil for the fourth quarter of fiscal year 2023,compared to US$32.6 million for the fourth quarter of fiscal year 2022.

Gross Profit

Gross profit decreased by 58.8% to US$141.3 million from US$343.1 million in the fourth quarter of fiscal year 2022.

Income/(Loss) from operations

Loss from operations was US$44.4 million in the fourth quarter of fiscal year 2023,compared to income from operations of US$0.6 million in the fourth quarter of fiscal year 2022. Non-GAAP lossfrom operations,compared to Non-GAAP income from operations of US$0.8 million in the same period of the prior year.

Other (Expense) /Income

Other incomewas US$2.1 million for the fourth quarter of fiscal year 2023,compared to other expense of US$0.7 million in the fourth quarter of fiscal year 2022.

Impairment Loss on Long-term Investments

Impairment loss on Long-term investment was US$0.9 million for the fourth quarter of fiscal year 2023,compared to US$97.8 million for the fourth quarter of fiscal year 2022.

Income Tax Expense

Income tax expense was US$10.5 million in the fourth quarter of fiscal year 2023,compared to US$29.9 million of income tax expense in the fourth quarter of fiscal year 2022.

Net Loss attributable to TAL Education Group

Net loss attributable to TAL was US$39.4 million in the fourth quarter of fiscal year 2023,compared to net loss attributable to TAL of US$108.1 million in the fourth quarter of fiscal year 2022. Non-GAAP net loss attributable to TAL,compared to Non-GAAP net loss attributable to TAL of US$108.0 million in the fourth quarter of fiscal year 2022.

Basic and Diluted Net Loss per ADS

Basic and diluted net loss per ADS were both US$0.06 in the fourth quarter of fiscal year 2023. Non-GAAP basic and diluted net loss per ADS,were both US$0.02 in the fourth quarter of fiscal year 2023.

Cash,Cash Equivalents,and Short-Term Investments

As of February 28,the Company had US$2,021.9 million of cash and cash equivalents and US$1,149.6 million of short-term investments,compared to US$1,638.2 million of cash and cash equivalents and US$1,070.5 million of short-term investments as of February 28,2022.

Deferred Revenue

As of February 28,the Company's deferred revenue balance was US$237.4 million,compared to US$187.7 million as of February 28,2022.

Financial Results for the Fiscal Year Ended February 28,2023

Net Revenues

For fiscal year 2023,TAL reported net revenues of US$1,representing a 76.8% decrease from US$4,390.9 million in the fiscal year 2022.

Operating Costs and Expenses

In the fiscal year 2023,operating costs and expenses wereUS$1,133.2 million,representing a 77.5% decrease fromUS$5,026.2 millionin the fiscal year 2022. Non-GAAP operating costs and expenses,wereUS$1,024.6 million,representing a 78.9% decrease fromUS$4,851.4 millionin the fiscal year 2022.

Cost of revenues decreased by 80.2% toUS$436.4 millionfromUS$2,203.3 millionin the fiscal year 2022. Non-GAAP cost of revenues,decreased by 80.7% toUS$425.0 millionfromUS$2,202.2 millionin the fiscal year 2022.

Selling and marketing expenses decreased by 74.7% toUS$283.0 millionfromUS$1,118.1 millionin the fiscal year 2022. Non-GAAP selling and marketing expenses,decreased by 76.3% toUS$252.4 million fromUS$1,064.3 millionin the fiscal year 2022.

General and administrative expenses decreased by 65.5% toUS$413.8 million from US$1,199.7 millionin the fiscal year 2022. Non-GAAP general and administrative expenses,decreased by 67.8% toUS$347.2 millionfromUS$1,079.9 millionin the fiscal year 2022.

Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 37.9% toUS$108.6 millionin the fiscal year 2023 fromUS$174.8 millionin the same period of fiscal year 2022.

Impairment loss on intangible assets and goodwill was nil for the fiscal year 2023,compared to US$505.1 million for the same period of fiscal year 2022.

Gross Profit

Gross profit decreased by 73.3% toUS$583.4 millionfromUS$2,187.6 millionin the fiscal year 2022.

Income/(Loss) from operations

Loss from operations wasUS$90.7 millionin the fiscal year 2023,compared to loss from operations ofUS$614.5 millionin the same period of the prior year. Non-GAAP income from operations,wasUS$17.8 million,compared toUS$439.7 million Non-GAAP loss from operationsin the same period of the prior year.

Other (Expense) /Income

Other expense wasUS$82.4 millionfor the fiscal year 2023,compared to other income of US$17.0 million in the same period of the prior year.

Impairment Loss on Long-term Investments

Impairment loss on long-term investments wasUS$7.7 million for the fiscal year 2023,compared toUS$275.9 millionfor the fiscal year 2022.

Income Tax Expense

Income tax expense wasUS$20.0 millionin the fiscal year 2023,compared toUS$397.0 millionof income tax expense in the fiscal year 2022.

Net Loss Attributable toTAL Education Group

Net loss attributable to TAL wasUS$135.6 millionin the fiscal year 2023,compared to net loss attributable to TAL ofUS$1,136.1 millionin the fiscal year 2022. Non-GAAP net loss attributable to TAL,compared toUS$961.3 million Non-GAAP loss attributable to TALin the same period of the prior year.

Basic and Diluted Net Loss per ADS

Basic and diluted net loss per ADS were bothUS$0.21 in the fiscal year 2023. Non-GAAP basic and diluted net loss per ADS,wereboth US$0.04.

Extension of Share Repurchase Program by the Company

TAL's board of directors (the "Board") has authorized to extend its share repurchase program launched in April 2021 by 12 months. The Company has repurchased its American depositary shares at an aggregate consideration of approximately US$66.4 million under the share repurchase program from April,2022 through April,2023. Pursuant to the extended share repurchase program,the Company may repurchase up to approximately US$737.4 million of its common shares through April 30,2024. The share repurchases may be effected from time to time on the open market at prevailing market prices,in privately negotiated transactions,in block trades and/or through other legally permissible means,depending on market conditions and will be implemented in accordance with applicable rules and regulations. The Company expects to fund the repurchases out of its existing cash balance.

Conference Call

The Company will host a conference call and live webcast to discuss its financial results for the fourth fiscal quarter of fiscal year 2023 ended February 28,2023 at 8:00 a.m. Eastern Time on April 27,2023 (8:00 p.m. Beijing time on April 27,2023).

Please note that you will need to pre-register for conference call participation at https://register.vevent.com/register/BI8434cf8eca934eeca83b8bb7c40495fb.

Upon registration,you will receive an email containing participant dial-in numbers and unique Direct Event Passcode. This information will allow you to gain immediate access to the call. Participants may pre-register at any time,including up to and after the call start time.

A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at https://ir.100tal.com/.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things,TAL Education Group's strategic and operational plans contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with,or furnished to,the U.S. Securities and Exchange Commission,in its annual reports to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to fourth parties. Statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: the Company's ability to continue to provide competitive learning services and products; the Company's ability to continue to recruit,train and retain talents; the Company's ability to improve the content of current course offerings and develop new courses; the Company's ability to maintain and enhance its brand; the Company's ability to maintain and continue to improve its teaching results; and the Company's ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company's reports filed with,or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release,and TAL Education Group undertakes no duty to update such information or any forward-looking statement,except as required under applicable law.

About TAL Education Group

TAL Education Groupis a smart learning solutions provider in China. The acronym "TAL" stands for "Tomorrow Advancing Life",which reflects our vision to promote top learning opportunities for students through both high-quality teaching and content,as well as leading edge application of technology in the education experience.TAL Education Groupoffers comprehensive learning services to students from all ages through diversified class formats. Our learning services mainly cover enrichment learnings programs and some academic subjects in and out of China. Our ADSs trade on theNew York Stock Exchangeunder the symbol "TAL".

About Non-GAAP Financial Measures

In evaluating its business,TAL considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP operating costs and expenses,non-GAAP cost of revenues,non-GAAP selling and marketing expenses,non-GAAP general and administrative expenses,non-GAAP loss from operations,non-GAAP net loss attributable to TAL,non-GAAP basic and non-GAAP diluted net loss per ADS. To present each of these non-GAAP measures,the Company excludes share-based compensation expenses,the related tax effect of which has been nil. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures,please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release.

TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. TAL believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to TAL's historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

For further information,please contact:

Jackson Ding

Investor Relations

TAL Education Group

Tel: +86 10 5292 6669-8809

Email: ir@tal.com

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)

As of

February 28,

2022

As of

February 28,

2023

ASSETS

Current assets

Cash and cash equivalents

$ 1,638,189

$ 2,021,927

Restricted cash-current

755,646

126,891

Short-term investments

1,070,535

1,149,607

Inventory

21,830

39,002

Amounts due from related parties-current

919

423

Income tax receivables

19,504

5,071

Prepaid expenses and other current assets

122,753

125,486

Total current assets

3,629,376

3,468,407

Restricted cash-non-current

287,951

146,089

Property and equipment,net

281,226

288,877

Deferred tax assets

6,747

5,973

Rental deposits

10,770

12,734

Intangible assets,net

1,696

485

Land use right,net

217,708

193,878

Goodwill

-

163

Amounts due from related parties- non-current

77

-

Long-term investments

414,487

453,375

Long-term prepayments and other non-current assets

5,418

5,371

Operating lease right-of-use assets

227,072

149,002

Total assets

$ 5,082,528

$ 4,724,354

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

$ 89,838

$ 59,991

Deferred revenue-current

187,718

234,889

Amounts due to related parties-current

205

100

Accrued expenses and other current liabilities

558,718

446,711

Operating lease liabilities,current portion

66,105

42,174

Total current liabilities

902,584

783,865

Deferred revenue-non-current

14

2,465

Deferred tax liabilities

1,680

1,563

Operating lease liabilities,non-current portion

175,988

115,548

Total liabilities

1,080,266

903,441

Equity

Class A common shares

167

169

Class B common shares

49

49

Treasury Stock

-

(6)

Additional paid-in capital

4,358,265

4,400,656

Statutory reserve

154,362

160,353

Accumulated deficit

(544,309)

(685,912)

Accumulated other comprehensive income/(loss)

61,617

(30,666)

Total TAL Education Group's equity

4,030,151

3,844,643

Noncontrolling interest

(27,889)

(23,730)

Total equity

4,002,262

3,820,913

Total liabilities and equity

$ 5,354

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars,except share,ADS,per share and per ADS data)

For the Three Months Ended

February 28,

For the Fiscal Year Ended

February 28,

2022

2023

2022

2023

Net revenues

$ 541,152

$ 268,986

$ 4,907

$ 1,772

Cost of revenues (note 1)

198,084

127,713

2,203,336

436,358

Gross profit

343,068

141,273

2,187,571

583,414

Operating expenses (note 1)

Selling and marketing

103,475

74,512

1,118,141

283,036

General and administrative

212,113

112,163

1,199,708

413,791

Impairment loss on intangible

assets and goodwill

32,613

-

505,050

-

Total operating expenses

348,201

186,675

2,822,899

696,827

Government subsidies

5,777

986

20,812

22,683

Income/(loss) from operations

644

(44,416)

(614,516)

(90,730)

Interest income

18,535

20,077

103,179

61,564

Interest expense

-

-

(7,871)

-

Other (expense) /income

(661)

2,110

16,950

(82,416)

Gain from disposal of a subsidiary

-

-

-

9,550

Impairment loss on long-term

investments

(97,809)

(862)

(275,872)

(7,687)

Loss before income tax expense

and income/(loss) from equity

method investments

(79,291)

(23,091)

(778,130)

(109,719)

Income tax expense

(29,872)

(10,452)

(396,992)

(20,011)

Income/(loss) from equity method

investments

316

(3,049)

10,787

(2,248)

Net loss

$ (108,847)

$ (36,592)

$ (1,164,335)

$ (131,978)

Add: Net loss/(income)

attributable to noncontrolling

interest

724

(2,825)

28,220

(3,634)

Total net loss attributable to

TAL Education Group

$ (108,123)

$ (39,417)

$ (1,115)

$ (135,612)

Net loss per common share

Basic

$ (0.50)

$ (0.19)

$ (5.29)

$ (0.64)

Diluted

(0.50)

(0.19)

(5.29)

(0.64)

Net loss per ADS (note 2)

Basic

$ (0.17)

$ (0.06)

$ (1.76)

$ (0.21)

Diluted

(0.17)

(0.06)

(1.76)

(0.21)

Weighted average shares used in

calculating net loss per

common share

Basic

215,454,363

211,977,774

214,825,470

212,575,277

Diluted

215,277

Note1: Share-based compensation expenses are included in the operating costs and expenses as follows:

For the Three Months

For the Fiscal Year Ended

Ended February 28,

Ended February 28,

2022

2023

2022

2023

Cost of revenues

$ 138

$ 2,790

$ 1,134

$ 11,319

Selling and marketing expenses

(9,590)

7,648

53,850

30,662

General and administrative expenses

9,587

15,888

119,848

66,590

Total

$ 135

$ 26,326

$ 174,832

$ 108,571

Note 2: ThreeADSsrepresent one Class A common Share.

TAL EDUCATION GROUP

UNAUDITED CONDENSED CONSOLIDATEDSTATEMENTS OF

COMPREHENSIVE (LOSS)/INCOME

(In thousands of U.S. dollars)

For the Three Months Ended

February 28,

2022

2023

2022

2023

Net loss

$ (108,978)

Other comprehensive

(loss)/income,net of tax

(7,533)

51,838

(25,325)

(89,534)

Comprehensive (loss)/income

(116,380)

15,246

(1,189,660)

(221,512)

Add: Comprehensive loss

/(income) attributable to

noncontrolling interest

986

(2,211)

28,841

(6,383)

Comprehensive (loss)/income

attributable to TAL

Education Group

$ (115,394)

$ 13,035

$ (1,160,819)

$ (227,895)

TALEDUCATION GROUP

Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures

(In thousands of U.S. dollars,per share and per ADS data)

For the Three Months Ended

February 28,

2022

2023

2022

2023

Cost of revenues

$ 198,084

$ 127,713

$ 2,336

$ 436,358

Share-based compensation expense

in cost of revenues

138

2,790

1,134

11,319

Non-GAAP cost of revenues

197,946

124,923

2,202,202

425,039

Selling and marketing expenses

103,036

Share-based compensation expense

in selling and marketing expenses

(9,662

Non-GAAP selling and marketing

expenses

113,065

66,864

1,064,291

252,374

General and administrative

expenses

212,791

Share-based compensation expense

in general and administrative

expenses

9,590

Non-GAAP general and

administrative expenses

202,526

96,275

1,079,860

347,201

Operating costs and expenses

546,285

314,388

5,026,235

1,133,185

Share-based compensation expense

in operating costs and expenses

135

26,326

174,832

108,571

Non-GAAP operating costs and

expenses

546,150

288,062

4,851,403

1,024,614

Income/ (loss) from operations

644

(44,730)

Share based compensation expenses

135

26,571

Non-GAAP income/ (loss) from

operations

779

(18,090)

(439,684)

17,841

Net loss attributable to TAL

Education Group

(108,123)

(39,417)

(1,115)

(135,612)

Share based compensation expenses

135

26,571

Non-GAAP net loss attributable to

TAL Education Group

$ (107,988)

$ (13,091)

$ (961,283)

$ (27,041)

Net loss per ADS

Basic

$ (0.17)

$ (0.06)

$ (1.76)

$ (0.21)

Diluted

(0.17)

(0.06)

(1.76)

(0.21)

Non-GAAP Net loss per ADS

Basic

$ (0.17)

$ (0.02)

$ (1.49)

$ (0.04)

Diluted

(0.17)

(0.02)

(1.49)

(0.04)

ADSs used in calculating net loss per ADS

Basic

646,363,089

635,933,322

644,476,410

637,725,831

Diluted

646,831

ADSs used in calculating Non-GAAP net loss per ADS

Basic

646,831