New Oriental announces net revenues US$524M for Q4 2022FY and Adoption of up to US$400M Share Repurchase Program

On July 27, 2022, New Oriental Education & Technology Group Inc. (the “Company” or “New Oriental”) (NYSE: EDU/ 9901.SEHK), one of the leading private educational services providers in China, announced its unaudited financial results for the fourth fiscal quarter and fiscal year ended May 31, 2022. Shares of the company in US stocks fell more than 6% after the company reported earnings. According to the fiscal results, total net revenues decreased by 56.8% year over year to US$524.0 million for the fourth fiscal quarter of 2022. Operating loss was US$105.6 million for the fourth fiscal quarter of 2022. Net loss attributable to New Oriental was US$189.3 million for the fourth fiscal quarter of 2022. The company said that the decrease was due to the regulation of K9 business. For the fiscal year 2022 ended May 31, 2022, New Oriental reported net revenues of US$3,105.2 million, representing a 27.4% decrease year over year. Loss from operations for the fiscal year 2022 was US$982.5 million, compared to an income of US$117.3 million in the same period of the prior fiscal year. Non-GAAP loss from operations for the fiscal year 2022 was US$849.5 million, compared to an income of US$186.1 million in the same period of the prior fiscal year. “Maintaining a strong cash position throughout the whole restructuring process.”The report shows that the total number of schools and learning centers was 744 as of May 31, 2022, a decrease of 103 and 925 compared to 847 as of February 28, 2022 and 1,669 as of May 31, 2021, respectively. The total number of schools was 107 as of May 31, 2022.The non-academic tutoring business was rolled out in over 50 cities, same as the intelligent learning system and devices that were adopted and tested in around 60 cities. Both have achieved positive customer feedback and improved customer retention. Other businesses, including study tour and research camp, educational materials and digitalized smart study solutions, as well as exam preparation courses designed for students with junior college diplomas to obtain bachelor's degrees, are making remarkable progress. “We are confident that by leveraging our brand recognition and educational resources accumulated over our operating history, these new businesses will start to generate notable revenue from the next fiscal year." Said Michael Yu, New Oriental's Executive Chairman.Stephen Zhihui Yang, New Oriental's Executive President and Chief Financial Officer, commented, "We maintained a strong cash position throughout the whole restructuring process. By the end of this fiscal year, our cash and cash equivalents, term deposits and short-term investments totaled approximately US$4.2 billion. The additional costs and expenses due to the termination of lease agreements in relation to the closure of our learning centers and employee layoffs were largely absorbed in fiscal year 2022. The Company's management team will continue to make great efforts to resume overall profitability of the Company as early as possible and proactively seek profitable growth.”Michael Yu: “We’ve stepped onto a new stage”Michael Yu commented that Fiscal year 2022 has been a year full of challenges and opportunities. The company restructured their core businesses and operations to comply with the government policies in China and stepped onto a new stage. The remaining key businesses are seeing a stable trend that lays a solid foundation for our future development.In this fiscal year, the overseas test preparation and overseas study consulting businesses increased by 6% and 16% year over year, respectively. Domestic test preparation business targeting adults and university students witnessed a record rapid growth of approximately 30% year over year. In this fiscal year, New Oriental’s subsidiary Koolearn established an e-commerce platform under the brand name DONG FANG ZHEN XUAN(东方甄选) for the sale of agricultural and other products. Koolearn also began to pilot livestreaming events on some famous short-video social platforms such as Douyin. DONG FANG ZHEN XUAN has made notable progress and received wide recognitions.On June 8th, Michael Yu wrote on his personal platform that He will also lead a New Oriental to set up the “New Oriental Live” team specializing in promoting New Oriental's high-quality educational products and other high-quality education-related products, including books, intelligent software and hardware equipment,  which is different from DONG FANG ZHEN XUAN(东方甄选) focusing on live broadcast of agricultural products.According to the company, New Oriental expects total net revenues in the first quarter of the fiscal year 2023 (June 1, 2022 to August 31, 2022) to be in the range of US$641.3 million to US$680.6 million, representing year-over-year decline in the range of 51% to 48%.Moreover, on July 26, 2022, New Oriental's board of directors authorized the repurchase of up to US$400 million of the Company's common shares during the period from July 28, 2022 through May 31, 2023.