Four Seasons Education (Cayman) Inc. American Depositary Shares, each ADS representing 10 ordinary shares

Your access code is confirmed. Please state your name and company after the tone. Press the pound key when you are finished. Your entry is confirmed. At any time during playback, you may press zero pound to go to the playback help menu.

Hello, ladies and gentlemen. Thank you for standing by for the Four Seasons Education's Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host. Ms. Olivia Lee, Investor Relations Manager for the company. Please go ahead, Olivia.

Hello, everyone, and welcome to Four Seasons Education's fourth quarter and fiscal year 2021 earnings conference call. The conference results were issued via Newswell Services earlier today and are posted online. You can download the earnings press release and sign up for the conference email distribution list by visiting the IR section of our website at ir.sijiedu.com. On today's call, Ms. Joanne Zuo, our Chief Executive Officer, will start by providing an overview of the company's performance highlights for the quarter. Ms. Xun Wang, the company's Vice President of Finance, will provide details on the company's financial results and business outlook before opening the call for your questions. Before we continue, please note that today's discussion will contain forward-looking statements. made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Further looking statements involving higher risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's perspective and its annual report on Form 20F at South River U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required on the application for law. Please also note that Four Seasons Education's earnings press release and this conference call include discussions of unordered GAAP financial information as well as unordered non-GAAP financial measures. Four Seasons Education's press release contains a reconciliation of the unordered non-GAAP measures to the unordered most directly compatible GAAP measures. I will now turn the call over to our CEO, Ms. Zhu. Please go ahead. Thank you, Olivia, and hello, everyone. Thank you for joining our call today. This fiscal year has been unusual and unprecedented in many ways, largely due to the COVID-19 pandemic. Despite the challenges we faced throughout the year, we have been proactively optimizing our operations and cost offerings to maintain competitive advantages in a tough market as we endeavor to propel our business toward long-term sustainability. In the fourth quarter of Office Code 2021, we are pleased to have concluded the year with a robust business recovery momentum as market demand for our effective, academically focused curricula and superior learning experience remains strong. We continued to outperform our revenue guidance and achieved a 26-year-over-year increase in total student enrollment during the quarter, underscoring our solid recovery trajectory. Our heavy emphasis on curriculum design and development distinguished us as a trusted partner of choice for students in their pursuit of our academic and intellectual excellence. In addition, our exceptional educational resources and well-versed tutors with strong academic backgrounds ensure that our adaptive curricula and effective educational programs resonate with students' needs, helping them meet the desired learning outcomes and academic goals throughout the unprecedented year. We are also very excited to see a set of accelerated enrollment retention rates across our class offerings for the spring season in Shanghai-based learning centers as we reach some of the highest levels in our record history. Heading into fiscal 2022, we are more confident than ever that we are on the right track to further improve our operations and return to our pre-pandemic growth trajectory. Student enrollment in our middle school programs maintained its growth momentum with a 78 year-over-year increase in the fourth quarter. further demonstrating our curriculum development capabilities to capture market dynamics in the fast-evolving after-school education landscape. Our proven track record of delivering tangible learning outcomes enables us to generate a broader appeal for our well-aligned middle school course offerings and to further cement our foothold in the after-school education market. In order to strengthen learning engagement and student loyalty, we continue to feature a wide spectrum of co-curricular and extracurricular programs, such as winter camps on writing, mathematical thinking, intangible culture, heritage, et cetera. As part of efforts to expand our educational service portfolio, We have collaborated with community service providers to establish a community-based study room chain brand, the Best Learning Space, which aims to deliver a wide range of educational programs such as educational salons, study planning, self-study rooms, etc., We will also leverage BeBest to host various education-related events across online and offline venues to tap into a broader base of lifelong learners. Additionally, we will cooperate with tech-focused Internet companies such as Tencent to explore the possibilities of delivering intelligent education to various consumers. Our learning space will support our endeavors to reach a wider student base and their daily and basic learning needs. Furthermore, our efforts to optimize our nationwide learning center network continued during the quarter as we add a new center outside Shanghai. A further testament to the growing organic demand for high-quality K-12 after-school tutoring services across the nation. Going forward, We will continue to enhance our stellar cost and service offerings in the K-12 after-school market to propel sustainable business development while simultaneously exploring new growth avenues. Also, the best-in-class educational programs and a strong tutoring team were confident in our ability to serve a broader user base in their pursuit of better learning experience while delivering long-term value to our shareholders. With that, I will now turn the call over to our Vice President of Finance, Ms. Xin Wang, who will discuss our key financial results. Thank you, Joanne, and hello, everyone. Now, let's move to the financial results. Revenue was RMB 70.2 million for the first quarter of fiscal year 2021, compared with RMB 71.1 million in the same period of last year. Cost of revenue decreased by 9.4% to RMB 41.9 million for the first quarter of fiscal year 2021, from RMB 46.3 million. in the same period of last year. Work profit increased by 14.1% to RMB 28.3 million for the fourth quarter of fiscal year 2021 from RMB 24.8 million in the same period of last year. General and administrative expenses decreased by 29.0% to RMB 28.3 million for the first quarter of fiscal year 2021 from RMB 39.8 million in the same period of last year, primarily attributable to the allowance accrued last year. Employment loss of intangible assets and goodwill was narrow for the first quarter of fiscal year 2021 compared to RMB 145.4 million in the same period of last year. Sales and marketing expenses increased by 10.2% to RMB 8.5 million for the first quarter of fiscal year 2021, to RMB 7.7 million in the same period of last year. Operating loss was RMB 8.5 million for the first quarter of fiscal year 2021, compared with RMB 168.2 million in the same period of last year. Objected operating loss was RMB 1.9 million for the first quarter of fiscal year 2021, compared with RMB 15.1 million in the same period of last year. Unincome net. with RMB 0.6 million for the fourth quarter of fiscal year 2021, compared with RMB 4.9 million in the same period of last year, primarily due to investment share value change and foreign exchange laws. Income tax expenses with RMB 4.7 million for the fourth quarter of fiscal year 2021, compared with benefits of RMB 15.7 million in the same period of last year, primarily attributable to the valuation allowance of different tax assets recorded in the fiscal year 2021. Next loss was RMB 11.5 million during the fourth quarter of fiscal year 2021, compared with RMB 145.4 million in the same period of last year. Adjusted net loss was RMB 4.2 million compared with RMB 4.7 million in the same period of last year. Basic and diluted net loss for ADS attributable to ordinary shareholders for the fourth quarter fiscal year 2021 were both RMB 25 cents compared with both RMB 3.11 cents. for the same period of last year. Adjusted basic and dilute net loss per ADS attributable to ordinary shareholders were both RMB 9 cents compared with both RMB 7 cents for the same period of last year. Cash and cash equivalents, as of February 28, 2021, the company had cash and cash equivalents of RMB 410 million compared with RMB 404.7 million as of February 29, 2020. To the mindful of the length of our earnings call for the fiscal year 2021 financial results, I would encourage listeners to refer to our earnings class release for further details. Looking forward, for the first quarter of fiscal year 2022, the company expects to generate revenues in the range of RMB $67.5 million to RMB $70.4 million, with standing an increase of 15% to 20% on a year-over-year basis. The above guidance reflects the company's current and preliminary view, which is subject to change. This concludes my portion of prepared remarks. We will now open the call to questions. Operator, please go ahead.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. As there are no further questions now, I would like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact Four Seasons Investor Relations through the contact information provided on our website or the Pearson Group Investor Relations.

This concludes this conference call.

You may now disconnect your line. Thank you. You have reached the end of playback for this conference recording. Press 4 pound to increase the volume. Press 6 pound to decrease the volume. Press 7 pound to skip backward in the conference recording. Press 8 pound to go to the beginning of the conference recording. Press 9 pound to skip forward in the conference recording. Press star pound to go back to playback. Press 0 pound to repeat this menu.