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spk_0: the day and thank you for standing by welcome to to yale education and group fourth quarter of like two thousand and twenty three earnings conference call at this time old pet it's been that in the listen only mode after the speakers presentation it'll be a question and answer session you ask a question during the session you and the press dar one on your telephone leads the of i have to help culprit is being recorded if you require any further assistance please press down the iraq and now a liked pit had the conference obits in the projects and thing investor relations director thank you please go have sir
spk_1: thank you all brighter
spk_2: thank you all will joining us to that point zero education groups for fiscal quarter of fiscal year twenty twenty two are nice conference call the earnings release was distributed earlier today and you may find a copy on the company on our website oh through the news wires during this call you a here from mr alex palm president and chief financial officer i myself investor relations director following the prepared remarks mr pony and i will be available to answer your questions before we continue please note that the discussion today will contain forward looking statements made under the safe harbor provisions of the us private securities litigation the format of nineteen ninety five forward looking statements a subject to risks and uncertainties may cause actual results to differ materially from our current expectations potential risks and uncertainties include but i'm not limited to those are like a public filings would be se si for more information about these risks and uncertainties please refer to are fighting with the fcc also our earnings from be and this call include discussion of certain long gap measure measures please refer to our earnings release which contained a reconciliation of the know gap measures to the most directly comparable gap measures i'll like loud to turn to call over to mr alex pope added please thank you jack welch and good evening care about the isle of all all i getting away will be good morning to those joining from the you are ah let me start by noting it then about a year said the company last organized and earnings top call armed so thank you all for making the time and joining us today and they're looking and looking for to discussion ah let me start with our financial results for the what father and the whole physical year twenty twenty two in that physical quarter ending our february twenty eight twenty twenty two we recorded five hundred forty one long i was found dollars is albany zero point six million us dollars said that six hundred thousand us dollars in gap operating income and a hundred and eight million us dollars in gap net loss attributable to tap so think the resale market conditions and regulatory environment keep open in our industry in the mainland china we've been taking actions and making necessary adjustments to our business first of all adds up december thirty first twenty twenty one we seized offering key ninth academic after school tutoring services in the behind the china which a job now used to constitute to the majority of our although lavender websites real lines are positioning as a smarter learning solutions provider and we have exhibited our product and service is a lot spray many to us and those are learning services technology solutions and learning how to solutions only offer they use to learners and learning institutions what in china
spk_3: a global
spk_4: the financial performance
spk_2: about what physical quarter and fiscal year twenty twenty two with flexed such transformation and will add it's a transformation in motion let me take this opportunity to express on behalf of child's management you are sincere appreciation so our customers for their trust and understanding talk colleagues an axe colleagues saw their dedication hard work and perseverance chart just as partners or that assistance in device to regulatory authorities for their supervision guidance and last but not least to our shareholders for their continued support all this transfer transformation jury thank you op as with are transforming minutes is smart learning solutions provider if alleging that for were primary off way the folly products and services learning services and others learning technology solution
spk_4: and content solutions
spk_2: or also explain why other initiatives in china and a global jax me will give you an update on our operation of the balance in these besides areas in reviewed of what quarter and fiscal your financial results after that i'll update you on our business strategy and then will open the for questions so jackson based on that thank you alex
spk_1: let me start by introduce the are learning services and others business
spk_2: we provide a lich my learning programs to learners between two and eighty years old these programs are offered in various top five it and both online and offline formats our offerings carly included the fall on programs five and creativity coding and programs humanity and that acts an exception let me now spend some time to talk about the program to themselves five and pretended he died learners to observation analysis an application of various scientific phenomena and theories the program is designed to develop learners scientific curiosity and probably sobbing capabilities calling and program he covers a broad range of computer science related topics including programming letters the software development algorithm an eccentric the program is designed to advance niners technological fluency and critical thinking skills humanity the know that it's provide comprehensive lunging at the intersection of history art and literature the program is designed to cultivate loners cultural and aesthetic little mercy a from on the often mentioned above we actively developing additional programs we haven't witnessed demand for more customers to develop as well rounded people and lifelong learners our enrichment programs are designed to captured that demand a rich my learning will continue to be an important pillar an old business going forward our second may better the area is learning technology solutions we provide a post wheat of enterprise grade technology products and services to learning institutions i'll you cover many components and the value chain of the learning process including online classroom content the bomb among teachers support and non essential management we're currently serving a number of for profit and not for profit learning institutions and will continue to expand our customer base our third main business area is counter solutions we operate authentic and now academic learning content in both paper and digital formats learning content materials themselves are either created in the house leveraging the broth counter library me accumulated over the course of the company history or acquired and the one license from domestic and global partners these digitally integrated heidi interactive learning contents enable our learn notes to sell study or to simply concealed casual oh these business areas mentioned above a still in development stages and a subject to further adjustments that concludes the operational development section let me now shift gears a little that to go through some keep the national highlight for the sport fiscal quarter and them briefly with view the fiscal year twenty twenty two financial results please note that the national results in the fourth quarter and fiscal year twenty twenty two a subject to impact on the one up as is adjustments as should be taken with care if to refer to our potential future performance please also note that such financial performance still includes partial results from cape brunei academic after school tutoring services prior to the secession and the fourth quarter of fiscal year twenty twenty two net revenues told five hundred and forty one million us dollars representing is sixty percent decrease from one billion three hundred and sixty three million and the fourth quarter of fiscal year twenty twenty one the decreasing revenue was primarily driven by the session of cape in ny academic a as t services gross profit declined by fifty six percent to three hundred and forty three million us dollars from seven hundred and eighty one minute just daughters in the same year ago period selling and market a expenses decreased by eighty four percent to a hundred and three million us dollars from six hundred and sixty minutes us dollars in the fourth quarter of fiscal year twenty twenty one now gap selling and marketing expenses which excluded show based compensations decrease by eighty two percent to a hundred and thirteen million us dollars from six hundred and thirty five million us dollars in the same year ago period saudi and marketing expenses as a percentage of revenue decreased by twenty nine percentage points to nineteen percent in the last quarter on a year on year basis the year on year decrease that sounding and marketing expenses was primarily a result of his abduction of marketing promotion activity general and administrative expenses decreased by thirty nine percent to two hundred and twelve million us dollars from three hundred forty nine million us dollars and that was quarter of the fiscal year twenty twenty one now gap general and an administrative expenses which excluded share based compensation expenses decreased by thirty one percent two two hundred and three million us dollars from two hundred and ninety four million us dollars in the same year ago period in comp i'm operations was point six metre your scholars are the fourth quarter of fiscal year twenty twenty two compared to los from operation of two hundred ninety seven million us dollars in the same year ago period non gap income from operations which excluded shared paid compensation expenses was point eight million us dollars compared to non gaap loss from operations of two hundred and seventeen million us dollars in the same period of the prior year not last attributable to t l was a hundred and eight million us dollars in the fourth quarter of fiscal year twenty twenty two compared to that last attributable to tl of a hundred sixty nine minute you start in the of fiscal quarter of fiscal year twenty twenty one now gap not loss of should i do to tnl which excluded shared based compensation expenses was a hundred and eight million us dollars compared to non gaap net loss attributable to check out of eighty nine in a u us dollars in the same period
spk_5: of the prior year
spk_2: as of february twenty eight twenty twenty two the company had one billion six hundred and thirty a million of cash and cash equivalents one bit and seventy one million us dollars of short term investments and one billion and forty four million us dollars and current and non current restricted cash as of february twenty eight twenty twenty two the company's deferred revenue balance was a hundred and eighty eight million us dollars compared to one gideon four hundred and seventeen million us dollars as of february twenty eight twenty twenty one representing a year over year decrease of eighty seven percent which was primarily driven by the succession of capable ny academic a as cheap services turning out to the fiscal year twenty twenty two national was all let me briefly reviews some keep the nationals as isles fiscal year revenues decreased by two percent to four billion three hundred and ninety one million us dollars off topic decreased by eleven percent to two billion one hundred and eighty eight billion us dollars last on operations was six hundred and fifteen million us dollars and the fiscal year twenty twenty two compared to the last one operations of four hundred and thirty a million us dollars in the prior year now gap laughs from operations which excluded share paid compensation expenses was four hundred and forty million dollars for the fiscal year twenty twenty two compared to non gaap loss on operations of two hundred thirty three million us dollars and a fiscal year twenty twenty one now lost a tribute about to t l was one billion one hundred thirty six million us dollars and the fiscal year twenty twenty two compared to not loss attributable to check out of a hundred and fifteen million us dollars in the previous fiscal year non gaap net loss attributable to t out which excluded sure based compensation expenses was nine hundred and sixty one minute us dollars compared to non gaap natty not a pop attributed to check out of eighty nine many your daughters in the fiscal year twenty
spk_6: twenty one
spk_2: that concludes the financial highlight action now i'll and to call back to have been to briefly update you on a business strategy out alex peace
spk_7: thanks jackson
spk_2: so physical year when he landed her was certainly any valid for we're in our industry we went through significant changes in the regulatory environment and market condition and i think they just entered into the opening chapters of a transformation job
spk_4: but while i look forward and look into the future
spk_2: and thinking about the mega try anything technology and then society
spk_8: for alpha saying
spk_2: new opportunities but all on you can
spk_9: i think the company will
spk_2: continue to strive to capture these opportunities and overcome these challenges and to the strength of our plans i experienced staff our continent evolving capabilities our technology and our operation more
spk_10: looking for
spk_7: we expect learning services
spk_2: learning technology solutions and content solution to have viable business models i will continue to and off into other to new initiatives as a smart learning solutions provider in china and applause continue to serve er nurse and learning institutions mobile and as i come to they end up my prepared remarks are just make a personal reflection as the chinese saying goes the journey is already gotten law and you will get to i just going forward and i think that speaks to the mindset of the management and the company or just go forward so that concludes my per carry march operator we're now ready to take question
spk_0: thank you ladies and gents memory now begin the question and answer session if you wish to ask a question the pressed star one on your telephone and lights for your name to be now if you wish to withdraw your reclines please press the pound key that guy well we compile the question answer roster for once given star one the questions as as question cancer him lucy you from bank of america let's go
spk_11: hi alex hi jackson that particular question or this is lucy calling from bank of america i have a question on a restructuring cost so how much of the restructuring cause i related to canine termination that were reported in your last fiscal year are today two and how word is are we instruction caught recorded a him here now
spk_12: and the will there be any more
spk_11: similar cost in the upcoming year thank you
spk_2: lucy that hero question of i've previously announced by the company would receive the uplink eight or nine damage after school tutoring services in england and of china by the end of last year the to the one time costs and expenses incurred and and process will primarily related to to stop optimization and married bench optimization on such cause an expensive items have largely been reflected in the second half hour fiscal year twenty twenty two financial results ah i would just say was tremendously difficult to say goodbye to some of our and beard colleagues we doubt i would never claim in the last year and tried our best to balance the korea of on employees the a of learners and the stopping me of the company in this doubt by the trough us on as for real estate related costs and expenses we have been having some active discussions in his own ambulance the the process of celtic taking a slightly longer than the staff on optimization process ah what considered a current business situation a future doesn't need in a just ordered that decides with the ongoing basis in the learning and the learning market will continue to adjust our job graphic footprints in the future so you sure i think the bulk of the the train lines keto nice as session related costs and expenses have already been parked in be are you know f y twenty twenty two a national results are my still be a small amount and up in the next cop
spk_13: the quarters
spk_14: a whole die as as a question
spk_15: yeah i get so much
spk_0: think you are next and cancer empty ask him friend jp morgan leave as a question
spk_16: hi alexa hate jackson i good evening and thanks for taking my questions and by to ice great to see our operating profit hiding positive him decide current like a congrats on that i just to follow up on i'll let you just made sense how can it can i ask come in a lot of be cleaned or packs love all for the are coming potter's i eat as a we understand our most of the be shocked and with have already been pope but just to gauge how much with be are bickering level can aid or idea how much was bullpen fourth quarter to their because type it out where what a pity bickering level going forward
spk_2: got it thank you the answer the question up a great question and i think before we ah elsa gonna be all packs our lives in the future the first baptist college you can discuss about how many learning centers and employees me happy time and as such we will have a better estimate about of our our packs going forward we have a substantial progress by not in a restructuring ah as alex mentioned earlier what edition to be a small only solutions provider to deliver many services money technology solutions and contests and inches i'm wearing an evolving market today and when we decide how many learning centers and how many employees to keep won't take to considerations of current business situation and future business ah by now staff optimization have the chiefs of staff and our overall employee five is a fraction of what it used to be temporary employee scale will provide suitable human capital resources for the business transformation as for learning centers you can see on a lot of the national it was that are operating these right abuse up decreased by eighty five percent compared with two quarters ago the reduction in learning centers as in line with the adoption of offering you ah like i that earlier was don't have any as some ongoing discussions with a few orlando florida optimize our geographic photos as for the off axis solve on what would you be on our fourth quarter of the nation's did still include some are packs prior to the taillights discussion
spk_16: so as we look forward you can expect all packed to to change of that fungal carbon love
spk_17: thank you that's really helpful and i are complex again or not kind of perfect as quarter
spk_0: think they'll let them
spk_18: thank you all next question comes from not leave france as the t v that's disgusting i management i thank you for that present a shit ah me i knowed on your future development plan of for that technology solutions and content solutions are these two hours at most respected free or any t operating metrics are we can track and
spk_2: what do you think about the timing or to see this as i to take off thank you clay petsmart others about a dollar question on i think before it was a specific by as much like some pilot at one point us question sort of take a step back and play that one novel look as emotionally life for carry logs looking forwards or united states are low the are interesting in spite of the ball nights in the industry across the world with in the last outset six to eight months of how the opportunity to speak what of number of players and colleagues on sunday in industry ah be so many different parts of the world illegal was ah in yard in other parts of asia and i think some of those conversations many of the lights holloway that we're really at the cost of a learning about the mix
spk_19: and some of these discussions i think your words come to my mind
spk_2: those are all line digital that apologize an open ah let me explain another that around us for works well so i'll i'll splash always west they impactful a plan that much as the online learning one that is really some many of his colleagues are tolerated here to set to stay ah
spk_13: that's a top was the digital content and digital devices
spk_20: playing an increasingly important part in the and joe
spk_2: in politics what the out on it's of coughlin says technologies
spk_7: an artificial intelligence related algorithms are really the same a much more natural and personalized experience for the learned us
spk_19: and the last one that opens it's like the proverbial it takes a village
spk_2: ah well you know it takes many players
spk_19: in the lowest and journal
spk_2: to make it like that successful it takes concerts a technology from many players to make it possible i'm so just a thought all that the only if we talk about us to allergy roughly speaking i think will certainly i just try to build well past for his party concepts but also to work with content providers across the world to bring those content to learn us of in china and in the back of the law we really look forward to integrating that xp i across many different one one technology
spk_7: ah and to provide a much more natural and individualized personalized learning just to lineups
spk_2: and lastly i think what the technologies that a felt over the years and worked experiencing the past of sort of the other players and in a should really look for actually following the entire ecosystem i'm it's digital transformation jut so if you said way you know that high like have adults i like had a chance going forward and the victim action for us by we are still in the early stages of this transformation
spk_21: we have many of the components that i talked about that a dog over the years but we usually still striving it's of thought viable business models to fine tune and optimize our product or services shows and continue to work but more partners
spk_0: our across so many americans armed so i'm not for watch ah i'm at a future date to get anybody updates on the matrix and how those strikes our transformation pollock
spk_22: thanks mom thank you alex
spk_2: thank you make passing comes from l c sang from morgan stanley please god and you management try teaching my client you ah my question is also very good too darn near in new jersey shore your jerk our cut out many ah new partners are not project that you're working on on win with trump done are more important than the
spk_23: he added an article how much mapping your contribution do you expect from the new business in future thank you
spk_2: they sell a product question glad question on as i mentioned before with the main contribution to applied for the for it upcoming the current ah as be aware that they probably will come from don't to buckets i learning service nurse learning technology submission and concepts search
spk_7: and out of the three areas
spk_23: it is likely that north and services or be the largest love a contributor in that light of the upswing
spk_2: but i'll just take them for as that is that much are still relatively old and what have more clarity on their almost five as they continue to develop on other new initiative look taken with that for almost nice i had on a killer those are still really good exploratory spacex and that's probably the hardest shirt
spk_24: really prevent those thoughts
spk_2: oh what continue to operate if all of these initiatives and scale of them are on the right market conditions and that life internal capabilities are bucks right now
spk_25: ah been a commercial before we are isn't his transformation jury emotional
spk_22: we are indeed undergoing major this with just notes and in new and the should set in conjunction at the same caught some of these different such areas of just started on and bowl of it looks forward to providing of one it's all like a solar power
spk_0: the one teacher
spk_7: that's healthy
spk_26: thank you very helpful thank you all next costs and chemistry select flair from u p s please as a classic
spk_4: couldn't they couldn't think of management fire take my question and a damn congratulations on turning probable in a very challenging environment and my question is are you i transitioned into white them now academic today as so could you share and that what color
spk_2: on the tradition and like that typically typically one are coming from a camel from the typical anglo have their habits glittering so well i bought the moment salary looking i actually retention rate to share and there and marginal are like ad for it then and now economic today and you
spk_4: great the spikes out another great question oh let me first recovered about what jackson i talked about that for
spk_2: since a star was in the ring in richmond learning a services in from of the subject areas are very different from academic after school children services ah but the this of us if we look out and fact that this a small on a somewhat similar to that of academic the at the ah the frog one out of stuff and i mentioned that pontiff been out of deference ah would provide veteran and learning services and both online and offline one that are embarrassed by five
spk_27: and we're also i'm observing some very interesting ah
spk_2: get make the some interesting observations ah that these kind of laugh is typically will foster allow more interaction ah a lot more student drove an activity ah i'm an absolute look forward to continue to up in debates and optimize those are offering saw customers and are flourish
spk_19: on
spk_2: for sure we're awfully tracking the matrix all that reflect the overall out and grow up a business
spk_19: so what they continue to find him that this model
spk_26: on the thought i think it's really not too early
spk_0: ah to discuss the metrics themselves
spk_28: com bubble come back for you had to let that article thanks okay thank you you are next costs it comes around led down one from a kyrie leave as you can fix
spk_2: i think management i saw other one question regarding for our tasked with the since i'm a was not that was probably be to spend some money to continue to invest in the new business and probably also a suffer found the certain period of the not making so i want to know that has a look at our task the sun and the which point or the question of what you were draw dance and you know of for how announcement out and lot of said at the the company would like to continue onto rewarded she avoided by the and she repeated so i just want to know that in addition to the here we purchase the ad management has ever consider to use the cash to return to the shareholder and of when the management thinking about or the humid a return i would like to cash return visit that share repurchase was the rationale behind that our we prepare our one over the other thank you very much
spk_7: thanks will end up on a gala mean unpack that question whether that i ah i think dogs in large earnings release the there are numbers from the banishing you can see i think jackson other than about that earlier ah wanna just recently said ah
spk_4: with a new the crash but the some a very solid
spk_2: ah he talked about the serving purchase and point
spk_4: again that lashing out trust news earlier in the words as author line as an extension of our share repurchase quiet
spk_29: ah and of his could vanish from the plan dollars put in place is about a year ago
spk_2: the planet fact that we allowed the company said as he approaches cit of approximately eight hundred million us dollars of the company share over the next twelve months and the company was also you wander in and management of the company would use their personal funds to purchase up to the hundred million of the company's shares
spk_30: i'm i think that so
spk_31: ah the
spk_0: the share repurchase have long been away for us to create the i'm far long term investors and shareholders
spk_22: last year we approve the currency of the purchased planned and executed a portion of it and we really really appreciate our shareholders continue to support through this transformation any or continue to create shareholder die
spk_4: elsewhere
spk_2: okay very clear think the ring much
spk_7: thank you and next question comes round leaping gel friend see i cc leave as a question thanks alex and jackson for taking the question or just one quick one for me
spk_2: on the board composition the kids are management's elaborate a little bit more on the change of the board composition thank you thanks for and up on a photo all on a different world really delighted to appoint janet yellen pounds job board of directors
spk_32: janet is clearly a senior vice president of the your financial services as a unit of should not have
spk_19: as if it's tenets of experience in this was on fire
spk_4: the word really half ago that a that's a different of a used on he that could have such a janet will add tremendous value to the company
spk_2: and i will also take the opportunity to really think jang song for her over a decade of saw that on the board of the doctors jang if a dear friend and mentor we learn a tremendous amount of again
spk_33: and i wish for the thought of lot of football in her future diapers
spk_34: the fighters change our core members on what are stable
spk_0: our founder and ceo the bathroom guy will serve as the chairman of the word
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