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Tal Education Group (NYSE:TAL)

Wednesday, September 29, 2010

For the Year Ended February 29/28,																		For the Six Months Ended August 31,
	2008						2009						2010						2009						2010
	$			%			$			%			$			%			$			%			$			%
	(in thousands of $, except percentages)

Net revenues	$	8,882			100.0	%	$	37,476			100.0	%	$	69,594			100.0	%	$	32,983			100.0		$	53,022			100.0	%

Cost of revenues		(4,367	)		(49.2	)		(18,554	)		(49.5	)		(37,649	)		(54.1	)		(16,068	)		(48.7	)		(26,255	)⁽¹⁾		(49.5	)

Gross profit		4,515			50.8			18,922			50.5			31,945			45.9			16,915			51.3			26,767			50.5

Operating expenses
Selling and marketing		(370	)		(4.2	)		(2,353	)		(6.3	)		(5,608	)		(8.1	)		(1,958	)		(5.9	)		(4,184	)⁽²⁾		(7.9	)
General and administrative		(2,478	)		(27.9	)		(5,890	)		(15.7	)		(10,872	)		(15.6	)		(4,602	)		(14.0	)		(7,808	)⁽³⁾		(14.7	)
Impairment losses on intangible assets and goodwill		—			—			(1,615	)		(4.3	)		—			—			—			—			—			—

Total operating expenses		(2,848	)		(32.1	)		(9,858	)		(26.3	)		(16,480	)		(23.7	)		(6,560	)		(19.9	)		(11,992	)		(22.6	)

Income from operations		1,667			18.7			9,064			24.2			15,465			22.2			10,355			31.4			14,775			27.9

Interest income, net		11			0.1			77			0.2			283			0.4			103			0.3			162			0.3
Other expenses		—			—			(210	)		(0.6	)		(124	)		(0.2	)		(119	)		(0.4	)		(27	)		(0.1	)
Impairment loss on available-for-sale securities		—			—			(363	)		(1.0	)		—			—			—			—			—			—
Gain from sales of available-for-sale securities		—			—			—			—			—			—			—			—			6			0.0
Gain on extinguishment of liabilities		—			—			731			2.0			—			—			—			—			—			—

Income before income tax provision		1,678			18.8			9,299			24.8			15,624			22.4			10,339			31.3			14,916			28.1
Provision for income tax		(165	)		(1.8	)		(2,018	)		(5.4	)		(1,379	)		(1.9	)		(912	)		(2.7	)		(1,670	)		(3.1	)

Net income	$	1,513			17.0	%	$	7,281			19.4	%	$	14,245			20.5	%	$	9,427			28.6	%	$	13,246			25.0	%