Good day, ladies and gentlemen. Thank you for standing by for the Four Seasons Education's First Quarter Fiscal Year 2020 Earnings Conference Call. [Operator instructions] Today's conference call is being recorded.I will now turn the conference over to your host, Ms. Olivia Li, Investor Relations Manager for the company. Please go ahead..
Hello, everyone, and welcome to First Quarter Fiscal Year 2020 Earnings Conference of Four Seasons Education. The company's results were issued via Newswire services earlier today and are posted online.
You can download the earnings press release and sign up for the company's e-mail distribution list by visiting the IR section of our Web site at ir.sijiedu.com.Mr. Peiqing Tian, our Chairman and Chief Executive Officer, will start the call by providing an overview of the company and performance highlights of the quarter in Chinese. Ms.
Joanne Zuo, our Director and Chief Financial Officer, will provide English interpretation of CEO remarks and then 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. Forward-looking statements involve inherent risks and uncertainties, as such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's prospectus as filed with the U.S.
Securities and Exchange Commission.The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.
Please also note that Four Seasons Education's earnings press release and this conference include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.
Four Seasons Education press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.I will now turn the call over to our CEO, Mr. Tian. Please go ahead..
Thank you, Mr. Tian. And hello, everyone. This is Joanne, CFO of the company. Let me first translate Mr. Tian's remarks into English.
In the first quarter, we achieved a 53.2% total student enrollment growth on a year-over-year basis, with math-related courses as our core education offering, we provided K-12 students a one-stop solution for after-school study and self-improvement.
During this quarter, we maintained enrollment and diversification momentum across a variety of subject courses.
Spotlighting on middle school program is gaining popularity with strong year-over-year enrollment growth and an increasing proportion of revenue contribution during the first quarter.Interpreted Our learning centers in Shanghai and other provinces maintained the steady development and ramp-up process following our learning center network optimization efforts from the previous quarters.
It's worth mentioning that the geographic diversification of our learning center continues, which is reflected by a remarkable 75% enrollment growth in the learning center outside of Shanghai, as compared with the year ago period.
As of May 31, 2019, we had 52 learning centers, including 44 in Shanghai and 8 in other cities.Some exciting news was that our learning center facilities and its high-standard education program have been further recognized by the government.
Recently, we were honored to be selected by the Shanghai Children's Foundation as one of the organizers of the Trusty Summer Childcare, this project is launched by Shanghai Women's Foundation and the China Children's Foundation and aims to have kids spend a safe, happy and fulfilling summer break.The Trusty Summer Childcare classes were launched in 12 of our learning centers in Shanghai during this summer vacation.
Besides the dedicated teachers taking care of the kids' security and daily life, we also prepared a series of fascinating courses and activities geared toward the children's logical thinking development.
Our participation in this public program, not only demonstrates our good compliance status and sterling brand reputation with the public, but also will further help elevate our brand awareness among parents and the students.Moving on to our future courses for logical thinking and other activities.
As a pioneer in Sudoku teaching, we continued to be the chosen organizer to host the Sudoku level testing and are dedicated to promoting this game to a broader audience. In June, our Four Seasons Bridge game also achieved outstanding performances in the [indiscernible] National Open.
With the healthy enrollment growth and development of learning centers, as well as other various activities underway, we're confident in our business growth to just portray and have a positive outlook on our operating performance.With math education as the anchor subject of our increasingly diversified portfolio of course offerings, and a trustworthy program quality as our strength, we are devoted to capturing the tremendous opportunity in the K-12 after-school market, by delivering an enriched learning experience to students of different age groups.Before I move on to the financial results, please note our adoption of new lease accounting standards.
The company has adopted Accounting Standards Update 2016-02, Leases since March 1, 2019. As a result of this adoption, the company recognized operating lease right-of-use assets of RMB239.2 million and related operating lease current liability of RMB0.3 million, and noncurrent liabilities of RMB240.9 million on March 1, 2019.
The impact on opening balance of retained earnings in the period of adoption was nil. The adoption of ASU 2016-02 did not materially affect the consolidated statements of operations and cash flows. For more information, please refer to the adoption of new lease accounting standards in our earnings release.Now let's move on to the financial results.
The first quarter results marked a solid start for the fiscal year 2020. After the winter break, our total student enrollment started to show an upward trajectory and delivered excellent year-over-year growth for the quarter.
This growth represents the popularity of our premium and extensive course offerings.As a result of our network optimization program from the preceding quarters, we reported a considerable sequential gross margin improvement, and achieved net income again for this quarter.
And we relentlessly deliver core math courses and enriched educational content for other subjects to a broader student base of different age groups.
We have seen a nice trend in the market demand for our courses reflected by the enrollment growth and increased deferred revenues, which give us a positive outlook for the top line performance for the quarters ahead.Now I'd like to walk you through more details on our first quarter fiscal year 2020 financial results.
Revenue decreased by 0.8% to RMB85.6 million for the first quarter of fiscal year 2020 from RMB86.4 million in the same period of last year.Cost of revenue increased by 21.3% to RMB46.3 million for the first quarter of fiscal year 2020 from RMB38.2 million in the same period of last year, primarily attributable to costs associated with the increase in faculty staff cost and learning centers' rental, utilities and maintenance and depreciation costs as a result of increased number of learning centers.Gross profit decreased by 18.3% to RMB39.4 million for the first quarter of fiscal year 2020 from RMB48.2 million in the same period of last year.
General and administrative expenses increased by 34.2% to RMB33.5 million for the first quarter of fiscal year 2020 from RMB25.0 million in the same period of last year, primarily attributable to increased staff cost and increased share-based compensation expenses.
Sales and marketing expenses decreased by 2.2% to RMB7.9 million for the first quarter of fiscal year 2020 from RMB8.1 million in the same period of last year.Operating losses was RMB2.1 million for the first quarter of fiscal year 2020 compared with operating income of RMB15.1 million in the same period of last year.
Adjusted operating income, which excludes share-based compensation expenses, was RMB7.8 million for the first quarter of fiscal year 2020 compared with RMB21.1 million in the same period of last year.
Subsidy income was RMB7.4 million for the first quarter of fiscal year 2020, compared with RMB0.4 million in the same period of last year, primarily due to subsidy income of unrestricted cash incentives that the company received from local government authorities, the amount of which varies from period-to-period.Interest income net was RMB1.1 million for the first quarter of fiscal year 2020, compared with RMB2.8 million in the same period of last year.
Other income net was RMB2.4 million for the first quarter of fiscal year 2020, compared with other expenses of RMB2.2 million in the same period of last year, primarily due to gains from fair value change of investments.Net income was RMB4.2 million during the first quarter of fiscal year 2020 compared with RMB8 million in the same period of last year.
Adjusted net income, which excludes share-based compensation expenses and fair value change of investments measured at fair value, was RMB11.2 million compared with RMB18.4 million in the same period of last year.Basic and diluted net income per ADS attributable to ordinary shareholders for the first quarter of fiscal year 2020 were both RMB0.08 compared with RMB0.16 and RMB0.15, respectively, for the same period of last year.
Non-GAAP basic and diluted net income per ADS attributable to ordinary shareholders for the first quarter of fiscal year 2020 was both RMB0.22, respectively, compared with RMB0.38 and RMB0.35, respectively, for the same period of last year.
Cash and cash equivalents, as of May 31, 2019, the company had cash and cash equivalents of RMB515.3 million, an increase of 17.2% compared with RMB439.6 million as of February 28, 2019.Looking forward, for the second quarter of fiscal 2020, the company expects to generate revenue in the range of RMB121.4 million to RMB126.1 million representing year-over-year growth of approximately 30% to 35%.
The above outlook is based on the current market conditions and reflects the company's preliminary estimates of market and other operating conditions and customer demand, which are all subject to change.This concludes my portion of prepared remarks. We will now open the call to questions. Operator, please go ahead..
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 TPG Investor Relations..
Thank you very much. Ladies and gentlemen that then concludes this conference call. Thank you for joining, and you may now disconnect your lines..