Hello, ladies and gentlemen. Thank you for standing by for the Four Seasons Education's Second Quarter of Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a 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 Li, Investor Relations Manager for the company. Please go head, Olivia..

Hello, everyone and welcome to the second quarter of fiscal year 2021 earnings conference call 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 website at ir.sijiedu.com. Ms. Joanne Zuo, our Chief Executive Officer will start the call 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 US 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 US 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 call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

Four Seasons Education's 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, Ms. Zuo. Please go ahead..

Thank you, Olivia and hello everyone. Thank you for joining our call today. In the second quarter of fiscal 2021, we continue to focus operational improvement multiple fronts to further optimize the learning experience of our students.

I'm happy to report that all of our learning centers across the country have reopened and fully operational during this quarter, delivering high quality educational product to our students. We are operating in a rapidly evolving environment that brings with it both significant challenges as well as new opportunities.

Those challenges include the increasingly fierce competition from online peers in the aftermath of COVID-19 and Shanghai Municipal Education Commission has adopted fully randomized admission policy for private, elementary and secondary schools since this year. Both of these changes impacted the customer demand.

Given market uncertainties we broadened our primary school courses to better serve and address the evolving customer demand due to the new policy. Also we're pleased to see the growth of our middle school tutoring classes, primarily driven by our designated curriculum adapted for the new customer demand.

In our diligent efforts to improve educational products, we remained dedicated to continuously enhancing our service quality by expanding our pre and post class educational service package with more available subjects.

Last but not least, I'd like to update you on other strategic initiatives as we continue to leverage our full capabilities to drive all growth in the long run.

Firstly, our nationwide expansion initiative remained intact and we're making progress in consolidating and upgrading nationwide applicable educational materials to prepare for our market expansion.

Second, we're making encouraging strides and collaboration with full time schools highlighted by 11 new school partnerships where we jointly offered in school tutorial classes and service for students.

In addition, our math lab project continued to gain industry's recognition while pleased to be selected to participate in the ninth Chongqing [ph] Education Equipment Exhibition and the 78th China Education Equipment Exhibition separately in October. First [indiscernible] teacher's industry events.

Speaking of expansion of our industry - of our interest oriented across offerings. We entered into a strategic cooperation agreement with Shanghai STEM cloud. We will jointly develop a STEM curriculum and organize activities to better address the increasing demand of the market.

Our pilot STEM camp was launched this October and has been well received by the market. Looking ahead, we're excited about opportunities that will come from our intense and deep portfolio of programs for academic subject, tutoring, interest nurturing and intellectual development.

As our online model, offline model further matures we will continue to drive student enrollment and engagement avenues work [ph] more tenaciously [ph] working to improve learning center network optimization and the strategically growing course offerings.

We believe our focus on our core strengths and fundamentals will set the foundation for sustainable operation. We remain confident about the recovery and robust long-term prospects. With that I'll now turn the call over to our Vice President of Finance, Ms. Xun Wang, who will discuss our key financial results..

Thank you, Joanne and hello, everyone. Now I'd like to walk you through further details of our second quarter fiscal year 2021 financial results.

Revenue was RMB83.8 million for the second quarter of fiscal year 2021, compared with RMB128.8 million in the same period of last year, primarily due to latest regulatory policy and the extended impact of COVID-19.

Cost of revenue decreased by 16.7% to RMB48.2 million for the second quarter of fiscal year 2021 from RMB57.9 million in the same period of last year. Gross profit was RMB35.6 million for the second quarter of fiscal year 2021, compared with RMB71.0 million in the same period of last year.

General and administrative expenses decreased by 7.0% to RMB30.3 million for the second quarter of fiscal year 2021 from RMB32.6 million in the same period of last year. Sales and marketing expenses decreased by 20.6% to RMB8.0 million for the second quarter of fiscal year 2021 from RMB10.0 million in the same period of last year.

Operating loss was RMB2.7 million for the second quarter of fiscal year 2021, compared with operating income of RMB28.3 million in the same period of last year. Adjusted operating income was RMB4.5 million for the second quarter of fiscal year 2021, compared with RMB35.7 million in the same period of last year.

Income tax expense was RMB1.8 million for the second quarter of fiscal year 2021, compared with RMB9.2 million in the same period of last year. Net income was RMB4.0 million during the second quarter of fiscal year 2021, compared with RMB20.3 million in the same period of last year.

Adjusted net income was RMB6.8 million for the second quarter of fiscal year 2021, compared with RMB26.9 million in the same period of last year.

Basic and diluted net income per ADS attributable to ordinary shareholders for the second quarter of fiscal year 2021 were both RMB0.07 compared with RMB0.40 and RMB0.39, respectively for the same period of last year.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders were both RMB0.13 for the second quarter of fiscal year 2021, compared with RMB0.53 and RMB0.52 respectively for the same period of last year.

Cash and cash equivalents as of August 31, 2020, the Company had cash and cash equivalents of RMB423.0 million compared with RMB404.7 million as of February 29, 2020. To be mindful of the length of our earnings call, for the first six months of fiscal year 2020 [ph] financial results.

I would encourage listeners to refer to earnings press release for further details. Looking forward for the third quarter of fiscal 2020 [ph], the company expects to generate revenue in the range of RMB62.1 million to RMB67.2 million.

The first outlook is based on the current market conditions and reflects the company's preliminary estimates of market and 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..

[Operator Instructions] all right. There's nothing at the present time. I would like to return the call to the company for any closing comments..

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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 Piacente Group Investor Relations..

Thank you. That concludes today's conference call. Thank you for attending today's presentation. You may now disconnect your lines..