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Ambow Education Announces First Quarter 2020 Financial Results

  • Thursday, July 9, 2020, 9:00 pm
  • ACROFAN=PRNewswire
  • mediainquiries@prnewswire.com

BEIJING, July 9, 2020 /PRNewswire/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE American: AMBO), a leading national provider of educational and career enhancement services in China, today announced its unaudited financial and operating results for the three-month period ended March 31, 2020.


"Against the backdrop of the unprecedented COVID-19 pandemic, our goal of empowering learning and teaching through technology has never been more relevant," said Dr. Jin Huang, Ambow's President and Chief Executive Officer. "With our strategic efforts to invest in technological advancements and educational service innovation, we remain committed to providing our learners with high-quality educational resources, ensuring a superior online education experience across our platform. For instance, we launched live streaming classes that are embedded with various interactive tools that dramatically enhance the engagement between students and teachers on our learning platform. We also introduced online practice training and career planning programs to help undergraduates and employees better prepare themselves in an increasingly challenging job market. By leveraging our leading position and strong network in the career enhancement services market, in collaboration with 6,000 enterprises, we organized online job fairs that enabled remote interviews, extending extra exposure for undergraduates seeking jobs."


Dr. Huang continued, "The outbreak of COVID-19 since the beginning of this year has adversely impacted the entire education industry. Our first quarter 2020 revenue performance was negatively impacted as a result of the suspension of our K-12 schools and offline tutoring services due to quarantine measures. With daily life in China gradually returning to normal since April, our schools reopened in April with the health and safety of our students and faculty a paramount priority. We are confident in our ability to navigate through the dynamic markets and capitalize on the elevated opportunities presented by the accelerated adoption of online education around the world."


"I am also pleased that we made another significant addition to our portfolio of international assets in the first quarter as we completed the acquisition of NewSchool of Architecture and Design, LLC ("NewSchool"), a San Diego-based higher learning institution. This acquisition underlines Ambow's vision to roll out a cross-border educational service platform, bringing unique learning and career advancement opportunities to students," concluded Dr. Huang.


First Quarter 2020 Financial Highlights


  • Net revenues for the first quarter of 2020 decreased by 28.2% to US$12.7 million from US$17.7 million in the same period of 2019. The decrease was primarily due to fewer services provided at the Company's K-12 schools and tutoring centers as operations during the quarter were temporarily suspended due to the outbreak of COVID-19, partially offset by revenue from NewSchool, acquired in the period.
  • Gross profit for the first quarter of 2020 decreased by 72.4% to US$1.6 million from US$5.8 million in the same period of 2019. Gross profit margin was 12.6%, compared with 32.8% for the first quarter of 2019. The decrease in gross profit and margin was mainly attributable to the decrease of net revenues.
  • Operating expenses for the first quarter of 2020 decreased by 19.1% to US$7.2 million from US$8.9 million for the same period of 2019. The decrease was primarily attributable to less expenditures due to the temporary suspension of operations at schools and tutoring centers in the period as part of the national pandemic containment effort, and stringent expense controls to improve operating efficiency.
  • Net income attributable to ordinary shareholders in the first quarter of 2020 was US$0.8 million, or US$0.02 per basic and diluted share, compared with a net loss of US$3.5 million, or US$0.08 per basic and diluted share, for the first quarter of 2019.
  • As of March 31, 2020, Ambow maintained strong cash resources of US$30.4 million, comprised of cash and cash equivalents of US$14.2 million and short-term investments of US$16.2 million.
  • As of March 31, 2020, the Company's deferred revenue balance was US$23.9 million, representing a slight increase compared with US$23.7 million as of December 31, 2019. Due to the temporary suspension of school operations to contain COVID-19, the Company postponed tuition and fee collection in its K-12 schools during the first quarter which led to the lower-than-usual increase in deferred revenue.

The Company's first-quarter 2020 financial and operating results can also be found on its Form 6-K filed with the U.S. Securities and Exchange Commission at www.sec.gov.


Exchange Rate Information


This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all amounts translated from RMB to U.S. dollars for the first quarter of 2020 are based on the effective exchange rate of 7.0808 as of March 31, 2020; all amounts translated from RMB to U.S. dollars for the first quarter of 2019 are based on the effective exchange rate of 6.7112 as of March 29, 2019; all amounts translated from RMB to U.S. dollars as of December 31, 2019 are based on the effective exchange rate of 6.9618 as of December 31, 2019. The exchange rates were according to the middle rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.


About Ambow Education Holding Ltd.


Ambow Education Holding Ltd. is a leading national provider of educational and career enhancement services in China, offering high-quality, individualized services and products. With its extensive network of regional service hubs complemented by a dynamic proprietary learning platform and distributors, Ambow provides its services and products to students in 30 out of the 31 provinces and autonomous regions within China.


Follow us on Twitter: @Ambow_Education


Safe Harbor Statement


This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the outlook and quotations from management in this announcement, as well as Ambow's strategic and operational plans, contain forward-looking statements. Ambow may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements, including but not limited to the following: the Company's goals and strategies, expansion plans, the expected growth of the content and application delivery services market, the Company's expectations regarding keeping and strengthening its relationships with its customers, and the general economic and business conditions in the regions where the Company provides its solutions and services. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Ambow undertakes no duty to update such information, except as required under applicable law.


For investor and media inquiries, please contact:


Ambow Education Holding Ltd.
Tel: +86-10-6206-8000


The Piacente Group | Investor Relations
Tel: +1-212-481-2050 or +86-10-6508-0677
E-mail: ambow@tpg-ir.com 


 


 


 



AMBOW EDUCATION HOLDING LTD.


UNAUDITED CONSOLIDATED BALANCE SHEETS


(All amounts in thousands, except for share and per share data)

















As of March 31,



As of December 31,






2020



2019






US$



RMB



RMB



ASSETS










Current assets:










Cash and cash equivalents




14,210



100,619



157,600



Restricted cash




2,001



14,170



-



Short term investments, available for sale




14,785



104,692



57,487



Short term investments, held to maturity




1,412



10,000



31,000



Accounts receivable, net




3,174



22,472



17,939



Amounts due from related parties




317



2,246



2,318



Prepaid and other current assets, net




22,542



159,618



133,296



Total current assets




58,441



413,817



399,640



Non-current assets:










Property and equipment, net




21,976



155,606



157,463



Land use rights, net




247



1,748



1,759



Intangible assets, net




8,695



61,567



56,607



Goodwill




8,659



61,313



60,353



Deferred tax assets, net




538



3,811



10,195



Operating lease right-of-use asset




42,809



303,120



257,361



Finance lease right-of-use asset




890



6,300



6,450



Other non-current assets, net




11,900



84,261



70,971



Total non-current assets




95,714



677,726



621,159












Total assets




154,155



1,091,543



1,020,799












LIABILITIES










Current liabilities:










Deferred revenue  *




23,858



168,933



165,111



Accounts payable  *




1,781



12,615



14,718



Accrued and other liabilities  *




28,059



198,681



192,957



Income taxes payable, current  *




26,507



187,691



180,715



Amounts due to related parties  *




278



1,971



1,971



Operating lease liability, current  *




8,018



56,774



53,512



Total current liabilities




88,501



626,665



608,984



Non-current liabilities:










Income taxes payable, non-current  *




4,564



32,315



32,152



Operating lease liability, non-current  *




37,158



263,109



216,067



Total non-current liabilities




41,722



295,424



248,219












Total liabilities




130,223



922,089



857,203












EQUITY










Preferred shares










(US$ 0.003 par value;1,666,667 shares
   authorized, nil issued and outstanding as of 
   December 31, 2019 and March 31, 2020) 




-



-



-



Class A Ordinary shares










(US$0.003 par value; 66,666,667 and
    66,666,667 shares authorized, 38,858,199
    and 38,870,699 shares issued and
    outstanding as of December 31, 2019 and
    March 31, 2020, respectively)




103



730



730



Class C Ordinary shares










(US$0.003 par value; 8,333,333 and 8,333,333
    shares authorized, 4,708,415 and 4,708,415
    shares issued and outstanding as of
    December 31, 2019 and March 31, 2020,
    respectively)




13



90



90



Additional paid-in capital




495,563



3,508,983



3,508,745



Statutory reserve




2,851



20,185



20,185



Accumulated deficit




(475,422)



(3,366,370)



(3,371,815)



Accumulated other comprehensive income




978



6,928



6,341



Total Ambow Education Holding Ltd.'s equity




24,086



170,546



164,276



Non-controlling interests




(154)



(1,092)



(680)



Total equity




23,932



169,454



163,596



Total liabilities and equity




154,155



1,091,543



1,020,799












*  All of the VIE's assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of
consolidating these VIEs do not represent additional claims on the Company's general assets.




 


 


 


AMBOW EDUCATION HOLDING LTD.


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)


(All amounts in thousands, except for share and per share data)





For the three months ended March 31,




2020



2020



2019




US$



RMB



RMB









NET REVENUES








 Educational program and services



12,748



90,267



118,185


Intelligent program and services



2



12



461


Total net revenues



12,750



90,279



118,646


COST OF REVENUES








 Educational program and services



(10,936)



(77,433)



(78,197)


 Intelligent program and services



(183)



(1,298)



(1,858)


Total cost of revenues



(11,119)



(78,731)



(80,055)









GROSS PROFIT



1,631



11,548



38,591


Operating expenses:








Selling and marketing



(1,490)



(10,549)



(14,088)


General and administrative



(5,536)



(39,201)



(45,618)


Research and development



(160)



(1,131)



(168)


Total operating expenses



(7,186)



(50,881)



(59,874)









OPERATING LOSS



(5,555)



(39,333)



(21,283)









OTHER INCOME (EXPENSES)








Interest income



281



1,990



388


Foreign exchange gain (loss), net



4



26



(31)


Other income, net



199



1,406



660


Gain from deregistration of subsidiaries



-



-



1,279


Gain on the bargain purchase



5,688



40,273



-


Gain on sale of investment available for sale



74



526



279


Total other income



6,246



44,221



2,575









INCOME (LOSS) BEFORE INCOME TAX
   AND NON-CONTROLLING INTEREST



691



4,888



(18,708)


Income tax benefit (expense)



104



739



(5,141)









NET INCOME (LOSS)



795



5,627



(23,849)


Less: Net loss attributable to non-controlling
    interest


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