acrofan

Industry Economy TECH GAME
Society Comfort AUTO MEDIA

Ambow Education Announces Second Quarter and First Half 2022 Financial Results

  • Friday, September 30, 2022, 9:00 pm
  • ACROFAN=PRNasia
  • hkcs@prnasia.com

BEIJING, Sept. 30, 2022 /PRNewswire/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE American: AMBO), a leading cross-border career educational and technology service provider, today announced its unaudited consolidated financial and operating results for the three-month and six-month periods ended June 30, 2022.


"In the first half of 2022, we remained focused on our core business strategy encompassing premium technology-driven educational and career enhancement service offerings amid the complex macro environment," noted Dr. Jin Huang, Ambow's President and Chief Executive Officer. "As we methodologically pave the way to drive our career-focused education business roadmap, we recorded net revenues of RMB 204.0 million in the first half of 2022."


"We remain dedicated to refining and innovating our proprietary technologies to empower our products and services. As a result, we are delighted to see our high-quality, technology-empowered offerings garner increasing recognition and popularity in the market. Additionally, we deepened our ongoing commitment to facilitating the national strategy of improving collaboration between educational institutions and industries to coordinate and propel talent development throughout China. As a veteran with a track record of over two decades in the education technology space, Ambow has built out a far-reaching cooperative network comprised of universities, institutions and commercial enterprises. Drawing on this powerful network alongside our innovative, superior products and services, we are well positioned to address educators and learners' critical demands in the evolving landscape while promoting the efficient integration of academia and business, as well as fostering a balance in talent supply and demand, especially in the technical fields."


"Moving through the second half of 2022, we will continue strengthening our competitive edge by further advancing our technologies, products and services, actively adapting ourselves to market dynamics and capturing new growth opportunities ahead. As always, we are committed to creating long-term sustainable value for all of our stakeholders," concluded Dr. Huang.


Second Quarter 2022 Financial Highlights 


  • Net revenues for the second quarter of 2022 decreased by 36.2% to RMB 109.9 million (US$ 16.4 million) from RMB 172.3 million for the same period of 2021. The decrease was primarily due to the planned sale of the K-9 business, which is expected to be completed by December 31, 2022. The profit or loss of the K-9 business since September 2021 was borne by and entitled to the buyer as agreed. The decrease was also partially due to the regulatory changes in China affecting the tutoring business since August 2021.

  • Gross profit for the second quarter of 2022 decreased by 40.6% to RMB 45.1 million (US$ 6.7 million) from RMB 75.9 million for the same period of 2021. Gross profit margin was 41.0%, compared with 44.1% for the second quarter of 2021. The decreases in gross profit and gross margin were mainly attributable to the immediate impact of regulatory changes on net revenues of the tutoring business, while there was less impact on costs during the period.

  • Operating expenses for the second quarter of 2022 increased by 20.5% to RMB 67.0 million (US$ 10.0 million) from RMB 55.6 million for the same period of 2021. The increase was primarily caused by a write-off of long-term receivables due from Jinghan Taihe of RMB 13.7 million and a share-based compensation expense of RMB 6.7 million and partially offset by the decrease in operating expenses due to stringent expense control in the period.

  • Operating loss for the second quarter of 2022 was RMB 21.9 million (US$ 3.3 million), compared to operating income of RMB 20.3 million for the same period of 2021.

  • Net loss attributable to ordinary shareholders for the second quarter of 2022 was RMB 71.4 million (US$ 10.7 million), or RMB 1.53 (US$ 0.23) per basic and diluted share, compared with a net income of RMB 22.4 million, or RMB 0.48 per basic and diluted share, for the same period of 2021. Other than the operating loss, the net loss was also caused by the income tax expense of RMB 39.0 million from the gain on waived inter-group payables and RMB 9.0 million from the valuation allowance for the deferred tax assets resulting from the write-off of the long-term receivables due from Jinghan Taihe.

  • As of June 30, 2022, Ambow maintained strong cash resources of RMB 142.6 million (US$ 21.2 million), comprised of cash and cash equivalents of RMB 61.8 million (US$ 9.2 million), short-term investments of RMB 78.5 million (US$ 11.7 million) and restricted cash of RMB 2.3 million (US$ 0.3 million).

First Six Months 2022 Financial Highlights


  • Net revenues for the first six months of 2022 decreased by 32.4% to RMB 204.0 million (US$ 30.5 million) from RMB 301.9 million for the same period of 2021. The decrease was primarily due to the planned sale of the K-9 business, which is expected to be completed by December 31, 2022. The profit or loss of the K-9 business since September 2021 was borne by and entitled to the buyer as agreed. The decrease was also partially due to the regulatory changes in China affecting the tutoring business since August 2021.

  • Gross profit for the first six months of 2022 decreased by 36.8% to RMB 76.2 million (US$ 11.4 million) from RMB 120.6 million for the same period of 2021. Gross profit margin was 37.3%, compared with 39.9% for the same period of 2021. The decreases in gross profit and gross margin were mainly attributable to the immediate impact of regulatory changes on net revenues of the tutoring business, while there was less impact on costs during the period.

  • Operating expenses for the first six months of 2022 decreased by 1.3% to RMB 113.9 million (US$ 17.0 million) from RMB 115.4 million for the same period of 2021. The decrease was attributable to stringent expense controls, offset by a write-off of long-term receivables due from Jinghan Taihe of RMB 13.7 million and a share-based compensation expense of RMB 6.7 million.

  • Operating loss for the first six months of 2022 was RMB 37.7 million (US$ 5.6 million), compared to operating income of RMB 5.2 million for the same period of 2021.

  • Net loss attributable to ordinary shareholders for the first six months of 2022 was RMB 89.0 million (US$ 13.3 million), or RMB 1.90 (US$ 0.28) per basic and diluted share, compared with a net income of RMB 8.1 million, or RMB 0.17 per basic and diluted share, for the same period of 2021. Other than the operating loss, the net loss was also caused by the income tax expense of RMB 39.0 million from the gain on waived inter-group payables and RMB 9.0 million from the valuation allowance for the deferred tax assets resulting from the write-off of the long-term receivables due from Jinghan Taihe.

The Company's financial and operating results for the second quarter and first half of 2022 can also be found on its Report of Foreign Private Issuer on Form 6-K, to be furnished 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 second quarter and first half of 2022 are based on the effective exchange rate of 6.6981 as of June 30, 2022; all amounts translated from RMB to U.S. dollars for the second quarter and first half of 2021 are based on the effective exchange rate of 6.4566 as of June 30, 2021; all amounts translated from RMB to U.S. dollars as of December 31, 2021, are based on the effective exchange rate of 6.3726 as of December 30, 2021. 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. Fluctuations in financial highlights are based on RMB amounts.


About Ambow Education Holding Ltd.


Ambow Education Holding Ltd. is a leading cross-border career educational and technology service provider, 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 China and the United States of America.


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.


CONSOLIDATED BALANCE SHEETS


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






As of June 30,



As of December 31,




2022



2021




US$



RMB



RMB




Unaudited




ASSETS








Current assets:








Cash and cash equivalents



9,230



61,824



157,399


Restricted cash



347



2,321



1,823


Short-term investments, available for sale



2,763



18,509



15,764


Short-term investments, held to maturity



8,958



60,000



2,000


Accounts receivable, net



2,529



16,939



25,602


Amounts due from related parties



453



3,037



3,103


Prepaid and other current assets, net



16,442



110,127



109,890


Assets classified as held for sale



21,939



146,951



132,724


Total current assets



62,661



419,708



448,305


Non-current assets:








Property and equipment, net



14,664



98,218



101,915


Intangible assets, net



4,478



29,993



29,986


Goodwill



3,271



21,907



21,907


Deferred tax assets, net







31


Operating lease right-of-use asset



31,240



209,246



220,404


Finance lease right-of-use asset



739



4,950



5,250


Other non-current assets



19,385



129,845



142,364


Total non-current assets



73,777



494,159



521,857









Total assets



136,438



913,867



970,162









LIABILITIES








Current liabilities:








Short-term borrowings *



4,340



29,070



10,103


Deferred revenue *



5,787



38,757



95,036


Accounts payable *



4,140



27,730



29,466


Accrued and other liabilities *



34,220



229,209



216,399


Income taxes payable, current *



23,270



155,864



116,341


Amounts due to related parties *



767



5,135



3,793


Operating lease liability, current *



7,293



48,846



48,923


Liabilities classified as held for sale *



11,773



78,857



83,161


Total current liabilities



91,590



613,468



603,222


Non-current liabilities:








Deferred tax liabilities, net *



1,455



9,748



-


Other non-current liabilities *



3



20



96


Income taxes payable, non-current *



4,412



29,553



21,475


Operating lease liability, non-current *



29,544



197,889



198,687


Total non-current liabilities



35,414



237,210



220,258









Total liabilities



127,004



850,678



823,480









EQUITY








Preferred shares








(US$0.003 par value;1,666,667 shares authorized, nil issued and outstanding as of June 30, 2022 and December 31,
    2021)








Class A Ordinary shares








(US$0.003 par value; 66,666,667 and 66,666,667 shares authorized, 47,398,276 and 41,973,276 shares issued and
    outstanding as of June 30, 2022 and December 31, 2021, respectively)



135



902



795


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 June 30, 2022 and December 31, 2021, respectively)



13



90



90


Additional paid-in capital



530,449



3,553,000



3,545,955


Statutory reserve



573



3,837



3,837


Accumulated deficit



(523,251)



(3,504,789)



(3,415,771)


Accumulated other comprehensive income



1,498



10,035



11,291


Total Ambow Education Holding Ltd.'s equity



9,417



63,075



146,197


Non-controlling interests



17



114



485


Total equity



9,434



63,189



146,682


Total liabilities and equity



136,438



913,867



970,162









*      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


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






For the six months ended June 30,



For the three months ended June 30,




2022



2022



2021



2022



2022



2021




US$