July 16, 2024

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Ambow Education Announces Third Quarter 2020 Financial Results

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Ambow Education Announces Third Quarter 2020 Financial Results
Ambow Education Announces Third Quarter 2020 Financial Results

BEIJING, Dec. 17, 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 and nine-month periods ended September 30, 2020.

“While our business continued to be impacted by COVID-19-related macro headwinds during the third quarter of 2020, I am pleased to report that after a solid start to the new fall semester, revenue from the K-12 schools segment increased 18.8% year-over-year. Encouragingly, deferred revenue related to tuition and course fees and our education service platform increased 12.4% to US$37.9 million from the year-ago period and reached its highest level since 2015, reflecting the resilience of our business. Supported by ample cash resources and a healthy balance sheet, our core strength and fundamentals remain solid across our key segments,” noted Dr. Jin Huang, Ambow’s President and Chief Executive Officer. “We are excited that in September we won the bid for a Technical and Vocational Education and Training (TVET) Center project that is financially supported by the Asian Development Bank as a part of its inclusive growth project in Ziyang City of Sichuan Province. This achievement demonstrates our exceptional capabilities and leading position in the vocational and technical education sector.”

“We continued to execute our key strategies to pursue more balanced growth, while providing high quality educational services that better engage students against the challenging backdrop of the COVID-19 environment. Leveraging our 20-year proven track record in curriculum development, professional training, job placement and education technology innovation, we are making massive progress in building out our online-to-offline education SaaS platform, Huanyujun Education Hub. We have gradually started rolling out Amazon Web Services (AWS) and Cisco-authorized certification and training courses on the Huanyujun Education Hub, which is already supported by our cutting-edge educational solutions such as Ambow Panorama Digital Teaching System and Ambow Cloud Platform. We believe these best-in-class educational services and course offerings will broaden our appeal to a wider student base as they pursue professional certifications for their technology careers.”

“Going forward, we will maintain our strategic efforts to enrich our educational service offerings, optimize operating efficiencies, and increase student enrollments and engagement. We remain confident that our efforts will support the long-term sustainability of our overall business,” concluded Dr. Huang.

Third Quarter 2020 Financial Highlights

  • Net revenues for the third quarter of 2020 decreased by 6.2% to US$16.6 million from US$17.7 million in the same period of 2019. The decrease was primarily from fewer services provided at the Company’s tutoring centers, training offices and college campuses. This was partially offset by the increase in the revenue from K-12 schools driven by higher enrollment and the revenue from NewSchool of Architecture and Design, LLC (“NewSchool”), acquired in the first quarter of 2020.
  • Gross profit for the third quarter of 2020 decreased by 77.8% to US$1.0 million from US$4.5 million in the same period of 2019. Gross profit margin was 6.0%, compared with 25.4% for the third quarter of 2019. The decreases in gross profit and margin were mainly attributable to the decrease in net revenues from CP&CE Programs.
  • Operating expenses for the third quarter of 2020 decreased by 3.4% to US$14.0 million from US$14.5 million for the same period of 2019. The decrease was primarily attributable to stringent expense controls to improve operating efficiency, and partially offset by operating expenses related to NewSchool.
  • Net loss attributable to ordinary shareholders was US$12.5 million, or US$0.29 per basic and diluted share, compared with a net loss of US$10.2 million, or US$0.23 per basic and diluted share, for the third quarter of 2019.
  • As of September 30, 2020, Ambow maintained strong cash resources of US$44.0 million, comprised of cash and cash equivalents of US$12.7 million and short-term investments of US$31.3 million.
  • As of September 30, 2020, the Company’s deferred revenue balance was US$37.9 million, representing a 59.9% increase from US$23.7 million as of December 31, 2019, mainly attributable to the tuition and fees collected at K-12 schools for the fall semester of the 2020-2021 academic year, and deferred revenue collected from our colleges for the fall semester of 2020.

First Nine Months 2020 Financial Highlights

  • Net revenues for the first nine months of 2020 decreased by 8.0% to US$52.8 million from US$57.4 million in the same period of 2019. The decrease was primarily from fewer boarding and other ancillary services provided for K-12 schools as result of temporary COVID-19-related campus closures in the first half of 2020, and fewer services provided at the Company’s tutoring centers, training offices and college campuses. This was partially offset by the revenue from NewSchool which was acquired in the period.
  • Gross profit for the first nine months of 2020 decreased by 40.5% to US$11.6 million from US$19.5 million in the same period of 2019. Gross profit margin was 22.0%, compared with 34.0% for the first nine months of 2019. The decreases in gross profit and margin were mainly attributable to the decrease in net revenues from CP&CE Programs.
  • Operating expenses for the first nine months of 2020 decreased by 1.9% to US$30.4 million from US$31.0 million for the same period of 2019. The decrease was primarily attributable to lower expenditures due to the temporary suspension of operations at training offices and tutoring centers in the period as a part of the national pandemic containment efforts, as well as stringent expense controls to improve operating efficiency, and partially offset by NewSchool’s operating expenses.
  • Net loss attributable to ordinary shareholders was US$10.9 million, or US$0.25 per basic and diluted share, compared with a net loss of US$12.3 million, or US$0.28 per basic and diluted share, for the first nine months of 2019.

On October 5, 2020, the Company completed a registered direct offering of 1,507,538 American Depositary Shares (“ADSs”, representing 3,015,076 Class A Ordinary Shares), at a purchase price of $3.98 per ADS. The Company also issued to investors registered warrants to purchase up to an aggregate amount of 603,016 ADSs (representing 1,206,032 Class A Ordinary Shares). Net proceeds from this offering were approximately US$5.2 million.

The Company’s financial and operating results for the third quarter and first nine months of 2020 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 third quarter and first nine months of 2020 are based on the effective exchange rate of 6.7896 as of September 30, 2020; all amounts translated from RMB to U.S. dollars for the third quarter and first nine months of 2019 are based on the effective exchange rate of 7.1477 as of September 30, 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 15 out of the 34 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: [email protected] 

 

 

 


AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED BALANCE SHEETS

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

As of September 30,



As of December 31,

2020

2019

US$

RMB



RMB

ASSETS

Current assets:

Cash and cash equivalents

12,677



86,072

157,600

Restricted cash

2,006

13,621



Short term investments, available for sale

26,898

182,629

57,487



Short term investments, held to maturity

4,419

30,000

31,000

Accounts receivable, net



3,616

24,549

17,939

Amounts due from related parties

907



6,159

2,318

Prepaid and other current assets, net

23,150

157,177



133,296

Total current assets

73,673

500,207

399,640



Non-current assets:

Property and equipment, net

21,603

146,678

157,463



Land use rights, net

254

1,726

1,759

Intangible assets, net



8,168

55,458

56,607

Goodwill

3,787



25,710

60,353

Deferred tax assets, net

538

3,653



10,195

Operating lease right-of-use asset

38,704

262,787

257,361



Finance lease right-of-use asset

884

6,000

6,450

Other non-current assets, net



12,429

84,388

70,971

Total non-current assets

86,367



586,400

621,159

Total assets

160,040

1,086,607



1,020,799

LIABILITIES

Current liabilities:

Short-term borrowings  *

2,948



20,013

Deferred revenue  *

37,906

257,368



165,111

Accounts payable  *

2,284

15,500

14,718



Accrued and other liabilities  *

27,277

185,203

192,957

Income taxes payable, current  *



27,060

183,729

180,715

Amounts due to related parties  *

718



4,876

1,971

Operating lease liability, current  *

7,459

50,642



53,512

Total current liabilities

105,652

717,331

608,984



Non-current liabilities:

Income taxes payable, non-current  *

5,094

34,589

32,152



Operating lease liability, non-current  *

34,723

235,756

216,067

Total non-current liabilities



39,817

270,345

248,219

Total liabilities

145,469



987,676

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 September 30,
  2020) 



Class A Ordinary shares

(US$0.003 par value; 66,666,667 and
  66,666,667 shares authorized, 38,858,199
  and 38,895,700 shares issued and
  outstanding as of December 31, 2019 and
  September 30, 2020, respectively)



108

731

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 September 30,
  2020, respectively)



13

90

90

Additional paid-in capital

516,868



3,509,330

3,508,745

Statutory reserve

620

4,210



20,185

Accumulated deficit

(505,202)

(3,430,122)

(3,371,815)



Accumulated other comprehensive income

2,420

16,429

6,341

Total Ambow Education Holding Ltd.’s equity



14,827

100,668

164,276

Non-controlling interests

(256)



(1,737)

(680)

Total equity

14,571

98,931



163,596

Total liabilities and equity

160,040

1,086,607

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

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

For the nine months ended September 30,

For the three months ended September 30,

2020



2020

2019

2020

2020

2019



US$

RMB

RMB

US$

RMB



RMB

NET REVENUES

 Educational program and 
  services

52,742

358,098



409,367

16,560

112,439

126,729

Intelligent program and 
  services



52

352

1,193

40

269



(173)

Total net revenues

52,794

358,450

410,560



16,600

112,708

126,556

COST OF REVENUES

 Educational program and 
  services



(40,898)

(277,683)

(265,454)

(15,518)

(105,359)



(92,934)

Intelligent program and 
  services

(345)

(2,340)

(5,818)



(130)

(882)

(1,109)

Total cost of revenues

(41,243)



(280,023)

(271,272)

(15,648)

(106,241)

(94,043)



GROSS PROFIT

11,551

78,427

139,288

952



6,467

32,513

Operating expenses:

Selling and marketing

(5,576)



(37,861)

(40,778)

(2,011)

(13,655)

(15,607)



General and administrative

(18,739)

(127,230)

(140,510)

(6,331)



(42,987)

(48,116)

Research and development

(656)

(4,456)



(1,555)

(259)

(1,758)

(1,087)

Impairment loss



(5,405)

(36,699)

(38,754)

(5,405)

(36,699)



(38,754)

Total operating expenses

(30,376)

(206,246)

(221,597)



(14,006)

(95,099)

(103,564)

OPERATING LOSS

(18,825)



(127,819)

(82,309)

(13,054)

(88,632)

(71,051)



OTHER INCOME (EXPENSES)

Interest income

1,053

7,150

3,343



444

3,015

1,823

Foreign exchange gain (loss),
  net

5



31

46

(1)

(4)

45



Other income (loss), net

124

840

193

(105)



(712)

7

Gain from deregistration of
  subsidiaries

584

3,967



1,279

10

70

Gain on disposal of
  subsidiaries



111

752

111

752



Gain on the bargain purchase

5,932

40,273



Gain on sale of investment
  available for sale

365



2,477

422

209

1,421

3



Total other income

8,174

55,490

5,283

668



4,542

1,878

LOSS BEFORE INCOME
  TAX AND NON-
  CONTROLLING
  INTEREST

(10,651)

(72,329)



(77,026)

(12,386)

(84,090)

(69,173)

Income tax expense



(353)

(2,399)

(11,032)

(114)

(776)



(3,634)

NET LOSS

(11,004)

(74,728)

(88,058)



(12,500)

(84,866)

(72,807)

Less: Net(loss)/income
 attributable to non-
 controlling interest

(153)



(1,040)

(269)

(49)

(332)

4



NET LOSS ATTRIBUTABLE
  TO ORDINARY
  SHAREHOLDERS

(10,851)

(73,688)

(87,789)

(12,451)



(84,534)

(72,811)

NET LOSS

(11,004)

(74,728)



(88,058)

(12,500)

(84,866)

(72,807)

OTHER
  COMPREHENSIVE
  INCOME, NET OF TAX



Foreign currency translation
    adjustments

1,581

10,731

(3,267)

354



2,403

(93)

Unrealized gains on short term
    investments

  Unrealized holding gains
    arising during period

224



1,518

1,238

85

578

538



  Less: reclassification
    adjustment for gains
    included in net income

318

2,161

489

220



1,493

37

Other comprehensive income
    (loss)

1,487

10,088



(2,518)

219

1,488

408

TOTAL
  COMPREHENSIVE
  LOSS



(9,517)

(64,640)

(90,576)

(12,281)

(83,378)



(72,399)

Net loss per share – basic and
  diluted

(0.25)

(1.69)

(2.02)



(0.29)

(1.94)

(1.67)

Weighted average shares used
  in calculating basic and
  diluted net loss per share

43,583,448



43,583,448

43,496,848

43,595,871

43,595,871

43,512,447



 

 

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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



Attributable to Ambow Education Holding Ltd.’s Equity

Retained

Accumulated

 Class A Ordinary

Class C Ordinary



Additional

Earnings

other

Non-

shares



shares

paid-in

Statutory

(Accumulated

comprehensive



controlling

Total

Shares

Amount

Shares



Amount

capital

reserves

deficit)

income



Interest

Equity

RMB

RMB

RMB



RMB

RMB

RMB

RMB

RMB



Balance as of January 1,
  2020

38,858,199

730

4,708,415

90



3,508,745

20,185

(3,372,409)

6,341

(680)



163,002

Share-based compensation



238



238

Issuance of ordinary shares 
  for restricted stock award

12,500

0



(0)



Foreign currency translation
  adjustment





433

433

Unrealized gain on
  investment, net of income
  taxes





154

154



Net income/(loss)



6,039

(412)



5,627

Balance as of March 31,
  2020

38,870,699

730

4,708,415



90

3,508,983

20,185

(3,366,370)

6,928



(1,092)

169,454

Share-based compensation



242



242

Issuance of ordinary shares
  for restricted stock award

12,500



1

(1)



Foreign currency translation
  adjustment





7,895

7,895



Unrealized gain on
  investment, net of income
  taxes



118



118

Deregistration of
  subsidiaries



(15,473)

15,473



Net income/(loss)



4,807



(297)

4,510

Balance as of June 30,
  2020

38,883,199



731

4,708,415

90

3,509,224

4,712



(3,346,090)

14,941

(1,389)

182,219

Share-based compensation



239



239



Issuance of ordinary shares
  for restricted stock award

12,501

0



(0)



Foreign currency translation
  adjustment



2,403



2,403

Unrealized gain on
  investment, net of income
  taxes





(915)

(915)

Deregistration of subsidiary





(16)

(16)

Disposal of subsidiaries



(133)



(502)

502

(133)



Net loss



(84,534)

(332)



(84,866)

Balance as of
  September 30, 2020

38,895,700

731

4,708,415



90

3,509,330

4,210

(3,430,122)

16,429



(1,737)

98,931

Balance as of January 1,
  2019

38,756,289

728



4,708,415

90

3,507,123

20,149

(3,271,838)



8,305

(1,786)

262,771

Share-based compensation



872



872

Issuance of ordinary shares
  for restricted stock award



28,646

1

(1)





Foreign currency translation
  adjustment



(2,428)



(2,428)

Unrealized gain on
  investment, net of income
  taxes



75



75

Net loss



(23,756)



(93)

(23,849)

Balance as of March 31,
  2019

38,784,935



729

4,708,415

90

3,507,994

20,149



(3,295,594)

5,952

(1,879)

237,441

Share-based compensation



266



266



Issuance of ordinary shares
  for restricted stock award

19,097

0



(0)



Foreign currency translation
  adjustment



(746)



(746)

Unrealized gain on
  investment, net of income
  taxes





173

173

Addition of noncontrolling
  interests resulting from
  new subsidiaries





502

502

Net income (loss)





8,778

(180)

8,598



Balance as of June 30,
  2019

38,804,032

729

4,708,415

90



3,508,260

20,149

(3,286,816)

5,379

(1,557)



246,234

Share-based compensation



244



244

Foreign currency translation
  adjustment





(93)

(93)

Unrealized gain on
  investment, net of income
   taxes





501

501

Net (loss) / income





(72,811)

4

(72,807)



Balance as of
  September 30, 2019

38,804,032

729

4,708,415

90



3,508,504

20,149

(3,359,627)

5,787

(1,553)



174,079

 

 

 

Discussion of Segment Operations



(All amounts in thousands)

For the nine months ended September 30,

For the three months ended September 30,

2020

2020



2019

2020

2020

2019

US$



RMB

RMB

US$

RMB

RMB



NET REVENUES

K-12 Schools

27,360

185,766

203,214



8,685

58,966

52,256

CP&CE Programs 

25,434



172,684

207,346

7,915

53,742

74,300



Total net revenues

52,794

358,450

410,560

16,600



112,708

126,556

COST OF REVENUES

K-12 Schools

(17,670)



(119,972)

(128,887)

(6,692)

(45,430)

(38,794)



CP&CE Programs 

(23,573)

(160,051)

(142,385)

(8,956)



(60,811)

(55,249)

Total cost of revenues

(41,243)

(280,023)



(271,272)

(15,648)

(106,241)

(94,043)

GROSS PROFIT



K-12 Schools

9,690

65,794

74,327

1,993



13,536

13,462

CP&CE Programs 

1,861

12,633



64,961

(1,041)

(7,069)

19,051

Total gross profit



11,551

78,427

139,288

952

6,467



32,513

 

View original content:https://www.prnewswire.com/news-releases/ambow-education-announces-third-quarter-2020-financial-results-301194787.html

SOURCE Ambow Education Holding Ltd.

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