omniture

Ambow Education Announces Second Quarter 2021 Financial Results

2021-09-20 21:00 11363

BEIJING, Sept. 20, 2021 /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 financial and operating results for the three-month and six-month periods ended June 30, 2021.

"In the second quarter of 2021, we remained focused on technology-driven educational and career enhancement services, embracing the national strategy of improving collaborative and coordinated development across education, talents and industry and promoting high-quality economic growth," noted Dr. Jin Huang, Ambow's President and Chief Executive Officer. "We're pleased to report solid financial performance and further improved operating efficiency in the second quarter, highlighted by a 10.8% year-over-year growth in net revenues and an increase in gross margin of 530 basis points year-over-year to 44.1%."

"Additionally, during the quarter, we made a number of strides that helped to expand our role as a leading innovator in the Chinese career education market. Building on our 20-year proven track record in the vocational and technical education sector, in June we cooperated with Nanchang Vocational University, one of the 15 first batch of undergraduate vocational education pilot schools in China, to co-found the Smart Manufacturing Modern Industrial College, underscoring China's pilot program for the integration between industry and education. Meanwhile, we formed a strategic cooperation with the Talent Exchange Center of the Ministry of Industry and Information Technology to strengthen international communication in various information technology-related disciplines. More excitingly, in July we launched an open education platform, OOOK, which incorporates our in-house developed technologies, enabling teachers to provide high-quality, cross-device live and recorded courses with immersive and interactive learning experiences. Notably, with its groundbreaking technology and solutions, OOOK won the '2021 Best Product Technology Innovation' award at the 10th Annual China Finance Summit."

"Moving into the second half of 2021, we remain committed to delivering innovative educational products and services that will be at the forefront of the industry by continuingly capitalizing on technology trends. We are confident that our strategic efforts will continue to drive the long-term growth of our overall business," concluded Dr. Huang.  

Second Quarter 2021 Financial Highlights

  • Net revenues for the second quarter of 2021 increased by 10.8% to RMB 172.3 million (US$ 26.7 million) from RMB 155.5 million (US$ 22.0 million) in the same period of 2020. The increase was primarily due to the full business recovery from the impact of the COVID-19 pandemic.
  • Gross profit for the second quarter of 2021 increased by 25.7% to RMB 75.9 million (US$ 11.8 million) from RMB 60.4 million (US$ 8.5 million) in the same period of 2020. Gross profit margin was 44.1%, compared with 38.8% for the first second quarter of 2020. The increases in gross profit and margin were mainly attributable to faster growth of net revenues in the period.
  • Operating expenses for the second quarter of 2021 decreased by 7.8% to RMB 55.6 million (US$ 8.6 million) from RMB 60.3 million (US$ 8.5 million) in the same period of 2020. The decrease was primarily attributable to stringent expense controls to improve operating efficiency.
  • Operating income for the second quarter of 2021 was RMB 20.3 million (US$ 3.1 million), compared to operating income of RMB 0.1 million (US$ 0.02 million) in the same period of 2020.
  • Net income attributable to ordinary shareholders was RMB 22.4 million (US$ 3.5 million), or RMB 0.48 (US$ 0.07) per basic and diluted share, compared with a net income of RMB 4.8 million (US$ 0.7 million), or RMB 0.11 (US$ 0.02) per basic and diluted share, in the same period of 2020.
  • As of June 30, 2021, Ambow maintained strong cash resources of RMB 257.7 million (US$ 39.9 million), comprised of cash and cash equivalents of RMB 168.4 million (US$ 26.1 million), short-term investments of RMB 87.6 million (US$ 13.5 million) and restricted cash of RMB 1.7 million (US$ 0.3 million).

First Six Months 2021 Financial Highlights

  • Net revenues for the first six months of 2021 increased by 22.9% to RMB 301.9 million (US$ 46.8 million) from RMB 245.7 million (US$ 34.8 million) in the same period of 2020. The increase was primarily due to the full business recovery from the impact of the COVID-19 pandemic and higher revenue contribution from our new U.S. business.
  • Gross profit for the first six months of 2021 increased by 67.5% to RMB 120.6 million (US$ 18.7 million) from RMB 72.0 million (US$ 10.2 million) in the same period of 2020. Gross profit margin was 39.9%, compared with 29.3% in the same period of 2020. The increases in gross profit and margin were mainly attributable to faster growth of net revenues in the period.
  • Operating expenses for the first six months of 2021 slightly increased by 3.9% to RMB 115.4 million (US$ 17.9 million) from RMB 111.1 million (US$ 15.7 million) in the same period of 2020.
  • Operating income for the six months of 2021 was RMB 5.2 million (US$ 0.8 million), compared to operating loss of RMB 39.2 million (US$ 5.5 million) in the same period of 2020.
  • Net income attributable to ordinary shareholders was RMB 8.1 million (US$ 1.3 million), or RMB 0.17 (US$ 0.03) per basic and diluted share, compared with a net income of RMB 10.8 million (US$ 1.5 million), or RMB 0.25 (US$ 0.04) per basic and diluted share, in the same period of 2020. Excluding the one-time gain from bargain purchase of NewSchool of Architecture and Design, LLC of RMB 40.3 million (US$ 5.7 million), net loss for the first six months of 2020 was RMB 29.5 million (US$ 4.2 million) or RMB 0.68 (US$ 0.10) per basic and diluted share.

The Company's financial and operating results for the second quarter and first half of 2021 can also be found on its Current Report on Form 6-K to be furnished with the U.S. Securities and Exchange Commission at www.sec.gov.

Regulatory Policy Update

The Standing Committee of the National People's Congress promulgated an amendment to the Implementation Rules of the Law for Promoting Private Education on April 7, 2021, which has been effective since September 1, 2021 (the "Implementation Rules"). The Implementation Rules stipulated, among other provisions, that (1) sponsors of private schools may choose to establish schools as either non-profit or for-profit schools, but nine-year compulsory education schools cannot be operated as for-profit schools; (2) foreign-invested enterprises established in China and social organizations whose actual controllers are foreign parties shall not sponsor, participate in or actually control private schools that provide compulsory education; (3) group-based education organizations shall not control non-profit private schools through mergers and acquisitions, franchise agreements and contractual arrangements; and (4) related party transactions entered into by private schools shall be open, fair and just, and shall not harm national interests, school interests, or student or teacher interests. The Company is assessing the impact of the Implementation Rules and formulating different scenarios as compliance measures.

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 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 for the second quarter and first half of 2020 are based on the effective exchange rate of 7.0651 as of June 30, 2020; all amounts translated from RMB to U.S. dollars as of December 31, 2020 are based on the effective exchange rate of 6.5250 as of December 31, 2020. 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 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.

UNAUDITED CONSOLIDATED BALANCE SHEETS

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
















As of June 30,


As of December 31,





2021


2020





US$


RMB


RMB


ASSETS









Current assets:









Cash and cash equivalents



26,086


168,424


118,821


Restricted cash



256


1,650


824


Short-term investments, available for sale



13,266


85,652


117,854


Short-term investments, held to maturity



310


2,000


45,000


Accounts receivable, net



3,289


21,234


20,972


Amounts due from related parties



501


3,235


3,024


Prepaid and other current assets, net



18,858


121,757


117,634


Total current assets



62,566


403,952


424,129


Non-current assets:









Property and equipment, net



21,989


141,972


144,492


Land use rights, net



262


1,693


1,715


Intangible assets, net



8,403


54,252


54,808


Goodwill



3,982


25,710


25,710


Deferred tax assets, net



883


5,704


6,338


Operating lease right-of-use asset



35,522


229,353


247,608


Finance lease right-of-use asset



860


5,550


5,850


Other non-current assets



21,805


140,786


139,067


Total non-current assets



93,706


605,020


625,588











Total assets



156,272


1,008,972


1,049,717











LIABILITIES









Current liabilities:









Short-term borrowings  *



3,020


19,498


10,000


Deferred revenue  *



21,106


136,274


163,699


Accounts payable  *



3,320


21,425


19,423


Accrued and other liabilities  *



31,473


203,207


209,590


Income taxes payable, current  *



28,669


185,105


184,638


Amounts due to related parties  *



429


2,771


2,543


Operating lease liability, current  *



7,620


49,198


53,702


Total current liabilities



95,637


617,478


643,595


Non-current liabilities:









Long-term borrowing 



-


-


9,594


Other non-current liabilities  *



47


304


292


Income taxes payable, non-current  *



5,316


34,322


34,763


Operating lease liability, non-current  *



32,196


207,877


220,319


Total non-current liabilities



37,559


242,503


264,968











Total liabilities



133,196


859,981


908,563











EQUITY









Preferred shares









(US$ 0.003 par value;1,666,667 shares
      authorized, nil issued and outstanding as of
      June 30, 2021 and December 31, 2020) 



-


-


-


Class A Ordinary shares









(US$0.003 par value; 66,666,667 and
     66,666,667 shares authorized, 41,948,276
     and 41,923,276 shares issued and
     outstanding as of June 30, 2021 and
     December 31, 2020, respectively)



123


794


794


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, 
     2021 and December 31, 2020, respectively)



14


90


90


Additional paid-in capital



549,130


3,545,512


3,545,073


Statutory reserve



652


4,210


4,210


Accumulated deficit



(528,302)


(3,411,035)


(3,419,146)


Accumulated other comprehensive income



1,844


11,907


12,101


Total Ambow Education Holding Ltd.'s equity



23,461


151,478


143,122


Non-controlling interests



(385)


(2,487)


(1,968)


Total equity



23,076


148,991


141,154


Total liabilities and equity



156,272


1,008,972


1,049,717











*  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,


2021


2021


2020


2021


2021


2020


US$


RMB


RMB


US$


RMB


RMB













NET REVENUES












 Educational program and
   services

46,635


301,104


245,659


26,576


171,590


155,392

Intelligent program and
   services

116


752


83


102


661


71

Total net revenues

46,751


301,856


245,742


26,678


172,251


155,463

COST OF REVENUES












 Educational program and
   services

(27,782)


(179,375)


(172,324)


(14,797)


(95,536)


(94,891)

Intelligent program and
   services

(299)


(1,930)


(1,458)


(122)


(786)


(160)

Total cost of revenues

(28,081)


(181,305)


(173,782)


(14,919)


(96,322)


(95,051)













GROSS PROFIT

18,670


120,551


71,960


11,759


75,929


60,412

Operating expenses:












Selling and marketing

(3,782)


(24,422)


(24,206)


(2,079)


(13,422)


(13,657)

General and
   administrative

(13,220)


(85,357)


(84,243)


(5,949)


(38,412)


(45,042)

Research and development

(868)


(5,602)


(2,698)


(582)


(3,757)


(1,567)

Total operating expenses

(17,870)


(115,381)


(111,147)


(8,610)


(55,591)


(60,266)













OPERATING INCOME
(LOSS)

800


5,170


(39,187)


3,149


20,338


146













OTHER INCOME
(EXPENSES)












Interest income

621


4,008


4,135


302


1,948


2,145

Foreign exchange gain
   (loss), net

31


203


35


(2)


(12)


9

Other (loss) income, net

(183)


(1,180)


1,552


(37)


(240)


146

Gain from deregistration
   of subsidiaries

205


1,325


3,897


183


1,181


3,897

Gain on the bargain
   purchase

-


-


40,273


-


-


-

Gain on sale of investment
   available for sale

189


1,221


1,056


73


474


530

Total other income

863


5,577


50,948


519


3,351


6,727

INCOME BEFORE
   INCOME TAX AND
   NON-CONTROLLING
   INTEREST

1,663


10,747


11,761


3,668


23,689


6,873

Income tax expense

(489)


(3,155)


(1,623)


(236)


(1,526)


(2,362)













NET INCOME

1,174


7,592


10,138


3,432


22,163


4,511

Less: Net loss attributable
   to non-controlling
   interest

(80)


(519)


(708)


(43)


(277)


(296)













NET INCOME
   ATTRIBUTABLE TO
   ORDINARY
   SHAREHOLDERS

1,254


8,111


10,846


3,475


22,440


4,807













NET INCOME

1,174


7,592


10,138


3,432


22,163


4,511













OTHER
   COMPREHENSIVE
   INCOME, NET OF
   TAX












Foreign currency
   translation adjustments

(65)


(417)


8,328


(82)


(532)


7,895

Unrealized gains on short-
   term investments












  Unrealized holding gains
   arising during period

166


1,075


940


76


493


499

  Less: reclassification
   adjustment for gains
   included in net income

132


852


668


48


308


381

Other comprehensive
   (loss) income

(31)


(194)


8,600


(54)


(347)


8,013













TOTAL
   COMPREHENSIVE
   INCOME

1,143


7,398


18,738


3,378


21,816


12,524













Net income per share –
   basic and diluted

0.03


0.17


0.25


0.07


0.48


0.11













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

46,642,280


46,642,280


43,577,168


46,648,495


46,648,495


43,583,418

 

 

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














Accumulated







 Class A Ordinary


Class C Ordinary


Additional






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, 2021


41,923,276


794


4,708,415


90


3,545,073


4,210


(3,419,146)


12,101


(1,968)


141,154

Share-based compensation


-


-


-


-


219


-


-


-


-


219

Issuance of ordinary shares for restricted
   stock award


12,500


0


-


-


(0)


-


-


-


-


-

Foreign currency translation adjustment


-


-


-


-


-


-


-


115


-


115

Unrealized gain on investment, net of
   income taxes


-


-


-


-


-


-


-


38


-


38

Net loss


-


-


-


-


-


-


(14,329)


-


(242)


(14,571)

Balance as of March 31, 2021


41,935,776


794


4,708,415


90


3,545,292


4,210


(3,433,475)


12,254


(2,210)


126,955

Share-based compensation


-


-


-


-


220


-


-


-


-


220

Issuance of ordinary shares for restricted
   stock award


12,500


0


-


-


(0)


-


-


-


-


-

Foreign currency translation adjustment


-


-


-


-


-


-


-


(532)


-


(532)

Unrealized gain on investment, net of
   income taxes


-


-


-


-


-


-


-


185


-


185

Net income/(loss)


-


-


-


-


-


-


22,440


-


(277)


22,163

Balance as of June 30, 2021


41,948,276


794


4,708,415


90


3,545,512


4,210


(3,411,035)


11,907


(2,487)


148,991






















Balance as of January 1, 2020


38,858,199


730


4,708,415


90


3,508,745


20,185


(3,371,815)


6,341


(680)


163,596

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

Impact on adoption of ASC 326


-


-


-


-


-


-


(594)


-


-


(594)

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


-


(296)


4,511

Balance as of June 30, 2020


38,883,199


731


4,708,415


90


3,509,224


4,712


(3,346,090)


14,941


(1,388)


182,220

 

 

 

Discussion of Segment Operations

(All amounts in thousands)



For the six months ended June 30,


For the three months ended June 30,


2021


2021


2020


2021


2021


2020


US$


RMB


RMB


US$


RMB


RMB













NET REVENUES












K-12 Schools

27,205


175,650


126,800


16,223


104,748


85,389

CP&CE Programs 

19,546


126,206


118,942


10,455


67,503


70,074

Total net revenues

46,751


301,856


245,742


26,678


172,251


155,463

COST OF REVENUES












K-12 Schools

(15,161)


(97,886)


(74,542)


(8,100)


(52,297)


(41,113)

CP&CE Programs 

(12,920)


(83,419)


(99,240)


(6,819)


(44,025)


(53,938)

Total cost of revenues

(28,081)


(181,305)


(173,782)


(14,919)


(96,322)


(95,051)

GROSS PROFIT












K-12 Schools

12,044


77,764


52,258


8,123


52,451


44,276

CP&CE Programs 

6,626


42,787


19,702


3,636


23,478


16,136

Total gross profit

18,670


120,551


71,960


11,759


75,929


60,412













 

Cision View original content:https://www.prnewswire.com/news-releases/ambow-education-announces-second-quarter-2021-financial-results-301379897.html

Source: Ambow Education Holding Ltd.
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