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Ambow Education Reports First Quarter 2018 Results

2018-06-29 04:05

Net Revenues for the First Quarter 2018 Increased 36.5% Year Over Year

Net Loss Decreased 53.9% Year Over Year

BEIJING, June 29, 2018 /PRNewswire/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE: 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, 2018.

  • Net revenues for the first quarter of 2018 increased by 36.5% to RMB104.8 million (US$16.7 million), from RMB76.8 million (US$11.2 million) in the same period of 2017, aided by a RMB22.8 million (US$3.6 million) contribution from Boston-based Bay State College (acquired by Ambow in November 2017), higher student enrollment for the 2017-2018 academic year in the Company's K-12 schools, and growth of Ambow's smart office solution business.
  • Gross profit for the first quarter of 2018 increased by 35.8% to RMB35.3 million (US$5.6 million) from RMB26.0 million (US$3.8 million) in the same period of 2017. Gross profit margin was 33.7%, compared with 33.9% for the first quarter of 2017.
  • Operating expenses for the first quarter of 2018 decreased by 2.7% to RMB43.9 million (US$7.0 million) from RMB45.1 million (US$6.6 million) for the same period of 2017. Operating expenses as a percentage of net revenues decreased to 41.9% from 58.7% in the same period 2017, primarily due to stringent cost controls.
  • Net loss attributable to ordinary shareholders was RMB7.1 million (US$1.1 million), or RMB0.18 (US$0.03) per basic and diluted share, representing a 53.9% reduction compared with a net loss of RMB15.4 million (US$2.2 million), or RMB0.40 (US$0.06) per basic and diluted share, for the first quarter of 2017. This improvement occurred despite the recent acquisition of Bay State College, and with Q1 being a traditionally soft quarter for the Company due to school closures for winter break.
  • As of March 31, 2018, Ambow maintained strong cash resources of RMB371.3 million (US$59.2 million), comprised of cash and cash equivalents of RMB160.8 million (US$25.6 million), short-term investments of RMB208.1 million (US$33.2 million), and restricted cash of RMB2.4 million (US$0.4 million).
  • As of March 31, 2018, the Company's deferred revenue balance was RMB122.7 million (US$19.6 million), representing a 7.3% increase from RMB114.4 million (US$17.6 million) as of December 31, 2017, mainly attributable to growth in student enrollment for the 2017-2018 academic year, associated tuition and course fees collected in the K-12 business segment, and tuition collected at Bay State College for the spring semester of 2018.

"We are pleased to achieve significant growth in several key financial metrics in Q1 2018, and implement cost-saving efficiencies, which will continue to drive further improvements near-term," said Dr. Jin Huang, Ambow's president and chief executive officer. "China's primary economic objective continues to be the rapid upgrade of its IT and technology-related sectors. Ambow is one of the leading companies in China to develop state-of-the-art, IT-oriented educational programs that enable the managers and technical staff needed to reach this goal. Against this backdrop, we're confident in our ability to meaningfully grow our top and bottom lines in the near future."

"We also took steps to expand our number of domestic college and university partners, whose students we teach the most advanced IT-oriented subjects, including computer science, software engineering, information technology and mobile communications," Dr. Huang continued. "Furthermore, we began preparations to integrate Bay State College into our Ambow University model and build a platform and ecosystem for a strong and profitable American presence. We also recently launched several overseas summer camps and faculty training programs, as well as strengthened our international advanced degree program for undergraduate students keen on studying abroad. All of these initiatives are expected to drive significant high-margin revenue in the near future. We expect that, starting in 2019, Bay State will also contribute to this profitability."

The Company's reputation was also bolstered, by the receipt of two elite awards, the 2017 Most Influential Brand of Education Organizations from Xinhua.net, and, for the second consecutive year, the 2017 Most Influential Career Education Brand from Sina.com. Dr. Huang commented, "Both awards are highly regarded and could aid the Company in securing incremental business going forward."

Ambow's successful completion of its IPO on June 5, 2018, raised approximately US$7.65 million before deducting underwriting discounts, commissions and other related expenses. "The IPO funds will be used to expand our schools and learning centers, teacher training programs, research and development of our educational content and to fund working capital of Bay State College," concluded Dr. Huang.

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 2018 are based on the effective exchange rate of 6.2726 as of March 30, 2018; all amounts translated from RMB to U.S. dollars for the first quarter of 2017 are based on the effective exchange rate of 6.8832 as of March 31, 2017; all amounts translated from RMB to U.S. dollars as of December 29, 2017 are based on the effective exchange rate of 6.5063 as of December 31, 2017. 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 10-5730-6200
Email: 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,





2018


2017





US$


RMB


RMB


ASSETS









Current assets:









Cash and cash equivalents



25,642


160,842


195,303


Restricted cash



375


2,350


2,350


Short term investments, available for sale



6,078


38,127


128,042


Short term investments, held to maturity



27,102


170,000


93,000


Accounts receivable, net



3,291


20,645


24,511


Prepaid and other current assets, net



21,491


134,806


129,517


Total current assets



83,979


526,770


572,723


Non-current assets:









Property and equipment, net



26,366


165,383


168,423


Land use rights, net



293


1,837


1,848


Intangible assets, net



15,242


95,608


96,769


Goodwill



11,664


73,166


73,166


Deferred tax assets, net



1,189


7,460


8,222


Long-term loan receivables



6,804


42,677


42,677


Other non-current assets, net



2,386


14,968


13,592











Total non-current assets



63,944


401,099


404,697











Total assets



147,923


927,869


977,420











LIABILITIES









Current liabilities:









Deferred revenue  *



19,559


122,687


114,396


Accounts payable  *



3,060


19,199


23,414


Accrued and other liabilities  *



58,595


367,546


418,998


Income taxes payable  *



32,711


205,185


202,314


Amounts due to related parties  *



547


3,430


3,430


Total current liabilities



114,472


718,047


762,552


Non-current liabilities:









Long-term borrowings from third party



6,015


37,729


39,205


Consideration payable for acquisitions



1,079


6,766


6,766


Other non-current liabilities



381


2,390


2,938











Total non-current liabilities



7,475


46,885


48,909











Total liabilities



121,947


764,932


811,461











EQUITY









Preferred shares









(US$ 0.003 par value;1,666,667 shares authorized,
nil issued and outstanding as of March 31, 2018
and December 31, 2017) 



-


-


-


Class A Ordinary shares









(US$0.003 par value; 66,666,667 and
   66,666,667 shares authorized, 34,206,939
   and 34,237,126 shares issued and
   outstanding as of December 31, 2017 and
   March 31, 2018, respectively)



102


641


640


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, 2017 and March 31, 2018,
     respectively)



14


90


90


Additional paid-in capital



551,115


3,456,922


3,456,307


Statutory reserve



3,194


20,036


20,036


Accumulated deficit



(529,888)


(3,323,777)


(3,316,715)


Accumulated other comprehensive income



1,628


10,216


6,876


Total Ambow Education Holding Ltd.'s equity



26,165


164,128


167,234


Non-controlling interests



(189)


(1,191)


(1,275)


Total equity



25,976


162,937


165,959


Total liabilities and equity



147,923


927,869


977,420



*  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 three months ended March 31,



2018


2018


2017



US$


RMB


RMB








NET REVENUES







 Educational program and services


16,167


101,411


76,750

Intelligent program and services


537


3,368


-

Total net revenues


16,704


104,779


76,750

COST OF REVENUES







 Educational program and services


(10,853)


(68,076)


(50,795)

 Intelligent program and services


(227)


(1,426)


-

Total cost of revenues


(11,080)


(69,502)


(50,795)








GROSS PROFIT


5,624


35,277


25,955

Operating expenses:







Selling and marketing


(1,627)


(10,205)


(10,217)

General and administrative


(5,308)


(33,292)


(33,646)

Research and development


(71)


(443)


(1,259)

Total operating expenses


(7,006)


(43,940)


(45,122)








OPERATING LOSS


(1,382)


(8,663)


(19,167)








OTHER INCOME (EXPENSES)







Interest income


333


2,090


1,032

Foreign exchange gain (loss), net


2


14


(3)

Other income, net


34


214


11

Gain on cancellation of subsidiaries


446


2,797


-

Gain on sale of investment available for sale


48


298


4,106

Total other income


863


5,413


5,146








LOSS BEFORE INCOME TAX AND NON-CONTROLLING INTEREST


(519)


(3,250)


(14,021)

Income tax expense


(593)


(3,719)


(1,967)








NET LOSS


(1,112)


(6,969)


(15,988)

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


15


93


(568)








NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS


(1,127)


(7,062)


(15,420)








NET LOSS


(1,112)


(6,969)


(15,988)








OTHER COMPREHENSIVE INCOME, NET OF TAX







Foreign currency translation adjustments


522


3,276


(187)

Unrealized gains on short term investments







  Unrealized holding gains arising during period


33


207


355

  Less: reclassification adjustment for gains included in net income


23


143


2,499

Other comprehensive income (loss)


532


3,340


(2,331)








TOTAL COMPREHENSIVE LOSS


(580)


(3,629)


(18,319)

Net loss per share - basic and diluted


(0.03)


(0.18)


(0.40)








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


38,925,752


38,925,752


38,729,052

Cision View original content:http://www.prnewswire.com/news-releases/ambow-education-reports-first-quarter-2018-results-300674277.html

Source: Ambow Education Holding Ltd.

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