EX-99.1 2 tv497231_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Ambow Education Reports First Quarter 2018 Results

 

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

 

Net Loss Decreased 53.9% Year Over Year

 

BEIJING, June 28, 2018 -- 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