Ambow Education Announces Fourth Quarter and Full Year 2020 Financial Results
04/08/2021 - 05:50 PM
BEIJING , April 8, 2021 /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 fourth quarter and audited financial and operating results for the fiscal year ended December 31, 2020 , respectively.
"In the fourth quarter of 2020, we remained focused and diligent in our efforts to help students achieve positive learning outcomes, especially as they navigate these challenging times," noted Dr. Jin Huang , Ambow's President and Chief Executive Officer. "We're pleased to report improved operating profitability in the fourth quarter, driven by healthy top-line performance and effective control over operating costs and expenses. Notably, gross margin increased 590 basis points year-over-year to 38.1%, reflecting the resilience of our business model in the wake of a weakened global economy due to COVID-19. With two decades of experience in education technology under our belt and powerful growth initiatives in place, we are confident in our ability to drive solid growth and further cement our leading position in China's career enhancement market."
"We recognize the increasingly pivotal role of advanced technologies and solutions as these uncertain times have reshaped the way education is delivered and received. The outbreak of COVID-19 further accelerated the integration of technology into classroom learning and significantly boosted the demand for online education from both students and education professionals. Through innovative solutions such as Huanyujun Education Hub, we are cultivating an online-to-offline education ecosystem that is built on cloud-based infrastructure to empower teaching and address both in-school and after-school learning needs. In December 2020 , Ambow won approval to establish a postdoctoral scientific research workstation specialized in next-generation education tech research and development, a further testament to our strong capabilities in technology advancement and innovation. Heading into 2021, we look forward to executing our growth initiatives with the goal of consistently driving shareholder value," concluded Dr. Huang.
Fourth Quarter 2020 Financial Highlights
Net revenues for the fourth quarter of 2020 remained flat at RMB173.5 million (US$26.6 million ) compared to RMB173.3 million in the same period of 2019. Gross profit for the fourth quarter of 2020 increased by 18.7% to RMB66.1 million (US$10.1 million ) from RMB55.7 million in the same period of 2019. Gross profit margin was 38.1%, compared with 32.1% for the fourth quarter of 2019. The increases in gross profit and gross profit margin were mainly attributable to stringent cost management. Operating expenses for the fourth quarter of 2020 decreased by 11.7% to RMB62.8 million (US$9.6 million ) from RMB71.1 million in the same period of 2019. The decrease was primarily attributable to stringent expense controls to improve operating efficiency, partially offset by operating expenses related to NewSchool of Architecture and Design, LLC ("NewSchool") which was acquired in the first quarter of 2020. Operating income for the fourth quarter of 2020 was RMB3.3 million (US$0.5 million ), compared to operating loss of RMB15.4 million in the same period of 2019. Net income attributable to ordinary shareholders was RMB11.0 million (US$1.7 million ), or RMB0.23 (US$0.04) per basic and diluted share, compared with a net loss of RMB12.2 million , or RMB0.28 (US$0.04) per basic and diluted share, for the fourth quarter of 2019. As of December 31, 2020 , Ambow maintained strong cash resources of RMB282.5 million (US$43.3 million ), comprised of cash and cash equivalents of RMB118.8 million (US$18.2 million ), restricted cash of RMB0.8 million (US$0.1 million ) and short-term investments of RMB162.9 million (US$25.0 million ). Fiscal Year 2020 Financial Highlights
Net revenues for fiscal year 2020 decreased by 8.9% to RMB532.0 million (US$81.5 million ) from RMB583.9 million in 2019. The decrease was primarily due to fewer boarding and other ancillary services provided for K-12 schools, and fewer services provided at the Company's tutoring centers, training offices and college campuses as a result of the outbreak of COVID-19. This was partially offset by the revenues from NewSchool. Gross profit for fiscal year 2020 decreased by 25.9% to RMB144.5 million (US$22.1 million ) from RMB195.0 million in 2019. Gross profit margin was 27.2%, compared with 33.4% in 2019. The decreases in gross profit and margin were mainly attributable to the decrease in revenue while keeping cost deployment to weather the COVID-19 pandemic in 2020. Operating expenses for fiscal year 2020 decreased by 8.1% to RMB269.0 million (US$41.2 million ) from RMB292.7 million in 2019. The decrease was primarily attributable to lower expenditures due to the temporary suspension of operations at training offices and tutoring centers during the period as part of the national pandemic containment efforts and stringent expense controls to improve operating efficiency. The decrease was partially offset by NewSchool's operating expenses. Operating loss for fiscal year 2020 was RMB124.6 million (US$19.1 million ), compared to operating loss of RMB97.7 million in 2019. Net loss attributable to ordinary shareholders was RMB62.7 million (US$9.6 million ), or RMB1.41 (US$0.22) per basic and diluted share, compared with a net loss of RMB99.9 million , or RMB2.30 (US$0.33) per basic and diluted share, in 2019. The Company's fourth quarter and fiscal year 2020 financial and operating results can also be found on its Form 6-K and Form 20-F 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 fourth quarter and the twelve months of 2020 are based on the effective exchange rate of 6.5250 as of December 31, 2020 ; all amounts translated from RMB to U.S. dollars for the fourth quarter and the twelve months of 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 Email: ir@ambow.com
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.
AUDITED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share and per share data)
As of December 31,
As of December 31,
2020
2019
US$
RMB
RMB
ASSETS
Current assets:
Cash and cash equivalents
18,210
118,821
157,600
Restricted cash
126
824
-
Short term investments, available for sale
18,062
117,854
57,487
Short term investments, held to maturity
6,897
45,000
31,000
Accounts receivable, net
3,214
20,972
17,939
Amounts due from related parties
463
3,024
2,318
Prepaid and other current assets, net
18,028
117,634
133,296
Total current assets
65,000
424,129
399,640
Non-current assets:
Property and equipment, net
22,144
144,492
157,463
Land use rights, net
263
1,715
1,759
Intangible assets, net
8,400
54,808
56,607
Goodwill
3,940
25,710
60,353
Deferred tax assets, net
971
6,338
10,195
Operating lease right-of-use asset
37,948
247,608
257,361
Finance lease right-of-use asset
897
5,850
6,450
Other non-current assets, net
21,313
139,067
70,971
Total non-current assets
95,876
625,588
621,159
Total assets
160,876
1,049,717
1,020,799
LIABILITIES
Current liabilities:
Short-term borrowing *
1,533
10,000
-
Deferred revenue *
25,088
163,699
165,111
Accounts payable *
2,976
19,423
14,718
Accrued and other liabilities *
32,121
209,590
192,957
Income taxes payable, current *
28,297
184,638
180,715
Amounts due to related parties *
390
2,543
1,971
Operating lease liability, current *
8,230
53,702
53,512
Total current liabilities
98,635
643,595
608,984
Non-current liabilities:
Long-term borrowing
1,470
9,594
-
Other non-current liabilities *
45
292
-
Income taxes payable, non-current *
5,328
34,763
32,152
Operating lease liability, non-current *
33,765
220,319
216,067
Total non-current liabilities
40,608
264,968
248,219
Total liabilities
139,243
908,563
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 2020)
-
-
-
Class A O rdinary shares
(US$0.003 par value; 66,666,667 and 66,666,667 shares authorized, 38,858,199 and 41,923,276 shares issued and outstanding as of December 31, 2019 and 2020, respectively)
122
794
730
Class C O rdinary shares
(US$0.003 par value; 8,333,333 and 8,333,333 shares authorized, 4,708,415 and 4,708,415 shares issued and outstanding as of December 31, 2019 and 2020, respectively)
14
90
90
Additional paid-in capital
543,306
3,545,073
3,508,745
Statutory reserve
645
4,210
20,185
Accumulated deficit
(524,007)
(3,419,146)
(3,371,815)
Accumulated other comprehensive income
1,855
12,101
6,341
Total Ambow Education Holding Ltd.'s equity
21,935
143,122
164,276
Non-controlling interests
(302)
(1,968)
(680)
Total equity
21,633
141,154
163,596
Total liabilities and equity
160,876
1,049,717
1,020,799
* All of the VIE's assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company's general assets.
AMBOW EDUCATION HOLDING LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except for share and per share data)
For the years ended December 31,
For the three months ended December 31,
2020
2020
2019
2020
2020
2019
US$
RMB
RMB
US$
RMB
RMB
Audited
Audited
Audited
Unaudited
Unaudited
Unaudited
NET REVENUES
Educational program and services
80,571
525,727
582,706
25,690
167,629
173,339
Intelligent program and services
958
6,253
1,203
904
5,901
10
Total net revenues
81,529
531,980
583,909
26,594
173,530
173,349
COST OF REVENUES
Educational program and services
(58,172)
(379,571)
(383,635)
(15,615)
(101,888)
(118,181)
Intelligent program and services
(1,214)
(7,919)
(5,259)
(855)
(5,579)
559
Total cost of revenues
(59,386)
(387,490)
(388,894)
(16,470)
(107,467)
(117,622)
GROSS PROFIT
22,143
144,490
195,015
10,124
66,063
55,727
Operating expenses:
Selling and marketing
(8,024)
(52,355)
(55,721)
(2,221)
(14,494)
(14,943)
General and administrative
(26,710)
(174,283)
(194,417)
(7,211)
(47,053)
(53,907)
Research and development
(874)
(5,703)
(3,793)
(191)
(1,247)
(2,238)
Impairment loss
(5,624)
(36,699)
(38,754)
-
-
-
Total operating expenses
(41,232)
(269,040)
(292,685)
(9,623)
(62,794)
(71,088)
OPERATING (LOSS) INCOME
(19,089)
(124,550)
(97,670)
501
3,269
(15,361)
OTHER INCOME (EXPENSES)
Interest income, net
1,456
9,501
5,379
360
2,351
2,036
Foreign exchange gain (loss), net
150
980
23
145
949
(23)
Other (loss) income, net
(191)
(1,244)
396
(319)
(2,084)
203
Gain from derecognition of liabilities
602
3,926
-
602
3,926
-
Gain from deregistration of subsidiaries
608
3,967
1,841
-
-
-
Gain on disposal of subsidiaries
115
752
-
-
-
562
Gain on the bargain purchase
6,172
40,273
-
-
-
-
Gain from fair value change of contingent consideration payable
-
-
1,322
-
-
1,322
Gain on sale of investment available for sale
533
3,476
1,200
153
999
778
Total other income
9,445
61,631
10,161
941
6,141
4,878
(LOSS) INCOME BEFORE INCOME TAX AND NON- CONTROLLING INTEREST
(9,644)
(62,919)
(87,509)
1,442
9,410
(10,483)
Income tax (expense) benefit
(163)
(1,062)
(12,917)
205
1,337
(1,885)
NET (LOSS) INCOME
(9,807)
(63,981)
(100,426)
1,647
10,747
(12,368)
Less: Net loss attributable to non-controlling interest
(194)
(1,269)
(485)
(35)
(229)
(216)
NET (LOSS) INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS
(9,613)
(62,712)
(99,941)
1,682
10,976
(12,152)
NET (LOSS) INCOME
(9,807)
(63,981)
(100,426)
1,647
10,747
(12,368)
OTHER COMPREHENSIVE INCOME, NET OF TAX
Foreign currency translation adjustments
955
6,234
(2,924)
(689)
(4,497)
343
Unrealized gains on short term investments
Unrealized holding gains arising during period
377
2,458
2,046
144
940
808
Less: reclassification adjustment for gains included in net income
449
2,932
1,086
118
771
597
Other comprehensive income (loss)
883
5,760
(1,964)
(663)
(4,328)
554
TOTAL COMPREHENSIVE (LOSS) INCOME
(8,924)
(58,221)
(102,390)
984
6,419
(11,814)
Net (loss) income per share – basic and diluted
(0.22)
(1.41)
(2.30)
0.04
0.23
(0.28)
Weighted average shares used in calculating basic and diluted net (loss) income per share
44,372,326
44,372,326
43,505,175
46,721,812
46,721,812
43,529,884
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, 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
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
(1,736)
98,932
Share-based compensation
-
-
-
-
228
-
-
-
-
228
Issuance of ordinary shares for restricted stock award
12,500
0
-
-
(0)
-
-
-
-
-
Issuance of ordinary shares in a registered direct offering
3,015,076
63
-
-
35,515
-
-
-
-
35,578
Foreign currency translation adjustment
-
-
-
-
-
-
-
(4,497)
-
(4,497)
Unrealized gain on investment, net of income taxes
-
-
-
-
-
-
-
169
-
169
Deregistration of subsidiary
-
-
-
-
-
-
-
-
(3)
(3)
Net income/(loss)
-
-
-
-
-
-
10,976
-
(229)
10,747
Balance as of December 31, 2020
41,923,276
794
4,708,415
90
3,545,073
4,210
(3,419,146)
12,101
(1,968)
141,154
Balance as of January 1, 2019
38,756,289
794
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
Share-based compensation
-
-
-
-
242
-
-
-
-
242
Issuance of ordinary shares for restricted stock award
54,167
1
-
-
(1)
-
-
-
-
-
Foreign currency translation adjustment
-
-
-
-
-
-
-
343
-
343
Appropriation to statutory reserves
-
-
-
-
-
36
(36)
-
-
-
Unrealized gain on investment, net of income taxes
-
-
-
-
-
-
-
211
-
211
Deregistration of subsidiaries
-
-
-
-
-
-
-
-
306
306
Noncontrolling interests from new subsidiaries
-
-
-
-
-
-
-
-
783
783
Net loss
-
-
-
-
-
-
(12,152)
-
(216)
(12,368)
Balance as of December 31, 2019
38,858,199
730
4,708,415
90
3,508,745
20,185
(3,371,815)
6,341
(680)
163,596
Discussion of Segment Operations
(All amounts in thousands)
For the years ended December 31,
For the three months ended December 31,
2020
2020
2019
2020
2020
2019
US$
RMB
RMB
US$
RMB
RMB
NET REVENUES
K-12 Schools
44,680
291,539
313,747
16,210
105,773
110,533
CP&CE Programs
36,849
240,441
270,162
10,384
67,757
62,816
Total net revenues
81,529
531,980
583,909
26,594
173,530
173,349
COST OF REVENUES
K-12 Schools
(28,909)
(188,628)
(197,064)
(10,522)
(68,656)
(68,177)
CP&CE Programs
(30,477)
(198,862)
(191,830)
(5,948)
(38,811)
(49,445)
Total cost of revenues
(59,386)
(387,490)
(388,894)
(16,470)
(107,467)
(117,622)
GROSS PROFIT
K-12 Schools
15,771
102,911
116,683
5,688
37,117
42,356
CP&CE Programs
6,372
41,579
78,332
4,436
28,946
13,371
Total gross profit
22,143
144,490
195,015
10,124
66,063
55,727
View original content:http://www.prnewswire.com/news-releases/ambow-education-announces-fourth-quarter-and-full-year-2020-financial-results-301265491.html
SOURCE Ambow Education Holding Ltd.
Ambow Education Holding Ltd
AMBO Rankings
N/A Ranked by Stock Gains
AMBO Stock Data
Industry
All Other Miscellaneous Schools and Instruction
Sector
Educational Services
Tags
Consumer Services, Other Consumer Services, Educational Services, All Other Miscellaneous Schools and Instruction
About AMBO
founded in 2000, ambow education is the leading provider of personalized education and training services in china. ambow is passionate about maximizing every student’s learning potential so that they can realize their dreams for the future. ambow has education and training services to cater for every stage of life. ambow learning centers are located throughout china, offering after-school tutoring programs, university entrance exam preparation, job-readiness training and corporate training. with its highly-effective ‘learning engine’ technology and responsive business model, ambow has consistently set the standards of excellence to which others aspire in the personalized education services sector in china. a pioneer in the sector, ambow remains its leading technological innovator, as well as the acknowledged trend-setter in the delivery of effective teaching and learning practices. with ambow, students and professionals can create the career path and future they desire.