Ambow Education Announces Fourth Quarter and Full Year 2020 Financial Results

Rhea-AI Summary

Ambow Education Holding Ltd. (AMBO) reported its financial results for Q4 and FY 2020. Q4 revenues remained flat at RMB173.5 million (US$26.6 million), while gross profit increased by 18.7% to RMB66.1 million (US$10.1 million), leading to a gross margin of 38.1%, a 590 basis point improvement year-over-year. However, FY 2020 revenues dropped by 8.9% to RMB532.0 million (US$81.5 million) due to pandemic-related service reductions. The company reported a net loss of RMB62.7 million (US$9.6 million) for FY 2020 but maintained strong cash resources of RMB282.5 million (US$43.3 million).

Positive

• Q4 gross profit increased by 18.7% to RMB66.1 million.
• Gross margin improved to 38.1%, up 590 basis points YoY.
• Operating expenses decreased by 11.7% to RMB62.8 million in Q4.
• Strong cash resources of RMB282.5 million as of December 31, 2020.

Negative

• FY 2020 net revenues decreased by 8.9% to RMB532.0 million.
• FY 2020 gross profit dropped by 25.9% to RMB144.5 million.
• Operating loss for FY 2020 was RMB124.6 million, worsening from RMB97.7 million in 2019.

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 Ordinary 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 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 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.

FAQ

What are Ambow Education's Q4 2020 financial results?

Ambow Education's Q4 2020 revenues were RMB173.5 million (US$26.6 million) with a gross profit of RMB66.1 million (US$10.1 million), representing an 18.7% increase from the previous year.

How did Ambow's revenue perform in fiscal year 2020?

Ambow's net revenue for fiscal year 2020 decreased by 8.9% to RMB532.0 million (US$81.5 million) compared to RMB583.9 million in 2019.

What was Ambow Education's net income for Q4 2020?

In Q4 2020, Ambow reported a net income attributable to ordinary shareholders of RMB11.0 million (US$1.7 million), or RMB0.23 per share.

What is the overall financial outlook for Ambow Education in 2021?

Ambow aims to leverage its technological capabilities and growth initiatives to drive solid growth and shareholder value in 2021.