RYB Education, Inc. Reports Second Quarter 2021 Financial Results
RYB Education, Inc. (RYB) reported robust financial results for Q2 2021, showcasing significant growth in revenues and a turn to profitability. Net revenues reached $53.4 million, soaring 318.1% year-over-year, primarily driven by increased tuition fees following the resumption of normal operations post-COVID-19. The company posted net income of $6.2 million compared to a net loss of $12.8 million in Q2 2020. With 37,166 students enrolled, RYB's gross profit improved to $14.5 million, up from a gross loss of $9.5 million in the same quarter last year. The positive trajectory continues with expectations of 26% to 29% revenue growth in Q3 2021.
- Net revenues for Q2 2021 increased to $53.4 million, up 318.1% from $12.8 million in Q2 2020.
- Net income attributable to ordinary shareholders for Q2 2021 was $6.2 million, compared to a net loss of $12.8 million in Q2 2020.
- Enrollment rose to 37,166 students as of June 30, 2021, a significant increase from 31,023 a year earlier.
- Gross profit for Q2 2021 improved to $14.5 million from a gross loss of $9.5 million in Q2 2020.
- Expected revenue growth for Q3 2021 is between $41.0 million and $42.0 million, indicating a year-over-year increase of 26-29%.
- Operating expenses rose to $5.9 million in Q2 2021, compared to $5.4 million in Q2 2020, indicating increasing operational costs.
BEIJING, Sept. 17, 2021 /PRNewswire/ -- RYB Education, Inc. ("RYB" or the "Company") (NYSE: RYB), a leading early childhood education service provider in China, today announced its unaudited financial results for the second quarter of 2021.
Second Quarter 2021 Operational and Financial Summary
- Number of students enrolled at directly operated facilities was 37,166 as of June 30, 2021, compared with 31,023[1] as of June 30, 2020.
- Net revenues were
$53.4 million , compared with$12.8 million for the second quarter of 2020. - Gross profit was
$14.5 million , compared with gross loss of$9.5 million for the second quarter of 2020. - Net income attributable to ordinary shareholders of RYB for the second quarter of 2021 was
$6.2 million , compared with$12.8 million of net loss attributable to ordinary shareholders of RYB for the second quarter of 2020. Adjusted net income attributable to ordinary shareholders[2] of RYB for the second quarter of 2021 was$6.8 million , compared with$12.0 million of adjusted net loss attributable to ordinary shareholders of RYB for the second quarter of 2020. - Cash generated from operating activities was
$0.2 million in the second quarter of 2021, compared with$5.0 million of cash used in operating activities for the second quarter of 2020.
First Six Months of 2021 Financial Results
- Net revenues were
$90.1 million , compared with$30.1 million for the first six months of 2020. - Gross profit was
$17.9 million , compared with gross loss of$21.1 million for the first six months of 2020. - Net income attributable to ordinary shareholders of RYB for the first six months of 2021 was
$4.4 million , compared with$39.5 million of net loss attributable to ordinary shareholders of RYB for the same period of 2020. Adjusted net income attributable to ordinary shareholders of RYB for the first six months of 2021 was$5.6 million , compared with$37.9 million of adjusted net loss attributable to ordinary shareholders of RYB for the same period of 2020. - Cash generated from operating activities was
$22.9 million , compared with$19.0 million of cash used in operating activities for the same period of 2020.
"RYB firmly supports the governmental strategies and policies related to pre-school education that are being introduced over time. As a participant of the early education industry, we strive to fulfill our corporate responsibilities and deliver products and services that complement public education. We continue to actively follow the policies that aim to better achieving the accessibility of education to young children and to provide better services to families and society," said Ms. Yanlai Shi, co-founder, director and chief executive officer of RYB. "During the first half of 2021, in response to government's call for increasing the overall supply of inclusive kindergarten and preschool education, we continued our efforts in expanding the number of classes and enrollment capacity at our facilities without compromising quality and safety. We make efforts to improve the quality of education and teaching through multiple ways and to create a learning environment that fosters independent decision making, collaboration and symbiotic value creation, which we believe supports the healthy, happy and all-rounded development of young children.
"Going through the challenges from the COVID-19 pandemic, the Company's business operations made a sound recovery in the second quarter of 2021. The recurrences of some COVID-19 cases in some regions during the first half of this year, however, casted some impact on the play-and-learn center operations. Nevertheless, we continue to upgrade our content and curriculum systems with the goal of completing it by the end of the year. With a hands-on approach to support the franchised play-and-learn centers, we remain committed to providing them with operational guidance and course and brand upgrades support to facilitate their operations once they resume normal business. The Company will also actively follow government's policy and guidance on early childcare, leverage our non-branded early childcare offerings, and empower the development of the industry," concluded Ms. Shi.
Second Quarter 2021 Financial Results
Net Revenues
Net revenues for the second quarter of 2021 were
Service revenues for the second quarter of 2021 were
Products revenues for the second quarter of 2021 were
Cost of Revenues
Cost of revenues for the second quarter of 2021 was
Gross Profit/loss
As a result of the foregoing, gross profit for the second quarter of 2021 was
Operating Expenses
Total operating expenses for the second quarter of 2021 were
Selling expenses for the second quarter of 2021 were
General and administrative expenses for the second quarter of 2021 were
Operating Income/loss
Operating income for the second quarter of 2021 was
Net Income/loss
Net income attributable to ordinary shareholders of RYB for the second quarter of 2021 was
Basic and diluted net income per American depositary share ("ADS") attributable to ordinary shareholders of RYB for the second quarter of 2021 were
Adjusted basic and diluted net income per ADS attributable to ordinary shareholders[4] of RYB for the second quarter of 2021 were
EBITDA[5] for the second quarter of 2021 was
Operating Cash Flow
Cash generated from operating activities was
Balance Sheet
As of June 30, 2021, the Company had total cash and cash equivalents of
First Six Months of 2021 Financial Results
Net Revenues
Net revenues for the first six months of 2021 were
Services revenues for the first six months of 2021 were
Products revenues for the first six months of 2021 were
Cost of Revenues
Cost of revenues for the first six months of 2021 was
Gross Profit/loss
Gross profit for the first six months of 2021 was
Operating Expenses
Total operating expenses for the first six months of 2021 were
Selling expenses were
General and administrative expenses for the first six months of 2021 were
Impairment loss on goodwill was nil for the first half of 2021, compared to
Operating Income/loss
Operating income for the first six months of 2021 was
Net Income/loss
Net income attributable to ordinary shareholders of RYB for the first six months of 2021 was
Basic and diluted net income per ADS attributable to ordinary shareholders of RYB for the first six months of 2021 were
Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of RYB for the first six months of 2021 were
EBITDA for the first six months of 2021 was
Business Outlook
For the third quarter of 2021, the Company's management currently expects net revenues to be between
[1] The number of students enrolled as of June 30, 2020 refers to the number of students enrolled before the temporary closure of the Company's facilities in China due to COVID-19 and the number of students enrolled in our facilities in Singapore as at June 30, 2020. |
[2] Adjusted net income (loss) attributable to ordinary shareholders is a non-GAAP financial measure, which is defined as net income (loss) attributable to ordinary shareholders excluding share-based compensation expenses and changes in redeemable non-controlling interests. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release. |
[3] Adjusted operating income (loss) is a non-GAAP financial measure, which is defined as operating income (loss) excluding share-based compensation expenses. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release. |
[4] Adjusted basic and diluted net income (loss) per ADS attributable to ordinary shareholders is a non- GAAP financial measure, which is defined as basic and diluted net income (loss) per ADS attributable to ordinary shareholders excluding share-based compensation expenses and changes in redeemable non-controlling interest. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release. |
[5] EBITDA is defined as net income (loss) excluding depreciation, amortization and income tax expenses. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release. |
[6] Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income (loss) excluding depreciation, amortization, income tax expenses, and share-based compensation expenses. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release. |
About RYB Education, Inc.
Founded on the core values of "Care" and "Responsibility," "Inspire" and "Innovate," RYB Education, Inc. is a leading early childhood education service provider in China. Since opening its first play-and-learn center in 1998, the Company has grown and flourished with the mission to provide high-quality, individualized and age-appropriate care and education to nurture and inspire each child for his or her betterment in life. During its two decades of operating history, the Company has built "RYB" into a well-recognized education brand and helped bring about many new educational practices in China's early childhood education industry. RYB's comprehensive early childhood education solutions meet the needs of children from infancy to 6 years old through structured courses at kindergartens and play-and-learn centers, as well as at-home educational products and services.
For more information, please visit http://ir.rybbaby.com
Use of Non-GAAP Financial Measures
We use EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income, and adjusted basic and diluted net income per ADS, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes.
EBITDA is defined as net income excluding depreciation, amortization and income tax expenses; adjusted EBITDA is defined as net income excluding depreciation, amortization, income tax expenses, and share-based compensation expenses; adjusted operating income is defined as operating income excluding share-based compensation expenses; adjusted net income attributable to ordinary shareholders is defined as net income attributable to ordinary shareholders excluding share-based compensation expenses and changes in redeemable non-controlling interest; and adjusted basic and diluted net income per ADS attributable to ordinary shareholders are defined as basic and diluted net income per ADS attributable to ordinary shareholders excluding share-based compensation expenses and changes in redeemable non-controlling interest.
We believe that EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income, and adjusted basic and diluted net income per ADS, help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in income from operations and net income. We believe that EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income, and adjusted basic and diluted net income per ADS, provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.
EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income, and adjusted basic and diluted net income per ADS, should not be considered in isolation or construed as an alternative to net income or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical adjusted financial measures to the most directly comparable GAAP measures. EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income, and adjusted basic and diluted net income per ADS, presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.
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," "confident" and similar statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. 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 statement, including but not limited to the following: the Company's brand recognition and market reputation; student enrollment in the Company's teaching facilities; the Company's growth strategies; its future business development, results of operations and financial conditions; trends and competition in China's early childhood education market; changes in its revenues and certain cost or expense items; the expected growth of the Chinese early childhood education market; Chinese governmental policies relating to the Company's industry and general economic conditions in China. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
In China:
RYB Education, Inc.
Investor Relations
E-mail: ir@rybbaby.com
The Piacente Group, Inc.
Yang Song
Tel: +86 (10) 6508-0677
E-mail: ryb@tpg-ir.com
In the United States:
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: ryb@tpg-ir.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(in thousands of U.S. dollars) | ||
As of | ||
June 30, 2021 | December 31, | |
Current assets: | ||
Cash and cash equivalents | 72,797 | 53,454 |
Accounts receivable, net | 2,142 | 1,844 |
Inventories | 5,829 | 5,773 |
Prepaid expenses and other current assets | 8,094 | 8,927 |
Loan receivables | 95 | 107 |
Total current assets | 88,957 | 70,105 |
Non-current assets: | ||
Restricted cash | 1,036 | 1,127 |
Property, plant and equipment, net | 44,299 | 47,638 |
Goodwill | 46,412 | 46,147 |
Intangible assets, net | 13,665 | 14,179 |
Long-term investment | 224 | 217 |
Deferred tax assets | 21,919 | 21,168 |
Other non-current assets | 12,032 | 14,438 |
Operating lease right-of-use assets | 77,956 | 87,472 |
Total assets | 306,500 | 302,491 |
Liabilities | ||
Current liabilities: | ||
Prepayments from customers, current portion | 4,725 | 4,145 |
Accrued expenses and other current liabilities | 58,897 | 54,406 |
Income tax payable | 20,805 | 18,592 |
Operating lease liabilities, current portion | 15,634 | 16,856 |
Deferred revenue, current portion | 36,222 | 34,351 |
Long-term debt, current portion | - | 7 |
Total current liabilities | 136,283 | 128,357 |
Non-current liabilities: | ||
Prepayments from customers, non-current portion | 3,767 | 4,024 |
Deferred revenue, non-current portion | 1,067 | 1,726 |
Other non-current liabilities | 12,112 | 12,519 |
Deferred income tax liabilities | 2,052 | 1,890 |
Operating lease liabilities, non-current portion | 66,785 | 76,308 |
Total liabilities | 222,066 | 224,824 |
Mezzanine equity | ||
Redeemable non-controlling interests | 10,489 | 9,988 |
Equity | ||
Ordinary shares | 29 | 29 |
Treasury stock | (9,881) | (10,321) |
Additional paid-in capital | 141,979 | 141,094 |
Statutory reserve | 4,652 | 4,652 |
Accumulated other comprehensive (loss)/ income | (1,347) | (1,468) |
Accumulated deficit | (67,472) | (71,837) |
Total RYB Education, Inc. shareholders' equity | 67,960 | 62,149 |
Non-controlling interest | 5,985 | 5,530 |
Total equity | 73,945 | 67,679 |
Total liabilities, mezzanine equity and total equity | 306,500 | 302,491 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(in thousands of U.S. dollars, except share, ADS, per share and per ADS data) | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||
2021 | 2020 | 2021 | 2020 | |
Net revenues: | ||||
Services | 51,280 | 11,596 | 86,331 | 28,388 |
Products | 2,119 | 1,175 | 3,747 | 1,702 |
Total net revenues | 53,399 | 12,771 | 90,078 | 30,090 |
Cost of revenues: | ||||
Services | 37,934 | 21,758 | 70,508 | 50,413 |
Products | 936 | 557 | 1,628 | 813 |
Total cost of revenues | 38,870 | 22,315 | 72,136 | 51,226 |
Gross profit (loss) | 14,529 | (9,544) | 17,942 | (21,136) |
Operating expenses | ||||
Selling expenses | 591 | 124 | 983 | 356 |
General and administrative expenses | 5,314 | 5,277 | 10,592 | 11,088 |
Impairment loss on goodwill | - | - | - | 8,454 |
Total operating expenses | 5,905 | 5,401 | 11,575 | 19,898 |
Operating income (loss) | 8,624 | (14,945) | 6,367 | (41,034) |
Interest income | 45 | 136 | 111 | 185 |
Government subsidy income | 1,045 | 1,742 | 2,104 | 1,887 |
(Loss) gain on disposal of subsidiaries | (154) | 48 | (154) | 48 |
Income (loss) before income taxes | 9,560 | (13,019) | 8,428 | (38,914) |
Less: Income tax expenses | 2,108 | 566 | 2,689 | 4,788 |
Income (loss) before loss in equity | 7,452 | (13,585) | 5,739 | (43,702) |
Loss from equity method investments | (103) | (116) | (104) | (2,009) |
Net income (loss) | 7,349 | (13,701) | 5,635 | (45,711) |
Less: Net income (loss) attributable to | 1,144 | (854) | 1,270 | (6,247) |
Net income (loss) attributable to | 6,205 | (12,847) | 4,365 | (39,464) |
Net income (loss) per share attributable | ||||
Basic | 0.22 | (0.46) | 0.15 | (1.43) |
Diluted | 0.21 | (0.46) | 0.15 | (1.43) |
Net income (loss) per ADS attributable | ||||
Basic | 0.22 | (0.46) | 0.15 | (1.43) |
Diluted | 0.21 | (0.46) | 0.15 | (1.43) |
Weighted average shares used in | ||||
Basic | 28,406,779 | 27,694,997 | 28,391,955 | 27,688,253 |
Diluted | 29,041,677 | 27,694,997 | 28,968,047 | 27,688,253 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
(in thousands of U.S. dollars, except share, ADS, per share and per ADS data) | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||
2021 | 2020 | 2021 | 2020 | |
Net income (loss) | 7,349 | (13,701) | 5,635 | (45,711) |
Other comprehensive income (loss), net | ||||
Change in cumulative foreign currency | 239 | (256) | 15 | (1,765) |
Total comprehensive income (loss) | 7,588 | (13,957) | 5,650 | (47,476) |
Less: Comprehensive income (loss) | 1,249 | (711) | 1,155 | (6,595) |
Comprehensive income (loss) | 6,339 | (13,246) | 4,495 | (40,881) |
Note 1：Each ADS represents one Class A ordinary share. | ||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS | ||||
(in thousands of U.S. dollars, except share, ADS, per share and per ADS data) | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||
2021 | 2020 | 2021 | 2020 | |
Operating income (loss) | 8,624 | (14,945) | 6,367 | (41,034) |
Share-based compensation expenses | 571 | 810 | 1,226 | 1,610 |
Adjusted operating income (loss) | 9,195 | (14,135) | 7,593 | (39,424) |
Net income (loss) attributable to ordinary | 6,205 | (12,847) | 4,365 | (39,464) |
Share-based compensation expenses | 571 | 810 | 1,226 | 1,610 |
Adjusted net income (loss) attributable to | 6,776 | (12,037) | 5,591 | (37,854) |
Net income (loss) | 7,349 | (13,701) | 5,635 | (45,711) |
Add: Income tax expense | 2,108 | 566 | 2,689 | 4,788 |
Depreciation of property, plant and equipment, and | 3,183 | 2,968 | 7,448 | 6,004 |
EBITDA | 12,640 | (10,167) | 15,772 | (34,919) |
Share-based compensation expenses | 571 | 810 | 1,226 | 1,610 |
Adjusted EBITDA | 13,211 | (9,357) | 16,997 | (33,309) |
Net income (loss) per ADS attributable to | 0.22 | (0.46) | 0.15 | (1.43) |
Net income (loss) per ADS attributable to | 0.21 | (0.46) | 0.15 | (1.43) |
Adjusted net income (loss) per ADS | 0.24 | (0.43) | 0.20 | (1.37) |
Adjusted net income (loss) per ADS | 0.23 | (0.43) | 0.19 | (1.37) |
Weighted average shares used in | 28,406,779 | 27,694,997 | 28,391,955 | 27,688,253 |
Weighted average shares used in | 29,041,677 | 27,694,997 | 28,968,047 | 27,688,253 |
Adjusted net income (loss) per share- | 0.24 | (0.43) | 0.20 | (1.37) |
Adjusted net income (loss) per share- | 0.23 | (0.43) | 0.19 | (1.37) |
Note 1：Each ADS represents one Class A ordinary share. | ||||
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SOURCE RYB Education, Inc.
FAQ
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