Ambow Education Holding Ltd 6-K, filed Apr 22, 2020
Ambow Education Holding Ltd. (AMBO)
About this 6-K
Ambow Education Holding Ltd filed this 6-K on April 22, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2020
Commission File Number: 001-34824
Ambow Education Holding Ltd.
Not Applicable
(Translation of Registrant’s name into English)
Cayman Islands
(Jurisdiction of incorporation or organization)
12th Floor, Tower 1, Financial Street Chang’An Center,
Shijingshan District, Beijing 100043
People’s Republic of China
Telephone: +86 (10) 6206-8000
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___
Other Information
Attached hereto as Exhibit 99.1 is a press release dated April 22, 2020, announcing the Company’s audited financial and operating results for the fourth quarter ended December 31, 2019 and fiscal year 2019.
Exhibits
99.1 Press Release, dated April 22, 2020
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Ambow Education Holding Ltd. | ||
| By: | /s/Jin Huang | |
| Name: Dr. Jin Huang | ||
| Title: President and Chief Executive Officer | ||
Date: April 22, 2020
Exhibit 99.1
Ambow Education Announces Fourth Quarter and Full Year 2019 Financial Results
BEIJING, April 22, 2020 -- 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 audited financial and operating results for the fourth quarter and fiscal year ended December 31, 2019.
“We are pleased to conclude fiscal year 2019 with solid fourth quarter results,” said Dr. Jin Huang, Ambow’s President and Chief Executive Officer. “Throughout the year, we continued our efforts and investment in new technology advancement and innovative education service offerings to strengthen our leadership in the career enhancement services market and further develop our cross-border education service platform. Looking ahead, by continuing to build and integrate our robust portfolio of international assets and partnerships, we believe we are well positioned to capture the opportunities in the underserved cross-border career education market between the U.S. and China.”
“We are closely monitoring the evolving situation brought about by the COVID-19 pandemic, and have taken numerous safeguarding measures to protect our employees and support the communities in which we operate. Notably, we have rolled out new initiatives to support the Chinese government’s plan of moving classroom school learning online during this period of prolonged school closures. Leveraging our expertise in online education, strong technology capabilities, and best-of-breed educational content, we promptly launched a series of online class programs, including our VIP classes focused on Big Data and Internet of Things (“IoT”) taught by leading professionals from around the world. We have also added new career planning classes to enhance the competitive skills and knowledge that will be required by students in the more challenging job market emerging from the global business downturn. These initiatives underline our mission, which is to address critical demands in the education market and bridge the gaps between higher education and the career aspirations of students,” concluded Dr. Huang.
Fourth Quarter 2019 Financial Highlights
| · | Net revenues for the fourth quarter of 2019 increased by 1.2% to US$24.9 million from US$24.6 million in the same period of 2018. This increase was mainly driven by higher student enrollment. |
| · | Gross profit for the fourth quarter of 2019 decreased by 3.6% to US$8.0 million from US$8.3 million in the same period of 2018. Gross profit margin was 32.1%, compared with 33.7% for the fourth quarter of 2018. |
| · | Operating expenses for the fourth quarter of 2019 increased by 47.8% to US$10.2 million from US$6.9 million for the same period of 2018. The increase of operating expenses was primarily due to a one-time bad debt expense recovery and reversal of US$2.9 million in the fourth quarter of 2018. |
| · | Net loss attributable to ordinary shareholders in the fourth quarter of 2019 was US$1.7 million, or US$0.04 per basic and diluted share, compared with a net income of US$4.5 million, or US$0.10 per basic and diluted share, for the fourth quarter of 2018. |
| · | As of December 31, 2019, Ambow maintained strong cash resources of US$35.3 million, comprised of cash and cash equivalents of US$22.6 million and short-term investments of US$12.7 million. |
| · | As of December 31, 2019, the Company’s deferred revenue balance was US$23.7 million, representing a 30.9% increase from US$18.1 million as of December 31, 2018, mainly attributable to the tuition and fees collected in the K-12 segment for the 2019-2020 academic year and tuition collected from our education service platforms. |
Fiscal Year 2019 Financial Highlights
| · | Net revenues for fiscal year 2019 increased by 8.5% to US$83.9 million from US$77.3 million in 2018. This increase was mainly driven by higher student enrollment. |
| · | Gross profit for the fiscal year 2019 decreased by 0.4% to US$28.0 million from US$28.1 million in 2018. Gross profit margin was 33.4%, compared with 36.4% in 2018. The decrease in gross profit margin was primarily due to additional investments in new programs and new technology deployment. |
| · | Operating expenses for the fiscal year 2019 increased by 62.2% to US$42.0 million from US$25.9 million in 2018. The increase of operating expenses was primarily due to more marketing activities to promote student enrollment, additional investments in new programs and new technology deployment, increase in staff compensation and an impairment loss of goodwill and intangible assets of US$5.6 million recorded in 2019, and a one-time bad debt expense recovery and reversal of US$2.9 million in 2018. |
| · | Net loss attributable to ordinary shareholders for the fiscal year 2019 was US$14.4 million, or US$0.33 per basic and diluted share, compared with a net income of US$6.5 million, or US$0.16 per basic and diluted share, in 2018. |
The Company's fourth quarter and fiscal year 2019 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 2019 are based on the effective exchange rate of 6.9618 as of December 31, 2019; all amounts translated from RMB to U.S. dollars for the fourth quarter and the twelve months of 2018 are based on the effective exchange rate of 6.8755 as of December 31, 2018. 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 +86-10-6508-0677
E-mail: 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 December 31, | As of December 31, | |||||||||||
| 2019 | 2018 | |||||||||||
| US$ | RMB | RMB | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | 22,638 | 157,600 | 211,436 | |||||||||
| Restricted cash | - | - | 30,072 | |||||||||
| Short term investments, available for sale | 8,257 | 57,487 | 47,208 | |||||||||
| Short term investments, held to maturity | 4,453 | 31,000 | 70,000 | |||||||||
| Accounts receivable, net | 2,577 | 17,939 | 18,132 | |||||||||
| Amounts due from related parties | 333 | 2,318 | 1,105 | |||||||||
| Prepaid and other current assets, net | 19,147 | 133,296 | 134,770 | |||||||||
| Loan receivable, current | - | - | 42,677 | |||||||||
| Total current assets | 57,405 | 399,640 | 555,400 | |||||||||
| Non-current assets: | ||||||||||||
| Property and equipment, net | 22,618 | 157,463 | 165,933 | |||||||||
| Land use rights, net | 253 | 1,759 | 1,804 | |||||||||
| Intangible assets, net | 8,131 | 56,607 | 92,412 | |||||||||
| Goodwill | 8,669 | 60,353 | 73,166 | |||||||||
| Deferred tax assets, net | 1,464 | 10,195 | 10,240 | |||||||||
| Operating lease right-of-use asset | 36,968 | 257,361 | - | |||||||||
| Finance lease right-of-use asset | 926 | 6,450 | - | |||||||||
| Other non-current assets, net | 10,194 | 70,971 | 11,264 | |||||||||
| Total non-current assets | 89,223 | 621,159 | 354,819 | |||||||||
| Total assets | 146,628 | 1,020,799 | 910,219 | |||||||||
| LIABILITIES | ||||||||||||
| Current liabilities: | ||||||||||||
| Deferred revenue * | 23,717 | 165,111 | 124,250 | |||||||||
| Accounts payable * | 2,113 | 14,718 | 13,583 | |||||||||
| Accrued and other liabilities * | 27,717 | 192,957 | 256,325 | |||||||||
| Borrowing from third party, current | - | - | 41,179 | |||||||||
| Income taxes payable, current * | 25,958 | 180,715 | 207,114 | |||||||||
| Amounts due to related parties * | 283 | 1,971 | 2,696 | |||||||||
| Operating lease liability, current * | 7,687 | 53,512 | - | |||||||||
| Total current liabilities | 87,475 | 608,984 | 645,147 | |||||||||
| Non-current liabilities: | ||||||||||||
| Consideration payable for acquisitions | - | - | 1,322 | |||||||||
| Other non-current liabilities | - | - | 979 | |||||||||
| Income taxes payable, non-current * | 4,618 | 32,152 | - | |||||||||
| Operating lease liability, non-current * | 31,036 | 216,067 | - | |||||||||
| Total non-current liabilities | 35,654 | 248,219 | 2,301 | |||||||||
| Total liabilities | 123,129 | 857,203 | 647,448 | |||||||||
| EQUITY | ||||||||||||
| Preferred shares | ||||||||||||
| (US$ 0.003 par value;1,666,667 shares authorized, nil issued and outstanding as of December 31, 2018 and 2019) | - | - | - | |||||||||
| Class A Ordinary shares | ||||||||||||
| (US$0.003 par value; 66,666,667 and 66,666,667 shares authorized, 38,756,289 and 38,858,199 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 105 | 730 | 728 | |||||||||
| 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, 2018 and 2019, respectively) | 13 | 90 | 90 | |||||||||
| Additional paid-in capital | 504,000 | 3,508,745 | 3,507,123 | |||||||||
| Statutory reserve | 2,899 | 20,185 | 20,149 | |||||||||
| Accumulated deficit | (484,331 | ) | (3,371,815 | ) | (3,271,838 | ) | ||||||
| Accumulated other comprehensive income | 911 | 6,341 | 8,305 | |||||||||
| Total Ambow Education Holding Ltd.’s equity | 23,597 | 164,276 | 264,557 | |||||||||
| Non-controlling interests | (98 | ) | (680 | ) | (1,786 | ) | ||||||
| Total equity | 23,499 | 163,596 | 262,771 | |||||||||
| Total liabilities and equity | 146,628 | 1,020,799 | 910,219 | |||||||||
| * | 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 CHANGES IN EQUITY
(All amounts in thousands, except for share and per share data)
| Attributable to Ambow Education Holding Ltd.’s Equity | ||||||||||||||||||||||||||||||||||||||||
| Retained | Accumulated | |||||||||||||||||||||||||||||||||||||||
| Class A Ordinary | Class C Ordinary | Additional | Earnings | 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, 2019 | 38,756,289 | 728 | 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 | ||||||||||||||||||||||||||||
| Balance as of January 1, 2018 | 34,206,939 | 640 | 4,708,415 | 90 | 3,456,307 | 20,036 | (3,316,715 | ) | 6,876 | (1,275 | ) | 165,959 | ||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | 616 | - | - | - | - | 616 | ||||||||||||||||||||||||||||||
| Issuance of ordinary shares for restricted stock award | 30,187 | 1 | - | - | (1 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | 3,276 | - | 3,276 | ||||||||||||||||||||||||||||||
| Unrealized gain on investment, net of income taxes | - | - | - | - | - | - | - | 64 | - | 64 | ||||||||||||||||||||||||||||||
| Deregistration of subsidiaries | - | - | - | - | - | - | - | - | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||
| Net (loss)/income | - | - | - | - | - | - | (7,062 | ) | - | 93 | (6,969 | ) | ||||||||||||||||||||||||||||
| Balance as of March 31, 2018 | 34,237,126 | 641 | 4,708,415 | 90 | 3,456,922 | 20,036 | (3,323,777 | ) | 10,216 | (1,191 | ) | 162,937 | ||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | 618 | - | - | - | - | 618 | ||||||||||||||||||||||||||||||
| Issuance of ordinary shares for restricted stock award | 30,187 | 0 | - | - | (0 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Issuance of ordinary shares on IPO | 4,140,000 | 80 | - | - | 46,047 | - | - | - | - | 46,127 | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | (1,523 | ) | - | (1,523 | ) | ||||||||||||||||||||||||||||
| Unrealized gain on investment, net of income taxes | - | - | - | - | - | - | - | 69 | - | 69 | ||||||||||||||||||||||||||||||
| Buy-outs of noncontrolling interests | - | - | - | - | (2,619 | ) | - | - | - | (1,885 | ) | (4,504 | ) | |||||||||||||||||||||||||||
| Deregistration of subsidiaries | - | - | - | - | - | - | - | - | (41 | ) | (41 | ) | ||||||||||||||||||||||||||||
| Net income/(loss) | - | - | - | - | - | - | 33,312 | - | (143 | ) | 33,169 | |||||||||||||||||||||||||||||
| Balance as of June 30, 2018 | 38,407,313 | 721 | 4,708,415 | 90 | 3,500,968 | 20,036 | (3,290,465 | ) | 8,762 | (3,260 | ) | 236,852 | ||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | 655 | - | - | - | - | 655 | ||||||||||||||||||||||||||||||
| Issuance of ordinary shares for restricted stock award | 29,355 | 0 | - | - | (0 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | (501 | ) | - | (501 | ) | ||||||||||||||||||||||||||||
| Unrealized gain on investment, net of income taxes | - | - | - | - | - | - | - | (114 | ) | - | (114 | ) | ||||||||||||||||||||||||||||
| Buy-outs of noncontrolling interests | - | - | - | - | - | - | - | - | 1 | 1 | ||||||||||||||||||||||||||||||
| Net (loss)/income | - | - | - | - | - | - | (12,413 | ) | - | 89 | (12,324 | ) | ||||||||||||||||||||||||||||
| Balance as of September 30, 2018 | 38,436,668 | 721 | 4,708,415 | 90 | 3,501,623 | 20,036 | (3,302,878 | ) | 8,147 | (3,170 | ) | 224,569 | ||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | 6,232 | - | - | - | - | 6,232 | ||||||||||||||||||||||||||||||
| Issuance of ordinary shares for restricted stock award | 319,621 | 7 | - | - | (7 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Issuance of ordinary shares on IPO | - | - | - | - | (725 | ) | - | - | - | - | (725 | ) | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | 52 | - | 52 | ||||||||||||||||||||||||||||||
| Appropriation to statutory reserves | - | - | - | - | - | 113 | (113 | ) | - | - | - | |||||||||||||||||||||||||||||
| Unrealized gain on investment, net of income taxes | - | - | - | - | - | - | - | 106 | - | 106 | ||||||||||||||||||||||||||||||
| Buy-outs of noncontrolling interests | - | - | - | - | - | - | - | - | 3 | 3 | ||||||||||||||||||||||||||||||
| Capital injection from minority shareholders | - | - | - | - | - | - | - | - | 1,470 | 1,470 | ||||||||||||||||||||||||||||||
| Net income/(loss) | - | - | - | - | - | - | 31,153 | - | (89 | ) | 31,064 | |||||||||||||||||||||||||||||
| Balance as of December 31, 2018 | 38,756,289 | 728 | 4,708,415 | 90 | 3,507,123 | 20,149 | (3,271,838 | ) | 8,305 | (1,786 | ) | 262,771 | ||||||||||||||||||||||||||||
AMBOW EDUCATION HOLDING LTD.
UNAUDITED 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, | |||||||||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||||||
| US$ | RMB | RMB | US$ | RMB | RMB | |||||||||||||||||||
| NET REVENUES | ||||||||||||||||||||||||
| Educational program and services | 83,700 | 582,706 | 525,134 | 24,899 | 173,339 | 168,705 | ||||||||||||||||||
| Intelligent program and services | 173 | 1,203 | 6,374 | 1 | 10 | 340 | ||||||||||||||||||
| Total net revenues | 83,873 | 583,909 | 531,508 | 24,900 | 173,349 | 169,045 | ||||||||||||||||||
| COST OF REVENUES | ||||||||||||||||||||||||
| Educational program and services | (55,106 | ) | (383,635 | ) | (331,939 | ) | (16,976 | ) | (118,181 | ) | (110,948 | ) | ||||||||||||
| Intelligent program and services | (755 | ) | (5,259 | ) | (6,204 | ) | 80 | 559 | (1,016 | ) | ||||||||||||||
| Total cost of revenues | (55,861 | ) | (388,894 | ) | (338,143 | ) | (16,896 | ) | (117,622 | ) | (111,964 | ) | ||||||||||||
| GROSS PROFIT | 28,012 | 195,015 | 193,365 | 8,004 | 55,727 | 57,081 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Selling and marketing | (8,004 | ) | (55,721 | ) | (43,751 | ) | (2,146 | ) | (14,943 | ) | (11,784 | ) | ||||||||||||
| General and administrative | (27,926 | ) | (194,417 | ) | (132,718 | ) | (7,743 | ) | (53,907 | ) | (35,846 | ) | ||||||||||||
| Research and development | (545 | ) | (3,793 | ) | (1,513 | ) | (321 | ) | (2,238 | ) | 134 | |||||||||||||
| Impairment loss | (5,567 | ) | (38,754 | ) | - | - | - | - | ||||||||||||||||
| Total operating expenses | (42,042 | ) | (292,685 | ) | (177,982 | ) | (10,210 | ) | (71,088 | ) | (47,496 | ) | ||||||||||||
| OPERATING (LOSS) INCOME | (14,030 | ) | (97,670 | ) | 15,383 | (2,206 | ) | (15,361 | ) | 9,585 | ||||||||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||||||||||
| Interest income | 773 | 5,379 | 6,652 | 292 | 2,036 | 1,285 | ||||||||||||||||||
| Foreign exchange gain, net | 3 | 23 | 372 | (3 | ) | (23 | ) | 218 | ||||||||||||||||
| Other income, net | 57 | 396 | 1,447 | 29 | 203 | 930 | ||||||||||||||||||
| Gain from derecognition of liabilities | - | - | 15,226 | - | - | 15,226 | ||||||||||||||||||
| Gain on deregistration of subsidiaries | 264 | 1,841 | 2,858 | 81 | 562 | (362 | ) | |||||||||||||||||
| Gain from fair value change of contingent consideration payable | 190 | 1,322 | 5,444 | 190 | 1,322 | 5,444 | ||||||||||||||||||
| Gain on sale of investment available for sale | 172 | 1,200 | 1,056 | 112 | 778 | 297 | ||||||||||||||||||
| Total other income | 1,459 | 10,161 | 33,055 | 701 | 4,878 | 23,038 | ||||||||||||||||||
| (LOSS) INCOME BEFORE INCOME TAX AND NON-CONTROLLING INTEREST | (12,571 | ) | (87,509 | ) | 48,438 | (1,505 | ) | (10,483 | ) | 32,623 | ||||||||||||||
| Income tax expense | (1,855 | ) | (12,917 | ) | (3,498 | ) | (271 | ) | (1,885 | ) | (1,559 | ) | ||||||||||||
| NET (LOSS) INCOME | (14,426 | ) | (100,426 | ) | 44,940 | (1,776 | ) | (12,368 | ) | 31,064 | ||||||||||||||
| Less: Net loss attributable to non-controlling interest | (70 | ) | (485 | ) | (50 | ) | (31 | ) | (216 | ) | (89 | ) | ||||||||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | (14,356 | ) | (99,941 | ) | 44,990 | (1,745 | ) | (12,152 | ) | 31,153 | ||||||||||||||
| NET (LOSS) INCOME | (14,426 | ) | (100,426 | ) | 44,940 | (1,776 | ) | (12,368 | ) | 31,064 | ||||||||||||||
| OTHER COMPREHENSIVE INCOME, NET OF TAX | ||||||||||||||||||||||||
| Foreign currency translation adjustments | (420 | ) | (2,924 | ) | 1,304 | 49 | 343 | 52 | ||||||||||||||||
| Unrealized gains on short term investments | ||||||||||||||||||||||||
| Unrealized holding gains arising during period | 294 | 2,046 | 776 | 116 | 808 | 330 | ||||||||||||||||||
| Less: reclassification adjustment for gains included in net income | 156 | 1,086 | 651 | 86 | 597 | 224 | ||||||||||||||||||
| Other comprehensive (loss) income | (282 | ) | (1,964 | ) | 1,429 | 79 | 554 | 158 | ||||||||||||||||
| TOTAL COMPREHENSIVE (LOSS) INCOME | (14,708 | ) | (102,390 | ) | 46,369 | (1,697 | ) | (11,814 | ) | 31,222 | ||||||||||||||
| Net (loss) income per share - basic | (0.33 | ) | (2.30 | ) | 1.09 | (0.04 | ) | (0.28 | ) | 0.72 | ||||||||||||||
| Net (loss) income per share - diluted | (0.33 | ) | (2.30 | ) | 1.08 | (0.04 | ) | (0.28 | ) | 0.71 | ||||||||||||||
| Weighted average shares used in calculating basic net (loss) income per share | 43,505,175 | 43,505,175 | 41,342,597 | 43,529,884 | 43,529,884 | 43,255,473 | ||||||||||||||||||
| Weighted average shares used in calculating diluted net (loss) income per share | 43,505,175 | 43,505,175 | 41,671,763 | 43,529,884 | 43,529,884 | 43,589,336 | ||||||||||||||||||
Discussion of Segment Operations
(All amounts in thousands)
| For the years ended December 31, | For the three months ended December 31, | |||||||||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||||||
| US$ | RMB | RMB | US$ | RMB | RMB | |||||||||||||||||||
| NET REVENUES | ||||||||||||||||||||||||
| K-12 Schools * | 45,067 | 313,747 | 277,790 | 15,877 | 110,533 | 101,614 | ||||||||||||||||||
| CP&CE Programs * | 38,806 | 270,162 | 253,718 | 9,023 | 62,816 | 67,431 | ||||||||||||||||||
| Total net revenues | 83,873 | 583,909 | 531,508 | 24,900 | 173,349 | 169,045 | ||||||||||||||||||
| COST OF REVENUES | ||||||||||||||||||||||||
| K-12 Schools * | (28,306 | ) | (197,064 | ) | (178,645 | ) | (9,793 | ) | (68,177 | ) | (69,958 | ) | ||||||||||||
| CP&CE Programs * | (27,555 | ) | (191,830 | ) | (159,498 | ) | (7,103 | ) | (49,445 | ) | (42,006 | ) | ||||||||||||
| Total cost of revenues | (55,861 | ) | (388,894 | ) | (338,143 | ) | (16,896 | ) | (117,622 | ) | (111,964 | ) | ||||||||||||
| GROSS PROFIT | ||||||||||||||||||||||||
| K-12 Schools * | 16,761 | 116,683 | 99,145 | 6,084 | 42,356 | 31,656 | ||||||||||||||||||
| CP&CE Programs * | 11,251 | 78,332 | 94,220 | 1,920 | 13,371 | 25,425 | ||||||||||||||||||
| Total gross profit | 28,012 | 195,015 | 193,365 | 8,004 | 55,727 | 57,081 | ||||||||||||||||||
| * | Ambow previously had three reportable segments, including Better School, Better Job and Others for the years prior to 2019. In 2019, in response to the shift of business development focus, Ambow changed its management approach to organize reportable segments to make operating decisions and assess performance. New reportable segments include K-12 schools and College Preparation & Career Enhancement Programs (“CP&CE Programs”), which provide K-12 educational services and tutoring and vocational educational services, respectively. |