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Ambow Education Announces First Nine Months and Third Quarter 2016 Unaudited Financial Results

Mittwoch, 30.11.2016 20:50 von

PR Newswire

BEIJING, Nov. 30, 2016 /PRNewswire/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company"), a leading national provider of educational and career enhancement services in China, today announced unaudited financial and operating results for the nine-month and three-month periods ended September 30, 2016.

"We are excited to report a milestone development in our Better Jobs business segment achieved during the third quarter," commented Dr. Jin Huang, Ambow's President and Chief Executive Officer. "In September, we entered into a framework agreement with Chongqing University of Arts and Sciences to establish a joint venture (JV) college that offers Internet Application subjects, including Computer Science, Finance, Commerce, Art Design and Big-data Analysis aligned with the Chinese government's Internet Plus initiative. This JV is our first joint venture college project under our unique Ambow University model. It also marks a significant outcome brought about from the Application-Oriented University Development and Presidents' Forum hosted by China's Ministry of Education Science and Technology Development Center earlier this year."

"Ambow has an extensive, nationwide network of educational resources, including four K-12 schools, delivering services to students in 30 of 31 provinces and autonomous regions in China. Additionally, our training facilities cover 28 provinces and include our innovative career enhancement campus located in the Yangtze River Delta region with over 4,500 beds and 8,000 training desks. It is in this region where we intend to launch our first global community college, in partnership with overseas colleges. With strong corporate relationships, we also provide corporate training services to approximately 5,000 companies annually, and our career enhancement training programs provide extensive job recruiting opportunities. Our nationwide coverage, deep educational experience, and local knowhow all position us well to execute on our commitment to our students to become a life-long learning and career enhancement partner," added Dr. Huang.

Kia Jing Tan, Chief Financial Officer, added, "Our consistent and disciplined financial control efforts have yielded significant results, reflected by gross profit margin increasing 2.7% to 42.0% for the first nine months of 2016, and by operating expenses decreasing 29.6% year-over-year for the same period, excluding share-based compensation. With strong cash resources of RMB538.7 million in total as of September 30, 2016, and excellent cash flow generation capabilities, we are poised to capture the tremendous growth opportunities ahead of us."

"We are pleased with the on-going integration of our Company-wide Enterprise Resource Planning (ERP) system and continued enhancements to our Standard Operating Procedure and transparent Vendor Evaluation System. We look forward to completing the ERP migration with all remaining business units by the end of the year and the enhanced operating efficiencies it will bring. In addition, we have integrated Internet of Things (IoT) technology into our facility modernization and development programs.  This supports our intelligent classroom concept, boosts resource utilization efficiency and promotes greener energy usage." concluded Chiao-Ling Hsu, Chief Operating Officer.

Financial Highlights For The Nine Months Ended September 30, 2016

  • Net revenues were RMB280.9 million, a slight decrease from RMB284.3 million for the first nine months of 2015. The decrease was mainly due to suspension of non-performing business units to solidify the operational base and enhance future growth prospects.
  • Gross profit was RMB118.0 million, a 5.5% increase from RMB111.8 million for the same period of 2015.  Gross profit margin was 42.0%, compared with 39.3% for the same period of 2015.
  • Operating expenses were RMB135.2 million, a 43.7% decrease from RMB240.1 million for the same period of 2015. Excluding share-based compensation expenses, operating expenses for the first nine months of 2016 decreased 29.6% year-over-year. The decrease was mainly due to continued cost-saving initiatives and enhanced operating efficiencies achieved through the new ERP system.
  • Loss from continuing operations was RMB18.3 million compared with a loss of RMB177.1 million for the same period of 2015.
  • Net loss attributable to the Company was RMB18.4 million, or RMB0.48 per basic and diluted share, compared with a net loss of RMB121.4 million, or RMB3.36 per basic and diluted share, for the same period of 2015.

Net loss for the nine months ended September 30, 2015 excluded a gain of RMB344.1 million from the disposal of 100% interest in Beijing Jinghan Education and Technology Co., Ltd. and Beijing Jinghan Taihe Education Technology Co., Ltd., and the 64% interest in Ambow Jingxue (Beijing) Technology Co., Ltd. and a one-time RMB56.6 million interest expense of convertible loan discounted amortization.

  • As of September 30, 2016, the Company continued to maintain strong cash resources of RMB538.7 million in total, including cash and cash equivalents of RMB182.9 million, short-term investments of RMB352.3 million, and restricted cash and term deposits of RMB3.5 million.
  • As of September 30, 2016, the Company's deferred revenue balance was RMB155.8 million, a 34.4% increase from RMB115.9 million as of December 31, 2015. Deferred revenue represents tuition and course fees collected and recognized as revenue proportionally over the period services are provided. The increase was mainly attributable to an increase in tuition and course fees collected in the K-12 business segment with the commencement of a new school year in September 2016.

Financial Highlights For The Three Months Ended September 30, 2016

  • Net revenues were RMB90.5 million, a 9.4% decrease from RMB99.9 million for the same period of 2015. The decrease was mainly due to suspension of non-performing business units to solidify the operational base and enhance future growth prospects.
  • Gross profit was RMB33.3 million, representing margin of 36.8%, compared with 39.4% for the same period of 2015.
  • Operating expenses were RMB46.3 million, a 37.6% decrease from RMB74.2 million for the same period of 2015. The decrease was largely driven by effective cost control measures and continued expense reduction. Excluding share-based compensation expenses, operating expenses for the third quarter 2016 decreased 23.1% year-over-year.
  • Loss from continuing operations was RMB10.2 million, compared with a loss from continuing operations of RMB37.4 million for the same period of 2015.
  • Net loss attributable to the Company was RMB10.1 million, or RMB0.26 per basic and diluted share, compared with a net loss of RMB37.6 million, or RMB1.00 per basic and diluted share, for the same period of 2015.

Recent Developments

  • Dr. Ping Wu was appointed as a member of the audit committee of the Company on October 30, 2016.
  • On November 22, 2016, the Company held an Annual Meeting of Shareholders to vote on the following proposals which were approved by the majority of the shareholders:        

a. to elect each of Ping Wu and John Robert Parks to serve on the Board of Directors of the Company as Class II directors until the 2019 annual meeting of shareholders of the Company or until their respective successors are duly appointed and qualified; and

b. to ratify the appointment of Marcum Bernstein & Pinchuk LLP as the independent auditors of the Company for the fiscal year ending December 31, 2016 relating to financial statements prepared in accordance with generally accepted accounting principles in the United States.

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 translations from RMB to U.S. dollars are based on the effective exchange rate of 6.6685 as of September 30, 2016, according to the noon buying 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 for the fourth quarter and full year 2016 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: +86-10-6206-8104

The Piacente Group | Investor Relations
Tel: +1 212-481-2050 or +86 10-6535-0147
Email: ambow@tpg-ir.com

- Tables to Follow -

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data) 














As of September 30,


As of December 31,



2016


2015



US$



RMB


RMB

ASSETS











Current assets:











Cash and cash equivalents



27,428



182,905


246,303

Restricted cash



352



2,350


2,050

Term deposits



172



1,150


1,150

Short term investments, available for sale



38,492



256,682


103,602

Short term investments, held to maturity



14,339



95,620


151,790

Accounts receivable, net



3,523



23,495


11,278

Amounts due from related parties



275



1,831


1,847

Prepaid and other current assets



23,745



158,341


156,104

Consideration receivable



1,275



8,500


8,500

Total current assets



109,601



730,874


682,624

Non-current assets:











Property and equipment, net



13,355



89,055


94,982

Land use rights, net



285



1,903


1,937

Intangible assets, net



14,522



96,839


103,394

Goodwill



13,001



86,700


85,988

Deferred tax assets, net



4,740



31,606


33,903

Other non-current assets, net



783



5,222


5,097












Total non-current assets



46,686



311,325


325,301












Total assets



156,287



1,042,199


1,007,925












LIABILITIES











Current liabilities:











Short-term borrowings  *



-



-


2,300

Deferred revenue  *



23,370



155,846


115,886

Accounts payable  *



3,935



26,225


28,391

Accrued and other liabilities  *



55,907



372,817


367,357

Income taxes payable  *



48,598



324,077


317,785

Amounts due to related parties  *



1,149



7,662


7,662

Total current liabilities



132,959



886,627


839,381

Non-current liabilities:











Deferred tax liabilities  *



3,569



23,798


25,721












Total liabilities



136,528



910,425


865,102












EQUITY











Preferred shares











(US$ 0.003 par value;1,666,667 shares authorized,
nil issued and outstanding as of September 30, 2016
and December 31, 2015) 



-



-


-

Ordinary shares











(US$0.003 par value; 40,000,000 and 40,000,000
shares authorized, 38,610,875 and 38,265,177
shares issued and outstanding as of
September 30, 2016 and December 31, 2015,
respectively)



108



724


717

Additional paid-in capital



517,540



3,451,215


3,445,408

Statutory reserve



12,147



81,005


81,005

Accumulated deficit



(510,882)



(3,406,815)


(3,388,447)

Accumulated other comprehensive income



857



5,716


5,113

Total Ambow Education Holding Ltd.'s equity



19,770



131,845


143,796

Non-controlling interests



(11)



(71)


(973)

Total equity



19,759



131,774


142,823

Total liabilities and equity



156,287



1,042,199


1,007,925












*  All of the VIE's assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of
consolidating these VIEs do not represent additional claims on the Company's general assets.

 

 

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands, except for share and per share data)



For the nine months ended September 30,


For the three months ended September 30,


2016


2016


2015


2016


2016


2015


US$


RMB


RMB


US$


RMB


RMB













NET REVENUES












 Educational program and 
     services

42,127


280,921


284,316


13,567


90,473


99,856













COST OF REVENUES












 Educational program and 
     services

(24,437)


(162,961)


(172,553)


(8,569)


(57,142)


(60,408)













GROSS PROFIT

17,690


117,960


111,763


4,998


33,331


39,448

Operating expenses:












Selling and marketing

(4,595)


(30,642)


(40,693)


(1,409)


(9,397)


(12,193)

General and administrative

(14,678)


(97,880)


(194,918)


(5,104)


(34,038)


(60,784)

Research and development

(860)


(5,732)


(4,536)


(284)


(1,893)


(1,211)

Impairment loss

(140)


(934)


-


(140)


(934)


-

Total operating expenses

(20,273)


(135,188)


(240,147)


(6,937)


(46,262)


(74,188)













OPERATING LOSS

(2,583)


(17,228)


(128,384)


(1,939)


(12,931)


(34,740)













OTHER INCOME (EXPENSES)












Interest income (expense), net

783


5,223


(56,155)


135


901


730

Foreign exchange gain (loss), 
     net

9


63


236


(2)


(14)


1,045

Other income (expense), net

(84)


(559)


2,873


514


3,425


(1,773)

Gain on sale of investment 
     available for sale

217


1,450


-


181


1,204


-

Total other income (expenses)

925


6,177


(53,046)


828


5,516


2

LOSS BEFORE INCOME 
     TAX, NON-
     CONTROLLING 
     INTEREST, AND 
     DISCONTINUED 
     OPERATIONS

(1,658)


(11,051)


(181,430)


(1,111)


(7,415)


(34,738)

Income tax benefit (expense)

(1,082)


(7,215)


4,291


(420)


(2,801)


(2,613)













LOSS FROM CONTINUING 
OPERATIONS

(2,740)


(18,266)


(177,139)


(1,531)


(10,216)


(37,351)

Income from and gain on sale
of discontinued operations,
net of income tax

-


-


344,099


-


-


-













NET INCOME (LOSS)

(2,740)


(18,266)


166,960


(1,531)


(10,216)


(37,351)

Less: Net income/(loss) 
     attributable to non-
     controlling interest from 
     continuing operations

15


102


837


(11)


(72)


295

Less: Net income attributable 
     to non-controlling interests 
     on sale of discontinued 
     operations

-


-


11


-


-


-













NET INCOME (LOSS) 
     ATTRIBUTABLE TO 
     AMBOW EDUCATION 
     HOLDING LTD.

(2,755)


(18,368)


166,112


(1,520)


(10,144)


(37,646)













Net loss from continuing 
       operations per share- basic 
       and diluted

(0.07)


(0.48)


(4.93)


(0.04)


(0.26)


(1.00)













Net income from discontinued 
     operations per share- basic 
     and diluted

-


-


9.53


-


-


-













Weighted average shares used 
     in calculating basic net 
     income (loss) per share

38,411,480


38,411,480


36,109,151


38,552,702


38,552,702


37,780,846

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ambow-education-announces-first-nine-months-and-third-quarter-2016-unaudited-financial-results-300370738.html

SOURCE Ambow Education Holding Ltd.