June 29, 2012 at 07:12 AM EDT
Ambow Education to Announce First Quarter 2012 Unaudited Financial Results on July 5, 2012 and Adjustments to Previous Quarterly 2011 Unaudited Financial Results

BEIJING, June 29, 2012 /PRNewswire-Asia/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE: AMBO), a leading national provider of educational and career enhancement services in China, today announced that the Company will report its unaudited financial results for the first quarter 2012 before US market opens on Thursday, July 5, 2012.

Following the earnings announcement, Ambow's management will host an earnings conference call at 8:00 a.m. U.S. Eastern Time on Thursday, July 5, 2012 (8:00 p.m. Beijing/Hong Kong Time on July 5, 2012) to discuss its first quarter 2012 financial results and highlights of operations and answer questions.

The dial-in number and passcode for the conference call are as follows:

U.S. Toll Free: +1-866-549-1292
China Toll Free: +400-681-6949
International: +852-3005-2050
The passcode for the call is "657079#"

Additionally, a live and archived webcast of this call will be available on the Investor Relations section of Ambow's website at: http://investors.ir.ambow.com/us/AMBO/irwebsite/  

Adjustments to Previous Quarterly 2011 Unaudited Financial Results

In connection with its 2011 Annual Report, the Company announced certain adjustments to its previous quarterly 2011 unaudited financial results presented in the Company's previous press release and filed as an exhibit to the Company's Form 6-K filed with the SEC on May 18, August 25 and November 15 in 2011 and March 5 in 2012 (the "Press Releases").

Please refer to the tables set forth at the end of this release which set out the primary differences between the unaudited annual financial results included in the Press Releases and the quarterly annual financial results reflected in the Company's audited financial statements included in the 2011 Annual Report.

About Ambow Education Holding Ltd.

Ambow Education Holding Ltd. (NYSE: AMBO) is a leading national provider of educational and career enhancement services in China, offering high-quality individualized services and products. Ambow has two business divisions: "Better Schools," which includes tutoring centers and K-12 schools; and "Better Jobs," which includes career enhancement centers and colleges. 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.

Forward-looking Statements

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the 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. Ambow may also make written or oral forward-looking statements in its reports to the SEC, including on Forms 20-F and Form 6-K, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Ambow's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks related to Ambow's ability to complete its annual audits in a timely manner, risks related to Ambow's ability to file its annual reports on Form 20-F within the time periods prescribed by the rules of the SEC (or any extension period thereof) and risks related to Ambow's identification of adjustments in its audited financial statements subsequent to announcing preliminary financial results, as well as risks outlined in Ambow's filings with the SEC, including its annual reports on Form 20-F. Ambow does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Ambow's consolidated financial results presented in accordance with GAAP, Ambow uses the following measures defined as non-GAAP financial measures by the SEC: (i) Non-GAAP operating income from continuing operations, (ii) Net income from continuing operations excluding disposal loss from continuing operations, (iii) Non-GAAP net income from continuing operations excluding disposal loss from continuing operations, (iv) Non-GAAP net income from continuing operations, (v) EBITDA from continuing operations excluding disposal loss from continuing operations, (vi) Adjusted EBITDA from continuing operations excluding disposal loss from continuing operations, (vii) Non-GAAP net income from continuing operations per ADS basic and diluted.  The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.  For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release.

Ambow believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity that may not be indicative of its operating performance from a cash perspective.  Ambow believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Ambow's historical performance and liquidity.  Ambow computes its non-GAAP financial measures using the same consistent method from quarter to quarter.  These non-GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers.  These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.  Ambow believes that these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making.  Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations with GAAP financial measures that are most directly comparable to non-GAAP financial measures.

For investor and media inquiries please contact:

Ms. Mandy Li
IR Manager
Ambow Education Holding Ltd.
Tel: +86-10-6206-8130
Email: ir@ambow.com  

AMBOW EDUCATION HOLDING LTD

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS 

(ALL AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)













Mar/31/11


Jun-30-11


Sep-30-11 


Dec-31-11




(Unaudited)


(Unaudited)


(Unaudited)


 (Audited) 




RMB


RMB


RMB


RMB


ASSETS










Current assets:










Cash and cash equivalents


790,907


524,751


576,214


470,682

3

Restricted cash


50


50


1,550


2,200


Term deposits


29,700


28,700


20,760


46,205


Accounts receivable, net


55,326


92,126

1

205,068

1

108,247

1,4

Amounts due from related parties


164,974


195,820


205,394


66,521


Deferred tax assets, current


10,540


12,421


14,667


17,126

3

Prepaid and other current assets


444,734


524,493


573,952


574,123

3

Assets classified as held for sale


-


-


-


384,401

2

TOTAL CURRENT ASSETS


1,496,231


1,378,361


1,597,605


1,669,505


Property and equipment, net


676,259


770,372


817,563


789,016

3,6

Intangible assets and land use rights, net


878,808


887,466


884,039


755,784

3

Goodwill


1,236,528


1,261,686


1,319,452


1,159,386

3

Deferred tax assets, non-current


5,646


5,507


6,857


4,800


Amounts due from related parties


22,593


22,541


22,502


22,463


Other non-current assets


151,425


187,185


171,314


319,673

6

TOTAL NON-CURRENT ASSETS


2,971,259


3,134,757


3,221,727


3,051,122


TOTAL ASSETS


4,467,490


4,513,118


4,819,332


4,720,627












LIABILITIES AND SHAREHOLDERS' EQUITY










Current liabilities:










Short-term borrowings


138,070


123,070


118,070


118,070


Current portion of Long-term borrowings


61,000


51,000


19,500


16,000


Deferred revenue


477,692


320,940


632,041


456,189

3

Accounts payable


33,100


59,188


49,201


51,896

3

Accrued expenses and other current liabilities


407,190


433,554


423,273


482,476

3,6

Income tax payable


95,882


111,766


123,211


132,406

3,5

Amount due to related parties


15,720


37,225


40,788


47,531


Liabilities classified as held for sale


-


-


-


145,169

2

TOTAL CURRENT LIABILITIES


1,228,654


1,136,743


1,406,084


1,449,737


Deferred tax liabilities, non-current


172,280


175,951


178,138


154,368

3

Long-term borrowings


54,000


64,000


52,500


46,500


Non-current portion of consideration payable for acquisitions and other liabilities


270,888


288,412


302,958


303,559

3

TOTAL NON-CURRENT LIABILITIES


497,168


528,363


533,596


504,427


TOTAL LIABILITIES


1,725,822


1,665,106


1,939,680


1,954,164












SHAREHOLDERS' EQUITY


2,686,913


2,789,992


2,817,536


2,711,582


TOTAL AMBOW EDUCATION HOLDING LTD'S EQUITY


2,686,913


2,789,992


2,817,536


2,711,582


Non-controlling interest


54,755


58,020


62,115


54,881


TOTAL SHAREHOLDERS' EQUITY


2,741,668


2,848,012


2,879,651


2,766,463


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


4,467,490


4,513,118


4,819,331


4,720,627


 

Note 1. Adjustment related distributor sales adjustment

Note 2. Assets held for sale and liabilities held for sale adjustments related to Beijing Century College reclassified as held for sale

Note 3. Adjustment due to Beijing 21st Century International School reclassified as held for use, whose Balance Sheet was included at the year end

Note 4. Adjustment related to bad debt provision

Note 5. Income tax payable adjustment due to decreased taxable income and Beijing 21st Century International School reclassified as held for use

Note 6. Leasehold  improvement adjustment relating to new training centers; depreciation and accrued expenses and other current liabilities were adjusted accordingly

 

 

AMBOW EDUCATION HOLDING LTD

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(ALL AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)


For the three months ended                        





Mar/31/11


Jun-30-11


Sep-30-11 


Dec-31-11


Dec-31-11



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Audited FY)




RMB


RMB


RMB


RMB


RMB


Better Schools











Tutoring

159,232


210,903


210,096


197,738

1

777,969

1

K-12 Schools

54,129


78,477


50,233


87,220


270,059


Better Job











Career Enhancement

75,690


131,379

1

140,023

1

158,110

1

505,202

1

Colleges

17,952


30,356


31,156


36,518


115,982


NET REVENUES

307,003


451,115


431,508


479,586


1,669,212


Cost of revenues

146,155

3

178,480

1,3

181,061

1,3

209,636

1,2,3,4

715,332

1,2,3,4

GROSS PROFIT

160,848


272,635


250,447


269,950


953,880


Operating expenses:











Selling and marketing

58,780


82,540


99,359


112,746


353,425


General and administrative

72,636

3

67,002

3

75,409

3

114,866

3,5

329,913

3,5

Research and development

7,789


8,047


14,016


9,689

4

39,541

4

Impairment loss

-


-


-


25,336


25,336


TOTAL OPERATING EXPENSES

139,205


157,589


188,784


262,637


748,215


OPERATING INCOME

21,643


115,046


61,663


7,313


205,665













OTHER INCOME (EXPENSE)











Interest expense, net

(5,733)


(6,221)


(6,844)


(5,805)


(24,603)


Foreign exchange losses, net

(1,742)


(1,720)


(1,787)


(94)


(5,343)


Other income, net

(1,119)


501


563


2,367


2,312


INCOME BEFORE TAX AND NON-CONTROLLING INTEREST

13,049


107,606


53,595


3,781


178,031


Income tax expense

2,059


16,691

6

9,641

6

13,840

6

42,231

6

INCOME/(LOSS) FROM CONTINUING OPERATIONS

10,990


90,915


43,954


(10,059)


135,800


Income/(loss) from discontinued operations, net of income taxes

(2,727)

7

16,142

7

(9,923)

7

(123,073)


(119,581)


NET INCOME/(LOSS)

8,263


107,057


34,031


(133,132)


16,219


Add: Net gain/(loss) attributable to non-controlling interests

(1,492)


1,465


2,295


(7,234)


(4,966)


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

9,755


105,592


31,736


(125,898)


21,185














Preferred shares redemption value accretion











Allocation of net income to participating preferred shareholders











NET INCOME/(LOSS) ATTRIBUTABLE TO ORDINARY SHAREHOLDERS

9,755


105,592


31,736


(125,898)


21,185













Net income/(loss) from continuing operations per ADS attributable to ordinary shareholders 











Basic

0.18


1.25


0.58


(0.05)


1.96


Diluted

0.17


1.20


0.56


(0.05)


1.88














Net income/(loss) from discontinued operations per ADS attributable to ordinary shareholders 











Basic

(0.04)


0.23


(0.14)


(1.72)


(1.67)


Diluted

(0.04)


0.22


(0.13)


(1.64)


(1.59)













Weighted average number of ADS (note 8)











Basic

71,283,488


71,328,089


71,560,179


71,700,732


71,469,519


Diluted

75,425,764


75,141,920


75,068,903


75,080,574


75,216,406













Supplementary Information:











Share-based compensation expense included in:











Selling and marketing

1,788


1,826


1,827


1,845


7,286


General and administrative

4,667


5,799


7,640


7,114


25,220


Research and development

221


204


207


210


842




6,676


7,829


9,674


9,169


33,348


 

Note 1. Revenue and cost of revenues adjustments related to distributor sales. 



Note 2. Leasehold improvement depreciation and other expense related to new training centers



Note 3. Reclassified student population amortization from G&A to cost of revenues



Note 4. Reclassified cost of revenues to R&D expense



Note 5. Adjustment related to bad debt provision



Note 6. Income tax impact due to lower taxable income



Note 7. Income/(loss) from discontinued operations in Q1, Q2, and Q3 by using the same methodology as that used for full year.



Note 8. Each ADS represents two common shares.



 

AMBOW EDUCATION HOLDING LTD

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(ALL AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)












For the three months ended                        




Mar/31/11


Jun-30-11


Sep-30-11 


Dec-31-11


Dec-31-11


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Audited FY)


RMB


RMB


RMB


RMB


RMB

Operating income from continuing operations

21,643


115,046


61,663


7,313


205,665

Share-based compensation expenses

6,676


7,829


9,674


9,169


33,348

Impairment loss

-


-


-


25,336


25,336

Non-GAAP operating income from continuing operations

28,319


122,875


71,337


41,818


264,349











Net income from continuing operations 

12,482


89,450


41,659


(2,825)


140,766

Impairment loss

-


-


-


25,336


25,336

Net income from continuing operations excluding impairment loss from continuing operations attributable to Ambow

12,482


89,450


41,659


22,511


166,102

Share-based compensation expenses

6,676


7,829


9,674


9,169


33,348

Non-GAAP net income from continuing operations 

19,158


97,279


51,333


31,680


199,450











Net income from continuing operations margin 

4%


20%


10%


-1%


8.4%

Non-GAAP net income from continuing operations margin 

6%


22%


12%


7%

4

11.9%











Net income from continuing operations per ADS attributable to Ordinary Shareholders - Basic (note 4) 

0.18


1.25


0.57


(0.04)


1.96

Net income from continuing operations per ADS attributable to Ordinary Shareholders - Diluted

0.17


1.19


0.56


(0.04)


1.88

Net income from continuing operations per adjusted ADS attributable to Ambow - Basic 

0.18


1.25


0.57


(0.04)


1.96

Net income from continuing operations per adjusted ADS attributable to Ambow – Diluted  (note3)

0.17


1.19


0.56


(0.04)


1.88

Non-GAAP net income from continuing operations per adjusted ADS attributable to Ambow - Basic 

0.27


1.36


0.72


0.44


2.79

Non-GAAP net income from continuing operations per adjusted ADS attributable to Ambow – Diluted 

0.25


1.29


0.68


0.42


2.65

Adjusted weighted average number of ADS used in calculating net income and non GAAP from continuing operations net income attributable to Ambow per ADS - basic

71,283,488


71,328,089


71,560,179


71,700,732


71,469,519

Adjusted weighted average number of ADS used in calculating net income and non GAAP net income from continuing operations attributable to Ambow per ADS - diluted

75,425,764


75,141,920


75,068,903


75,080,574


75,216,406

EBITDA from continuing operations excluding impairment loss from continuing operations (note1)

47,612


139,481


84,618


76,131


347,842

Share-based compensation expenses

6,676


7,829


9,674


9,169


33,348

Adjusted EBITDA from continuing operation excluding impairment loss from continuing operations (note2)

54,288


147,310


94,292


85,300


381,190











EBITDA margin from continuing operations excluding impairment loss from continuing operations

15.5%


30.9%


19.6%


15.9%


20.8%

Adjusted EBITDA margin from continuing operations excluding impairment loss from continuing operations

17.7%


32.7%


21.9%


17.8%


22.8%











Note1:     EBITDA from continuing operations, a non-GAAP measure,  being net income from continuing operations attributable to Ambow excluding interest expense, income tax expenses, depreciation and amortization.  The depreciation and amortization from continuing operations for the twelve months of 2011(6-k) and 2011 (adjusted) were RMB 106,940 and RMB 114,906, respectively.











Note2:      Adjusted EBITDA from continuing operations being EBITDA from continuing operations excluding share based compensation.











Note3:     Net income from continuing operations per adjusted ADS attributable to Ambow  - diluted is computed by dividing net income  from continuing operations attributable to Ambow by weighted average number of common shares outstanding for the period plus (1) shares issuable upon the exercise of outstanding share options and (2) the number of common shares resulting from the assumed conversion of all the outstanding redeemable convertible preferred share and exercise of warrants upon closing of the initial public offering as if the conversion or exercise had occurred at the beginning of the period.











Note4:     Net income from continuing operations used to calculate EPADS is equal to net income (loss) attributable to AMBOW EDUCATION HOLDING LTD minus income (loss) from discontinued operations, net of income taxes.

 

SOURCE Ambow Education Holding Ltd.

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