Ambow Education Announces First Quarter 2012 Unaudited Financial Results
Tutoring revenue increased 42.0% year-over-year

BEIJING, July 4, 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, reported its preliminary and unaudited financial results for the first quarter of 2012 on July 5 Beijing Time. The unaudited financial information disclosed in this press release is preliminary and subject to completion of review procedures.

Financial Highlights for the First Quarter Ended March 31, 2012:

  • Total net revenue increased 22.1% year-over-year to $59.5 million[1] from $48.8[2] million for the same period in 2011 and organic growth is over 11.4% year-over-year.
    • The growth assets, which consist of Tutoring and Career Enhancement, achieved 27.6% year-over-year revenue growth, of which organic growth was 13.6%.  $14.3 million of services and products delivered in the first quarter will be recognized as revenue in future periods upon cash collection while $4.3 million of services and products delivered in 2011 were recognized as revenue in the first quarter of 2012.
    • Tutoring revenue increased 42.0% to $35.9 million from $25.3 million for the same period in 2011, of which organic growth was 28.4% year-over-year. $4.8 million of services and products delivered in the first quarter will be recognized as revenue in future periods upon cash collection while $2.4 million of services and products delivered in 2011 were recognized as revenue in the first quarter of 2012.
    • Career Enhancement revenue decreased 2.8% to $11.7 million from $12.0 million for the same period in 2011. $9.5 million of services and products delivered in the first quarter will be recognized as revenue in future periods upon cash collection while $1.9 million of services and products delivered in 2011 were recognized as revenue in the first quarter of 2012.
  • Operating loss was $13.0 million compared to operating income of $3.4 million for the same period in 2011. Non-GAAP operating loss[3] was $10.6 million compared to non-GAAP operation income of $4.5 million for the same period in 2011.
  • Net loss was $12.7 million compared to net income of $2.0 million for the same period in 2011. Non-GAAP net loss[4] was $10.2 million compared to non-GAAP net income of $3.0 million for the same period in 2011.
  • Diluted non-GAAP net loss per ADS attributable to Ambow[5] was $0.14 as compared to diluted non-GAAP net income per ADS attributable to Ambow of $0.04 for the same period in 2011.
  • Total student enrollments[6] increased 17.4% to 265,400 from 226,000 for the same period in 2011. 
    • The student enrollments for growth assets increased 21.3 % to 239,000 from 197,000 for the same period in 2011.
  • As part of the latest development, Ambow has signed a US$50 million loan package agreement with International Financial Corporation (IFC), a member of the World Bank Group, to support Ambow's employment oriented career enhancement developments. The loan package consists of 1) a $30 million 8-year loan with a variable interest rate of Libor + 4.5%, and 2) a $20 million 5-year convertible bond with a variable interest rate of Libor +4.2% and a conversion price of $10 per ADS. Both loans have interest rate step down features. Disbursement of the loan proceeds to Ambow is subject to various conditions.  Subject to satisfaction of these conditions and disbursement of the loan proceeds, the company will use IFC's $50 million loan to build two new campuses in the capital Beijing and the southern city of Guangzhou, and expand existing campuses in the eastern cities of Kunshan and Dalian. The Company cannot be sure that we will satisfy the conditions to the disbursement in a timely manner, or at all.

Commenting on the first quarter results, Ambow's President and Chief Executive Officer Dr. Jin Huang provided the following remarks: 

In the first half of this year, we experienced unexpected challenges as a young publicly listed company. Despite delivering a substantial portion of certain services and products, the revenues for these services and products could not be recognized in the first quarter.  Nevertheless and under the circumstances, our company delivered satisfactory results.

Regarding our tutoring services, our same center sales[7] growth was around 8% year-over-year. Our enrollment growth has accelerated to over 22%, driven by the new centers that we opened in the last four quarters. Building on the initial success of new store expansion last year, we have added 15 more learning centers during the first quarter. We expect to add around 20 more centers in the second quarter. Moreover, we are making good progress on the brand integration for tutoring in Beijing. Ambow's tutoring operations are also entering Shanghai, which is the largest city in China. The momentum for tutoring operations is expected to continue into the later part of the year.

Career Enhancement, which is our highest margin and growth segment, has approximately 40% of its sales sold through distributors. A large portion of the revenues coming through this channel will be recognized later this year instead of the first quarter. Sales through the distributor's channel have been temporarily interrupted for the second quarter of 2012. We are in the process of switching career enhancement service and product sales that were originally handled by distributors to an online e-commerce model. 

Ambow's Chief Strategy Officer Ms. Jenny Zhan added, "I am happy to report that as of the last month of the second quarter we are again focusing our efforts on growing the business. We believe that our business fundamentals are strong and that our operations are resilient. Concurrently, we expect our growth to recover in the second half of the year."

Financial Results for the First Quarter of 2012

Net Revenues

Total net revenues for the first quarter of 2012 increased 22.1% to $59.5 million from $48.8 million for the same period in 2011. $14.3 million of services and products delivered in the first quarter will be recognized as revenue in future periods upon cash collection while $4.3 million of services and products delivered in 2011 were recognized as revenue in the first quarter of 2012.

Better Schools

Tutoring revenue increased 42.0% to $35.9 million from $25.3 million for the same period in 2011. The revenue growth in Tutoring was due to a 23.5% increase in enrollments and a 15.0% increase in Average Selling Price ("ASP") year-over-year.  $4.8 million of services and products delivered in the first quarter will be recognized as revenue in future periods upon cash collection while $2.4 million of services and products delivered in 2011 were recognized as revenue in the first quarter of 2012.

K-12 Schools revenue increased 1.0% to $8.7 million from $8.6 million for the same period in 2011.  During the quarter, enrollments decreased 15.0% while ASP increased 18.9% year-on-year. The drop in enrollments was because we reverted the operating right for the Junior High portion of Zhenjiang Foreign Language School back to the original owner and stopped recording revenue from the school in the third quarter of 2011.

Total student enrollments in Better Schools for the first quarter of 2012 were about 241,000 of which approximately 221,000 were in Tutoring and 20,000 were in K-12 Schools.

Better Jobs

Career Enhancement revenue was $11.7 million in the first quarter of 2012, compared to $12.0 million for the same period in 2011. The Company recorded a 2.1% increase in enrollment and a 4.8% decrease in ASP year-on-year. $9.5 million of services and products delivered in the first quarter will be recognized as revenue in future periods upon cash collection while $1.9 million of services and products delivered in 2011 were recognized as revenue in the first quarter of 2012.

Colleges revenue increased 14.0% to $3.3 million from $2.9 million for the same period in 2011.

Total student enrollments in Better Jobs for the first quarter of 2012 were about 24,400 with approximately 18,000 in Career Enhancement and 6,400 in Colleges.

Gross Profit and Gross Margin

Overall gross profit increased 9.4% to $27.9 million for the first quarter of 2012 from $25.5 million for the same period in 2011. Gross margin was 46.9% for the first quarter of 2012, compared to 52.4% for the same period in 2011. The decrease in gross margin is largely due to high margin services and products that were delivered in the first quarter, but will be recognized as revenue in future periods upon cash collection.

Operating Expenses

Operating expenses, which include selling and marketing, general and administrative, and research and development expenses, were $41.0 million for the first quarter of 2012, a 85.4% year-over-year increase from $22.1 million for the same period in 2011. Operating expenses as a percentage of total net revenues were 68.8% for the first quarter of 2012, compared to 45.3% for the same period in 2011.  The increase in operating expenses as a percentage of total net revenues were partly because $14.3 million of services and products delivered in the first quarter will only be recognized as revenue in future periods upon cash collection.  Besides that, other main reasons for the increase in operating expenses as a percentage of total net revenues were as follows:

  • Selling and marketing expenses increased to $20.7 million for the first quarter of 2012 from $9.3 million for the same period in 2011.  The increase was mainly because of higher advertising expenses associated with business expansion in tutoring and career enhancement segments. 
  • General and administrative expenses increased to $18.5 million for the first quarter of 2012 from $11.5 million for the same period in 2011.  The increase was mainly because of the provision of bad debts of $2.3 million, an increase in share based compensation expenses of $1.4 million and an increase in general and administrative expenses in connection with businesses acquired in the past four quarters.   Included in the share based computation in the first quarter of 2012 was a non-cash compensation expense of $0.6 million arising from a participation agreement entered between Dr. Jin Huang and Baring Private Equity Asia ("Baring Transaction") in October 2011 for the acquisition of Ambow shares.  In total, $6 million of non-cash compensation charge in connection to the Baring Transaction will be expensed over a 4-year period.
  • Research and development increased to $1.8 million for the first quarter of 2012 from $1.2 million for the same period in 2011.   

Non-GAAP operating loss was $10.6 million compared to non-GAAP operating income of $4.5 million for the same period in 2011.

Income Tax Expenses

Income tax benefits were $0.6 million for the first quarter of 2012, compared to income tax expenses of $0.3 million for the same period in 2011.

Net Loss and EPS

Net loss was $12.7 million for the first quarter of 2012, compared to net income of $2.0 million for the same period in 2011

Non-GAAP net loss was $10.2 million for the first quarter of 2012, compared to non-GAAP net income of $3.0 million for the same period in 2011.

Both basic and diluted non-GAAP net loss per ADS[8] attributable to Ambow were $0.14, compared to basic and diluted non-GAAP net income per ADS of $0.04 for the same period in 2011.

Adjusted EBITDA

Adjusted EBITDA was negative $4.7 million for the first quarter of 2012, compared to positive $8.6 million for the same period in 2011.  Depreciation and amortization in the first quarter of 2012 was $5.4 million as compared to $4.3 million in the same period in 2011.

Adjusted EBITDA margin[9] was negative 8.0%, compared to positive 17.7% for the same period in 2011.  Depreciation and amortization as a percentage of revenue was 9.1% in the first quarter of 2012.

Balance Sheet and Cash Flow Information

Cash and cash equivalents, restricted cash and term deposits as of March 31, 2012 were $52.9 million, compared to $82.4 million as of December 31, 2011. The decrease was mainly because of the payments related to previous acquisitions as well as capital expenditure payments and prepayments made in the first quarter of 2012. 

Prepaid and other current assets as of March 31, 2012 were $130.0 million, compared to $91.2 million as of December 31, 2011. The increase was mainly due to the receivable arising from the disposal of Beijing Century College and the disposal of the equity of 21st   Century School.

Goodwill increased to $194.2 million as of March 31, 2012 from $184.1 million as of March 31, 2011 as a result of the acquisition of sixteen early-stage tutoring centers from a third party during the first quarter of 2012. 

Other non-current assets decreased to $40.1 million as of March 31, 2012 from $50.8 million as of December 31, 2011.  The decrease was mainly due to the reclassification of part of the prepaid advertising expense from non-current portion to current portion and the reclassification of the long-term lease prepayments for a new career enhancement campus to fixed assets.

Deferred revenue balance of growth assets as of March 31, 2012 increased 12.1% to $58.0 million compared to $51.7 million as of March 31, 2011.

Accrued and other liabilities increased to $90.3 million as of March 31, 2012 from $76.6 million as of December 31, 2011.  The increase was mainly due to the reclassification of part of consideration payable for previous acquisitions from non-current portion to current portion.

Assets and liabilities held for sale as of December 31, 2011 had since been removed from the balance sheet because the disposal of Beijing Century College was completed in the first quarter of 2012.

The disposal of the equity of 21st Century School (the "School") was also completed in the first quarter of 2012.  However, the Company continues to consolidate the financial statements of the School on the basis that due to Ambow's continuing involvement in the operation of the School, it is deemed to be a variable interest entity for which Ambow is the primary beneficiary.   The buyer's equity interest in the School was reflected in the balance sheet as non-controlling interest.

Financial Outlook for the Second Quarter and Full-Year of 2012

Ambow expects total net revenues for the second quarter of 2012 to be in the range of $69.9 million (Rmb440 million) to $73.0 million (Rmb460 million). The net revenue for the full year of 2012 is expected to be in the range of $301.7 million (Rmb1.9 billion) to $333.5 million (Rmb2.1 billion).

This is the Company's current view and it is subject to change.  This guidance is subject to various risks and uncertainties, including those related to additional legal or advisory costs associated with litigation and investigation matters.

Conference Call Information

Ambow's management will host an earnings conference call at 8:00 a.m. U.S. Eastern Time on July 5, 2012 (8:00 p.m. Beijing/Hong Kong Time on July 5, 2012).

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/

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 K-12 schools and tutoring centers; and "Better Jobs," which includes colleges and career enhancement centers. 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

Certain statements in this press release, including statements regarding the outlook for the second quarter and full year of 2012, expected growth recovery in the second half of the year, quotations from management concerning Ambow's strategic and operational plans and expectations, and Ambow's plans regarding the IFC loan, are forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.  Ambow uses words such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates", "target" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are based on management's current expectations and involve risks and uncertainties. The following important factors, without limitation, could cause actual results to differ materially from those contained in these forward-looking statements: Ambow's ability to manage its business expansion and operations effectively, to make strategic acquisitions and investments and to successfully integrate acquired businesses; significant competition; Ambow's ability to continue to attract students to enroll in its programs, to continually enhance its programs, services and products, to successfully develop and introduce new services and products in time and to adequately and promptly respond to changes in curriculum, testing materials and standards; economic conditions; changes in government policies, laws and regulations; Ambow's ability to satisfy the conditions to disbursement of funds under its loan agreement with IFC; 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. More information on factors that could affect Ambow's results is included from time to time in Ambow's Securities and Exchange Commission (SEC) filings and reports, including the risks described in its annual report on Form 20-F for the fiscal year ended December 31, 2011 filed with the SEC on May 29, 2012 and in Ambow's other filings with the SEC from time to time, including on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on Ambow's future results.  In light of these risks, uncertainties and factors, you are cautioned not to place undue reliance on forward-looking statements. Ambow disclaims any obligation to update information contained in forward-looking statements, whether as a result of new information, future events or otherwise.

Statement Regarding Unaudited Financial Information

The unaudited financial information disclosed in this press release is preliminary and subject to completion of review procedures.  Adjustments to the unaudited financial information disclosed in this press release may be identified in the future, which could result in significant differences between the Company's audited financial statements and this preliminary unaudited financial information.  Quarterly and year end results may not be indicative of the Company's results of operations for future quarterly periods.

About Non-GAAP Financial Measures

To supplement Ambow's unaudited 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 loss, (ii) Non-GAAP net loss, (iii) Non-GAAP net loss attributable to Ambow per ADS basic and diluted and (iv) Adjusted EBITDA. 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 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
Investor Relations Manager
Ambow Education Holding Ltd.
Tel: +86-10-6206-8130
Email: ir@ambow.com


[1] The reporting currency of the Company is Renminbi ("RMB"), but for the convenience of the reader, the amounts presented throughout the release are in US dollar ("$"). Unless otherwise stated, all translations from RMB to US$ are based on the historical exchange rate of US$1.0 to RMB6.2975, representing the noon buying rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board on March 30, 2012. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.

[2] The 2011 comparative figures exclude the discontinued operations which comprise Beijing Century College disposed in the first quarter of 2012 and the four subdivisions, including three in Tutoring and one in Career Enhancement. The four subdivisions were disposed in the fourth quarter of 2011.

[3] Non-GAAP operating loss is defined as operating loss excluding share-based compensation expenses.

[4] Non-GAAP net loss is defined as net loss excluding share-based compensation expenses.

[5] Diluted non-GAAP net loss per ADS attributed to Ambow is computed by dividing non-GAAP net loss attributed to Ambow by weighted average number of common shares outstanding for the period plus (1) shares issuable upon the exercise of outstanding shares 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.

[6] Enrollments refers to the cumulative total number of course enrolled in and paid for by students either directly through our schools or through our distributors for the respective period, including multiple online and offline courses enrolled in and paid for by the same student.

[7] Same center sales are sales dollars generated only by those centers that have been open for more than one year and have historical data to compare current quarter's sales to the sales of  same quarter last year.

[8] Each ADS represents two ordinary shares.

[9] Adjusted EBITDA margin, being Adjusted EBITDA as a percentage of total net revenues.

 

AMBOW EDUCATION HOLDING LTD

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

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












As of
March 31, 


As of
December 31, 


As of
March 31, 


As of
December 31, 



2012


2011


2012


2011



 USD


 USD


RMB


RMB

ASSETS









Current assets:









       Cash and cash equivalents


52,176


74,741


328,578


470,682

       Restricted cash


588


349


3,700


2,200

       Term deposits


159


7,337


1,000


46,205

       Accounts receivable, net


21,705


17,189


136,686


108,247

       Amounts due from related parties


9,531


10,563


60,021


66,521

       Deferred tax assets, current


2,583


2,719


16,267


17,126

       Prepaid and other current assets


129,954


91,168


818,388


574,123

       Assets classified as held for sale


-


61,040


-


384,401

TOTAL CURRENT ASSETS


216,696


265,106


1,364,640


1,669,505

       Property and equipment, net


137,439


125,290


865,521


789,016

       Intangible assets and land use rights, net


123,473


120,013


777,570


755,784

       Goodwill


194,226


184,103


1,223,137


1,159,386

       Deferred tax assets, non-current


733


762


4,613


4,800

       Non-current amounts due from related parties


3,560


3,567


22,418


22,463

       Other non-current assets


40,135


50,762


252,752


319,673

TOTAL NON-CURRENT ASSETS


499,566


484,497


3,146,011


3,051,122

TOTAL ASSETS


716,262


749,603


4,510,651


4,720,627










LIABILITIES AND SHAREHOLDERS' EQUITY









Current liabilities:









       Short-term borrowings


11,433


18,749


72,000


118,070

       Current portion of Long-term borrowings


3,890


2,541


24,500


16,000

       Deferred revenue


79,255


72,440


499,108


456,189

       Accounts payable


8,369


8,240


52,701


51,896

       Accrued and other liabilities


90,270


76,613


568,466


482,476

       Income tax payable


19,228


21,025


121,088


132,406

       Amount due to related parties


11,691


7,548


73,626


47,531

       Liabilities classified as held for sale


-


23,052


-


145,169

TOTAL CURRENT LIABILITIES


224,136


230,208


1,411,489


1,449,737

       Deferred tax liabilities


24,951


24,513


157,128


154,368

       Long-term borrowings


6,034


7,384


38,000


46,500

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


9,375


48,202


59,038


303,559

TOTAL NON-CURRENT LIABILITIES


40,360


80,099


254,166


504,427

TOTAL LIABILITIES


264,496


310,307


1,665,655


1,954,164










SHAREHOLDERS' EQUITY


420,232


430,581


2,646,413


2,711,582

TOTAL AMBOW EDUCATION HOLDING LTD'S EQUITY


420,232


430,581


2,646,413


2,711,582

       Non-controlling interest


31,534


8,715


198,583


54,881

TOTAL SHAREHOLDERS' EQUITY


451,766


439,296


2,844,996


2,766,463

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


716,262


749,603


4,510,651


4,720,627

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 March 31,


2012


2011


2012


2011


USD


USD


RMB


RMB

Better Schools








Tutoring

35,902


25,285


226,090


159,232

K-12 Schools

8,681


8,595


54,668


54,129

Better Job








Career Enhancement

11,686


12,019


73,593


75,690

Colleges

3,251


2,851


20,474


17,952

NET REVENUES

59,520


48,750


374,825


307,003

Cost of revenues

(31,584)


(23,208)


(198,900)


(146,155)

GROSS PROFIT

27,936


25,542


175,925


160,848

Operating expenses:








Selling and marketing

(20,730)


(9,334)


(130,549)


(58,780)

General and administrative

(18,454)


(11,534)


(116,213)


(72,636)

Research and development

(1,793)


(1,237)


(11,292)


(7,789)

TOTAL OPERATING EXPENSES

(40,977)


(22,105)


(258,054)


(139,205)

OPERATING INCOME (LOSS)

(13,041)


3,437


(82,129)


21,643









OTHER INCOME (EXPENSE)








Interest expense

(737)


(1,206)


(4,640)


(7,596)

Interest income

119


296


748


1,863

Foreign exchange income (loss), net

20


(277)


124


(1,742)

Other loss, net

(115)


(178)


(726)


(1,119)

INCOME (LOSS) BEFORE TAX AND NON-CONTROLLING INTEREST

(13,754)


2,072


(86,623)


13,049

Income tax expenses

580


(327)


3,653


(2,059)

INCOME (LOSS) FROM CONTINUING OPERATIONS

(13,174)


1,745


(82,970)


10,990

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

-


(433)


-


(2,727)

NET INCOME (LOSS)

(13,174)


1,312


(82,970)


8,263

Add: Net loss attributable to non-controlling interest

524


237


3,303


1,492

NET INCOME (LOSS) ATTRIBUTABLE TO AMBOW EDUCATION HOLDING LTD

(12,650)


1,549


(79,667)


9,755









NET INCOME (LOSS) ATTRIBUTABLE TO ORDINARY SHAREHOLDERS

(12,650)


1,549


(79,667)


9,755









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








Basic

(0.17)


0.03


(1.10)


0.18

Diluted

(0.17)


0.03


(1.10)


0.17









Weighted average number of ADS(note 1)








Basic

72,411,499


71,283,488


72,411,499


71,283,488

Diluted

72,411,499


75,425,764


72,411,499


75,425,764









Supplementary Information:








Share-based compensation expense included in:








Selling and marketing

276


284


1,738


1,788

General and administrative

2,152


741


13,553


4,667

Research and development

38


35


242


221


2,466


1,060


15,533


6,676









Note1:      Each ADS represents two common shares.

 

AMBOW EDUCATION HOLDING LTD

RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES

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



For the three months ended March 31, 



2012


2011


2012


2011



USD


USD


RMB


RMB

Operating income (loss)


(13,041)


3,437


(82,129)


21,643

Share-based compensation expenses


2,466


1,060


15,533


6,676

Non-GAAP operating income (loss)


(10,575)


4,497


(66,596)


28,319










Net income (loss) 


(12,650)


1,982


(79,667)


12,482

Share-based compensation expenses


2,466


1,060


15,533


6,676

Non-GAAP net income (loss) 


(10,184)


3,042


(64,134)


19,158










Net income (loss) margin 


(21.3%)


4.1%


(21.3%)


4.1%

Non-GAAP net income (loss) margin 


(17.1%)


6.2%


(17.1%)


6.2%

Net income (loss) per ADS attributable to Ordinary Shareholders - Basic


(0.17)


0.03


(1.10)


0.18

Net income (loss) per ADS attributable to Ordinary Shareholders - Diluted


(0.17)


0.03


(1.10)


0.17

Non-GAAP net income (loss) per ADS attributable to Ambow - Basic 


(0.14)


0.04


(0.89)


0.27

Non-GAAP net income (loss) per ADS attributable to Ambow – Diluted 


(0.14)


0.04


(0.89)


0.25










Weighted average number of ADS used in calculating net income and non-GAAP net income (loss) attributable to Ambow per ADS - basic


72,411,499


71,283,488


72,411,499


71,283,488

Weighted average number of ADS used in calculating net income and non-GAAP net income (loss)attributable to Ambow per ADS - diluted


72,411,499


75,425,764


72,411,499


75,425,764










EBITDA (note1)


(7,207)


7,561


(45,384)


47,612

Share-based compensation expenses


2,466


1,060


15,533


6,676

Adjusted EBITDA (note2)


(4,741)


8,621


(29,851)


54,288










EBITDA margin 


(12.1%)


15.5%


(12.1%)


15.5%

Adjusted EBITDA margin 


(8.0%)


17.7%


(8.0%)


17.7%


Note1:      EBITDA, a non-GAAP measure,  being net loss attributable to Ambow excluding interest expense, income tax expenses, depreciation and amortization.  The depreciation and amortization in the first quarter of 2011 and 2012 were RMB 27,338 and RMB 34,044, respectively.

Note2:      Adjusted EBITDA being EBITDA excluding share based compensation.

 

SOURCE Ambow Education Holding Ltd.

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