Ambow Education to Announce First Quarter 2012 Unaudited Financial Results on July 5, 2012 and Adjustments to Previous Quarterly 2011 Unaudited Financial Results

News provided by

Ambow Education Holding Ltd.

Jun 29, 2012, 07:12 ET

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: [email protected]  

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.