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 July 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 o
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): o
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): o
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 July 9, 2020, announcing the Company’s unaudited financial and operating results for the three months ended March 31, 2020.
Exhibits
99.1 Press Release, dated July 9, 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: July 9, 2020
Exhibit 99.1
Ambow Education Announces First Quarter 2020 Financial Results
BEIJING, July 9, 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 unaudited financial and operating results for the three-month period ended March 31, 2020.
“Against the backdrop of the unprecedented COVID-19 pandemic, our goal of empowering learning and teaching through technology has never been more relevant,” said Dr. Jin Huang, Ambow’s President and Chief Executive Officer. “With our strategic efforts to invest in technological advancements and educational service innovation, we remain committed to providing our learners with high-quality educational resources, ensuring a superior online education experience across our platform. For instance, we launched live streaming classes that are embedded with various interactive tools that dramatically enhance the engagement between students and teachers on our learning platform. We also introduced online practice training and career planning programs to help undergraduates and employees better prepare themselves in an increasingly challenging job market. By leveraging our leading position and strong network in the career enhancement services market, in collaboration with 6,000 enterprises, we organized online job fairs that enabled remote interviews, extending extra exposure for undergraduates seeking jobs.”
Dr. Huang continued, “The outbreak of COVID-19 since the beginning of this year has adversely impacted the entire education industry. Our first quarter 2020 revenue performance was negatively impacted as a result of the suspension of our K-12 schools and offline tutoring services due to quarantine measures. With daily life in China gradually returning to normal since April, our schools reopened in April with the health and safety of our students and faculty a paramount priority. We are confident in our ability to navigate through the dynamic markets and capitalize on the elevated opportunities presented by the accelerated adoption of online education around the world.”
“I am also pleased that we made another significant addition to our portfolio of international assets in the first quarter as we completed the acquisition of NewSchool of Architecture and Design, LLC (“NewSchool”), a San Diego-based higher learning institution. This acquisition underlines Ambow’s vision to roll out a cross-border educational service platform, bringing unique learning and career advancement opportunities to students,” concluded Dr. Huang.
First Quarter 2020 Financial Highlights
| · | Net revenues for the first quarter of 2020 decreased by 28.2% to US$12.7 million from US$17.7 million in the same period of 2019. The decrease was primarily due to fewer services provided at the Company’s K-12 schools and tutoring centers as operations during the quarter were temporarily suspended due to the outbreak of COVID-19, partially offset by revenue from NewSchool, acquired in the period. |
| · | Gross profit for the first quarter of 2020 decreased by 72.4% to US$1.6 million from US$5.8 million in the same period of 2019. Gross profit margin was 12.6%, compared with 32.8% for the first quarter of 2019. The decrease in gross profit and margin was mainly attributable to the decrease of net revenues. |
| · | Operating expenses for the first quarter of 2020 decreased by 19.1% to US$7.2 million from US$8.9 million for the same period of 2019. The decrease was primarily attributable to less expenditures due to the temporary suspension of operations at schools and tutoring centers in the period as part of the national pandemic containment effort, and stringent expense controls to improve operating efficiency. |
| · | Net income attributable to ordinary shareholders in the first quarter of 2020 was US$0.8 million, or US$0.02 per basic and diluted share, compared with a net loss of US$3.5 million, or US$0.08 per basic and diluted share, for the first quarter of 2019. |
| · | As of March 31, 2020, Ambow maintained strong cash resources of US$30.4 million, comprised of cash and cash equivalents of US$14.2 million and short-term investments of US$16.2 million. |
| · | As of March 31, 2020, the Company’s deferred revenue balance was US$23.9 million, representing a slight increase compared with US$23.7 million as of December 31, 2019. Due to the temporary suspension of school operations to contain COVID-19, the Company postponed tuition and fee collection in its K-12 schools during the first quarter which led to the lower-than-usual increase in deferred revenue. |
The Company's first-quarter 2020 financial and operating results can also be found on its Form 6-K 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 first quarter of 2020 are based on the effective exchange rate of 7.0808 as of March 31, 2020; all amounts translated from RMB to U.S. dollars for the first quarter of 2019 are based on the effective exchange rate of 6.7112 as of March 29, 2019; all amounts translated from RMB to U.S. dollars as of December 31, 2019 are based on the effective exchange rate of 6.9618 as of December 31, 2019. 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 March 31, | As of December 31, | |||||||||||
| 2020 | 2019 | |||||||||||
| US$ | RMB | RMB | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | 14,210 | 100,619 | 157,600 | |||||||||
| Restricted cash | 2,001 | 14,170 | - | |||||||||
| Short term investments, available for sale | 14,785 | 104,692 | 57,487 | |||||||||
| Short term investments, held to maturity | 1,412 | 10,000 | 31,000 | |||||||||
| Accounts receivable, net | 3,174 | 22,472 | 17,939 | |||||||||
| Amounts due from related parties | 317 | 2,246 | 2,318 | |||||||||
| Prepaid and other current assets, net | 22,542 | 159,618 | 133,296 | |||||||||
| Total current assets | 58,441 | 413,817 | 399,640 | |||||||||
| Non-current assets: | ||||||||||||
| Property and equipment, net | 21,976 | 155,606 | 157,463 | |||||||||
| Land use rights, net | 247 | 1,748 | 1,759 | |||||||||
| Intangible assets, net | 8,695 | 61,567 | 56,607 | |||||||||
| Goodwill | 8,659 | 61,313 | 60,353 | |||||||||
| Deferred tax assets, net | 538 | 3,811 | 10,195 | |||||||||
| Operating lease right-of-use asset | 42,809 | 303,120 | 257,361 | |||||||||
| Finance lease right-of-use asset | 890 | 6,300 | 6,450 | |||||||||
| Other non-current assets, net | 11,900 | 84,261 | 70,971 | |||||||||
| Total non-current assets | 95,714 | 677,726 | 621,159 | |||||||||
| Total assets | 154,155 | 1,091,543 | 1,020,799 | |||||||||
| LIABILITIES | ||||||||||||
| Current liabilities: | ||||||||||||
| Deferred revenue * | 23,858 | 168,933 | 165,111 | |||||||||
| Accounts payable * | 1,781 | 12,615 | 14,718 | |||||||||
| Accrued and other liabilities * | 28,059 | 198,681 | 192,957 | |||||||||
| Income taxes payable, current * | 26,507 | 187,691 | 180,715 | |||||||||
| Amounts due to related parties * | 278 | 1,971 | 1,971 | |||||||||
| Operating lease liability, current * | 8,018 | 56,774 | 53,512 | |||||||||
| Total current liabilities | 88,501 | 626,665 | 608,984 | |||||||||
| Non-current liabilities: | ||||||||||||
| Income taxes payable, non-current * | 4,564 | 32,315 | 32,152 | |||||||||
| Operating lease liability, non-current * | 37,158 | 263,109 | 216,067 | |||||||||
| Total non-current liabilities | 41,722 | 295,424 | 248,219 | |||||||||
| Total liabilities | 130,223 | 922,089 | 857,203 | |||||||||
| EQUITY | ||||||||||||
| Preferred shares | ||||||||||||
| (US$ 0.003 par value;1,666,667 shares authorized, nil issued and outstanding as of December 31, 2019 and March 31, 2020) | - | - | - | |||||||||
| Class A Ordinary shares | ||||||||||||
| (US$0.003 par value; 66,666,667 and 66,666,667 shares authorized, 38,858,199 and 38,870,699 shares issued and outstanding as of December 31, 2019 and March 31, 2020, respectively) | 103 | 730 | 730 | |||||||||
| Class C Ordinary shares | ||||||||||||
| (US$0.003 par value; 8,333,333 and 8,333,333 shares authorized, 4,708,415 and 4,708,415 shares issued and outstanding as of December 31, 2019 and March 31, 2020, respectively) | 13 | 90 | 90 | |||||||||
| Additional paid-in capital | 495,563 | 3,508,983 | 3,508,745 | |||||||||
| Statutory reserve | 2,851 | 20,185 | 20,185 | |||||||||
| Accumulated deficit | (475,422 | ) | (3,366,370 | ) | (3,371,815 | ) | ||||||
| Accumulated other comprehensive income | 978 | 6,928 | 6,341 | |||||||||
| Total Ambow Education Holding Ltd.’s equity | 24,086 | 170,546 | 164,276 | |||||||||
| Non-controlling interests | (154 | ) | (1,092 | ) | (680 | ) | ||||||
| Total equity | 23,932 | 169,454 | 163,596 | |||||||||
| Total liabilities and equity | 154,155 | 1,091,543 | 1,020,799 | |||||||||
* All of the VIE's assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company's general assets.
AMBOW EDUCATION HOLDING LTD.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(All amounts in thousands, except for share and per share data)
| For the three months ended March 31, | ||||||||||||
| 2020 | 2020 | 2019 | ||||||||||
| US$ | RMB | RMB | ||||||||||
| NET REVENUES | ||||||||||||
| Educational program and services | 12,748 | 90,267 | 118,185 | |||||||||
| Intelligent program and services | 2 | 12 | 461 | |||||||||
| Total net revenues | 12,750 | 90,279 | 118,646 | |||||||||
| COST OF REVENUES | ||||||||||||
| Educational program and services | (10,936 | ) | (77,433 | ) | (78,197 | ) | ||||||
| Intelligent program and services | (183 | ) | (1,298 | ) | (1,858 | ) | ||||||
| Total cost of revenues | (11,119 | ) | (78,731 | ) | (80,055 | ) | ||||||
| GROSS PROFIT | 1,631 | 11,548 | 38,591 | |||||||||
| Operating expenses: | ||||||||||||
| Selling and marketing | (1,490 | ) | (10,549 | ) | (14,088 | ) | ||||||
| General and administrative | (5,536 | ) | (39,201 | ) | (45,618 | ) | ||||||
| Research and development | (160 | ) | (1,131 | ) | (168 | ) | ||||||
| Total operating expenses | (7,186 | ) | (50,881 | ) | (59,874 | ) | ||||||
| OPERATING LOSS | (5,555 | ) | (39,333 | ) | (21,283 | ) | ||||||
| OTHER INCOME (EXPENSES) | ||||||||||||
| Interest income | 281 | 1,990 | 388 | |||||||||
| Foreign exchange gain (loss), net | 4 | 26 | (31 | ) | ||||||||
| Other income, net | 199 | 1,406 | 660 | |||||||||
| Gain from deregistration of subsidiaries | - | - | 1,279 | |||||||||
| Gain on the bargain purchase | 5,688 | 40,273 | - | |||||||||
| Gain on sale of investment available for sale | 74 | 526 | 279 | |||||||||
| Total other income | 6,246 | 44,221 | 2,575 | |||||||||
| INCOME (LOSS) BEFORE INCOME TAX AND NON-CONTROLLING INTEREST | 691 | 4,888 | (18,708 | ) | ||||||||
| Income tax benefit (expense) | 104 | 739 | (5,141 | ) | ||||||||
| NET INCOME (LOSS) | 795 | 5,627 | (23,849 | ) | ||||||||
| Less: Net loss attributable to non-controlling interest | (58 | ) | (412 | ) | (93 | ) | ||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | 853 | 6,039 | (23,756 | ) | ||||||||
| NET INCOME (LOSS) | 795 | 5,627 | (23,849 | ) | ||||||||
| OTHER COMPREHENSIVE INCOME, NET OF TAX | ||||||||||||
| Foreign currency translation adjustments | 61 | 433 | (2,428 | ) | ||||||||
| Unrealized gains on short term investments | ||||||||||||
| Unrealized holding gains arising during period | 62 | 441 | 280 | |||||||||
| Less: reclassification adjustment for gains included in net income | 41 | 287 | 205 | |||||||||
| Other comprehensive income/(loss) | 83 | 587 | (2,353 | ) | ||||||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | 878 | 6,214 | (26,202 | ) | ||||||||
| Net income (loss) per share - basic and diluted | 0.02 | 0.14 | (0.55 | ) | ||||||||
| Weighted average shares used in calculating basic and diluted net income (loss) per share | 43,570,918 | 43,570,918 | 43,474,571 | |||||||||
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, 2020 | 38,858,199 | 730 | 4,708,415 | 90 | 3,508,745 | 20,185 | (3,372,409 | ) | 6,341 | (680 | ) | 163,002 | ||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | 238 | - | - | - | - | 238 | ||||||||||||||||||||||||||||||
| Issuance of ordinary shares for restricted stock award | 12,500 | 0 | - | - | (0 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | 433 | - | 433 | ||||||||||||||||||||||||||||||
| Unrealized gain on investment, net of income taxes | - | - | - | - | - | - | - | 154 | - | 154 | ||||||||||||||||||||||||||||||
| Net income/(loss) | - | - | - | - | - | - | 6,039 | - | (412 | ) | 5,627 | |||||||||||||||||||||||||||||
| Balance as of March 31, 2020 | 38,870,699 | 730 | 4,708,415 | 90 | 3,508,983 | 20,185 | (3,366,370 | ) | 6,928 | (1,092 | ) | 169,454 | ||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
Discussion of Segment Operations
(All amounts in thousands)
| For the three months ended March 31, | ||||||||||||
| 2020 | 2020 | 2019 | ||||||||||
| US$ | RMB | RMB | ||||||||||
| (All amounts in thousands) | ||||||||||||
| NET REVENUES | ||||||||||||
| K-12 Schools | 5,849 | 41,411 | 63,793 | |||||||||
| CP&CE Programs | 6,901 | 48,868 | 54,853 | |||||||||
| Total net revenues | 12,750 | 90,279 | 118,646 | |||||||||
| COST OF REVENUES | ||||||||||||
| K-12 Schools | (4,721 | ) | (33,429 | ) | (42,296 | ) | ||||||
| CP&CE Programs | (6,398 | ) | (45,302 | ) | (37,759 | ) | ||||||
| Total cost of revenues | (11,119 | ) | (78,731 | ) | (80,055 | ) | ||||||
| GROSS PROFIT | ||||||||||||
| K-12 Schools | 1,128 | 7,982 | 21,497 | |||||||||
| CP&CE Programs | 503 | 3,566 | 17,094 | |||||||||
| Total gross profit | 1,631 | 11,548 | 38,591 | |||||||||