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Ambow Education Holding Q4 net revenues increased 10.8%

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Christian Fernsby | Monday April 8, 2019 4:38AM ET
Ambow Education Holding
Ambow Education Holding   This increase was due primarily to higher student enrollment

Ambow Education Holding announced its audited financial and operating results for the fourth quarter ended December 31, 2018 and fiscal year 2018.


Fourth quarter 2018 financial highlights

Ambow Education Holding' net revenues for the fourth quarter of 2018 increased 10.8% to US$24.6 million from US$22.2 million in the same period of 2017.

This increase was due primarily to higher student enrollment for the 2018-2019 academic year in Ambow Education Holding's K-12 schools and revenues from Boston-based Bay State College ("BSC"), acquired in November 2017).

Ambow Education Holding' gross profit for the fourth quarter of 2018 was US$8.3 million, compared with US$9.8 million for the same period of 2017.

Ambow Education Holding' gross profit margin was 33.7% for the fourth quarter of 2018, compared to 44.1% in the same period of 2017.

The decrease in gross profit margin was primarily attributable to lower profit margin at BSC, as Ambow Education Holding is in the process of consolidating its business operations.

Operating expenses in the fourth quarter of 2018 decreased 5.5% to US$6.9 million from US$7.3 million for the same period of 2017.

Ambow Education Holding' operating expenses as a percentage of net revenues for the quarter decreased to 28.0% from 33.0% in the same period of 2017, primarily due to a one-time bad debt expense recovery and reversal of US$2.9 million in the fourth quarter of 2018.

Ambow Education Holding' net income attributable to ordinary shareholders for the fourth quarter of 2018 was US$4.5 million, or US$0.10 per basic and diluted share, compared with a net income of US$3.3 million for the fourth quarter of 2017, or US$0.09 per basic share and US$0.08 per diluted share.

As of December 31, 2018, Ambow maintained strong cash resources of US$52.2 million, comprising cash and cash equivalents of US$30.8 million, short-term investments of US$17.0 million, and restricted cash of US$4.4 million.

As of December 31, 2018, Ambow Education Holding's deferred revenue balance was US$18.1 million, representing a 2.8% increase from US$17.6 million as of December 31, 2017, mainly attributable to the tuition and course fees collected in the K-12 business segment for the 2018-2019 academic year, and the tuition and fees collected at BSC for the spring semester of 2019.

Fiscal year 2018 financial highlights

Net revenues for fiscal year 2018 increased 13.3% to US$77.3 million from US$68.2 million in 2017, due primarily to higher student enrollment for both 2017-2018 and 2018-2019 academic years in Ambow Education Holding's K-12 schools and revenues from BSC.

Gross profit for fiscal year 2018 decreased 2.4% to US$28.1 million from US$28.8 million in 2017.

Gross profit margin was 36.4%, compared to 44.2% in 2017.

The decrease in gross profit margin was primarily attributable to lower profit margin at BSC, as Ambow Education Holding is in the process of consolidating its business operations.

Ambow Education Holding' operating expenses for fiscal year 2018 were US$25.9 million, a 9.1% decrease from US$28.5 million in 2017.

Ambow Education Holding' operating expenses as a percentage of net revenues for the year decreased to 33.5% from 41.8% in 2017, primarily due to a one-time bad debt expense recovery and reversal of US$2.9 million in the fourth quarter of 2018.

Ambow Education Holding' operating income for fiscal year 2018 was US$2.2 million, compared with an operating income of US$0.4 million for 2017.

Net income attributable to ordinary shareholders for fiscal year 2018 was US$6.5 million, or US$0.16 per basic and diluted share, compared with a net income of US$7.1 million, or US$0.18 per basic and diluted share, in the prior year.

A one-time gain of US$5.7 million from the sale of subsidiaries was recorded in 2017.

 

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