Puxin Limited Announces Third Quarter 2019 Unaudited Financial Results

BEIJING,Nov. 18,2019 -- Puxin Limited (NYSE: NEW) ("Puxin" or the "Company"),a successful consolidator of the after-school education industry in China,today announced its unaudited financial results for the third quarter ended September 30,2019.

Third Quarter 2019 Financial and Operational Highlights

Net revenues were RMB996.0 million (US$139.4 million),an increase of 48.7% from RMB669.7 million in the third quarter of 2018.

Operating income was RMB41.5 million (US$5.8 million),compared to operating loss of RMB(61.1) million in the third quarter of 2018.

Adjusted operating income (loss)[1] was RMB52.2 million (US$7.3 million),compared to RMB(41.8) million in the third quarter of 2018.

Net income attributable to Puxin Limited was RMB33.7 million (US$4.7 million),compared to net loss of RMB(50.2) million in the third quarter of 2018.

Adjusted net income (loss) attributable to Puxin Limited[2] was RMB43.5 million (US$6.1 million),compared to RMB(51.0) million in the third quarter of 2018.

Adjusted EBITDA[3] was RMB80.6 million (US$11.3 million),compared to RMB(20.3) million in the third quarter of 2018.

Cash and cash equivalents were RMB322.0 million (US$45.0 million),compared to RMB778.0 million as of December 31,2018.

Student enrollments increased by 60.2% to 871,896 from 544,253 in the third quarter of 2018.

Mr. Yunlong Sha,Chairman and Chief Executive Officer of Puxin,commented,"the third quarter of 2019 was an inspiring period and we are delighted to announce solid results. To highlight,Puxin has achieved profitability on an operational basis for the first time. Net revenues grew 48.7% year-over-year to RMB996.0 million,beating previous expectation. In particular,our K-12 education service line performed exceptionally well. Excluding financial impact from online school and headquarter,net revenues increased by 86.4% year-over-year and the operating profit increased by 667.1% year-over-year. In the meantime,excluding financial impact from online school and headquarter,Puxin's study-abroad services had its first positive quarterly operating margin at 8.5% since the acquisition of Global Education and ZMN Education in 2017."

"Puxin continues to scale up at a steady pace and we believe this can be attributed to both our 'acquisition and integration' strategy as well as excellent organic growth of our existing portfolio. Improved operational efficiency also contributed to our quarterly performance. For example,student enrollments increased by 60.2%,reaching a total number of 871,896 enrollments. In addition,the retention rate reached 70.3% which further solidified Puxin's position as a top-tier education service provider. Looking ahead,with eight newly acquired schools,we will continue our dedication to realizing future growth fueled by our 'acquisition and integration' strategy. Overall,we are optimistic about the outlook for the education market in China and are committed to sustain the solid growth momentum in thefuture."

[1]Adjusted operating income (loss) is a non-GAAP financial measure,which is defined as operating income (loss) excluding share-based compensation expenses. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release.

[2]Adjusted net income (loss) attributable to Puxin Limited is a non-GAAP financial measure,which is defined as net income (loss) attributable to Puxin Limited excluding share-based compensation expenses and loss on changes in fair value of convertible notes,derivative liabilities and warrants and loss on extinguishment of convertible notes. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release.

[3] EBITDA is a non-GAAP financial measure,which is defined as net income (loss) excluding depreciation,amortization,interest expense,interest income and income tax (benefits) expenses; adjusted EBITDA is a non-GAAP financial measure,interest income,income tax (benefits) expenses,share-based compensation expenses,loss on changes in fair value of convertible notes,derivative liabilities and warrants and loss on extinguishment of convertible notes. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release.

Financial Results for the Third Quarter of 2019

Net Revenues

Net revenues increased by 48.7% to RMB996.0 million (US$139.4 million) from RMB669.7 million in the third quarter of 2018. This increase was primarily driven by an increase in student enrollments. Student enrollments increased by 60.2% to 871,253in the same period of 2018.

Cost of Revenues

Cost of revenues increased by 32.0% to RMB494.6 million (US$69.2 million) from RMB374.6 million in the same period of 2018,primarily due to an increase in teaching staff's compensation. Cost of revenues,excluding share-based compensation expenses,increased by 32.5% to RMB493.6 million (US$69.1 million) from RMB372.5 million in the third quarter of 2018.

Gross Profit and Gross Margin

Gross profit was RMB501.5 million (US$70.2 million),an increase of 70.0% from RMB295.1 million in the same period of 2018. Gross margin was 50.3%,compared to 44.1% for the same period in 2018.

Operating Expenses

Total operating expenses increased by 29.1% to RMB459.9 million (US$64.3 million) from RMB356.1 million in the third quarter of 2018.

Selling expenses increased by 28.5% to RMB304.8 million (US$42.6 million) from RMB237.3 million in the third quarter of 2018. Selling expenses,increased by 31.8% to RMB299.9 million (US$42.0 million) from RMB227.6 million in the third quarter of 2018. The increases were primarily due to increases in marketing expense and marketing staff compensation.

General and administrative expenses increased by 30.5% to RMB155.1 million (US$21.7 million) from RMB118.8 million during the same period of 2018. General and administrative expenses,increased by 35.0% to RMB150.3 million (US$21.0 million) from RMB111.3 million in the third quarter of 2018. The increases were primarily due to increases in staff compensation and daily operating expense.

Total share-based compensation expenses allocated to related operating costs and expenses decreased to RMB10.7 million (US$1.5 million) from RMB19.3 million in the same period of 2018,primarily due to less grants of options to employees in 2019.

Operating Income (Loss) and Operating Margin

Operating income in the third quarter of 2019 was RMB41.5 million (US$5.8 million) compared to the operating loss of RMB(61.1) million in the third quarter of 2018.

Operating margin was 4.2% in the third quarter of 2019,compared to (9.1)% in the same period in 2018.

Adjusted operating income was RMB52.2 million (US$7.3 million),compared to the adjusted operating loss of RMB(41.8) million in the third quarter of 2018.

Adjusted operating margin was 5.2%,compared to (6.2)% in the same period of the prior year.

Net Income (Loss)

Net income attributable to Puxin Limited was RMB33.7 million (US$4.7 million),compared to the net loss attributable to Puxin Limited of RMB(50.2) million during the third quarter of 2018.Basic and diluted net income per ADS attributable to Puxin Limited were RMB0.38 (US$0.06),compared to basic and diluted net loss of RMB(0.62) during the same period of 2018.

Adjusted net income attributable to Puxin Limited was RMB43.5 million (US$6.1 million),compared to adjusted net loss attributable to Puxin Limited of RMB(51.0) million during the same period of 2018. Adjusted basic net income per ADS attributable to Puxin Limited[4] was RMB0.50 (US$0.07),compared to adjusted basic net loss of RMB(0.62) during the same period of 2018. Adjusted diluted net income per ADS attributable to Puxin Limited was RMB0.49 (US$0.07),compared to adjusted diluted net loss of RMB(0.62) during the same period of 2018.

[4] Adjusted basic and diluted net income (loss) per ADS attributable to Puxin Limited is a non-GAAP financial measure,which is defined as basic and diluted net income (loss) per ADS attributable to Puxin Limited excluding share-based compensation expenses,derivative liabilities and warrants and loss on extinguishment of convertible notes. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release.

EBITDA

EBITDA was RMB70.8 million (US$9.9 million),compared to RMB(19.5) million in the third quarter of 2018.

EBITDA margin was 7.1% in the third quarter of 2019,compared to (2.9)% in the same period in 2018.

Adjusted EBITDA was RMB80.6 million (US$11.3 million),compared to RMB(20.3) million in the third quarter of 2018.

Adjusted EBITDA margin was 8.1%,compared to (3.0)% in the same period in 2018.

Cash and cash equivalents

As of September 30,2019,the Company had total cash and cash equivalents of RMB322.0million (US$45.0million),compared to RMB778.0million as of December 31,2018. The decreases were primarily due to acquisitions of k-12 schools.

Business Outlook

For the fourth quarter of 2019,based on the information available as of the date of this press release,the Company expects net revenues to be between RMB770.6 million and RMB797.2 million,which represents an increase of 45% to 50% year-over-year. These forecasts reflect the Company's current and preliminary views on the market and operational conditions,which are subject to change.

Conference Call Information

Puxin's management team will hold a conference call on November 18,2019 at 8:00 AM U.S. Eastern Time (or 9:00 PM on the same day,Beijing/Hong Kong Time) following the quarterly results announcement. Participants may access the call by dialing the following numbers:

International: +1-412-902-4272

Mainland China: 4001-201203

US: +1-888-346-8982

Hong Kong: +852-301-84992

Passcode: Puxin

Please dial in 10 minutes before the call is scheduled to begin. When prompted,ask to be connected to the Puxin Limited Call. Participants will be required to state their name and company upon entering the call.

A replay of the conference call will be accessible two hours after the conclusion of the conference call through November 25,2019 by dialing the following numbers:

International: +1-412-317-0088

US: +1-877-344-7529

Passcode: 10136851

A live webcast and archive of the conference call will be available on the Investor Relations section of Puxin's website at http://ir.pxjy.com/.

Exchange Rate

The Company's business is primarily conducted in China and all of the revenues are denominated in Renminbi ("RMB"). This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") at specified rates solely for the convenience of the readers. Unless otherwise noted,all translations from RMB to USD are made at the rate of RMB7.1477 to US$1.00,the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on September 30,2019. No representation is made that the RMB amounts could have been,or could be,converted,realized or settled into US$ at that rate on September 30,or at any other rate.

Use of Non-GAAP Financial Measures

To supplement the Company's financial results presented in accordance with U.S. GAAP,the Company also uses non-GAAP financial measures,including adjusted operating income (loss),adjusted net income (loss) attributable to Puxin Limited,EBITDA,adjusted EBITDA,adjusted basic and diluted net income (loss) per ADS attributable to Puxin Limited,as supplemental measures to review and assess the Company's operating performance. Adjusted operating income (loss) is defined as operating income (loss) excluding share-based compensation expenses; adjusted net income (loss) attributable to Puxin Limited is defined as net income (loss) attributable to Puxin Limited excluding share-based compensation expenses,derivative liabilities and warrants and loss on extinguishment of convertible notes;EBITDA is defined as net income (loss) excluding depreciation,interest income and income tax (benefits) expenses; adjusted EBITDA is defined as net income (loss) excluding depreciation,derivative liabilities and warrants and loss on extinguishment of convertible notes,and adjusted basic and diluted net income (loss) per ADS attributable to Puxin Limited are defined as basic and diluted net income (loss) per ADS attributable to Puxin Limited excluding share-based compensation expenses,derivative liabilities and warrants and loss on extinguishment of convertible notes.

The Company believes that these non-GAAP financial measures provide useful information about the Company's operating results,enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools,and when assessing the Company's operating performance,investors should not consider them in isolation. In addition,calculations of this non-GAAP financial information may be different from calculations used by other companies,and therefore comparability may be limited.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures,all of which should be considered when evaluating our performance.

For more information on this non-GAAP financial measure,please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934,as amended,and 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","confident" and similar statements. The Company may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Any statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements that involve factors,risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include,but not limited to the following: its goals and strategies,its ability to achieve and maintain profitability,its ability to attract and retain students to enroll in its courses,its ability to effectively manage its business expansion and successfully integrate businesses it acquired,its ability to identify or pursue targets for acquisitions,its ability to compete effectively against its competitors,its ability to improve the content of its existing courses or to develop new courses,and relevant government policies and regulations relating to the Company's corporate structure,business and industry. 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 current as of the date of the press release,and the Company does not undertake any obligation to update such information,except as required under applicable law.

About Puxin Limited

Puxin Limited ("Puxin" or the "Company") is a successful consolidator of the after-school education industry in China. Puxin has a strong acquisition and integration expertise to effectively improve education quality and operational performance of acquired schools. Puxin offers a full spectrum of K-12 and study-abroad tutoring programs designed to help students achieve academic excellence,as well as prepare for admission tests and applications for top schools,universities and graduate programs in China and other countries. The Company has developed a business model effectively combining strategic acquisitions and organic growth achieved through successful post-acquisition integration,which has differentiated the Company from other after-school education service providers in China. For more information,please visit http://www.pxjy.com/.

Contacts

Puxin Limited

Phone: +86-10-6269-8930

E-mail: ir@pxjy.com

Institutional Capital Advisory (ICA)

Mr. Kevin Yang

Phone: +86-021-8028-6033

E-mail: puxin@icaasia.com

PUXIN LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of RMB and USD,except for share,per share and per ADS data)

As of December 31,

As of September 30,

2018

2019

2019

RMB

RMB

USD

ASSETS

Current assets

Cash and cash equivalents

778,006

321,998

45,049

Restricted cash,current portion

-

358,835

50,203

Inventories

9,659

11,879

1,662

Prepaid expenses and other current assets

128,638

111,752

15,635

Loan receivable

-

189,557

26,520

Total current assets

916,303

994,021

139,069

Non-current assets

Restricted cash,non-current portion

40,971

39,176

5,481

Operating lease right-of-use assets

-

991,398

138,702

Property,plant and equipment,net

248,801

292,244

40,886

Intangible assets

218,978

261,785

36,625

Goodwill

1,243,817

1,895,362

265,171

Deferred tax assets

3,456

2,018

282

Rental deposit

64,693

74,350

10,402

TOTAL ASSETS

2,737,019

4,550,354

636,618

LIABILITIES

Current liabilities

Accrued expenses and other current liabilities (including accrued

expenses and other current liabilities of the consolidated VIE

without recourse to the Group of RMB490,696 and

RMB1,146,823as of December 31,2018 and September 30,

2019,respectively)

515,623

1,189,302

166,389

Income tax payable of the consolidated VIE without recourse to

the Group

15,755

15,126

2,116

Deferred revenue,current portion (including deferred revenue,

current portion of the consolidated VIE without recourse to the

Group of RMB862,043 and RMB1,179,549 as of

December 31,respectively)

876,861

1,190,608

166,572

Operating lease liabilities,current portion of the consolidated

VIE without recourse to the Group

-

246,895

34,542

Amounts due to related parties (including amounts due to related

parties of the consolidated VIE without recourse to the Group

of RMB3,199 and RMB354 as of December 31,2018 and

September 30,respectively)

54,493

1,998

280

Bank borrowing of the consolidated VIE without recourse to the Group

106,600

355,100

49,680

Promissory notes,current portion (including promissory notes,

current portion of the consolidated VIE without recourse to the

Group of RMB190,000 and RMB nil as of December 31,2018

and September 30,respectively)

361,888

89,346

12,500

Total current liabilities

1,931,220

3,088,375

432,079

PUXIN LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of RMB and USD,

2018

2019

2019

RMB

RMB

USD

Non-current liabilities

Deferred revenue,non-current portion of the consolidated VIE

without recourse to the Group

121,191

90,545

12,668

Operating lease liabilities,non-current portionof the consolidated

VIE without recourse to the Group

-

663,548

92,834

Deferred tax liabilities of the consolidated VIE without recourse

to the Group

71,031

81,393

11,387

Franchise deposits of the consolidated VIE without recourse to

the Group

1,763

2,443

342

Derivative liabilities (including derivative liabilities of the

consolidated VIE without recourse to the Group of RMB nil

and RMB nilas of December 31,respectively)

63,942

170,115

23,800

Promissory notes,non-current portion (including promissory

notes,non-current portion of the consolidated VIE without

recourse to the Group of RMB nil and RMB nil as of December

31,respectively)

-

89,500

TOTAL LIABILITIES

2,147

4,185,765

585,610

SHAREHOLDERS' EQUITY

Ordinary shares (par value of USD0.00005 per share;

1,000,000 and 1,000 shares authorized,

188,627,228 and 188,228 shares issued and

165,038,164 and 173,955,196 shares outstanding as of

December 31,respectively)

62

62

9

Additional paid-in capital

1,944,325

2,165,200

302,922

Statutory reserve

4,595

4,595

643

Accumulated other comprehensive income

68,214

73,693

10,310

Accumulated deficit

(1,469,303)

(1,879,008)

(262,883)

Total Puxin Limited shareholders' equity

547,893

364,542

51,001

Non-controlling interest

(21)

47

7

TOTAL SHAREHOLDERS' EQUITY

547,872

364,589

51,008

TOTAL LIABILITIES AND TOTAL SHAREHOLDERS' EQUITY

2,618

PUXIN LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of RMB and USD,per share and per ADS data)

Forthe three months ended September30,

2018

2019

2019

RMB

RMB

USD

Net revenues

669,664

996,042

139,351

Cost of revenues (including share-based compensation expenses of

RMB2,153and RMB954 for the three months ended September 30,

2018 and 2019,respectively)

374,614

494,581

69,194

Gross profit

295,050

501,461

70,157

Operating expenses:

Selling expenses (including share-based compensation expenses of

RMB9,646 and RMB4,861 for the three months ended September

30,2018 and 2019,respectively)

237,291

304,801

42,643

General and administrative expenses (including share-based

compensation expenses of RMB7,486 and RMB4,843 for the three

months ended September 30,respectively)

118,834

155,113

21,701

Total operating expenses

356,125

459,914

64,344

Operating (loss) income

(61,075)

41,547

5,813

Interest expense

9,827

13,773

1,927

Interest income

1,418

6,925

969

Foreign exchange gain

-

318

44

Gain on changes in fair value of convertible notes,derivative

liabilities and warrants

20,022

912

128

Loss on disposal of subsidiary

11

-

-

(Loss) income before income taxes

(49,473)

35,929

5,027

Income tax expenses

746

2,187

306

Net (loss) income

(50,219)

33,742

4,721

Less: Net income attributable to non-controlling interest

18

32

4

Net (loss) income attributable to Puxin Limited

(50,237)

33,710

4,717

Net (loss) income per share attributable to Puxin Limited

Basic and diluted

(0.31)

0.19

0.03

Net (loss) income per ADS attributable to Puxin Limited

Basic and diluted

(0.62)

0.38

0.06

Weighted average shares used in calculating basic

net (loss) income per share

163,323,504

173,938,756

173,756

Weighted average shares used in calculating diluted

net (loss) income per share

163,504

177,818,968

177,968

Note: Each ADS represents two ordinary shares.

PUXIN LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)INCOME

(In thousands of RMB and USD)

For the three monthsended September30,

2018

2019

2019

RMB

RMB

USD

Net (loss) income

(50,721

Other comprehensive (loss) income,net of tax:

Change in cumulative foreign currency translation adjustments

(4,308)

7,560

1,058

Total comprehensive (loss) income

(54,527)

41,302

5,779

Less: comprehensive income attributable to non-controlling interest

18

32

4

Total comprehensive (loss) incomeattributable to Puxin Limited

(54,545)

41,270

5,775

PUXIN LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of RMB and USD,per share and per ADS data)

Forthe nine months ended September30,

2018

2019

2019

RMB

RMB

USD

Net revenues

1,696,676

2,244,639

314,037

Cost of revenues (including share-based compensation expenses of RMB

5,405and RMB3,534 for the nine months ended September 30,respectively)

936,654

1,163,008

162,711

Gross profit

760,022

1,081,631

151,326

Operating expenses:

Selling expenses (including share-based compensation expenses of

RMB20,293 and RMB17,326 for the nine months ended

September 30,respectively)

611,963

769,174

107,611

General and administrative expenses (including share-based

compensation expenses of RMB304,057 and RMB199,914 for the

nine months ended September 30,respectively)

620,954

576,161

80,608

Total operating expenses

1,232,917

1,345,335

188,219

Operating loss

(472,895)

(263,704)

(36,893)

Interest expense

27,473

54,005

7,556

Interest income

1,702

11,835

1,656

Foreign exchange gain

-

308

43

Loss on changes in fair value of convertible notes,derivative

liabilities and warrants

96,128

97,967

13,706

Loss on extinguishment of convertible notes

900

-

-

Gain on disposal of subsidiary

82

-

-

Loss before income taxes

(595,612)

(403,533)

(56,456)

Income tax (benefits) expenses

(1,953)

6,104

854

Net loss

(593,659)

(409,637)

(57,310)

Less: Net income attributable to non-controlling interest

12

68

10

Net loss attributable to Puxin Limited

(593,671)

(409,705)

(57,320)

Net loss per share attributable to Puxin Limited

Basic and diluted

(4.32)

(2.41)

(0.34)

Net loss per ADS attributable to Puxin Limited

Basic and diluted

(8.64)

(4.82)

(0.68)

Weighted average shares used in calculating basic and diluted net loss per share

137,560,036

169,863,123

169,123

Note: Each ADS represents two ordinary shares.

PUXIN LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands of RMB and USD)

For the nine monthsended September30,

2018

2019

2019

RMB

RMB

USD

Net loss

(593,310)

Other comprehensive income,net of tax:

Change in cumulative foreign currency translation adjustments

10,407

5,479

767

Total comprehensive loss

(583,252)

(404,158)

(56,543)

Less: comprehensive income attributable to non-controlling interest

12

68

10

Total comprehensive loss attributable to Puxin Limited

(583,264)

(404,226)

(56,553)

PUXIN LIMITED

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(In thousands of RMB and USD,

2018

2019

2019

RMB

RMB

USD

Operating (loss) income

(61,813

Add: Share-based compensation expenses

19,285

10,658

1,491

Adjusted operating (loss) income

(41,790)

52,205

7,304

Net (loss) incomeattributable to Puxin Limited

(50,717

Add: Share-based compensation expenses

19,491

Less: Gain on changes in fair value of convertible notes,022

912

128

Adjusted net (loss)income attributable to Puxin Limited

(50,974)

43,456

6,080

Net (loss) income

(50,721

Add: Income tax expenses

746

2,187

306

Depreciation of property,plant and equipment

15,430

18,001

2,518

Amortization of intangible assets

6,100

10,034

1,404

Interest expense

9,927

Less: Interest income

1,925

969

EBITDA

(19,534)

70,812

9,907

Add:Share-based compensation expenses

19,491

Less: Gain on changes in fair value of convertible notes,

derivative liabilities and warrants

20,022

912

128

Adjusted EBITDA

(20,271)

80,558

11,270

Net (loss) incomeper ADS attributable to Puxin Limited

- Basic and diluted

(0.62)

0.38

0.06

Adjusted net (loss) incomeper ADS attributable to Puxin Limited

- Basic

(0.62)

0.50

0.07

Adjusted net (loss) incomeper ADS attributable to Puxin Limited

- Diluted

(0.62)

0.49

0.07

Weighted average shares used in calculating basic

net (loss) income per share

163,968

Note: Each ADS represents two ordinary shares.

PUXIN LIMITED

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(In thousands of RMB and USD,

2018

2019

2019

RMB

RMB

USD

Operating loss

(472,893)

Add: Share-based compensation expenses

329,755

220,774

30,887

Adjusted operating loss

(143,140)

(42,930)

(6,006)

Net loss attributable to Puxin Limited

(593,320)

Add: Share-based compensation expenses

329,887

Add: Loss on changes in fair value of convertible notes,derivative

liabilities and warrants

96,706

Add: Loss on extinguishment of convertible notes

900

-

-

Adjusted net loss attributable to Puxin Limited

(166,888)

(90,964)

(12,727)

Net loss

(593,310)

Add: Income tax (benefits) expenses

(1,104

854

Depreciation of property,plant and equipment

42,927

54,664

7,648

Amortization of intangible assets

22,204

25,803

3,610

Interest expense

27,556

Less: Interest income

1,656

EBITDA

(504,710)

(280,896)

(39,298)

Add:Share-based compensation expenses

329,887

Loss on changes in fair value of convertible notes,

derivative liabilities and warrants

96,706

Loss on extinguishment of convertible notes

900

-

-

Adjusted EBITDA

(77,927)

37,845

5,295

Net loss per ADS attributable to Puxin Limited

- Basic and diluted

(8.64)

(4.82)

(0.68)

Adjusted net loss per ADS attributable to Puxin Limited

- Basic and diluted

(2.43)

(1.07)

(0.15)

Weighted average shares used in calculating basic and diluted

net loss per share

137,123

Note: Each ADS represents two ordinary shares.

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