Ambow Education Announces Fourth Quarter and Full Year 2019 Financial Results

BEIJING,April 23,2020 -- 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 audited financial and operating results for the fourth quarter and fiscal year ended December 31,2019.

"We are pleased to conclude fiscal year 2019 with solid fourth quarter results," said Dr. Jin Huang,Ambow's President and Chief Executive Officer. "Throughout the year,we continued our efforts and investment in new technology advancement and innovative education service offerings to strengthen our leadership in the career enhancement services market and further develop our cross-border education service platform. Looking ahead,by continuing to build and integrate our robust portfolio of international assets and partnerships,we believe we are well positioned to capture the opportunities in the underserved cross-border career education market between the U.S. and China."

"We are closely monitoring the evolving situation brought about by the COVID-19 pandemic,and have taken numerous safeguarding measures to protect our employees and support the communities in which we operate. Notably,we have rolled out new initiatives to support the Chinese government's plan of moving classroom school learning online during this period of prolonged school closures. Leveraging our expertise in online education,strong technology capabilities,and best-of-breed educational content,we promptly launched a series of online class programs,including our VIP classes focused on Big Data and Internet of Things ("IoT") taught by leading professionals from around the world. We have also added new career planning classes to enhance the competitive skills and knowledge that will be required by students in the more challenging job market emerging from the global business downturn. These initiatives underline our mission,which is to address critical demands in the education market and bridge the gaps between higher education and the career aspirations of students," concluded Dr. Huang.

Fourth Quarter 2019 Financial Highlights

Net revenues for the fourth quarter of 2019 increased by 1.2% to US$24.9 million from US$24.6 million in the same period of 2018. This increase was mainly driven by higher student enrollment.

Gross profit for the fourth quarter of 2019 decreased by 3.6% to US$8.0 million from US$8.3 million in the same period of 2018. Gross profit margin was 32.1%,compared with 33.7% for the fourth quarter of 2018.

Operating expenses for the fourth quarter of 2019 increased by 47.8% to US$10.2 million from US$6.9 million for the same period of 2018. The increase of operating expenses was primarily due to a one-time bad debt expense recovery and reversal of US$2.9 million in the fourth quarter of 2018.

Net loss attributable to ordinary shareholders in the fourth quarter of 2019was US$1.7 million,or US$0.04 per basic and diluted share,compared with a net income of US$4.5 million,or US$0.10 per basic and diluted share,for the fourth quarter of 2018.

As of December 31,2019,Ambow maintained strong cash resources of US$35.3 million,comprised of cash and cash equivalents of US$22.6 million and short-term investments of US$12.7 million.

As of December 31,the Company's deferred revenue balance was US$23.7 million,representing a 30.9% increase from US$18.1 million as of December 31,2018,mainly attributable to the tuition and fees collected in the K-12 segment for the 2019-2020 academic year and tuition collected from our education service platforms.

Fiscal Year 2019 Financial Highlights

Net revenues for fiscal year 2019 increased by 8.5% to US$83.9 million from US$77.3 million in 2018. This increase was mainly driven by higher student enrollment.

Gross profit for the fiscal year 2019 decreased by 0.4% to US$28.0 million from US$28.1 million in 2018. Gross profit margin was 33.4%,compared with 36.4% in 2018. The decrease in gross profit margin was primarily due to additional investments in new programs and new technology deployment.

Operating expenses for the fiscal year 2019 increased by 62.2% to US$42.0 million from US$25.9 million in 2018. The increase of operating expenses was primarily due to more marketing activities to promote student enrollment,additional investments in new programs and new technology deployment,increase in staff compensation and an impairment loss of goodwill and intangible assets of US$5.6 million recorded in 2019,and a one-time bad debt expense recovery and reversal of US$2.9 million in 2018.

Net loss attributable to ordinary shareholders for the fiscal year 2019 was US$14.4 million,or US$0.33 per basic and diluted share,compared with a net income of US$6.5 million,or US$0.16 per basic and diluted share,in 2018.

The Company's fourthquarter and fiscal year 2019 financial and operating results can also be found on its Form 6-K and Form 20-F filed with the U.S. Securities and Exchange Commission atwww.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 fourth quarter and the twelve months of 2019 are based on the effective exchange rate of 6.9618as of December 31,2019; all amounts translated from RMB to U.S. dollars for the fourth quarter and the twelve months of 2018 are based on the effective exchange rate of 6.8755as of December 31,2018. 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 December 31,

As of December 31,

2019

2018

US$

RMB

RMB

ASSETS

Current assets:

Cash and cash equivalents

22,638

157,600

211,436

Restricted cash

-

-

30,072

Short term investments,available for sale

8,257

57,487

47,208

Short term investments,held to maturity

4,453

31,000

70,000

Accounts receivable,net

2,577

17,939

18,132

Amounts due from related parties

333

2,318

1,105

Prepaid and other current assets,net

19,147

133,296

134,770

Loan receivable,current

-

-

42,677

Total current assets

57,405

399,640

555,400

Non-current assets:

Property and equipment,net

22,618

157,463

165,933

Land use rights,net

253

1,759

1,804

Intangible assets,net

8,131

56,607

92,412

Goodwill

8,669

60,353

73,166

Deferred tax assets,net

1,464

10,195

10,240

Operating lease right-of-use asset

36,968

257,361

-

Finance lease right-of-use asset

926

6,450

-

Other non-current assets,net

10,194

70,971

11,264

Total non-current assets

89,223

621,159

354,819

Total assets

146,628

1,020,799

910,219

LIABILITIES

Current liabilities:

Deferred revenue *

23,717

165,111

124,250

Accounts payable *

2,113

14,718

13,583

Accrued and other liabilities *

27,717

192,957

256,325

Borrowing from third party,current

-

-

41,179

Income taxes payable,current *

25,958

180,715

207,114

Amounts due to related parties *

283

1,971

2,696

Operating lease liability,current *

7,687

53,512

-

Total current liabilities

87,475

608,984

645,147

Non-current liabilities:

Consideration payable for acquisitions

-

-

1,322

Other non-current liabilities

-

-

979

Income taxes payable,non-current *

4,618

32,152

-

Operating lease liability,non-current *

31,036

216,067

-

Total non-current liabilities

35,654

248,219

2,301

Total liabilities

123,129

857,203

647,448

EQUITY

Preferred shares

(US$0.003 par value;1,666,667 shares authorized,

nil issued and outstanding as of December31,

2018 and 2019)

-

-

-

Class A Ordinary shares

(US$0.003 par value; 66,667 and

66,38,756,289

and 38,858,199 shares issued and

outstanding as of December31,2018and

2019,respectively)

105

730

728

Class C Ordinary shares

(US$0.003 par value; 8,333,333 and 8,333

shares authorized,4,708,415 and 4,415

shares issued and outstanding as of

December31,2018 and 2019,respectively)

13

90

90

Additional paid-in capital

504,000

3,508,745

3,507,123

Statutory reserve

2,899

20,185

20,149

Accumulated deficit

(484,331)

(3,371,815)

(3,271,838)

Accumulated other comprehensive income

911

6,341

8,305

Total Ambow Education Holding Ltd.'s equity

23,597

164,276

264,557

Non-controlling interests

(98)

(680)

(1,786)

Total equity

23,499

163,596

262,771

Total liabilities and equity

146,219

* 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 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,

2019

38,289

728

4,415

90

3,123

20,149

(3,838)

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 March31,784,935

729

4,994

20,295,594)

5,952

(1,879)

237,441

Share-based compensation

-

-

-

-

266

-

-

-

-

266

Issuance of ordinary shares

for restricted stock award

19,097

-

-

(0)

-

-

-

-

-

Foreign currency translation

adjustment

-

-

-

-

-

-

-

(746)

-

(746)

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

173

-

173

Addition of noncontrolling

interests resulting from

new subsidiaries

-

-

-

-

-

-

-

-

502

502

Net income/(loss)

-

-

-

-

-

-

8,778

-

(180)

8,598

Balance as of June30,804,032

729

4,260

20,286,816)

5,379

(1,557)

246,234

Share-based compensation

-

-

-

-

244

-

-

-

-

244

Foreign currency translation

adjustment

-

-

-

-

-

-

-

(93)

-

(93)

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

501

-

501

Net (loss)/income

-

-

-

-

-

-

(72,811)

-

4

(72,807)

Balance as of

September30,2019

38,504

20,359,627)

5,787

(1,553)

174,079

Share-based compensation

-

-

-

-

242

-

-

-

-

242

Issuance of ordinary shares

for restricted stock award

54,167

1

-

-

(1)

-

-

-

-

-

Foreign currency translation

adjustment

-

-

-

-

-

-

-

343

-

343

Appropriation to statutory

reserves

-

-

-

-

-

36

(36)

-

-

-

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

211

-

211

Deregistration of

subsidiaries

-

-

-

-

-

-

-

-

306

306

Noncontrolling interests

from new subsidiaries

-

-

-

-

-

-

-

-

783

783

Net loss

-

-

-

-

-

-

(12,152)

-

(216)

(12,368)

Balance as of

December31,199

730

4,745

20,185

(3,815)

6,341

(680)

163,596

Balance as of January 1,

2018

34,206,939

640

4,456,307

20,036

(3,316,715)

6,876

(1,275)

165,959

Share-based compensation

-

-

-

-

616

-

-

-

-

616

Issuance of ordinary shares

for restricted stock award

30,187

1

-

-

(1)

-

-

-

-

-

Foreign currency translation

adjustment

-

-

-

-

-

-

-

3,276

-

3,276

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

64

-

64

Deregistration of

subsidiaries

-

-

-

-

-

-

-

-

(9)

(9)

Net (loss)/income

-

-

-

-

-

-

(7,062)

-

93

(6,969)

Balance as of March31,237,126

641

4,922

20,323,777)

10,216

(1,191)

162,937

Share-based compensation

-

-

-

-

618

-

-

-

-

618

Issuance of ordinary shares

for restricted stock award

30,187

-

-

(0)

-

-

-

-

-

Issuance of ordinary shares

on IPO

4,140,000

80

-

-

46,047

-

-

-

-

46,127

Foreign currency translation

adjustment

-

-

-

-

-

-

-

(1,523)

-

(1,523)

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

69

-

69

Buy-outs of noncontrolling

interests

-

-

-

-

(2,619)

-

-

-

(1,885)

(4,504)

Deregistration of

subsidiaries

-

-

-

-

-

-

-

-

(41)

(41)

Net income/(loss)

-

-

-

-

-

-

33,312

-

(143)

33,169

Balance as of June30,

2018

38,407,313

721

4,500,968

20,290,465)

8,762

(3,260)

236,852

Share-based compensation

-

-

-

-

655

-

-

-

-

655

Issuance of ordinary shares

for restricted stock award

29,355

-

-

(0)

-

-

-

-

-

Foreign currency translation

adjustment

-

-

-

-

-

-

-

(501)

-

(501)

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

(114)

-

(114)

Buy-outs of noncontrolling

interests

-

-

-

-

-

-

-

-

1

1

Net (loss)/income

-

-

-

-

-

-

(12,413)

-

89

(12,324)

Balance as of

September30,2018

38,436,668

721

4,501,623

20,302,878)

8,147

(3,170)

224,569

Share-based compensation

-

-

-

-

6,232

-

-

-

-

6,232

Issuance of ordinary shares

for restricted stock award

319,621

7

-

-

(7)

-

-

-

-

-

Issuance of ordinary shares

on IPO

-

-

-

-

(725)

-

-

-

-

(725)

Foreign currency translation

adjustment

-

-

-

-

-

-

-

52

-

52

Appropriation to statutory

reserves

-

-

-

-

-

113

(113)

-

-

-

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

106

-

106

Buy-outs of noncontrolling

interests

-

-

-

-

-

-

-

-

3

3

Capital injection from

minority shareholders

-

-

-

-

-

-

-

-

1,470

1,470

Net income/(loss)

-

-

-

-

-

-

31,153

-

(89)

31,064

Balance as of

December31,771

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands,except for share and per share data)

For the years ended December 31,

For the three months ended December 31,

2019

2019

2018

2019

2019

2018

US$

RMB

RMB

US$

RMB

RMB

NET REVENUES

Educational program and

services

83,700

582,706

525,134

24,899

173,339

168,705

Intelligent program and

services

173

1,203

6,374

1

10

340

Total net revenues

83,873

583,909

531,508

24,900

173,349

169,045

COST OF REVENUES

Educational program and

services

(55,106)

(383,635)

(331,939)

(16,976)

(118,181)

(110,948)

Intelligent program and

services

(755)

(5,259)

(6,204)

80

559

(1,016)

Total cost of revenues

(55,861)

(388,894)

(338,143)

(16,896)

(117,622)

(111,964)

GROSS PROFIT

28,012

195,015

193,365

8,004

55,727

57,081

Operating expenses:

Selling and marketing

(8,004)

(55,721)

(43,751)

(2,146)

(14,943)

(11,784)

General and administrative

(27,926)

(194,417)

(132,718)

(7,743)

(53,907)

(35,846)

Research and development

(545)

(3,793)

(1,513)

(321)

(2,238)

134

Impairment loss

(5,567)

(38,754)

-

-

-

-

Total operating expenses

(42,042)

(292,685)

(177,982)

(10,210)

(71,088)

(47,496)

OPERATING (LOSS)

INCOME

(14,030)

(97,670)

15,383

(2,206)

(15,361)

9,585

OTHER INCOME

(EXPENSES)

Interest income

773

5,379

6,652

292

2,036

1,285

Foreign exchange gain,net

3

23

372

(3)

(23)

218

Other income,net

57

396

1,447

29

203

930

Gain from derecognition of

liabilities

-

-

15,226

-

-

15,226

Gain on deregistration of

subsidiaries

264

1,841

2,858

81

562

(362)

Gain from fair value change of

contingent consideration

payable

190

1,322

5,444

190

1,444

Gain on sale of investment

available for sale

172

1,200

1,056

112

778

297

Total other income

1,459

10,161

33,055

701

4,878

23,038

(LOSS) INCOME BEFORE

INCOME TAX AND NON-

CONTROLLING

INTEREST

(12,571)

(87,509)

48,438

(1,505)

(10,483)

32,623

Income tax expense

(1,855)

(12,917)

(3,498)

(271)

(1,885)

(1,559)

NET (LOSS) INCOME

(14,426)

(100,426)

44,940

(1,776)

(12,368)

31,064

Less: Net loss attributable to

non-controlling interest

(70)

(485)

(50)

(31)

(216)

(89)

NET (LOSS) INCOME

ATTRIBUTABLE TO

ORDINARY

SHAREHOLDERS

(14,356)

(99,941)

44,990

(1,745)

(12,152)

31,153

NET (LOSS) INCOME

(14,064

OTHER

COMPREHENSIVE

INCOME,NET OF TAX

Foreign currency translation

adjustments

(420)

(2,924)

1,304

49

343

52

Unrealized gainson short term

investments

Unrealized holding gains

arising during period

294

2,046

776

116

808

330

Less: reclassification

adjustment for gains

included in net income

156

1,086

651

86

597

224

Other comprehensive (loss)

income

(282)

(1,964)

1,429

79

554

158

TOTAL

COMPREHENSIVE

(LOSS) INCOME

(14,708)

(102,390)

46,369

(1,697)

(11,814)

31,222

Net (loss) income per share -

basic

(0.33)

(2.30)

1.09

(0.04)

(0.28)

0.72

Net (loss) income per share -

diluted

(0.33)

(2.30)

1.08

(0.04)

(0.28)

0.71

Weighted average shares used

in calculating basic net

(loss) income per share

43,505,175

43,175

41,342,597

43,529,884

43,255,473

Weighted average shares used

in calculating diluted net

(loss) income per share

43,671,763

43,589,336

Discussion of Segment Operations

(All amounts in thousands)

For the years ended December 31,

2019

2019

2018

2019

2019

2018

US$

RMB

RMB

US$

RMB

RMB

NET REVENUES

K-12 Schools *

45,067

313,747

277,790

15,877

110,533

101,614

CP&CE Programs *

38,806

270,162

253,718

9,023

62,816

67,431

Total net revenues

83,045

COST OF REVENUES

K-12 Schools *

(28,306)

(197,064)

(178,645)

(9,793)

(68,177)

(69,958)

CP&CE Programs *

(27,555)

(191,830)

(159,498)

(7,103)

(49,445)

(42,006)

Total cost of revenues

(55,964)

GROSS PROFIT

K-12 Schools *

16,761

116,683

99,145

6,084

42,356

31,656

CP&CE Programs *

11,251

78,332

94,220

1,920

13,371

25,425

Total gross profit

28,081

* Ambow previously had three reportable segments,including Better School,Better Job and Others for the years prior to 2019. In

2019,in response to the shift of business development focus,Ambow changed its management approach to organize reportable

segments to make operating decisions and assess performance. New reportable segments include K-12 schools and College

Preparation & Career Enhancement Programs ("CP&CE Programs"),which provide K-12 educational services and tutoring and

vocational educational services,respectively.

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