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 empoweringlearning and teaching through technologyhas 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 dueto 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,"concludedDr. 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,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 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 first quarter of 2020 are based on the effective exchange rate of 7.0808as 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 6.7112as 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 6.9618as 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

December31,2019 and March 31,2020)

-

-

-

Class A Ordinary shares

(US$0.003 par value; 66,667 and

66,667 shares authorized,38,858,199

and 38,870,699 shares issued and

outstanding as of December31,2019and

March 31,respectively)

103

730

730

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

December31,2019and March 31,

respectively)

13

90

90

Additional paid-in capital

495,563

3,508,983

3,745

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

154,799

* 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

ANDNON-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

5,849)

OTHER COMPREHENSIVE INCOME,NET

OF TAX

Foreign currency translation adjustments

61

433

(2,428)

Unrealized gainson 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 dilutednet income (loss) per share

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

38,199

730

4,415

90

3,745

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)

-

-

-

-

-

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 March31,699

730

4,983

20,370)

6,928

(1,092)

169,454

Balance as of January 1,

2019

38,756,289

728

4,507,123

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 March31,784,935

729

4,994

20,295,594)

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

12,646

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

(11,055)

GROSS PROFIT

K-12 Schools

1,128

7,982

21,497

CP&CE Programs

503

3,566

17,094

Total gross profit

1,591

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