Ambow Education Announces First Quarter 2021 Financial Results

BEIJING,June 28,2021 -- 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 31,2021.

"We are pleased to start 2021 with better-than-expectedfirst quarter results,highlighted by a 43.5% year-over-year increase in total revenues,thanks tothe strong execution of our overall strategy which focuses on operational improvements," said Dr. Jin Huang,Ambow's President and Chief Executive Officer. "Specifically,we further revived solid gross margin expansion for both of our CP&CE Programs and K-12 Schools segments during the quarter,lifting it even higher than the same period in 2019.As a prominent education brand in China,we remain committed to delivering in-demand and high-quality educational services for our learners in their pursuit of academic and professional excellence."

"Supported by our industry-leading intelligent education products,we endeavor to provide superior online talent training to address various career enhancement needs. For example,we cooperated with Kylinsoft toprovide a suite of education services across a series of Kylinsoft operating system products,spanning training courses,certification programs,internship placement,employment servicesand industrial colleges. We also formed a strategic cooperation with Adobe Authorized Training Centre to provide international certification services for Chinese students. Meanwhile,we further integrated advanced technology into our educational services to increase our competitiveness. We launched a blockchain-based career-oriented education skills recognition system to redefine educational accreditation for professional talents. Looking ahead,we will remain focused on harnessing our technological capabilities to offer a broader range of education services in China and U.S.,while enhancing operating efficiency. We believe these efforts,coupled with our 20-year proven track record in the education sector,will help us grow our overall business while delivering long-term value to our shareholders," concluded Dr. Huang.

First Quarter 2021 Financial Highlights

Net revenues for the first quarter of 2021 increased by 43.5% to RMB129.6 million (US$19.8 million) from RMB90.3 million in the same period of 2020. The increase was primarily due to the full business recovery from the impact of the COVID-19 pandemic and higher revenue contribution from NewSchool of Architecture and Design,LLC ("NewSchool") which was acquired and consolidated by the Company from March 2020.

Gross profit for the first quarter of 2021 increased by 287.8% to RMB44.6 million (US$6.8 million) from RMB11.5 million in the same period of 2020. Gross profit margin was 34.4%,compared with 12.7% for the first quarter of 2020. The increases in gross profit and margin were mainly attributable to faster growth of net revenues in the period.

Operating expenses for the first quarter of 2021 increased by 17.5% to RMB59.8 million (US$9.1 million) from RMB50.9 million in the same period of 2020. The increase was primarily attributable to more expenses related to NewSchool compared to the first quarter of 2020 as the consolidation of NewSchool started in March 2020.

Operating loss for the first quarter of 2021 was RMB15.2 million (US$2.3 million),compared to operating loss of RMB39.3 million in the same period of 2020.

Net loss attributable to ordinary shareholders for the first quarter of 2021 was RMB14.3 million (US$2.2 million),or RMB0.31 (US$0.05) per basic and diluted share,compared with net income of RMB6.0 million,or RMB0.14 (US$0.02) per basic and diluted share for the same period of 2020. Excluding the one-time gain from bargain purchase of NewSchool of RMB40.3 million,net loss for the first quarter of 2020 was RMB34.3 million or RMB0.79 (US$0.11) per basic and diluted share.

As of March 31,2021,Ambow maintained strong cash resources of RMB281.4 million (US$42.9 million),comprised of cash and cash equivalents of RMB121.4 million (US$18.5 million),short-term investments of RMB158.2 million (US$24.1 million) and restricted cash of RMB1.8 million (US$0.3 million).

As of March 31,the Company's deferred revenue balance was RMB181.3 million (US$27.7 million),representing a 10.8% increase compared with RMB163.7 million as of December 31,2020,mainly attributable to the tuition and fees collected at K-12 business segment for the spring semester of the 2020-2021 academic year,and increase in deferred revenue at CP&CE business segment.

The Company's first quarter 2021 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 2021 are based on the effective exchange rate of 6.5518as of March 31,2021; 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 as of December 31,2020 are based on the effective exchange rate of 6.5250as of December 31,2020. 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 15 out of the 34 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

Email: ir@ambow.com

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,

2021

2020

US$

RMB

RMB

ASSETS

Current assets:

Cash and cash equivalents

18,526

121,381

118,821

Restricted cash

271

1,773

824

Short term investments,available for sale

11,326

74,206

117,854

Short term investments,held to maturity

12,821

84,000

45,000

Accounts receivable,net

2,863

18,758

20,972

Amounts due from related parties

464

3,037

3,024

Prepaid and other current assets,net

18,184

119,136

117,634

Total current assets

64,455

422,291

424,129

Non-current assets:

Property and equipment,net

21,483

140,751

144,492

Land use rights,net

260

1,704

1,715

Intangible assets,net

8,287

54,296

54,808

Goodwill

3,924

25,710

25,710

Deferred tax assets,net

901

5,903

6,338

Operating lease right-of-use asset

36,775

240,945

247,608

Finance lease right-of-use asset

870

5,700

5,850

Other non-current assets,700

142,176

139,067

Total non-current assets

94,200

617,185

625,588

Total assets

158,655

1,039,476

1,049,717

LIABILITIES

Current liabilities:

Short-term borrowing *

1,526

10,000

10,000

Deferred revenue *

27,676

181,325

163,699

Accounts payable *

2,795

18,311

19,423

Accrued and other liabilities *

31,273

204,895

209,590

Income taxes payable,current *

28,298

185,403

184,638

Amounts due to related parties *

388

2,543

2,543

Operating lease liability,current *

7,506

49,177

53,702

Total current liabilities

99,462

651,654

643,595

Non-current liabilities:

Long-term borrowing

1,475

9,662

9,594

Other non-current liabilities *

29

189

292

Income taxes payable,non-current *

5,368

35,173

34,763

Operating lease liability,non-current *

32,944

215,843

220,319

Total non-current liabilities

39,816

260,867

264,968

Total liabilities

139,278

912,521

908,563

EQUITY

Preferred shares

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

nil issued and outstanding as of

December 31,2020 and March 31,2021)

-

-

-

Class A Ordinary shares

(US$0.003 par value; 66,667 and

66,41,923,276

and 41,935,776 shares issued and

outstanding as of December 31,2020 and

March 31,respectively)

121

794

794

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

December 31,

respectively)

14

90

90

Additional paid-in capital

541,117

3,545,292

3,073

Statutory reserve

643

4,210

4,210

Accumulated deficit

(524,051)

(3,433,475)

(3,419,146)

Accumulated other comprehensive income

1,870

12,254

12,101

Total Ambow Education Holding Ltd.'s equity

19,714

129,165

143,122

Non-controlling interests

(337)

(2,210)

(1,968)

Total equity

19,377

126,955

141,154

Total liabilities and equity

158,717

* 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,

2021

2021

2020

US$

RMB

RMB

NET REVENUES

Educational program and services

19,768

129,514

90,267

Intelligent program and services

14

91

12

Total net revenues

19,782

129,605

90,279

COST OF REVENUES

Educational program and services

(12,796)

(83,839)

(77,433)

Intelligent program and services

(175)

(1,144)

(1,298)

Total cost of revenues

(12,971)

(84,983)

(78,731)

GROSS PROFIT

6,811

44,622

11,548

Operating expenses:

Selling and marketing

(1,679)

(11,000)

(10,549)

General and administrative

(7,165)

(46,945)

(39,201)

Research and development

(282)

(1,845)

(1,131)

Total operating expenses

(9,126)

(59,790)

(50,881)

OPERATING LOSS

(2,315)

(15,168)

(39,333)

OTHER INCOME (EXPENSES)

Interest income

314

2,060

1,990

Foreign exchange gain (loss),net

33

215

26

Other (loss) income,net

(143)

(940)

1,406

Gain from deregistration of subsidiaries

22

144

-

Gain on the bargain purchase

-

-

40,273

Gain on sale of investment available for sale

114

747

526

Total other income

340

2,226

44,221

(LOSS) INCOME BEFORE INCOME TAX AND NON-

CONTROLLING INTEREST

(1,975)

(12,942)

4,888

Income tax (expense) benefit

(249)

(1,629)

739

NET (LOSS) INCOME

(2,224)

(14,571)

5,627

Less: Net loss attributable to non-controlling interest

(37)

(242)

(412)

NET (LOSS) INCOME ATTRIBUTABLE TO ORDINARY

SHAREHOLDERS

(2,187)

(14,329)

6,039

NET (LOSS) INCOME

(2,627

OTHER COMPREHENSIVE INCOME,NET OF TAX

Foreign currency translation adjustments

18

115

433

Unrealized gainson short term investments

Unrealized holding gains arising during period

89

582

441

Less: reclassification adjustment for gains included in net

income

83

544

287

Other comprehensive income

24

153

587

TOTAL COMPREHENSIVE (LOSS) INCOME

(2,200)

(14,418)

6,214

Net (loss) income per share - basic and diluted

(0.05)

(0.31)

0.14

Weighted average shares used in calculating basic and diluted

net (loss) income per share

46,635,997

46,997

43,570,918

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

Accumulated

Class A Ordinary

Class C Ordinary

Additional

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,

2021

41,276

794

4,415

90

3,073

4,210

(3,146)

12,101

(1,968)

141,154

Share-based compensation

-

-

-

-

219

-

-

-

-

219

Issuance of ordinary shares

for restricted stock award

12,500

-

-

(0)

-

-

-

-

-

Foreign currency translation

adjustment

-

-

-

-

-

-

-

115

-

115

Unrealized gain on

investment,net of income

taxes

-

-

-

-

-

-

-

38

-

38

Net loss

-

-

-

-

-

-

(14,329)

-

(242)

(14,571)

Balance as of March31,776

794

4,292

4,475)

12,254

(2,210)

126,955

Balance as of January 1,

2020

38,858,199

730

4,508,745

20,185

(3,371,815)

6,341

(680)

163,596

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

Impact on adoption of ASC

326

-

-

-

-

-

-

(594)

-

-

(594)

Net income/(loss)

-

-

-

-

-

-

6,039

-

(412)

5,627

Balance as of March31,870,699

730

4,983

20,366,370)

6,928

(1,092)

169,454

Discussion of Segment Operations

(All amounts in thousands)

For the three months ended March 31,

2021

2021

2020

US$

RMB

RMB

(All amounts in thousands)

NET REVENUES

K-12 Schools

10,822

70,902

41,411

CP&CE Programs

8,960

58,703

48,868

Total net revenues

19,279

COST OF REVENUES

K-12 Schools

(6,958)

(45,589)

(33,429)

CP&CE Programs

(6,013)

(39,394)

(45,302)

Total cost of revenues

(12,731)

GROSS PROFIT

K-12 Schools

3,864

25,313

7,982

CP&CE Programs

2,947

19,309

3,566

Total gross profit

6,548

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