RYB Education, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results

Author: RYB Education, Inc. / 2023-07-24 00:24 / Source: RYB Education, Inc.

RYB Education, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results

BEIJING,May 12,2022 -- RYB Education,Inc. ("RYB" or the "Company") (NYSE: RYB),a leading early childhood education service provider in China,today announced its unaudited financial results for the fourth quarter and full year ended December 31,2021.

Fourth Quarter 2021 Operational and Financial Summary

Number of students enrolled at directly operated facilities was 33,890 as of December 31,2021,compared with 34,011 as of December 31,2020.

Net revenues increased by 0.7% to $47.4 million,compared with $47.1 million for the fourth quarter of 2020.

Gross profit decreased by 14.9% to $10.2 million,compared with $11.9 million for the fourth quarter of 2020.

Net income attributable to ordinary shareholders of RYB for the fourth quarter of 2021 was $4.7 million,compared with $9.3 million for the fourth quarter of 2020. Adjusted net income attributable to ordinary shareholders[1] of RYB for the fourth quarter of 2021 was $1.5 million,compared with $10.0 million for the fourth quarter of 2020.

Cash used in operating activities was $11.1 million in the fourth quarter of 2021,compared with $2.1 million cash used in operating activities for the fourth quarter of 2020.

[1]Adjusted net income (loss) attributable to ordinary shareholders is a non-GAAP financial measure,which is defined as net income (loss) attributable to ordinary shareholders excluding share-based compensation expenses and changes of redeemable non-controlling interests. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" included elsewhere in this earnings release.

Full Year 2021 Financial Summary

Net revenues increased by 64.3% to $180.3 million,compared with $109.7 million for 2020.

Gross profit was $31.2 million,compared with a gross loss of $7.2 million for 2020.

Net income attributable to ordinary shareholders of RYB for 2021 was $6.8 million,compared with net loss of $37.3 million for 2020. Adjusted net income attributable to ordinary shareholders[2] of RYB for 2021 was $5.4million,compared with adjusted net loss of $34.4 million for 2020.

[2]Adjusted net income (loss) attributable to ordinary shareholders is a non-GAAP financial measure,which is defined as net income (loss) attributable to ordinary shareholders excluding share-based compensation expenses and changes of redeemable non-controlling interests. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" included elsewhere in this earnings release.

"Over the past year,we continued to commit ourselves to the healthy and sustainable development of preschool education in China by strictly adhering to policies and rules implemented by the regulators. As we smoothly finished the fourth quarter and 2021,our business operations have notably recovered from the ongoing COVID-19 impacts. Children and their families also appreciate the series of effective measures that we adopted during this period,and speak highly of the quality of our educational services and products. This underpins our improved capability to navigate through COVID-19 and stronger business resilience." said Ms. Yanlai Shi,Co-founder,Director and Chief Executive Officer of RYB.

"Earlier in March,we announced the divestiture of our directly operated kindergarten business in China,which marks a key milestone in enhancing compliance with regulation and further transforming the Company's business model. Going forward,we will focus on making the Company a powerful education service platform to provide end-to-end services across brand,content,systems,training,among others,to educational institutions." concluded Ms. Shi.

Fourth Quarter 2021 Financial Results

Net Revenues

Net revenues for the fourth quarter of 2021 increased by 0.7% to $47.4 million,from $47.1 million for the same quarter of 2020.

Service revenues for the fourth quarter of 2021 increased by 2.5% to $46.1 million,from $44.9 million for the same quarter of 2020. The increase was primarily caused by the increase in tuition fee from the Company's directly operated kindergartens in China,which was due to the increase of student enrollments. Increase in training fee revenue also contribute to the increase in service revenues.

Product revenues for the fourth quarter of 2021 decreased by 36.2% to $1.4 million,from $2.1 million for the same quarter of 2020. The decrease was primarily due to a decrease in the amount of merchandise sold through the Company's franchise network.

Cost of Revenues

Cost of revenues for the fourth quarter of 2021 was $37.3 million,a 6.0% increase from $35.1 million for the same quarter of 2020. Cost of revenues for services for the fourth quarter of 2021 was $36.6 million,compared with $33.7 million for the same quarter of 2020. The increase was primarily due to increase in staff compensation and increase in direct cost of the Company's directly operated kindergarten business. Cost of products revenues for the fourth quarter of 2021 was $0.7 million,compared with $1.4 million for the same quarter of 2020. The decrease was generally in line with the decrease in product revenues.

Gross Profit and Gross Margin

Gross profit for the fourth quarter of 2021 decreased by 14.9% to $10.2 million,compared with $11.9 million for the same quarter of 2020.

Gross margin for the fourth quarter of 2021 was 21.4%,compared with 25.3% for the same quarter last year.

Operating Expenses

Total operating expenses for the fourth quarter of 2021 were $10.0 million,compared with $10.8 million for the same quarter of 2020. Excluding share-based compensation expenses,operating expenses were $9.7 million,compared with $10.1 million for the fourth quarter of 2020.

Selling expenses for the fourth quarter of 2021 were $0.8 million,compared with $0.4 million for the same quarter of 2020.

General and administrative ("G&A") expenses for the fourth quarter of 2021 were $4.7 million,a 43.2% decrease from $8.2 million for the same quarter of 2020. Excluding share-based compensation expenses,G&A expenses were $4.3 million for the fourth quarter of 2021,compared with $7.5 million for the same quarter of 2020. The decrease in G&A expenses excluding share-based compensation expenses was primarily due to a one-off credit loss of $3.4 million incurred in the fourth quarter of 2020. The share-based compensation expenses included in G&A expenses were $0.3 million for the quarter.

Impairment loss on goodwill was $4.6 million for the fourth quarter of 2021,compared to nil for the same quarter of 2020.

Impairment loss on long-lived asset was nil for the fourth quarter of 2021,compared to $2.1 million for the same quarter of 2020.

Operating Income

Operating income for the fourth quarter of 2021 was $0.1million,compared with $1.2 million of operating income for the same quarter last year. Adjusted operating income[3] was $0.5 million for the fourth quarter of 2021,compared with $1.9 million for the same quarter of 2020.

[3] Adjusted operating income is a non-GAAP financial measure,which is defined as operating income excluding share-based compensation expenses.

Net Income/loss

Net income attributable to ordinary shareholders of RYB for the fourth quarter of 2021 was $4.7 million,compared with $9.3 million for the same quarter of 2020. Adjusted net income attributable to ordinary shareholders of RYB,which excludes the impact of share-based compensation expenses and changes of redeemable non-controlling interests,for the fourth quarter of 2021 was $1.5 million,compared with $10.0 million for the same quarter of 2020.

Basic and diluted net income per American depositary share ("ADS") attributable to ordinary shareholders of RYB for the fourth quarter of 2021 were $0.17 and $0.16,compared with basic and diluted net income per ADS attributable to ordinary shareholders of RYB of $0.34 and $0.33 respectively,for the same quarter of 2020. Each ADS represents one Class A ordinary share.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders[4] of RYB for the fourth quarter of 2021 were both $0.05,compared with both $0.36 for the same quarter of 2020.

EBITDA[5] for the fourth quarter of 2021 was $3.7 million,compared with $5.2 million for the same period of 2020. Adjusted EBITDA[6] for the fourth quarter of 2021 was $4.0 million,compared with $5.9 million for the same quarter of 2020.

[4] Adjusted basic and diluted net income per ADS attributable to ordinary shareholders is a non-GAAP financial measure,which is defined as basic and diluted net income per ADS attributable to ordinary shareholders excluding share-based compensation expenses.

[5] EBITDA is defined as net income excluding depreciation,amortization and income tax expenses.

[6] Adjusted EBITDA is a non-GAAP financial measure,which is defined as net income excluding depreciation,amortization,interest expenses,income tax expenses,and share-based compensation expenses.

Operating Cash Flow

Cash used in operating activities was $11.1 million during the fourth quarter of 2021,compared with $2.1 million of cash used in operating activities during the fourth quarter of 2020.

Full Year of 2021 Financial Results

Net Revenues

Net revenues for the full year of 2021 were $180.3 million,compared with $109.7 million for 2020.

Services revenues for the full year of 2021 were $172.4 million,compared with $103.1 million for 2020. The increase was primarily due to a significant increase in tuition fee revenue,as the Company's directly operated facilities in China were in normal operation during most of 2021 whereas those facilities,as a result of the COVID-19 pandemic,were temporarily closed for most of the first nine months of 2020.

Product revenues for the full year of 2021 were $7.9 million,compared with $6.6 million for 2020. The increase was primarily due to an increase in the amount of merchandise sold through the Company's franchise network,the operation of which was temporarily suspended operations during most of the first nine months of 2020 caused by COVID-19 pandemic.

Cost of Revenues

Cost of revenues for the full year of 2021 was $149.1 million,compared with $116.9 million for 2020. Cost of services revenues for the full year of 2021 was $145.5 million,compared with $113.3 million for 2020. The increase was primarily due toincrease in staff compensation and direct cost of the Company's directly operated kindergarten business. Cost of products revenues for the full year of 2021 was $3.7 million,compared with $3.6 million for 2020.

GrossProfit / Loss

Gross profit for the full year of 2021 was $31.2 million,compared with a gross loss of $7.2 million for 2020.

Operating Expenses

Total operating expenses for the full year of 2021 were $27.3 million,compared with $36.2 million for 2020. Excluding share-based compensation expenses,operating expenses were $25.3 million,compared with $33.3 million for 2020.

Selling expenses were $2.5 million for the full year of 2021,compared with $1.3 million for 2020.

G&A expenses for the full year of 2021 were $20.3 million,compared with $24.3 million for 2020. Excluding share-based compensation expenses,G&A expenses were $18.3 million for the full year of 2021,compared with $21.5million for 2020. The decrease was primarily due to a one-off credit loss of $4.3 million for other receivables and loan receivables incurred in 2020.

Impairment loss on goodwill was $4.6 million for the full year of 2021,compared to $8.5 million for 2020.

Impairment loss on long-lived asset was nil for the full year of 2021,compared to $2.1 million for 2020.

Operating Income/loss

Operating income for the full year of 2021 was $3.8 million,compared with operating loss of $43.4 million for 2020. Adjusted operating income for 2021 was $5.9 million,compared with adjusted operating loss of $40.5 million for 2020.

Impairment loss on long-term investment

Impairment loss on long-term investment for the full year of 2021 was nil,compared with $2.4 million for 2020.

Net Income/loss

Net income attributable to ordinary shareholders of RYB for the full year of 2021 was $6.8 million,compared with a loss of $37.3 million for 2020. Adjusted net income attributable to ordinary shareholders of RYB,for the full year of 2021 was $5.4 million,compared with a loss of $34.4 million for 2020.

Basic and diluted net income per ADS attributable to ordinary shareholders of RYB for the full year of 2021 were $0.24 and $0.23,compared with basic and diluted net loss per ADS attributable to ordinary shareholders of RYB of both $1.32 for 2020. Each ADS represents one Class A ordinary share.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of RYB for the full year of 2021 were both $0.19,compared with adjusted basic and diluted net loss per ADS attributable to ordinary shareholders of RYB of both $1.22 for 2020.

EBITDA for the full year of 2021 was $20.0 million,compared with a loss of $29.3 million for 2020. Adjusted EBITDA for 2021 was $22.0 million,compared with a loss of $26.4 million for 2020.

Balance Sheet

As of December 31,the Company had total cash and cash equivalents of $65.3 million,compared with $53.5 million as of December 31,2020. The increase in cash and cash equivalents balance was mainly due to the operating cash inflow of $19.2 million throughout the full year of 2021 as a result of tuition fees collected at the Company's directly operated facilities.

The Divestiture of the Company's Directly Operated Kindergarten Business in China

On March 1,2022,the subsidiaries of the Company,Beijing RYB Technology Development Co.,Ltd. ("RYB Technology") and Qiyuan Education Technology (Tianjin) Co.,Ltd ("TJ Qiyuan") have entered into termination agreements with certain variable interest entities ("the previous VIEs"),Beijing RYB Children Education Technology Development Co.,Ltd ("Beijing RYB") and Beiyao Technology Development Co.,Ltd. ("Beiyao"). By entering into those termination agreements,the Company no longer has contractual control over its directly operated kindergarten business (the "Divestiture").

This Divestiture includes the termination of agreements by and among RYB Technology,TJ Qiyuan,Beijing RYB,Beiyao and their shareholders. As a result,90 directly operated kindergartens are divested. As the consideration for the termination of VIE agreements,an aggregate amount of RMB158.5 million will be paid in installments to RYB Technology and TJ Qiyuan. At the same time,to ensure ongoing stability and sustained provision of quality kindergarten education,the subsidiaries of the Company have entered into a series of service agreements to provide brand royalty,management IT system,recruitment,and curriculum design services to the previous VIEs and/or their subsidiaries. The Divestiture becomes effective on April 30,2022.

As part of the Divestiture,RYB Technology has entered into a loan agreement with Beijing RYB and Beiyao to reflect the net balance of historical inter-company lending and borrowing,the exact amount of which is subject to the further audit procedure completion.

The pro forma statements of financial position and pro forma statements of operations of all the entities as a group that would be deconsolidated through the Divestiture,as well as those of all entities that remain in the Group as of and for the year ended December 31,as if the Divestiture had become effective on January 1,are also attached with the Company's unaudited consolidated financial statements.

About RYB Education,Inc.

Founded on the core values of ''Care'' and ''Responsibility,'' ''Inspire'' and ''Innovate,'' RYB Education,Inc. is a leading early childhood education service provider inChina. Since opening its first play-and-learn center in 1998,the Company has grown and flourished with the mission to provide high-quality,individualized and age-appropriate care and education to nurture and inspire each child for his or her betterment in life. During its two decades of operating history,the Company has built "RYB" into a well-recognized education brand and helped bring about many new educational practices inChina'searly childhood education industry. RYB's comprehensive early childhood education solutions meet the needs of children from infancy to 6 years old through structured courses at kindergartens and play-and-learn centers,as well as at-home educational products and services.

For more information,please visit http://ir.rybbaby.com

Use of Non-GAAP Financial Measures

We use EBITDA,adjusted EBITDA,adjusted operating income,adjusted net income,and adjusted basic and diluted net income per ADS,each a non-GAAP financial measure,in evaluating our operating results and for financial and operational decision-making purposes.

EBITDA is defined as net income excluding depreciation,and income tax expenses; adjusted EBITDA is defined as net income excluding depreciation,and share-based compensation expenses; adjusted operating income is defined as operating income excluding share-based compensation expenses; adjusted net income attributable to ordinary shareholders is defined as net income attributable to ordinary shareholders excluding share-based compensation expenses and changes of redeemable non-controlling interests; and adjusted basic and diluted net income per ADS attributable to ordinary shareholders are defined as basic and diluted net income per ADS attributable to ordinary shareholders excluding share-based compensation expenses and changes of redeemable non-controlling interests.

We believe that EBITDA,help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in income from operations and net income. We believe that EBITDA,provide useful information about our operating results,enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

EBITDA,should not be considered in isolation or construed as an alternative to net income or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical adjusted financial measures to the most directly comparable GAAP measures. EBITDA,presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently,limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

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," "confident" and similar statements. Statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements. 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 statement,including but not limited to the following: the Company's brand recognition and market reputation; student enrolment in the Company's teaching facilities; the Company's growth strategies; its future business development,results of operations and financial condition; trends and competition in China's early childhood education market; changes in its revenues and certain cost or expense items; the expected growth of the Chinese early childhood education market; Chinese governmental policies relating to the Company's industry and general economic conditions in China. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release,and the Company undertakes no obligation to update any forward-looking statement,except as required under applicable law.

For investor and media inquiries,please contact:

In China:

RYB Education,Inc.

Investor Relations

E-mail: ir@rybbaby.com

The Piacente Group,Inc.

Yang Song

Tel: +86 (10) 6508-0677

E-mail: ryb@tpg-ir.com

In the United States:

The Piacente Group,Inc.

Brandi Piacente

Tel : +1-212-481-2050

E-mail : ryb@tpg-ir.com

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)

As of

December 31,

2021

December 31,

2020

Current assets:

Cash and cash equivalents

65,263

53,454

Term deposits

215

Accounts receivable,net

1,300

1,844

Inventories

6,130

5,773

Prepaid expenses and other current assets

9,344

8,927

Loan receivables

107

Total current assets

82,252

70,105

Non-current assets:

Restricted cash

993

1,127

Property,plant and equipment,net

39,379

47,638

Goodwill

42,102

46,147

Intangible assets,net

12,737

14,179

Long-term investment

169

217

Deferred tax assets

22,803

21,168

Other non-current assets

8,668

14,438

Operating lease right-of-use assets

73,973

87,472

Total assets

283,076

302,491

Liabilities

Current liabilities:

Prepayments from customers,current portion

4,919

4,145

Accrued expenses and other current liabilities

55,642

54,406

Income tax payable

20,888

18,592

Operating lease liabilities,current portion

13,890

16,856

Deferred revenue,current portion

27,019

34,351

Long-term debt,current portion

Total current liabilities

122,358

128,357

Non-current liabilities:

Prepayments from customers,non-current portion

1,461

4,024

Deferred revenue,non-current portion

999

1,726

Other non-current liabilities

11,645

12,519

Deferred income tax liabilities

1,768

1,890

Operating lease liabilities,non-current portion

65,689

76,308

Total liabilities

203,920

224,824

Mezzanine equity

Redeemable non-controlling interests

4,942

9,988

Equity

Ordinary shares

Treasury stock

(8,667)

(10,321)

Additional paid-in capital

136,504

141,094

Statutory reserve

5,164

4,652

Accumulated other comprehensive income/(loss)

257

(1,468)

Accumulated deficit

(65,559)

(71,837)

Total RYB Education,Inc. shareholders' equity

67,728

62,149

Non-controlling interest

6,486

5,530

Total equity

74,214

67,679

Total liabilities,mezzanine equity and total equity

283,491

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands of U.S. dollars,except share,ADS,per share and per ADS data)

Three Months Ended

December 31,

YearEnded

December 31,

2021

2020

2021

2020

Net revenues:

Services

46,057

44,930

172,404

103,073

Products

1,368

2,143

7,909

6,642

Total net revenues

47,425

47,073

180,313

109,715

Cost of revenues:

Services

36,556

33,722

145,473

113,285

Products

710

1,420

3,669

3,616

Total cost of revenues

37,266

35,142

149,142

116,901

Gross profit/(loss)

10,159

11,931

31,171

(7,186)

Operating expenses

Selling expenses

816

416

2,491

1,285

General and administrative expenses

4,654

8,198

20,286

24,313

Impairment loss on goodwill

4,559

8,454

Impairment loss on long-lived assets

2,148

Total operating expenses

10,029

10,762

27,336

36,200

Operating income/(loss)

130

1,169

3,835

(43,386)

Interest income

219

348

Government subsidy income

119

1,601

2,491

4,591

Gain on disposal of subsidiaries

621

216

439

Impairment loss on long-term investments

(519)

(2,432)

Income/(loss) before income taxes

931

2,528

6,984

(40,783)

Less: Income tax expense (benefit)

1,008

(8,298)

3,440

215

(Loss)/income before gain/(loss) in equity

method investments

(77)

10,826

3,544

(40,998)

Gain/(loss) from equity method investment

101

(15)

(185)

Net income/(loss)

10,865

3,529

(41,183)

Less: Net (loss)/ income attributable to non-

controlling interest

(1,179)

1,550

189

(3,903)

Decrease in redeemable non-

controlling interest

(3,450)

Net income/(loss) attributable to ordinary

shareholders of RYB

4,653

9,315

6,790

(37,280)

Net income/(loss) per share attributable to

ordinary shareholders of RYB Education,Inc.

Basic

0.17

0.34

0.24

(1.33)

Diluted

0.16

0.33

0.23

(1.33)

Net income/(loss) per ADS attributable to

ordinary shareholders of RYB Education,Inc.

(Note 1)

Basic

0.05

0.34

0.19

(1.33)

Diluted

0.05

0.33

0.19

(1.33)

Weighted average shares used in calculating

net income/(loss) per ordinary share

Basic

28,003,415

27,792,174

28,208,734

28,122,851

Diluted

28,796,018

28,196,921

28,962,480

28,851

Note 1: Each ADS represents one Class A ordinary share.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands of U.S. dollars)

Three Months Ended

December 31,

YearEnded

December 31,

2021

2020

2021

2020

Net income/(loss)

10,183)

Other comprehensive income/(loss),net of tax

of nil:

Change in cumulative foreign currency

translation adjustments

1,938

1,089

1,785

(1,036)

Total comprehensive income/(loss)

1,962

11,954

5,314

(42,219)

Less: Comprehensive (loss)/income

attributable to non-controlling interest

(4,403)

2,143

(3,201)

(3,330)

Comprehensive income/(loss)attributable to

RYB Education,Inc.

6,365

9,811

8,515

(38,889)

RECONCILIATION OFGAAP AND NON-GAAP RESULTS

(in thousands of U.S. dollars,per share and per ADS data)

Three Months Ended

December 31,

2021

2020

2021

2020

Operating income/(loss)

130

1,169

3,835

(43,386)

Share-based compensation expenses

324

703

2,021

2,930

Adjusted operating income/(loss)

454

1,872

5,856

(40,456)

Net income/(loss) attributable to ordinary

shareholders of RYB Education,Inc.

4,653

9,315

6,790

(37,280)

Share-based compensation expenses

324

703

2,930

Decrease in redeemable non-

controlling interest

(3,450)

Adjusted net income/(loss) attributable to

ordinary shareholders of RYB Education,Inc.

1,527

10,018

5,361

(34,350)

Net income/(loss)

10,865

3,529

(41,183)

Add: Income tax expense (benefit)

1,440

215

Depreciation and amortization

2,662

2,590

13,048

11,670

EBITDA

3,694

5,157

20,017

(29,298)

Share-based compensation expenses

324

703

2,930

Adjusted EBITDA

4,860

22,038

(26,368)

Net income/(loss) per ADS attributable to

ordinary shareholders of RYB Education,Inc.-

Basic (Note1)

0.17

0.34

0.24

(1.33)

Net income/(loss) per ADS attributable to

ordinary shareholders of RYB Education,Inc.-

Diluted (Note 1)

0.16

0.33

0.23

(1.33)

Adjusted net income/(loss) per ADS

attributable to ordinary shareholders of RYB

Education,Inc.- Basic (Note 1)

0.05

0.36

0.19

(1.22)

Adjusted net income/(loss) per ADS

attributable to ordinary shareholders of RYB

Education,Inc.- Diluted (Note 1)

0.05

0.36

0.19

(1.22)

Weighted average shares used in calculating

basic net income/(loss)adjusted net income/(loss) per

ADS (Note 1)

28,851

Weighted average shares used in calculating

diluted net income/(loss) per ADS (Note 1)

28,851

Weighted average shares used in calculating

diluted adjusted net income/(loss) per ADS (Note 1)

28,851

Adjusted net income/(loss) per share

attributable to ordinary shareholders of RYB

Education,Inc. - Basic

0.05

0.36

0.19

(1.22)

Adjusted net income/(loss) per share attributable to

ordinary shareholders of RYB Education,Inc. -

Diluted

0.05

0.36

0.19

(1.22)

Note 1: Each ADS represents one Class A ordinary share.

UNAUDITED PRO FORMA STATEMENTS OF FINANCIAL POSITION

(In thousands of U.S. dollars)

As of December 31,2021

Consolidated

Divestiture

Non

Adjustment

Divestiture

ASSETS

Current assets

Cash and cash equivalents

65,263

31,892

33,371

Term deposits

215

Accounts receivable

1,300

1,273

Inventories

6,130

Prepaid expenses and other current assets

9,344

6,409

2,935

Total current assets

82,252

38,543

43,709

Non-current assets

Restricted cash

993

Property,379

32,967

6,412

Goodwill

42,102

22,925

19,177

Intangible assets,737

1,638

11,099

Long-term investments

169

Deferred tax assets

22,803

13,969

8,834

Other non-current assets

8,668

3,194

5,474

Operating lease right-of-use assets

73,973

49,581

24,392

Amounts due from related parties (for Divestiture)

22,576

Amounts due from related parties

44,664

TOTAL ASSETS

283,076

163,810

67,240

186,506

LIABILITIES

Current liabilities

Prepayments from customers,919

183

4,736

Accrued expenses and other current liabilities

55,642

32,337

23,305

Income tax payable

20,888

20,020

868

Operating lease liabilities,890

8,503

5,387

Deferred revenue,019

18,865

8,154

Long-term debt,current portion

Amounts due to related parties

44,664

Total current liabilities

122,358

124,572

44,664

42,450

Non-current liabilities

Prepayments from customers,461

540

921

Deferred revenue,non-current portion

999

Other non-current liabilities

11,645

2,071

9,574

Deferred income tax liabilities

1,768

1,754

Operating lease liabilities,689

47,239

18,450

TOTAL LIABILITIES

203,920

174,436

44,664

74,148

NET ASSETS(LIABILITIES)

79,156

(10,626)

22,576

112,358

UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars,except share and per share data,or otherwise noted)

For the year ended December 31,2021

Consolidated

Divestiture

Non

Adjustment

Divestiture

Net revenues

180,313

102,966

77,347

Cost of revenues

149,142

94,590

54,552

Gross profit

31,171

8,376

22,795

Selling expenses

2,491

1,291

1,200

General and administrative expenses

20,286

2,181

18,105

Impairment loss on goodwill

4,559

Total operating expenses

27,336

8,031

19,305

Operating income

3,835

345

3,490

Interest income

219

144

Government subsidy income

2,053

1,438

Gain(loss) on disposal of subsidiaries

439

459

(20)

Gain on divestiture

34,068

Income before income taxes

6,984

2,001

34,068

39,051

Less: Income tax expenses

3,440

1,126

2,314

Income before loss from equity method investments

3,544

875

36,737

Loss from equity method investments

(15)

(8)

(7)

Net income

3,529

867

34,068

36,730

View original content:https://www.prnewswire.com/news-releases/ryb-education-inc-reports-fourth-quarter-and-full-year-2021-financial-results-301545495.html

Tags: Banking/Financial Service Education

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