Stock News in Focus: Ambow Education Holding Ltd. (NYSE:AMBO)

Ambow Education Holding Ltd. (NYSE:AMBO) stock identified change of 212.00% away from 52-week low price and recently located move of -22.00% off 52-week high price. It has market worth of $132.91M. AMBO stock has been recorded -1.95% away from 50 day moving average and 7.01% away from 200 day moving average. Moving closer, we can see that shares have been trading -2.65% off 20-day moving average.

Ambow Education Holding Ltd. (NYSE:AMBO), a leading national provider of educational and career enhancement services in China, reported its audited financial and operating results for the fourth quarter ended December 31, 2018 and fiscal year 2018.

Fourth Quarter 2018 Financial Highlights

Net revenues for the fourth quarter of 2018 increased by 10.8% to US$24.6 million from US$22.2 million in the same period of 2017. This increase was due primarily to higher student enrollment for the 2018-2019 academic year in the Company’s K-12 schools and revenues from Boston-based Bay State College (“BSC”, acquired in November 2017).

Gross profit for the fourth quarter of 2018 was US$8.3 million, compared with US$9.8 million for the same period of 2017. Gross profit margin was 33.7% for the fourth quarter of 2018, compared to 44.1% in the same period of 2017. The decrease in gross profit margin was primarily attributable to lower profit margin at BSC, as the Company is in the process of consolidating its business operations.

Operating expenses in the fourth quarter of 2018 decreased by 5.5% to US$6.9 million from US$7.3 million for the same period of 2017. Operating expenses as a percentage of net revenues for the quarter decreased to 28.0% from 33.0% in the same period of 2017, primarily due to a one-time bad debt expense recovery and reversal of US$2.9 million in the fourth quarter of 2018.

Net income attributable to ordinary shareholders for the fourth quarter of 2018 was US$4.5 million, or US$0.10 per basic and diluted share, compared with a net income of US$3.3 million for the fourth quarter of 2017, or US$0.09 per basic share and US$0.08 per diluted share.

As of December 31, 2018, Ambow maintained strong cash resources of US$52.2 million, comprising cash and cash equivalents of US$30.8 million, short-term investments of US$17.0 million, and restricted cash of US$4.4 million.

As of December 31, 2018, the Company’s deferred revenue balance was US$18.1 million, representing a 2.8% increase from US$17.6 million as of December 31, 2017, mainly attributable to the tuition and course fees collected in the K-12 business segment for the 2018-2019 academic year, and the tuition and fees collected at BSC for the spring semester of 2019.

Fiscal Year 2018 Financial Highlights

Net revenues for fiscal year 2018 increased by 13.3% to US$77.3 million from US$68.2 million in 2017, due primarily to higher student enrollment for both 2017-2018 and 2018-2019 academic years in the Company’s K-12 schools and revenues from BSC.

Gross profit for fiscal year 2018 decreased by 2.4% to US$28.1 million from US$28.8 million in 2017. Gross profit margin was 36.4%, compared to 44.2% in 2017. The decrease in gross profit margin was primarily attributable to lower profit margin at BSC, as the Company is in the process of consolidating its business operations.

Operating expenses for fiscal year 2018 were US$25.9 million, a 9.1% decrease from US$28.5 million in 2017. Operating expenses as a percentage of net revenues for the year decreased to 33.5% from 41.8% in 2017, primarily due to a one-time bad debt expense recovery and reversal of US$2.9 million in the fourth quarter of 2018.

Operating income for fiscal year 2018 was US$2.2 million, compared with an operating income of US$0.4 million for 2017.

Net income attributable to ordinary shareholders for fiscal year 2018 was US$6.5 million, or US$0.16 per basic and diluted share, compared with a net income of US$7.1 million, or US$0.18 per basic and diluted share, in the prior year. A one-time gain of US$5.7 million from the sale of subsidiaries was recorded in 2017.

“We are pleased to report a solid fourth quarter; with year-over-year revenue growth across our two primary business segments, Better Schools and Better Jobs, up 12.8 percent and 38.3 percent, respectively,” said Dr. Jin Huang, Ambow’s President and Chief Executive Officer. “While tuition fees from Bay State College contributed significantly to Ambow’s Better Jobs revenue throughout the fiscal year, transition expenses related to BSC’s acquisition pressured margins and impacted the Company’s financial results for the year. However, with higher enrollments to be expected across all business segments in 2019, we will remain focused on managing costs and improving margins to boost operational efficiency and generate greater overall profitability.”

Dr. Huang further commented on the strategic value of Bay State College to Ambow’s long-term success, “Through international expansion, Ambow is now uniquely positioned to address the pressing needs of smaller private U.S. colleges that are experiencing declining enrollments and tuition revenue. In launching Ambow’s first Cross-Border College Program between China and U.S. colleges, we are optimizing BSC’s course offerings while simultaneously providing talented and financially qualified students from China who are eager to earn a bachelor’s degree in the United States.”

“We are confident that the implementation of the Cross-Border Program at Bay State will serve as an excellent model that is scalable and can be adopted by many U.S. colleges facing enrollment and tuition challenges.”

 The Services sector company, Ambow Education Holding Ltd. noticed change of -3.26% to $6.24 along volume of 6206 shares in recent session compared to an average volume of 5.58K. The stock observed return of -0.16% in 5 days trading activity. The stock was at -8.64% over one month performance. AMBO’s shares are at 8.44% for the quarter and driving a 56.00% return over the course of the past year and is now at 14.92% since this point in 2018. 

 The average volatility for the week at 3.72% and for month was at 3.81%. There are 21.3M shares outstanding and 7.65M shares are floated in market.

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