BEIJING, Aug. 27, 2020 /PRNewswire/ -- 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 second quarter
of 2020.
Impact from COVID-19
With the unprecedented challenges created by the Covid-19
pandemic since late January 2020, the
Company encountered disruptions of business starting from the first
quarter. Following the control measures and regulations introduced
by the government, the Company began in late January to temporarily
suspend the operations of its facilities in China. The closure of facilities has continued
through nearly the entire second quarter of this year. This had a
significantly adverse impact on the result of operation in the
first half of 2020 as the majority of the Company's net revenues
are derived from tuition fees collected at such facilities.
In response to the challenges presented by Covid-19, the Company
has taken various actions to mitigate impacts, including measures
to ensure the health and safety of the students and families, to
optimize personnel and control discretionary spending, especially
for the business initiatives facing more serious impact in the near
term. Moreover, the Company acted swiftly and effectively to
introduce online education content and maintain ongoing
parent-teacher communication. The Company is encouraged to see that
these efforts and education offerings have been well-received by
students and their families.
By the end of the second quarter, 75% of the Company's directly
operated kindergartens in PRC and Singapore, and over 70% of franchise
play-and-learn centers, had resumed operation. Student recruitment
at directly operated kindergartens and promotional activities for
franchise play-and-learn centers have now resumed through both
online and offline channels.
Second Quarter 2020 Operational and
Financial Summary
- Number of students enrolled at directly operated facilities was
31,023[1] as of June 30, 2020,
compared with 30,478 as of June 30,
2019.
- Net revenues were $12.8 million,
compared with $53.6 million for the
second quarter of 2019.
- Gross loss was $9.5 million,
compared with gross profit of $11.9
million for the second quarter of 2019.
- Net loss attributable to ordinary shareholders of RYB for the
second quarter of 2020 was $12.8
million, compared with $2.9
million of net income attributable to ordinary shareholders
of RYB for the second quarter of 2019. Adjusted net loss
attributable to ordinary shareholders[2] of RYB for the second
quarter of 2020 was $12.0 million,
compared with $3.9 million of
adjusted net income attributable to ordinary shareholders of RYB
for the second quarter of 2019.
- Cash used in operating activities was $5.0 million in the second quarter of 2020,
compared with $2.9 million of cash
used in operating activities for the second quarter of 2019.
First Six Months of 2020 Financial Results
- Net revenues were $30.1 million,
compared with $87.8 million for the
first six months of 2019.
- Gross loss was $21.1 million,
compared with gross profit of $13.8
million for the first six months of 2019.
- Net loss attributable to ordinary shareholders of RYB was
$39.5 million, compared with
$0.6 million of net income
attributable to ordinary shareholders of RYB for the same period of
2019. Adjusted net loss attributable to ordinary shareholders of
RYB was $37.9 million, compared with
$2.7 million of adjusted net income
attributable to ordinary shareholders of RYB for the same period of
2019.
- Cash used in operating activities was $19.0 million, compared with $10.3 million of cash generated from operating
activities for the same period of 2019.
"During the second quarter, in the face of prolonged
facility closures due to impacts of the Covid-19 pandemic, we
continued to enhance our online service capabilities to ensure that
students would have undisrupted remote access to high-quality
at-home learning resources and to a good collection of early
childhood education content," said Ms. Yanlai Shi, Co-founder,
Director and Chief Executive Officer of RYB, "Following the initial
launch in the first quarter of our paid course platform for
kindergarteners, during the second quarter the team further added
content offerings available on the platform. We simultaneously
carried out a pilot promotion of this platform for enrolled
students at some directly operated kindergartens, and their parents
provided positive feedback. With the help of this platform and most
of our facilities across regions back to normal operation over
time, we will push forward the online-merge-offline practice for
learning at the kindergarten level. While still in its very early
stage, I believe this platform will help us better upgrade our
service quality as part of our digitalization efforts in
kindergarten services. With a complete and polished content
platform fully established in the future, we look forward to
exploring its potential to be adopted across market.
"At the same time, we also completed planning for service
management model for third-party kindergarten and play-and-learn
center operations. We plan to leverage our integrated
online-merge-offline model and expand existing services by this
service management model. Through this service management model, we
can deliver high-quality content, standardized management systems,
and targeted service training to a broad range of facility
operators in a systematic manner with modularized offerings. We
believe this can also help reinvigorate the industry. In addition,
we kicked off our early-years childcare business, an
initiative for which we have been doing market
research, developing educational content, assembling a team
with expertise, and setting up an operating pilot facility for
nearly three years. With a supportive policy environment for
early-years childcare services, along with our core strengths and
network presence, we are confident to see further growth in this
service unit, and it becoming an integral part of a refined and
expanded service offerings for 0-6-year-olds," concluded Ms.
Shi.
Mr. Hao Gu, Chief Financial Officer of RYB, added, "In the
second quarter, the Company's revenues came under pressure as
prolonged facility closures were observed due to Covid-19 impacts
across regions. However, we actively executed strict measures to
reduce expenses and expenditures and control cash outflows. As
compared to the first quarter, the gross and operating losses also
significantly narrowed. Our directly operated facilities have
started to resume operation in the second quarter, and with
the upcoming semester starting in September, we expect to see
significant improvement in the Company's operating cash flow. We
are pleased that at the end of the second quarter, with the
exception of facilities in a few places including Beijing and Wuhan, most of our directly operated
kindergartens had re-opened. Thanks to the comprehensive planning
beforehand and meticulous advance preparation, we are happy to
report a satisfactory attendance rate, or rate of return to our
facilities of approximately 80% pre-Covid-19 enrollment levels.
Additionally, for the facilities in Beijing, related government authorities have
recently announced a clear schedule for re-opening in September.
Our faculty and staff members have made preparations and are ready
to welcome students back to kindergartens once those facilities
reopen."
"In the process of upgrading our services and our business
transformation, we will make use of the advantages of our existing
facility network and enrollment and leverage other resources to
achieve better performance and long-term growth efficiently,"
concluded Mr. Gu.
Second Quarter 2020 Financial Results
Net Revenues
Net revenues for the second quarter of 2020 were $12.8 million, compared with $53.6 million for the same quarter of 2019.
Service revenues for the second quarter of 2020 were
$11.6 million, compared with
$48.2 million for the same quarter of
2019. The decrease was caused by decreased tuition fees as the
temporary closure of the facilities in China. While over 60% of the directly operated
facilities in China have gradually
resumed operation starting from the late May, they remained closed
for the most of this quarter due to the Covid-19 pandemic.
Franchise services revenues also decreased due to the slow-down of
play-and-learn franchise expansion and lower revenue generated from
franchisees as the vast majority of the franchised facilities have
just resumed operation since the end of May.
Products revenues for the second quarter of 2020 were
$1.2 million, compared with
$5.4 million for the same quarter of
2019. The decrease was due to a significant decrease in the amount
of merchandise sold through the Company's franchise network as
the franchisees' facilities are still in the warm-up period as they
have just resumed operation during the late of this quarter.
Cost of Revenues
Cost of revenues for the second quarter of 2020 was $22.3 million, a 46.4% decrease from $41.6 million for the same quarter of 2020. Cost
of revenues for services for the second quarter of 2020 was
$21.8 million, compared with
$38.8 million for the same quarter of
2019. The decrease was mainly driven by a decrease in the direct
cost as those facilities remained temporarily closed during the most of the
quarter and various cost management steps have been taken by
the Company in response to Covid-19, such as reducing labor cost
and discretionary spending, especially for business initiatives
facing more serious negative impact in the near term. Cost of
products revenues for the second quarter of 2020 was $0.6
million, compared with $2.8 million for the same quarter
of 2019. The decrease was generally in line with the decrease in
products revenues.
Gross Profit/loss
As a result of the foregoing, gross loss for the second quarter
of 2020 was $9.5 million, compared
with gross profit of $11.9
million for the same quarter of 2019.
Operating Expenses
Total operating expenses for the second quarter of 2020 were
$5.4 million, compared with
$6.6 million for the same quarter of
2019. Excluding share-based compensation expenses, operating
expenses were $4.6 million, a
decrease of 18.6% from $5.7 million
for the second quarter of 2019.
Selling expenses for the second quarter of 2020 were
$0.1 million, compared with
$0.7 million for the same quarter of
2019.
G&A expenses for the second quarter of 2020 were
$5.3 million, a 10.2% decrease from
$5.9 million for the same quarter of
2019. Excluding share-based compensation expenses, G&A expenses
were $4.5 million for the second
quarter of 2020, a 9.0% decrease from $4.9
million for the same quarter of 2019. The decrease in
G&A expenses excluding share-based compensation expenses was
primarily driven by the decrease in G&A expenses in
China as a result of more efforts
made by the Company on cost control and reducing discretionary
spending to cope with the Covid-19 outbreak. The share-based
compensation expenses included in G&A expenses were
$0.8 million for the quarter.
Operating Income/loss
Operating loss for the second quarter of 2020 was $14.9 million, compared with $5.3 million of operating income for the same
quarter last year. Adjusted operating loss[3] was $14.1 million for the second quarter of 2020,
compared with $6.3 million of
adjusted operating income for the same quarter of 2019.
Net Income/loss
Net loss attributable to ordinary shareholders of RYB for the
second quarter of 2020 was $12.8 million, compared
with $2.9 million of net income attributable to
ordinary shareholders of RYB for the second quarter of 2019.
Adjusted net loss attributable to ordinary shareholders of
RYB, which excludes the impact of $0.8 million of
share-based compensation expense was $12.0 million, compared
with $3.9 million of adjusted net income attributable to
ordinary shareholders of RYB for the second quarter of
2019.
Basic and diluted net loss per American depositary share
("ADS") attributable to ordinary shareholders of RYB for the second
quarter of 2020 were $0.46 and
$0.46, respectively, compared with
basic and diluted net income per ADS of $0.11 and $0.10,
respectively for the second quarter of 2019. Each ADS
represents one Class A ordinary share.
Adjusted basic and diluted net loss per ADS attributable to
ordinary shareholders[4] of RYB for the second
quarter of 2020 were $0.43 and $0.43, respectively, compared with adjusted basic
and diluted net income per ADS of $0.14 and $0.13, respectively for the second quarter
of 2019.
EBITDA[5] for the second quarter of 2020 was a loss of
$10.2 million, compared with an
income of $8.2 million for
the second quarter of 2019. Adjusted EBITDA[6] for the second
quarter of 2020 was a loss of $9.4 million, compared with an income of
$9.2 million for the second
quarter of 2019.
Operating Cash Flow
Cash used in operating activities
was $5.0 million during the second quarter of 2020,
compared with $2.9 million cash used in
operating activities during the second quarter of 2019.
Balance Sheet
As of June 30, 2020, the Company
had total cash and cash equivalents of $48.3 million, a decrease from
$68.7 million as of December 31, 2019. The decrease in cash and cash
equivalents balances was mainly due to the operating cash
outflow of $19.0 million during the
first half of 2020 as a result of the disruption of the
pandemic.
First Six Months of 2020 Financial Results
Net Revenues
Net revenues for the first six months of 2020 were $30.1 million, compared with $87.8 million for the same period of 2019.
Services revenues for the first six months of 2020 were
$28.4 million, compared with
$80.0 million for the same period
last year. The decrease was primarily due to decreased tuition fees
as the Company began the temporary closures of all facilities in
China beginning in late January as
a result of the Covid-19 outbreak, which remained suspended of
operation for the most of the first half of 2020. Franchise
services revenues also decreased owing to the slow-down of
play-and-learn franchise expansion and lower revenue generated from
franchisees due to the impact of the Covid-19 as a vast majority of
franchised facilities have started to resume operation since the
end of May 2020.
Products revenues for the first six months of 2020 were
$1.7 million, compared with
$7.8 million for the same period in
2019. The decrease was due to a significant decrease in the amount
of merchandise sold through the Company's franchise network as
the franchisees' facilities were temporarily closed during most of
the first half of 2020.
Cost of Revenues
Cost of revenues for the first six months of 2020 was
$51.2 million, compared with
$74.0 million for the first six
months of 2019. Cost of revenues for services for the first six
months of 2020 was $50.4 million, compared with $70.0
million for the same period of 2019. The decrease was mainly
driven by a decrease in the direct cost of those facilities which
were temporarily closed during the first half of 2020, stringent
cost control measures and certain operational strategy adjusted by
the Company, such as reducing resource allocation to the
initiatives facing more challenges in the near term. Cost of
products revenues for the first six months of 2020 was $0.8 million, compared with $4.0 million for the same period last year. The
decrease was in line with the decrease in products revenues.
Gross Profit/loss
Gross loss for the first six months of 2020 was $21.1 million, compared with gross profit of
$13.8 million for the same period
last year.
Operating Expenses
Total operating expenses for the first six months of 2020 were
$19.9 million, compared with
$12.5 million for the same period
last year. Excluding share-based compensation expenses, operating
expenses were $18.3 million for the
first six months of 2020.
Selling expenses were $0.4 million
for the first six months of 2020, compared with $1.3 million for the same period last year.
G&A expenses for the first six months of 2020 were
$11.1 million, compared with
$11.2 million for the same period
last year. Excluding share-based compensation expenses, G&A
expenses were $9.5 million for the
first six months of 2020, compared with $9.0
million for the same period of 2019. The increase in G&A
expenses excluding share-based compensation expenses was primarily
due to the G&A expenses incurred in directly operated
facilities in Singapore that were
acquired during the second quarter of 2019. The increase was
partially offset by the decrease in G&A expenses as a result of
stringent cost control measures carried out in China.
Impairment loss on goodwill was $8.5
million for the first half of 2020, compared to nil for the
same period last year. Due to the impact of COVID-19 on operations
and financial results, the Company concluded that an impairment
indicator existed at the end of the first quarter and the fair
value of its certain reporting units, primarily those with new
initiatives, were less than their carrying value. As a result of
these impairment assessments, the Company determined that there was
an impairment loss on goodwill of $8.5
million.
Operating Income/loss
Operating loss for the first six months of 2020 was $41.0 million, compared with operating income of
$1.3 million for the same period last
year. Adjusted operating loss for the first six months of 2020 was
$39.4 million, compared with adjusted
operating income of $3.5 million for
the same period last year.
Net Income/loss
Net loss attributable to ordinary shareholders of RYB for the
first six months of 2020 was $39.5
million, compared with $0.6
million of net income attributable to ordinary shareholders
of RYB for the same period of 2019. Adjusted net loss attributable
to ordinary shareholders of RYB, which excludes the impact of
share-based compensation expense and changes in redeemable
non-controlling interests, for the first six months of 2020 was
$37.9 million, compared with
$2.7 million of adjusted net income
attributable to ordinary shareholders of RYB for the same period of
2019.
Basic and diluted net loss per ADS attributable to ordinary
shareholders of RYB for the first six months of 2020 were
$1.43 and $1.43, respectively, compared with basic and
diluted net income per ADS attributable to ordinary shareholders of
RYB of $0.02 and $0.02, respectively for the same period of 2019.
Each ADS represents one Class A ordinary share.
Adjusted basic and diluted net loss per ADS attributable to
ordinary shareholders of RYB for the first six months of 2020 were
$1.37 and $1.37, respectively, compared with adjusted basic
and diluted net income per ADS attributable to ordinary
shareholders of RYB of $0.10 and
$0.09, respectively for the same
period of 2019.
EBITDA for the first six months of 2020 was a loss of
$34.9 million, compared with an
income of $7.5 million for the same
period of 2019. Adjusted EBITDA for the first six months of 2020
was a loss of $33.3 million, compared
with an income of $9.8 million for
the same period of 2019.
Business Outlook
The majority of our facilities have been reopened as of the
date of this press release, and we expect the remaining of our
existing kindergartens will be able to resume operations by the end
of the third quarter. Based on the information available as of the
date of this press release, for the third quarter of 2020, the
Company's management currently expects net revenues to be in the
range of $27.0 and $28.0 million.
The above outlook is based on the current market conditions and
reflects the Company management's current review, which is subject
to change given the dynamic impact of COVID-19.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern
Time on Friday, August 28, 2020 (8:00
p.m. Beijing Time on August 28, 2020). Listeners may
access the call by dialing:
United States (toll
free):
|
1-888-346-8982
|
International:
|
1-412-902-4272
|
China (toll
free):
|
400-120-1203
|
Hong Kong (toll
free):
|
800-905-945
|
Participants should dial-in at least 10-15 minutes before the
scheduled start time and ask to be connected to the RYB Education,
Inc. conference call.
A telephone replay will be available approximately one hour
after the call until September 4, 2020 by dialing:
United States (toll
free):
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Replay Access
Code:
|
10147536
|
Additionally, a live and archived webcast of the conference call
will be available at http://ir.rybbaby.com.
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 in China. 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 in
China's early 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.
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,
amortization and income tax expenses; adjusted EBITDA is defined as
net income excluding depreciation, amortization, income tax
expenses, 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 in redeemable non-controlling interest; 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 in redeemable non-controlling
interest.
We believe that EBITDA, adjusted EBITDA, adjusted operating
income, adjusted net income, and adjusted basic and diluted net
income per ADS, 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, adjusted EBITDA, adjusted operating income,
adjusted net income, and adjusted basic and diluted net income per
ADS, 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, adjusted EBITDA, adjusted operating income, adjusted net
income, and adjusted basic and diluted net income per ADS, 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, adjusted EBITDA, adjusted
operating income, adjusted net income, and adjusted basic and
diluted net income per ADS, 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
enrollment 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
Tel: 86-10-8767-5752
E-mail: ir@rybbaby.com
The Piacente Group, Inc.
Ross Warner
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
|
|
June
30,
2020
|
December 31,
2019
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
48,318
|
68,728
|
Term
deposits
|
-
|
1,005
|
Accounts receivable,
net
|
2,142
|
2,804
|
Inventories
|
6,963
|
7,256
|
Prepaid expenses and
other current assets
|
10,943
|
10,279
|
Amounts due from
related parties
|
-
|
349
|
Loan
receivables
|
566
|
1,149
|
Total current
assets
|
68,932
|
91,570
|
|
|
|
Non-current
assets:
|
|
|
Restricted
cash
|
784
|
710
|
Property, plant and
equipment, net
|
47,614
|
50,142
|
Intangible
assets
|
15,356
|
17,700
|
Goodwill
|
44,028
|
52,687
|
Long-term
investment
|
2,612
|
5,237
|
Deferred tax
assets
|
12,884
|
18,161
|
Operating lease
right-of-use assets
|
81,947
|
83,403
|
Other non-current
assets
|
13,465
|
16,484
|
Total
assets
|
287,622
|
336,094
|
|
|
|
Liabilities
|
|
|
Current
liabilities:
|
|
|
Prepayments from
customers, current portion(including prepayments from customers of
the consolidated VIEs without recourse to the Group of $6,658 and
$5,904 as of June 30, 2020 and December 31, 2019,
respectively)
|
6,658
|
5,904
|
Accrued expenses and
other current liabilities(including accrued expenses and other
current liabilities of the consolidated VIEs without recourse to
the Group of $51,137 and $47,825 as of June 30, 2020 and December
31, 2019, respectively)
|
59,338
|
56,472
|
Income taxes
payable(including income taxes payable of the consolidated VIEs
without recourse to the Group of $13,367 and $14,364 as of June 30,
2020 and December 31, 2019, respectively)
|
14,272
|
14,929
|
Operating lease liabilities,
current portion (including operating lease liabilities of the
consolidated VIEs without recourse to the Group of $14,209 and
$13,068 as of June 30, 2020 and December 31, 2019,
respectively)
|
17,350
|
16,399
|
Deferred revenue,
current portion(including deferred revenue of the consolidated VIEs
without recourse to the Group of $27,413 and $30,266 as of June 30,
2020 and December 31, 2019, respectively)
|
28,978
|
31,993
|
Amounts due to
related parties (including amounts due to related parties of the
consolidated VIEs without recourse to the Group of nil and $124 as
of June 30, 2020 and December 31, 2019, respectively)
|
-
|
124
|
Long-term debt,
current portion (including long-term debt of the consolidated VIEs
without recourse to the Group of nil and nil as of June 30, 2020
and December 31, 2019, respectively)
|
45
|
87
|
Total current
liabilities
|
126,641
|
125,908
|
|
|
|
Non-current
liabilities:
|
|
|
Prepayments from
customers, non-current portion (including prepayments from
customers of the consolidated VIEs without recourse to the Group of
$1,252 and $2,508 as of June 30, 2020 and December 31, 2019,
respectively)
|
1,252
|
2,508
|
Deferred revenue,
non-current portion (including deferred revenue of the consolidated
VIEs without recourse to the Group of $3,841 and $4,206 as of June
30, 2020 and December 31, 2019, respectively)
|
5,146
|
5,531
|
Operating lease
liabilities, non-current portion (including operating lease
liabilities of the consolidated VIEs without recourse to the Group
of $66,696 and $68,509 as of June 30, 2020 and December 31, 2019,
respectively)
|
70,402
|
71,012
|
Other non-current
liabilities (including other non-current liabilities of the
consolidated VIEs without recourse to the Group of $8,855 and
$9,167 as of June 30, 2020 and December 31, 2019,
respectively)
|
10,732
|
11,034
|
Deferred income tax
liabilities (including deferred income tax liabilities of the
consolidated VIEs without recourse to the Group of $671 and $1,271
as of June 30, 2020 and December 31, 2019,
respectively)
|
2,715
|
3,384
|
Total
liabilities
|
216,888
|
219,377
|
|
|
|
|
Mezzanine
equity
Redeemable
non-controlling interests
|
8,925
|
8,801
|
Equity
|
|
|
Ordinary
shares
|
29
|
29
|
Treasury
stock
|
(11,116)
|
(12,000)
|
Additional paid-in
capital
|
140,569
|
139,843
|
Statutory
reserve
|
4,060
|
4,060
|
Accumulated other
comprehensive (loss) income
|
(1,277)
|
141
|
Accumulated
deficit
|
(73,430)
|
(33,553)
|
Total RYB
Education, Inc. shareholders' equity
|
58,835
|
98,520
|
Non-controlling
interest
|
2,974
|
9,396
|
Total
equity
|
61,809
|
107,916
|
Total liabilities,
mezzanine equity and total equity
|
287,622
|
336,094
|
|
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands of
U.S. dollars, except share, ADS, per share and per ADS
data)
|
|
|
|
Three Months Ended
June 30,
|
Six
Months Ended June 30,
|
|
2020
|
2019
|
2020
|
2019
|
Net
revenues:
|
|
|
|
|
Services
|
11,596
|
48,186
|
28,388
|
80,029
|
Products
|
1,175
|
5,365
|
1,702
|
7,786
|
Total net
revenues
|
12,771
|
53,551
|
30,090
|
87,815
|
Cost of
revenues:
|
|
|
|
|
Services
|
21,758
|
38,840
|
50,413
|
70,036
|
Products
|
557
|
2,779
|
813
|
4,009
|
Total cost of
revenues
|
22,315
|
41,619
|
51,226
|
74,045
|
Gross (loss)
profit
|
(9,544)
|
11,932
|
(21,136)
|
13,770
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
124
|
733
|
356
|
1,283
|
General
and administrative
|
5,277
|
5,878
|
11,088
|
11,201
|
Impairment
loss on goodwill
|
-
|
-
|
8,454
|
-
|
|
|
|
|
|
Total operating
expenses
|
5,401
|
6,611
|
19,898
|
12,484
|
|
|
|
|
|
Operating (loss)
income
|
(14,945)
|
5,321
|
(41,034)
|
1,286
|
Interest
income
|
136
|
355
|
185
|
560
|
Government subsidy
income
|
1,742
|
95
|
1,887
|
220
|
Gain(loss) on
disposal of subsidiaries
|
48
|
(416)
|
48
|
281
|
|
|
|
|
|
(Loss) income
before income taxes
|
(13,019)
|
5,355
|
(38,914)
|
2,347
|
Less: Income tax
expenses
|
566
|
1,798
|
4,788
|
1,361
|
|
|
|
|
|
(Loss) income
before loss in equity method investments
|
(13,585)
|
3,557
|
(43,702)
|
986
|
Loss from equity
method investments
|
(116)
|
(183)
|
(2,009)
|
(296)
|
|
|
|
|
|
|
Net (loss)
income
|
(13,701)
|
3,374
|
(45,711)
|
690
|
Less: Net (loss)
income attributable to non-controlling interest
|
(854)
|
431
|
(6,247)
|
239
|
|
|
|
|
|
Less: Decrease in
redeemable non-controlling interests
Net (loss) income
attributable to ordinary shareholders of RYB Education,
Inc.
|
-
(12,847)
|
-
2,943
|
-
(39,464)
|
(143)
594
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share attributable to ordinary shareholders of RYB Education,
Inc.
|
|
|
|
|
Basic
|
(0.46)
|
0.11
|
(1.43)
|
0.02
|
Diluted
|
(0.46)
|
0.10
|
(1.43)
|
0.02
|
Net (loss) income per
ADS attributable to ordinary shareholders of RYB Education, Inc.
(Note 1)
|
|
|
|
|
Basic
|
(0.46)
|
0.11
|
(1.43)
|
0.02
|
Diluted
|
(0.46)
|
0.10
|
(1.43)
|
0.02
|
|
|
|
|
|
Weighted average
shares used in calculating net (loss) income per ordinary
share
|
|
|
|
|
Basic
|
27,694,997
|
27,904,877
|
27,688,253
|
28,466,197
|
Diluted
|
27,694,997
|
29,239,156
|
27,688,253
|
29,813,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(in thousands of
U.S. dollars, except share, ADS, per share and per ADS
data)
|
|
|
|
Three Months Ended June
30,
|
Six Months Ended June
30,
|
|
|
2020
|
2019
|
2020
|
2019
|
Net (loss)
income
|
|
(13,701)
|
3,374
|
(45,711)
|
690
|
Other comprehensive
loss, net of tax of nil:
|
|
|
|
|
|
Change in cumulative
foreign currency translation adjustments
|
|
(256)
|
(178)
|
(1,765)
|
(241)
|
Total
comprehensive (loss) income
|
|
(13,957)
|
3,196
|
(47,476)
|
449
|
Less: Comprehensive
(loss) income attributable to non-controlling interest
|
|
(711)
|
319
|
(6,595)
|
276
|
Comprehensive
(loss) income attributable to RYB Education, Inc.
|
|
(13,246)
|
2,877
|
(40,881)
|
173
|
Note 1:Each ADS represents one
Class A ordinary share.
RECONCILIATION
OF GAAP AND NON-GAAP RESULTS
|
(in
thousands of U.S. dollars, except share, ADS, per share and per ADS
data)
|
|
|
|
Three Months
Ended June 30,
|
Six Months Ended
June 30,
|
|
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
Operating (loss)
income
|
(14,945)
|
5,321
|
(41,034)
|
1,286
|
Share-based
compensation expenses
|
810
|
964
|
1,610
|
2,261
|
Adjusted operating
(loss) income
|
(14,135)
|
6,285
|
(39,424)
|
3,547
|
|
|
|
|
|
Net (loss) income
attributable to ordinary shareholders of RYB Education,
Inc.
|
(12,847)
|
2,943
|
(39,464)
|
594
|
Share-based
compensation expenses
|
810
|
964
|
1,610
|
2,261
|
(Decrease) in
redeemable non-controlling interests
|
-
|
-
|
-
|
(143)
|
Adjusted net (loss)
income attributable to ordinary shareholders of RYB Education,
Inc.
|
(12,037)
|
3,907
|
(37,854)
|
2,712
|
|
|
|
|
|
Net (loss)
income
|
(13,701)
|
3,374
|
(45,711)
|
690
|
Add: Income tax
expense
|
566
|
1,798
|
4,788
|
1,361
|
Depreciation of
property, plant and equipment, and amortization of intangible
assets
|
2,968
|
3,027
|
6,004
|
5,468
|
EBITDA
|
(10,167)
|
8,199
|
(34,919)
|
7,519
|
Share-based
compensation expenses
|
810
|
964
|
1,610
|
2,261
|
Adjusted
EBITDA
|
(9,357)
|
9,163
|
(33,309)
|
9,780
|
|
|
|
|
|
Net (loss)income per
ADS attributable to ordinary shareholders of RYB Education, Inc.-
Basic (Note1)
|
(0.46)
|
0.11
|
(1.43)
|
0.02
|
Net (loss) income per
ADS attributable to ordinary shareholders of RYB Education, Inc.-
Diluted (Note1)
|
(0.46)
|
0.10
|
(1.43)
|
0.02
|
|
|
|
|
|
Adjusted net
(loss)income per ADS attributable to ordinary shareholders of RYB
Education Inc.- Basic (Note1)
|
(0.43)
|
0.14
|
(1.37)
|
0.10
|
Adjusted net (loss)
income per ADS attributable to ordinary shareholders of RYB
Education Inc.- Diluted (Note1)
|
(0.43)
|
0.13
|
(1.37)
|
0.09
|
|
|
|
|
|
Weighted average
shares used in calculating basic net (loss) income per
ADS(Note1)
|
27,694,997
|
27,904,877
|
27,688,253
|
28,466,197
|
Weighted average
shares used in calculating diluted net (loss) income per
ADS(Note1)
|
27,694,997
|
29,239,156
|
27,688,253
|
29,813,542
|
|
|
|
|
|
Adjusted net (loss)
income per share- Basic
|
(0.43)
|
0.14
|
(1.37)
|
0.10
|
Adjusted net (loss)
income per share- Diluted
|
(0.43)
|
0.13
|
(1.37)
|
0.09
|
Note 1:Each ADS represents one
Class A ordinary share.
[1] The number of students enrolled refers to the number of
students enrolled before the temporary closure of the Company's
facilities in China due to
COVID-19 who remained enrolled as at June
30, 2020, and the number of students enrolled in our
facilities in Singapore as at
June 30, 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 in redeemable
non-controlling interests. See "Use of Non-GAAP Financial Measures"
and "Reconciliations of GAAP and non-GAAP results" elsewhere in
this earnings release.
[3] Adjusted operating income (loss) is a non-GAAP financial
measure, which is defined as operating income (loss) excluding
share-based compensation expenses. See "Use of Non-GAAP Financial
Measures" and "Reconciliations of GAAP and non-GAAP results"
elsewhere in this earnings release.
[4] Adjusted basic and diluted net income (loss) per ADS
attributable to ordinary shareholders is a non- GAAP financial
measure, which is defined as basic and diluted net income (loss)
per ADS attributable to ordinary shareholders excluding share-based
compensation expenses and changes in redeemable non-controlling
interest. See "Use of Non-GAAP Financial Measures" and
"Reconciliations of GAAP and non-GAAP results" elsewhere in this
earnings release.
[5] EBITDA is defined as net income (loss) excluding
depreciation, amortization and income tax expenses. See "Use of
Non-GAAP Financial Measures" and "Reconciliations of GAAP and
non-GAAP results" elsewhere in this earnings release.
[6] Adjusted EBITDA is a non-GAAP financial measure, which is
defined as net income (loss) excluding depreciation, amortization,
income tax expenses, and share-based compensation expenses. See
"Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP
and non-GAAP results" elsewhere in this earnings release.
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content:http://www.prnewswire.com/news-releases/ryb-education-inc-reports-second-quarter-2020-financial-results-301120117.html
SOURCE RYB Education, Inc.