BEIJING, Nov. 28, 2018 /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 third quarter ended September 30, 2018.
Third Quarter 2018 Operational and
Financial Summary
- Number of students enrolled at RYB directly operated
kindergartens was 23,010 as of September 30,
2018 as compared to 21,413 as of September 30, 2017.
- Net revenues decreased by 5.7% to $35.3
million, compared with $37.4
million for the third quarter of 2017.
- Gross profit was $1.2 million,
compared with $9.0 million for the
third quarter of 2017.
- Net loss attributable to ordinary shareholders of RYB for the
third quarter of 2018 was $4.3
million, compared with net income attributable to ordinary
shareholders of RYB of $1.6 million
for the third quarter of 2017. Adjusted net loss attributable to
ordinary shareholders[1]
of RYB for the third quarter of 2018 was $1.9 million, compared with adjusted net income
attributable to ordinary shareholders of $3.8 million for the third quarter of 2017.
- Cash generated from operating activities was $14.7 million in the third quarter of 2018 as
compared to $19.3 million for the
third quarter of 2017.
First Nine Months of 2018 Financial Highlights
- Net revenues were $111.5 million,
compared with $101.7 million for the
first nine months of 2017.
- Gross profit was $17.7 million,
compared with $22.0 million for the
first nine months of 2017.
- Net loss attributable to ordinary shareholders of RYB for the
first nine months of 2018 was $2.3
million, compared with net income of $6.9 million for the same period last year.
Adjusted net income attributable to ordinary shareholders of RYB
for the first nine months of 2018 was $4.1
million, compared with $9.3
million for the first nine months of 2017.
- Cash generated from operating activities was $9.4 million for the nine months of 2018,
compared with $40.1 million for the
first nine months of 2017.
"The third quarter saw a slight decrease in our total revenue as
the cessation of our kindergarten franchise program and the
temporary pause of our play-and-learn franchise expansion in the
first half of this year continued to affect our performance. In
addition, a smaller kindergarten applicant population due to a
lower birth rate in 2015 also contributed to lower-than-expected
quarterly kindergarten student enrollment," said Ms. Yanlai Shi,
Co-founder, Director and Chief Executive Officer of RYB. "However,
the number of enrolled students at our directly operated
kindergartens continue to increase subsequent to the end of the
third quarter and our play-and-learn program has also gained
healthy momentum as we continue to focus on delivering quality
education and services to our students and franchisees.
Additionally, with over 70 new centers enrolled, or nearly
enrolled, in our play-and-learn offering since July, we believe
that we are well-positioned for growth in our non-kindergarten
business segments in 2019."
"Importantly, we fully support the recently issued "Opinions of
the CPC central committee and the State Council on further
reforming the orderly development of kindergarten education
("Opinion")." We will proactively work with the government agencies
tasked with regulating kindergartens to assess the impact of the
Opinion on our current kindergarten operation and make adjustments
if needed. As a well-diversified, full-service early childhood
education services provider, and as a responsible corporate
citizen, we are committed to providing individualized
age-appropriate high quality education to nurture and inspire each
child to realize his or her full potential. We firmly believe in
the value of our differentiated, high-quality early childhood
education services and the familial and societal benefits they
bring." Ms. Shi concluded.
Ms. Ping Wei, Chief Financial
Officer of RYB, added, "In the third quarter, some of our
kindergartens experienced operating losses, as lower-than-expected
enrollments and conservative pricing strategy affected our revenue
growth, and the higher costs and expenses associated with increases
in teachers' and staff compensation also affected our margin. Our
total revenues for the quarter were also impacted by the
implementation of the new GAAP revenue recognition requirements
ASC606 for initial franchise fees as well as the impact of pausing
of the kindergarten franchise program and the temporary pause of
play-and-learn franchises for the first half of this year. In
addition, the third quarter is a seasonally low revenue and
profitability quarter, especially for directly operated
kindergartens, as many students take time off in the summer."
"Looking forward, we will continue to focus on our educational
quality by investing in our teachers, educational content and
innovations. We will also continue to prioritize the security and
safety of our children and our facilities. Furthermore, in response
to the CPC's mandate to increase the affordability and
accessibility of quality kindergarten education, we may see more of
our kindergarten facilities offering inclusive kindergarten
services in the future. All these may affect our revenue growth and
margins for the short term. We remain fully committed to providing
high-quality education programs and social value to our students
and their families and maintain our steadfast focus on providing
sustained value for our shareholders," Ms. Wei remarked.
Third Quarter 2018 Financial Results
Net Revenues
Net revenues for the third quarter of 2018 decreased by 5.7% to
$35.3 million, from $37.4 million for the same quarter of 2017.
Service revenues for the third quarter of 2018 decreased by 2.2%
to $31.2 million, from $31.9 million for the same quarter of 2017. The
decrease was primarily due to the decreased franchise services
revenue as the pausing of the kindergarten franchise program,
temporary pause of play-and-learn franchise expansion during the
first half of this year as well as lower revenue generated from
existing franchisees as a one-off fee reduction at the beginning of
this year all affected revenue generated in the quarter. The
decrease was partially offset by the increase in kindergarten
revenue as the number of facilities in operation and number of
students enrolled all increased from same period last year.
Product revenues for the third quarter of 2018 decreased by
25.9% to $4.1 million, from
$5.5 million for the same quarter of
2017. The decrease was primarily due to a decrease in the amount of
merchandise sold through the Company's franchise network as the
Company paused franchise expansion for the first half of this
year.
Cost of Revenues
Cost of revenues for the third quarter of 2018 was $34.0 million, a 19.9% increase from $28.4 million for the same quarter of 2017. Cost
of revenues for services for the third quarter of 2018 was
$31.9 million, compared with
$25.3 million for the same quarter of
2017. The increase was primarily due to an increase in staff
compensation at the Company's directly operated kindergartens and
higher operating cost, such as rental and material consumption as
the Company continued to moderately expand its kindergarten
facilities network. Cost of products revenues for the third quarter
of 2018 was $2.2 million, compared
with $3.1 million for the same
quarter of 2017. The reduction was in line with the decrease in
revenue.
Gross Profit and Gross Margin
Gross profit for the third quarter of 2018 decreased by 86.4% to
$1.2 million, compared with
$9.0 million for the same quarter of
2017. The decrease in gross profit was primarily due to the
losses generated with the Company's directly operated kindergartens
due to higher costs and expenses incurred and lower margin
generated from franchise operation.
Gross margin for the third quarter of 2018 was 3.5%, compared
with 24.1% for the same quarter last year. The decrease in gross
margin was primarily due to the decreased franchise fee revenue and
the increase in staff compensation and operating costs at the
directly operated kindergartens.
Operating Expenses
Total operating expenses for the third quarter of 2018 were
$6.5 million, comparable with
$6.3 million for the same quarter of
2017. Excluding share-based compensation expenses, operating
expenses were $4.9 million, an
increase of 19.2% from $4.1 million
for the third quarter of 2017.
Selling expenses for the third quarter of 2018 were $0.8 million, compared with $0.5 million for the same quarter of 2017.
General and administrative ("G&A") expenses for the third
quarter of 2018 were $5.6 million,
comparable with $5.7 million for the
same quarter of 2017. Excluding share-based compensation expenses,
G&A expenses were $4.1 million
for the third quarter of 2018, a 12.8% increase from $3.6 million for the same quarter of 2017. The
increase in G&A expenses excluding share-based compensation
expenses was primarily due to higher payroll expenses and
additional expenses incurred in professional service fees. The
share-based compensation expenses included in G&A expenses were
$1.5 million for the quarter.
Operating Income/loss
Operating loss for the third quarter of 2018 was $5.3 million, compared with $2.8 million operating income for the same
quarter last year. Adjusted operating loss[2] was $3.7
million for the third quarter of 2018, compared with
$4.9 million adjusted operating
income for the same quarter of 2017.
Net Income/loss
Net loss attributable to ordinary shareholders of RYB for the
third quarter of 2018 was $4.3
million, compared with net income attributable to ordinary
shareholders of RYB of $1.6 million
for the same quarter of 2017. Adjusted net loss attributable to
ordinary shareholders of RYB, which excludes the impact of
$1.6 million of share-based
compensation expense and $0.8 million
accretion of redeemable non-controlling interests for the third
quarter of 2018, was $1.9 million,
compared with adjusted net income attributable to ordinary
shareholders of RYB of $3.8 million
for the same quarter of 2017.
Basic and diluted net losses per American depositary share
("ADS") attributable to ordinary shareholders of RYB for the third
quarter of 2018 were both $0.15,
compared with basic and diluted net income per ADS attributable to
ordinary shareholders of RYB of $0.07
and $0.06, respectively, for the same
quarter of 2017. Each ADS represents one Class A ordinary
share.
Adjusted basic and diluted net losses per ADS attributable to
ordinary shareholders[3]
of RYB for the third quarter of 2018 were both $0.06, compared with adjusted basic and diluted
net income per ADS attributable to ordinary shareholders of RYB of
$0.16 and $0.15, respectively, for the same quarter of
2017.
EBITDA[4] for the
third quarter of 2018 was a loss of $2.0
million, compared with an income of $4.5 million for the same period of 2017.
Adjusted EBITDA[5] for the third quarter of 2018 was a
loss of $0.4 million, compared with
an income of $6.7 million for the
same quarter of 2017.
Balance Sheet
As of September 30, 2018, the
Company had total cash, cash equivalents and term deposits of
$137.6 million, compared with
$158.7 million as of December 31, 2017. The decrease in cash balance
was primarily driven by acquisition payments of $15.3 million, capital expenditures of
$9.7 million; partially offset by
$9.4 million of operational cash flow
generated for the first nine months of 2018.
Operating Cash Flow
Cash generated from operating activities were $14.7 million during the third quarter of 2018,
compared with $19.3 million from
operating activities during the third quarter of 2017. The decrease
was primarily due to the decreased cash earnings in the
quarter.
First Nine Months of 2018 Financial Results
Net Revenues
Net revenues for the first nine months of 2018 were $111.5 million, compared with $101.7 million for the first nine months of
2017.
Services revenues for the first nine months of 2018 were
$100.8 million, compared with
$88.1 million for the same period
last year. The increase was mainly contributed by the increase in
kindergarten revenue as the number of facilities in operation and
number of students enrolled both increased from the same period
last year. Franchise services revenue also contributed to the
increase due to the recognition of initial franchise fee revenue
over the service period as the Company adopted Topic 606 "Revenue
from Contracts with Customers" (ASC 606) applying the modified
retrospective method to franchise contracts not completed as of
January 1, 2018. This increase was
partially offset by reduced revenue due to the pausing of the
kindergarten franchise program, temporary pause of play-and-learn
franchise expansion during the first half of this year as well as
lower revenue generated from existing franchisees as a one-off fee
reduction at the beginning of this year continued.
Products revenues for the first nine months of 2018 were
$10.7 million, compared with
$13.6 million for the same period in
2017. 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 first nine months of 2018 was
$93.8 million, compared with
$79.7 million for the first nine
months of 2017. Cost of services revenues for the first nine months
of 2018 was $88.0 million, compared
with $72.2 million for the same
period in 2017. The increase was primarily due to an increase in
staff compensation at the Company's directly operated kindergartens
and higher operating cost, such as rental and material consumption
as the Company continued to moderately expand its kindergarten
facilities network. Cost of products revenues for the first nine
months of 2018 was $5.8 million,
compared with $7.5 million for the
same period last year. The reduction was in line with the decrease
in product revenue.
Gross Profit and Gross Margin
Gross profit for the first nine months of 2018 was $17.7 million, compared with $22.0 million for the first nine months of
2017.
Gross margin for the first nine months of 2018 was 15.9%,
compared with 21.7% for the same period last year.
Operating Expenses
Total operating expenses for the first nine months of 2018 were
$20.6 million, compared with
$12.6 million for the same period
last year. Excluding share-based compensation expenses, operating
expenses were $15.2 million.
Selling expenses were $1.5 million
for the first nine months of 2018, compared with $1.2 million for the same period last year.
G&A expenses for the first nine months of 2018 were
$19.1 million, compared with
$11.3 million for the same period
last year. Excluding share-based compensation expenses, G&A
expenses were $13.7 million for the
first nine months of 2018, a 51.4% increase from $9.1 million for the same quarter of 2017. The
increase in G&A expenses excluding share-based compensation
expenses was primarily due to higher payroll expenses and
additional expenses incurred in professional service fees.
Operating Income/loss
Operating loss for the first nine months of 2018 was
$2.9 million, compared with operating
income of $9.5 million for the same
period last year. Adjusted operating income for the first nine
months of 2018 was $2.6 million,
compared with $11.8 million for the
same period last year.
Net Income/loss
Net loss attributable to ordinary shareholders of RYB for the
first nine months of 2018 was $2.3
million, compared with $6.9
million for the same period last year. Adjusted net income
attributable to ordinary shareholders of RYB, which excludes the
impact of share-based compensation expenses and assertion of
redeemable non-controlling interests, for the first nine months of
2018 was $4.1 million, compared with
$9.3 million for the same period last
year.
Basic and diluted net losses per ADS attributable to ordinary
shareholders of RYB for the first nine months of 2018 were both
$0.08, compared with basic and
diluted net income per ADS attributable to ordinary shareholders of
RYB of $0.30 and $0.28, respectively, for the same period last
year. Each ADS represents one Class A ordinary share.
Adjusted basic and diluted net income per ADS attributable to
ordinary shareholders of RYB for the first nine months of 2018 were
$0.14 and $0.13, respectively, compared with adjusted basic
and diluted net income per ADS attributable to ordinary
shareholders of RYB of $0.40 and
$0.37, respectively, for the same
period last year.
EBITDA for the first nine months of 2018 was $5.3 million, compared with $14.2 million for the same period last year.
Adjusted EBITDA for the first nine months of 2018 was $10.8 million, compared with $16.5 million for the same period last year.
Outlook
For the fourth quarter of 2018, the Company's management
currently expects:
- Net revenues to be between
$39.8 million and $43.8 million, representing a year-over-year
increase of approximately 1.8% to 12.0%.
For the full year of 2018, the Company's management currently
expects:
- Net revenues to be between
$151 million and $155 million, representing a year-over-year
increase of approximately 7.2% to 10.1%.
The above outlook is based on the current market conditions and
reflects the Company management's current and preliminary estimates
of market and operating conditions and customer demand, which are
all subject to change.
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.
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,
amortization, interest expenses, and income tax expenses; adjusted
EBITDA is defined as net income excluding depreciation,
amortization, interest expenses, 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
accretion 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 accretion of redeemable non-controlling
interests.
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) 5730-6200
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
[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 accretion 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.
|
[2] Adjusted
operating loss is a non-GAAP financial measure, which is defined as
operating income 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.
|
[3] 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 and
accretion of redeemable non-controlling interest. See "Use of
Non-GAAP Financial Measures" and "Reconciliations of GAAP and
non-GAAP results" elsewhere in this earnings release.
|
[4] EBITDA is
defined as net income excluding depreciation, amortization and
income tax expenses. See "Use of Non-GAAP Financial Measures" and
"Reconciliations of GAAP and non-GAAP results" included elsewhere
in this earnings release.
|
[5] 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. See "Use of Non-GAAP
Financial Measures" and "Reconciliations of GAAP and non-GAAP
results" included elsewhere in this earnings
release.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS BALANCE SHEETS
|
(in thousands of
U.S. dollars)
|
|
|
|
|
|
|
|
As
of
|
|
September 30,
2018
|
December 31,
2017
|
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
82,468
|
158,691
|
Term
deposits
|
55,146
|
-
|
Accounts receivable,
net
|
1,162
|
901
|
Inventories
|
5,009
|
3,549
|
Prepaid expenses and
other current assets
|
14,125
|
9,541
|
Amounts due from
related parties
|
36
|
126
|
Total current
assets
|
157,946
|
172,808
|
|
|
|
Non-current
assets
|
|
|
Restricted
Cash
|
771
|
543
|
Property and
equipment, net
|
46,039
|
40,163
|
Acquired intangible
assets
|
4,766
|
-
|
Goodwill
|
26,369
|
428
|
Long-term
investment
|
164
|
256
|
Deferred tax
assets
|
15,373
|
12,430
|
Loan
receivables
|
1,165
|
-
|
Other non-current
assets
|
4,499
|
3,110
|
Available-for-sale
security
|
437
|
-
|
Total non-current
assets
|
99,583
|
56,930
|
|
|
|
Total
assets
|
257,529
|
229,738
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
Current
liabilities
|
|
|
Prepayments from
customers, current
portion(including prepayments from customers
of the consolidated VIEs without recourse to the
Group of $7,624 and $11,962 as of September
30, 2018 and December 31, 2017, respectively)
|
7,653
|
11,968
|
Accrued expenses and
other current
liabilities (including accrued expenses and other
current liabilities of the consolidated VIEs
without recourse to the Group of $58,098 and
$48,123 as of September 30, 2018 and
December 31, 2017, respectively)
|
63,348
|
51,854
|
Income taxes
payable(including income taxes
payable of the consolidated VIEs without
recourse to the Group of $5,249 and $10,125 as
of September 30, 2018 and December 31, 2017,
respectively)
|
9,785
|
10,534
|
Deferred revenue,
current portion(including
deferred revenue of the consolidated VIEs
without recourse to the Group of $37,485 and
$22,327 as of September 30, 2018 and December
31, 2017, respectively)
|
44,289
|
22,666
|
|
|
|
Total current
liabilities
|
125,075
|
97,022
|
|
|
|
Non-current
liabilities
|
|
|
Prepayments from
customers, non-current
portion (including prepayments from customers
of the consolidated VIEs without recourse to the
Group of $3,956 and $8,542 as of September 30,
2018 and December 31, 2017, respectively)
|
3,956
|
8,542
|
Deferred revenue,
non-current portion (including
deferred revenue of the consolidated VIEs
without recourse to the Group of $5,687 and
$8,505 as of September 30, 2018 and December
31, 2017, respectively)
|
7,045
|
10,396
|
Deferred income taxes
liabilities(including
deferred income taxes liabilities of the
consolidated VIEs without recourse to the Group
of $499 and nil as of September 30, 2018 and
December 31, 2017, respectively)
|
1,178
|
-
|
Other non-current
liabilities (including other
non-current liabilities of the consolidated VIEs
without recourse to the Group of $8,166 and
$8,484 as of September 30, 2018 and December
31, 2017, respectively)
|
8,166
|
8,484
|
Total non-current
liabilities
|
20,345
|
27,422
|
|
|
|
Total
liabilities
|
145,420
|
124,444
|
Mezzanine
equity
Redeemable
non-controlling interests
|
1,672
|
-
|
Shareholders'
equity:
|
|
|
Ordinary
shares
|
29
|
29
|
Additional paid-in
capital
|
134,426
|
129,134
|
Statutory
reserve
|
2,678
|
2,678
|
Accumulated other
comprehensive (loss) income
|
(316)
|
783
|
Accumulated
deficits
|
(30,300)
|
(28,879)
|
Total RYB
Education, Inc. shareholders'
equity
|
106,517
|
103,745
|
|
|
|
Non-controlling
interests
|
3,920
|
1,549
|
|
|
|
Total
equity
|
110,437
|
105,294
|
|
|
|
Total liabilities,
mezzanine equity and total
equity
|
257,529
|
229,738
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands of
U.S. dollars, except share, ADS, per share and per ADS
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September
30,
|
Nine Months Ended
September
30,
|
|
|
2018
|
2017
|
2018
|
2017
|
Net
revenues:
|
|
|
|
|
Services
|
31,151
|
31,865
|
100,753
|
88,114
|
Products
|
4,106
|
5,539
|
10,741
|
13,628
|
Total net
revenues
|
35,257
|
37,404
|
111,494
|
101,742
|
Cost of
revenues:
|
|
|
|
|
Services
|
31,870
|
25,257
|
87,976
|
72,230
|
Products
|
2,166
|
3,139
|
5,784
|
7,463
|
Total cost of
revenues
|
34,036
|
28,396
|
93,760
|
79,693
|
Gross
profit
|
1,221
|
9,008
|
17,734
|
22,049
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
Expenses
|
844
|
513
|
1,537
|
1,238
|
General and
administrative
|
5,628
|
5,744
|
19,090
|
11,313
|
Total operating
expenses
|
6,472
|
6,257
|
20,627
|
12,551
|
|
|
|
|
|
Operating (loss)
income
|
(5,251)
|
2,751
|
(2,893)
|
9,498
|
Interest
income
|
465
|
51
|
1,503
|
128
|
Government subsidy
income
|
94
|
239
|
384
|
420
|
Gain (loss) on
disposal of subsidiaries
|
-
|
-
|
1
|
(168)
|
|
|
|
|
|
(Loss) income
before income taxes
|
(4,692)
|
3,041
|
(1,005)
|
9,878
|
Less: Income tax
(benefits)/expenses
|
(843)
|
1,529
|
552
|
3,326
|
|
|
|
|
|
(Loss) income
before loss in equity method
investments
|
(3,849)
|
1,512
|
(1,557)
|
6,552
|
Loss from equity
method investment
|
(134)
|
(30)
|
(224)
|
(122)
|
|
|
|
|
|
Net (loss)
income
|
(3,983)
|
1,482
|
(1,781)
|
6,430
|
Less: Net loss
attributable to non-controlling
interest
|
(524)
|
(106)
|
(319)
|
(485)
|
|
|
|
|
|
Less: Accretion of
redeemable non-controlling
interests
|
885
|
-
|
885
|
-
|
|
|
|
|
|
Net (loss) income
attributable to ordinary
shareholders of RYB Education, Inc.
|
(4,344)
|
1,588
|
(2,347)
|
6,915
|
|
|
|
|
|
Net (loss) income per
share attributable to
ordinary shareholders of RYB Education, Inc.
|
|
|
|
|
Basic
|
(0.15)
|
0.07
|
(0.08)
|
0.30
|
Diluted
|
(0.15)
|
0.06
|
(0.08)
|
0.28
|
Net (loss) income per
ADS attributable to
ordinary shareholders of RYB Education, Inc.
(Note 1)
|
|
|
|
|
Basic
|
(0.15)
|
0.07
|
(0.08)
|
0.30
|
Diluted
|
(0.15)
|
0.06
|
(0.08)
|
0.28
|
|
|
|
|
|
Weighted average
shares used in calculating net
income per ordinary share
|
Basic
|
29,406,801
|
23,343,149
|
29,324,087
|
23,224,241
|
Diluted
|
29,406,801
|
25,255,573
|
31,458,658
|
24,858,196
|
|
|
|
|
|
|
Net (loss)
income
|
|
(3,983)
|
1,482
|
(1,781)
|
6,430
|
Other comprehensive
(loss) income, net of tax
of nil:
|
|
|
|
|
|
Change in cumulative
foreign currency
translation adjustments
|
|
(819)
|
128
|
(2,441)
|
295
|
|
|
|
|
|
|
Total
comprehensive (loss) income
|
|
(4,802)
|
1,610
|
(4,222)
|
6,725
|
Less: Comprehensive
loss attributable to non-
controlling interest
|
|
(544)
|
(86)
|
(601)
|
(446)
|
|
|
|
|
|
|
Comprehensive
(loss) income attributable to
RYB Education, Inc.
|
|
(4,258)
|
1,696
|
(3,621)
|
7,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
September 30,
|
Nine Months Ended
September 30,
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
Operating (loss)
income
|
(5,251)
|
2,751
|
(2,893)
|
9,498
|
Share-based
compensation expenses
|
1,562
|
2,169
|
5,536
|
2,336
|
Adjusted operating
(loss) income
|
(3,689)
|
4,920
|
2,643
|
11,834
|
|
|
|
|
|
Net (loss) income
attributable to ordinary
shareholders of RYB Education, Inc.
|
|
|
|
|
(4,344)
|
1,588
|
(2,347)
|
6,915
|
|
|
|
|
|
Share-based
compensation expenses
|
1,562
|
2,169
|
5,536
|
2,336
|
Accretion of
redeemable non-controlling
interests
|
885
|
-
|
885
|
-
|
Adjusted net (loss)
income attributable to
ordinary shareholders of RYB Education, Inc.
|
(1,897)
|
3,757
|
4,074
|
9,251
|
|
|
|
|
|
Net (loss)
income
|
(3,983)
|
1,482
|
(1,781)
|
6,430
|
Add: Income tax
expense
|
(843)
|
1,529
|
552
|
3,326
|
Depreciation of
property, plant and
equipment, and amortization of intangible assets
|
2,864
|
1,527
|
6,530
|
4,431
|
EBITDA
|
(1,962)
|
4,538
|
5,301
|
14,187
|
Share-based
compensation expenses
|
1,562
|
2,169
|
5,536
|
2,336
|
Adjusted
EBITDA
|
(400)
|
6,707
|
10,837
|
16,523
|
|
|
|
|
|
Net (loss) income per
ADS attributable to
ordinary shareholders of RYB Education,Inc.-
Basic (Note1)
|
(0.15)
|
0.07
|
(0.08)
|
0.30
|
Net (loss) income per
ADS
attributable to ordinary shareholders of RYB
Education,Inc.-
Diluted (Note1)
|
(0.15)
|
0.06
|
(0.08)
|
0.28
|
|
|
|
|
|
Adjusted net (loss)
income per ADS
attributable to ordinary shareholders of RYB
Education,Inc.- Basic (Note1)
|
(0.06)
|
0.16
|
0.14
|
0.40
|
Adjusted net (loss)
income per ADS
attributable to ordinary shareholders of RYB
Education,Inc.- Diluted (Note1)
|
|
|
|
|
(0.06)
|
0.15
|
0.13
|
0.37
|
|
|
|
|
|
Weighted average
shares used in calculating
basic net income per ADS(Note1)
|
29,406,801
|
23,343,149
|
29,324,087
|
23,224,241
|
Weighted average
shares used in calculating
diluted net income per ADS(Note1)
|
29,406,801
|
25,255,573
|
31,458,658
|
24,858,196
|
|
|
|
|
|
Adjusted net income
per share- Basic
|
(0.06)
|
0.16
|
0.14
|
0.40
|
Adjusted net income
per share- Diluted
|
(0.06)
|
0.15
|
0.13
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1:Each ADS represents one Class A ordinary share.
|
View original
content:http://www.prnewswire.com/news-releases/ryb-education-inc-reports-third-quarter-2018-financial-results-300757299.html
SOURCE RYB Education, Inc.