Form: 6-K

Current report of foreign issuer pursuant to Rules 13a-16 and 15d-16 Amendments

May 12, 2022

 

Exhibit 99.1

 

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

 

BEIJING, May 11, 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 shareholders1 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.

 

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 shareholders2 of RYB for 2021 was $5.4million, compared with adjusted net loss of $34.4 million for 2020.

 

“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.

 

 

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.

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.

 

 

 

 

“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.

 

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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 $0.1 million, compared with $1.2 million of operating income for the same quarter last year. Adjusted operating income3 was $0.5 million for the fourth quarter of 2021, compared with $1.9 million for the same quarter of 2020.

 

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 2021was $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.

 

 

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

 

3

 

 

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders4 of RYB for the fourth quarter of 2021 were both $0.05, compared with both $0.36 for the same quarter of 2020.

 

EBITDA5 for the fourth quarter of 2021 was $3.7 million, compared with $5.2 million for the same period of 2020. Adjusted EBITDA6 for the fourth quarter of 2021 was $4.0 million, compared with $5.9 million for the same quarter of 2020.

 

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 to increase 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.

 

 

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.

 

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Gross Profit / 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, which excludes the impact of share-based compensation expenses and changes of redeemable non-controlling interests, 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.

 

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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, 2021, 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, training, 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, 2021, as if the Divestiture had become effective on January 1, 2021, are also attached with the Company’s unaudited consolidated financial statements.

 

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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, 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 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, 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.

 

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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

 

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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     -       7  
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     29       29  
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     283,076       302,491  

 

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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,
    Year Ended 
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       -       4,559       8,454  
Impairment loss on long-lived assets     -       2,148       -       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     61       61       219       348  
Government subsidy income     119       1,601       2,491       4,591  
Gain on disposal of subsidiaries     621       216       439       96  
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       39       (15 )     (185 )
                                 
Net income/(loss)     24       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 )     -       (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       28,122,851  

 

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

 

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands of U.S. dollars)

 

    Three Months Ended
December 31,
    Year Ended
December 31,
 
    2021     2020     2021     2020  
Net income/(loss)     24       10,865       3,529       (41,183 )
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 )

 

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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
December 31,
    Year 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       2,021       2,930  
Decrease in redeemable non-controlling interest     (3,450 )     -       (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)     24       10,865       3,529       (41,183 )
Add: Income tax expense (benefit)     1,008       (8,298 )     3,440       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       2,021       2,930  
Adjusted EBITDA     4,018       5,860       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 (Note1)     0.16       0.33       0.23       (1.33 )
                                 
Adjusted net income/(loss) per ADS attributable to ordinary shareholders of RYB Education,Inc.- Basic (Note1)     0.05       0.36       0.19       (1.22 )
Adjusted net income/(loss) per ADS attributable to ordinary shareholders of RYB Education,Inc.- Diluted (Note1)     0.05       0.36       0.19       (1.22 )
                                 
Weighted average shares used in calculating basic net income/(loss)/adjusted net income /(loss) per ADS(Note1)     28,003,415       27,792,174       28,208,734       28,122,851  
Weighted average shares used in calculating diluted net income/(loss) per ADS(Note1)     28,796,018       28,196,921       28,962,480       28,122,851  
Weighted average shares used in calculating diluted adjusted net income/(loss) per ADS(Note1)     28,796,018       28,196,921       28,962,480       28,122,851  
                                 
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.

 

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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     Divestiture     Non  
                Adjustment     Divestiture  
ASSETS                        
Current assets                                
Cash and cash equivalents     65,263       31,892       -       33,371  
Term deposits     215       215       -       -  
Accounts receivable     1,300       27       -       1,273  
Inventories     6,130       -       -       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       993       -       -  
Property, plant and equipment, net     39,379       32,967       -       6,412  
Goodwill     42,102       22,925       -       19,177  
Intangible assets, net     12,737       1,638       -       11,099  
Long-term investments     169       -       -       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       22,576  
Amounts due from related parties     -       -       44,664       44,664  
TOTAL ASSETS     283,076       163,810       67,240       186,506  
                                 
LIABILITIES                                
Current liabilities                                
Prepayments from customers, current portion     4,919       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, current portion     13,890       8,503       -       5,387  
Deferred revenue, current portion     27,019       18,865       -       8,154  
Long-term debt, current portion     -       -       -       -  
Amounts due to related parties     -       44,664       44,664       -  
Total current liabilities     122,358       124,572       44,664       42,450  
                                 
Non-current liabilities                                
Prepayments from customers, non-current portion     1,461       540       -       921  
Deferred revenue, non-current portion     999       -       -       999  
Other non-current liabilities     11,645       2,071       -       9,574  
Deferred income tax liabilities     1,768       14       -       1,754  
Operating lease liabilities, non-current portion     65,689       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  

 

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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     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       4,559       -       -  
Total operating expenses     27,336       8,031       -       19,305  
                                 
Operating income     3,835       345       -       3,490  
                                 
Interest income     219       144       -       75  
Government subsidy income     2,491       1,053       -       1,438  
Gain (loss) on disposal of subsidiaries     439       459               (20 )
Gain on divestiture                     34,068       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  
                                 

 

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