BEST Inc. Announces Unaudited Second Quarter 2020 Financial Results
BEST Inc. (NYSE: BEST) reported its financial results for Q2 2020, revealing a 4.2% year-over-year decline in revenue to RMB8.42 billion (US$1.19 billion). Despite a net loss of RMB30.9 million, the company improved its gross profit by 9.6% to RMB570 million. The gross margin increased by 0.9 percentage points to 6.8%. Adjusted EBITDA reached RMB158 million, signaling effective cost management amid the pandemic recovery. BEST’s Express and Freight segments saw volume growth of 19.3% and 28.9% respectively, while the company expanded in Southeast Asia, launching services in Malaysia, Singapore, and Cambodia.
- Gross profit increased by 9.6% to RMB570 million.
- Adjusted EBITDA reached RMB158 million, up from RMB148.2 million YoY.
- Express parcel volume grew by 19.3% YoY.
- Freight volume grew by 28.9% YoY.
- Revenue declined by 4.2% YoY to RMB8.42 billion.
- Net loss increased to RMB30.9 million from RMB22.4 million YoY.
- ASP for Express services decreased by 20.7% YoY.
HANGZHOU, China, Aug. 17, 2020 /PRNewswire/ -- BEST Inc. (NYSE: BEST) ("BEST" or the "Company"), a leading integrated smart supply chain solutions and logistics services provider in China, today announced its unaudited financial results for the quarter ended June 30, 2020.
Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, "With the height of the COVID-19 pandemic in China behind us, we made a faster-than-expected recovery as we benefited from the deeper and wider trends of digitalization for merchants and online shopping for consumers. In the second quarter of 2020, we strategically targeted both top-line growth and profitability while enhancing efficiency across our businesses. As a result, we continued to gain healthy volume growth while lowering costs in our Express and Freight segments and improved our gross margin by 0.9 percentage point year-over-year, despite challenging market dynamics. We also continued to make strong progress in Store+, which resulted in a significant reduction in losses. We are confident that we have developed the right business model for Store+ that would bring a positive impact to the Company's revenue growth and profitability. Our momentum has also been strong for Global, driven by robust demand in Southeast Asia, and further boosted by our entries into the markets of Malaysia, Singapore and Cambodia during the second quarter."
"We are committed to delivering high-quality growth in a challenging market environment. Going forward, we plan to maintain a balanced growth strategy and strive for profitability by continuing leveraging our technology-enabled integrated supply chain and logistics service model, through emphasizing e-commerce, investing in technology application and automation, capturing revenue and cost synergies across multiple business units, and enhancing service quality." concluded Mr. Chou.
Gloria Fan, BEST's Chief Financial Officer, commented, "In the second quarter, we continued efforts of cost and expense reductions, while reduced risks by emphasizing accounts with higher margins and implementing stringent credit control. Although we recorded a net loss of RMB 30.9 million, we achieved a gross profit of RMB570 million, a year-over-year increase of
FINANCIAL HIGHLIGHTS[1]
For the Quarter Ended June 30, 2020:
- Revenue was RMB8,418.3 million (US
$1,191.5 million ), a decrease of4.2% year-over-year ("YoY"). The decrease was primarily due to a decrease in average selling price (ASP) of Express business, partially offset by an increase in Express volume. - Gross Profit was RMB569.7 million (US
$80.6 million ), an increase of9.6% YoY compared to gross profit of RMB520.1 million in the same period of 2019. The increase was primarily due to improved operating efficiency resulted from continued cost reduction, partially offset by a decrease in revenue. Gross Margin was6.8% , an increase of 0.9 percentage point (ppt) YoY. - Net Loss was RMB30.9 million (US
$4.4 million ), compared to a net loss of RMB22.4 million in the same period of 2019. Non-GAAP Net Income[2][3]was RMB11.2 million (US$1.6 million ), compared to non-GAAP Net Income of RMB6.5 million in the same period of 2019. - Diluted EPS[4]was negative RMB0.06 (US
$0.01) , compared to negative RMB0.05 in the same period of 2019. Non-GAAP diluted EPS[3][5] was RMB0.05 (US$0.01) , compared to RMB0.02 in the same period of 2019. - EBITDA[3][6]was RMB117.9 million (US
$16.7 million ), compared to RMB122.0 million in the same period of 2019. Adjusted EBITDA[3][6] was RMB157.7 million (US$22.3 million ), compared to RMB148.2 million in the same period of 2019.
BUSINESS HIGHLIGHTS AND STRATEGIC UPDATES[1]
Core Logistics and Supply Chain
The Company's results rebounded strongly in the quarter ended June 30, 2020 as the impact from COVID-19 pandemic in China subsided. In addition to the company-wide pursuit of balanced top-line growth and profitability, its key strategic focus during the quarter also included:
- Emphasis on business integrations, synergies and efficiencies: the Company continued to emphasize e-commerce related transactions across all business units. This helped the Company achieve strong business-to-consumer (B2C) order growth during the quarter. Furthermore, the Company continued to enhance automation for its hubs and sortation centers, and combine dynamic routing between Express and Freight to drive down unit costs.
- Enhancement of service quality: the Company continued to focus on service enhancement, network flexibility, density of last-mile service outlets, and overall customer experience.
BEST Express – Successfully executed its strategy of balanced quality growth and profitability through continued cost reduction and improved quality of service. Parcel volume increased by
BEST Freight – Continued to solidify its leadership position and achieved a growth rate significantly higher than industry-wide average, as well as strong gross margin expansion of 2.5 ppts YoY, driven primarily by the Company's focus on e-commerce products, economies of scale and continuous network optimization. Freight volume increased by
BEST Supply Chain Management – Focused on expanding franchised Cloud OFC business, while targeting projects with higher margins and clients with strong credit profile. As a result, gross margin increased by 0.8 ppt YoY to
BEST UCargo – The number of registered drivers on the UCargo mobile app increased
BEST Capital – As of June 30, 2020, BEST Capital had provided financing solutions to 12,373 trucks in total, a quarter-over-quarter ("QoQ") increase of
BEST Store+
Store+ business continued to execute its strategy of enhancing order quality to improve gross margin, while developing its asset-light partnership model which enables accelerated acquisition of both membership stores and franchised BEST-Neighbor stores, and contributes to lower selling and fulfilling expenses to achieve profitability. As a result, gross margin increased by 2.5ppts YoY to
BEST Global
Global continued with strong momentum in Southeast Asia. In the quarter ended June 30, 2020, parcel volume in Thailand increased by
Key Operational Metrics | |||||||||
Three Months Ended | % Change YoY | ||||||||
Express Parcel Volume (in '000) | June 30, | June 30, | June 30, | 2019 VS | 2020 VS | ||||
1,280,050 | 1,906,863 | 2,274,585 | |||||||
Freight Volume (Tonne in '000) | 1,366 | 1,730 | 2,230 | ||||||
Supply Chain Management | 61,178 | 86,663 | 111,332 | ||||||
UCargo Number of | 96 | 115 | 137 | ||||||
Store+ Total Number of | 871 | 780 | 768 | ( | ( | ||||
Global Parcel Volume in | - | 783 | 16,100 | - | 1, | ||||
FINANCIAL RESULTS
For the Quarter Ended June 30, 2020:
Revenue:
The following table sets forth a breakdown of revenue by business segment for the periods indicated.
Table 1 – Breakdown of Revenue by Business Segment
Three Months Ended | ||||||||||||
June 30, 2019 | June 30, 2020 | |||||||||||
(In '000, except for %) | RMB | % of | RMB | US$ | % of | % Change | ||||||
Core logistics and supply chain | ||||||||||||
Express | 5,448,476 | 5,151,845 | 729,196 | ( | ||||||||
Freight | 1,305,785 | 1,364,989 | 193,202 | |||||||||
Supply Chain Management | 600,211 | 509,708 | 72,144 | ( | ||||||||
UCargo | 521,830 | 492,554 | 69,716 | ( | ||||||||
Capital | 56,398 | 49,314 | 6,980 | ( | ||||||||
Total core logistics and supply chain | 7,932,700 | 7,568,410 | 1,071,238 | ( | ||||||||
Store+ | 790,558 | 657,364 | 93,044 | ( | ||||||||
Global | 64,872 | 192,500 | 27,247 | |||||||||
Total Revenue | 8,788,130 | 8,418,274 | 1,191,529 | ( | ||||||||
Core Logistics and Supply Chain
- Express Service Revenue decreased by
5.4% YoY to RMB5,151.8 million (US$729.2 million ) from RMB5,448.5 million, primarily due to a20.7% YoY decrease in ASP per parcel, offset by a19.3% YoY increase in parcel volume. The decrease in ASP is primarily attributable to competitive market dynamics. - Freight Service Revenue increased by
4.5% YoY to RMB1,365.0 million (US$193.2 million ) from RMB1,305.8 million, primarily due to a28.9% YoY increase in freight volume, offset by a18.9% YoY decrease in ASP per tonne. - Supply Chain Management Service Revenue decreased by
15.1% YoY to RMB509.7 million (US$72.1 million ) from RMB600.2 million, primarily due to a decrease in transportation service revenue, partially offset by a28.5% increase in number of B2C orders fulfilled. - BEST UCargo Revenue decreased by
5.6% YoY to RMB492.6 million (US$69.7 million ) from RMB521.8 million, primarily due to discontinuation of several key account customers to minimize credit exposure. - BEST Capital Revenue decreased by
12.6% YoY to RMB49.3 million (US$7.0 million ) from RMB56.4 million, primarily due to implementation of more stringent credit control policies.
BEST Store+ - Revenue decreased by
BEST Global - Revenue increased by
Cost of Revenue:
The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.
Table 2 – Breakdown of Cost of Revenue by Business Segment
Three Months Ended | % of Revenue YoY | |||||||||||
June 30, 2019 | June 30, 2020 | |||||||||||
(In '000, except for %) | RMB | % of | RMB | US$ | % of | |||||||
Core logistics and supply chain | ||||||||||||
Express | (5,203,842) | (4,874,191) | (689,897) | (0.9ppt) | ||||||||
Freight | (1,222,296) | (1,242,847) | (175,914) | (2.5ppts) | ||||||||
Supply Chain Management | (546,778) | (460,298) | (65,151) | (0.8ppt) | ||||||||
UCargo | (499,994) | (479,946) | (67,932) | 1.6ppts | ||||||||
Capital | (16,794) | (4,545) | (643) | (20.6ppts) | ||||||||
Total for core logistics and supply chain | (7,489,704) | (7,061,827) | (999,537) | (1.1ppts) | ||||||||
Store+ | (707,497) | (572,162) | (80,984) | (2.5ppts) | ||||||||
Global | (70,862) | (214,540) | (30,366) | 2.2ppts | ||||||||
Total Cost of Revenue | (8,268,063) | (7,848,529) | (1,110,887) | (0.9ppt) | ||||||||
Cost of Revenue was RMB7,848.5 million (US
Table 3 – Breakdown of Average Cost Per Parcel and Average Cost Per Tonne
Three Months Ended | % Change | |||
(in RMB) | June 30, 2019 | June 30, 2020 | YoY | |
Express: | ||||
Average Cost Per Parcel | 2.73 | 2.14 | ( | |
Average Transportation Cost Per Parcel | 0.71 | 0.57 | ( | |
Average Labor Cost Per Parcel | 0.23 | 0.21 | ( | |
Average Lease Cost Per Parcel | 0.09 | 0.08 | ( | |
Average Other Cost Per Parcel | 0.14 | 0.08 | ( | |
Average Last-mile Cost Per Parcel | 1.56 | 1.20 | ( | |
Freight: | ||||
Average Cost Per Tonne | 706.5 | 557.4 | ( | |
Average Transportation Cost Per Tonne | 351.5 | 250.2 | ( | |
Average Labor Cost Per Tonne | 93.7 | 76.0 | ( | |
Average Lease Cost Per Tonne | 55.4 | 51.5 | ( | |
Average Other Cost Per Tonne | 44.5 | 40.8 | ( | |
Average Last-mile Cost Per Tonne | 161.4 | 138.9 | ( | |
- Express Service Average Cost per Parcel decreased by
21.5% , primarily attributable to improved operating efficiency and economies of scale. - Freight Service Average Cost per Tonne decreased by
21.1% YoY, primarily due to improved operating efficiency, network optimization and economies of scale.
Gross Profit was RMB569.7 million (US
Operating Expenses
The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.
Table 4 – Breakdown of Operating Expenses and Adjusted Operating Expenses by Category
Three Months Ended | |||||||||
June 30, 2019 | June 30, 2020 | ||||||||
(In '000, except for %) | RMB | % of | RMB | US$ | % of | % of Revenue | |||
Selling, General and | (514,391) | (555,417) | (78,614) | 0.7ppt | |||||
Adjusted for SBC Expenses | (23,569) | (36,541) | (5,172) | 0.2ppt | |||||
Adjusted Selling, General | (490,822) | (518,876) | (73,442) | 0.5ppt | |||||
Research and | (62,517) | (50,499) | (7,148) | (0.1ppt) | |||||
Adjusted for SBC Expenses | (2,388) | (2,489) | (352) | 0.0ppt | |||||
Adjusted Research and | (60,129) | (48,010) | (6,796) | (0.1ppt) | |||||
Total Operating Expenses | (576,908) | (605,916) | (85,762) | 0.6ppt | |||||
Adjusted for SBC Expenses | (25,957) | (39,030) | (5,524) | 0.2ppt | |||||
Adjusted Total | (550,951) | (566,886) | (80,238) | 0.4ppt | |||||
Selling, General and Administrative Expenses were RMB555.4 million (US
Research and Development Expenses were RMB50.5 million (US
Share-based Compensation ("SBC") Expenses included in the cost and expense items above in the quarter ended June 30, 2020 were RMB39.7 million (US
Net Loss and Non-GAAP Net Income
Net Loss in the quarter ended June 30, 2020 was RMB30.9 million (US
The following table sets forth a breakdown of non-GAAP net income for the three months ended June 30, 2020 by segment.
Table 5 – Breakdown of non-GAAP Net Income by Segment
Three Months Ended June 30, 2020 | ||||||||||||||||||
Core logistics and supply chain | ||||||||||||||||||
(In RMB'000) | Express | Freight | Supply Chain | UCargo | Capital | Store+ | Global | Unallocated[7] | Total | |||||||||
Non-GAAP Net | 108,337 | 57,940 | (5,131) | (17,626) | 36,849 | (69,405) | (50,735) | (48,991) | 11,238 | |||||||||
Diluted EPS and non-GAAP diluted EPS
Diluted EPS in the quarter ended June 30, 2020 was negative RMB0.06 (US
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA was RMB157.7 million (US
Adjusted EBITDA and Adjusted EBITDA Margin by Segment
The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the three months ended June 30, 2020 by segment.
Table 6 – Breakdown of Adjusted EBITDA and Adjusted EBITDA Margin by Segment
Three Months Ended June 30, 2020 | |||||||||||||||||
Core logistics and supply chain | |||||||||||||||||
(In RMB'000) | Express | Freight | Supply Chain | UCargo | Capital | Store+ | Global | Unallocated[8] | Total | ||||||||
Adjusted EBITDA | 188,881 | 73,075 | 5,709 | (17,507) | 40,708 | (67,336) | (47,805) | (18,064) | 157,661 | ||||||||
Adjusted EBITDA | ( | ( | ( | - | |||||||||||||
Core Logistics and Supply Chain - Adjusted EBITDA was RMB290.9 million (US
Store+ - Adjusted EBITDA was negative RMB67.3 million (US
Global - Adjusted EBITDA was negative RMB47.8 million (US
Cash and Cash Equivalents, Restricted Cash and Short-term Investments
As of June 30, 2020, cash and cash equivalents, restricted cash and short-term investments were RMB5,141.9 million (US
Net Cash Generated from Operating Activities
Net cash generated from operating activities was RMB722.6 million (US
Capital Expenditures ("CAPEX")
CAPEX was RMB424.1 million (US
SHARES OUTSTANDING
As of the date of this press release, the Company had approximately 385.1 million ordinary shares outstanding[9]. Each American Depositary Share represents one Class A ordinary share.
FINANCIAL GUIDANCE
Due to the rapidly evolving market dynamics, the negative impact from the COVID-19 pandemic, BEST is unable to provide financial guidance at this time. The Company is closely monitoring the situation and will provide more information as it becomes available.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company will hold a conference call at 9:00 pm U.S. Eastern Time on August 17, 2020 (9:00 am Beijing Time on August 18), to discuss its financial results and operating performance for the second quarter of 2020.
Participants may access the call by dialing the following numbers:
United States | : +1-888-317-6003 |
Hong Kong | : 800-963976 or +852-5808-1995 |
Mainland China | : 4001-206115 |
International | : +1-412-317-6061 |
Participant Elite Entry Number | : 7770489 |
A replay of the conference call will be accessible through August 24, 2020 by dialing the following numbers:
United States | : +1-877-344-7529 |
International | : +1-412-317-0088 |
Replay Access Code | : 10146908 |
Please visit the Company's investor relations website http://ir.best-inc.com/ on August 17, 2020 to view the earnings release prior to the conference call. A live and archived webcast of the conference call and a corporate presentation will be available at the same site.
ABOUT BEST INC.
BEST Inc. (NYSE: BEST) is a leading integrated smart supply chain solutions and logistics services provider in China. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-add services, including express and freight delivery, supply chain management and last-mile services, truckload service brokerage, international logistics and financial services. BEST's mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain. For more information, please visit: http://www.best-inc.com/en/.
For investor and media inquiries, please contact:
BEST Inc.
Investor relations team
ir@best-inc.com
The Piacente Group, Inc.
Yang Song
Tel: +86-10-6508-0677
E-mail: best@tpg-ir.com
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: best@tpg-ir.com
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" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as BEST's strategic and operational plans, contain forward-looking statements. BEST may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about BEST'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: BEST's goals and strategies; BEST's future business development, results of operations and financial condition; BEST 's ability to maintain and enhance its ecosystem; BEST 's ability to continue to innovate, meet evolving market trends, adapt to changing customer demands and maintain its culture of innovation; fluctuations in general economic and business conditions in China and other countries in which BEST operates, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in BEST'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 BEST does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
USE OF NON-GAAP FINANCIAL MEASURES
In evaluating its business, BEST considers and uses non-GAAP measures, such as non-GAAP net loss/income, non-GAAP net loss/profit margin, adjusted EBITDA, adjusted EBITDA margin, EBITDA, adjusted selling expenses, adjusted general and administrative expenses, adjusted research and development expenses, and non-GAAP diluted EPS, as supplemental measures in the evaluation of the Company's operating results and in the Company's financial and operational decision-making. The Company believes these non-GAAP financial measures that help identify underlying trends in the Company's business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in loss from operations and net loss. The Company believes that these non-GAAP financial measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in the results announcement.
The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
Summary of Unaudited Condensed Consolidated Income Statements | |||||||||||||
(In Thousands) | |||||||||||||
Three Months Ended June 30, Six Months Ended June 30, | |||||||||||||
2019 | 2020 | 2019 | 2020 | ||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
Revenue | |||||||||||||
Express | 5,448,476 | 5,151,845 | 729,196 | 9,716,435 | 8,518,532 | 1,205,720 | |||||||
Freight | 1,305,785 | 1,364,989 | 193,202 | 2,293,715 | 2,048,509 | 289,948 | |||||||
Supply Chain Management | 600,211 | 509,708 | 72,144 | 1,134,848 | 917,300 | 129,835 | |||||||
Store+ | 790,558 | 657,364 | 93,044 | 1,344,080 | 1,120,199 | 158,554 | |||||||
Global | 64,872 | 192,500 | 27,247 | 105,819 | 308,288 | 43,635 | |||||||
Ucargo | 521,830 | 492,554 | 69,716 | 963,017 | 873,103 | 123,580 | |||||||
Capital | 56,398 | 49,314 | 6,980 | 104,790 | 97,799 | 13,843 | |||||||
Total Revenue | 8,788,130 | 8,418,274 | 1,191,529 | 15,662,704 | 13,883,730 | 1,965,115 | |||||||
Cost of Revenue | |||||||||||||
Express | (5,203,842) | (4,874,191) | (689,897) | (9,341,550) | (8,365,512) | (1,184,061) | |||||||
Freight | (1,222,296) | (1,242,847) | (175,914) | (2,177,011) | (2,059,282) | (291,472) | |||||||
Supply Chain Management | (546,778) | (460,298) | (65,151) | (1,059,832) | (864,744) | (122,397) | |||||||
Store+ | (707,497) | (572,162) | (80,984) | (1,190,942) | (973,637) | (137,809) | |||||||
Global | (70,862) | (214,540) | (30,366) | (118,487) | (362,858) | (51,359) | |||||||
Ucargo | (499,994) | (479,946) | (67,932) | (932,675) | (852,985) | (120,732) | |||||||
Capital | (16,794) | (4,545) | (643) | (29,434) | (11,602) | (1,642) | |||||||
Total Cost of Revenue | (8,268,063) | (7,848,529) | (1,110,887) | (14,849,931) | (13,490,620) | (1,909,472) | |||||||
Gross Profit | 520,067 | 569,745 | 80,642 | 812,773 | 393,110 | 55,643 | |||||||
Selling Expenses | (213,222) | (230,433) | (32,616) | (406,489) | (449,210) | (63,582) | |||||||
General and Administrative | (301,169) | (324,984) | (45,998) | (588,246) | (625,703) | (88,563) | |||||||
Research and | (62,517) | (50,499) | (7,148) | (116,536) | (110,814) | (15,685) | |||||||
Total Operating Expenses | (576,908) | (605,916) | (85,762) | (1,111,271) | (1,185,727) | (167,830) | |||||||
Loss from Operations | (56,841) | (36,171) | (5,120) | (298,498) | (792,617) | (112,187) | |||||||
Interest Income | 26,024 | 18,415 | 2,606 | 50,049 | 40,000 | 5,662 | |||||||
Interest Expense | (14,696) | (41,379) | (5,857) | (40,744) | (74,551) | (10,552) | |||||||
Foreign Exchange (Loss)/ | |||||||||||||
Gain | (2,198) | 334 | 47 | (4,066) | 185 | 26 | |||||||
Other Income | 33,076 | 37,935 | 5,369 | 53,635 | 71,869 | 10,172 | |||||||
Other Expense | (3,225) | (6,037) | (854) | (7,920) | (18,361) | (2,599) | |||||||
Loss before Income Tax | (17,860) | (26,903) | (3,809) | (247,544) | (773,475) | (109,478) | |||||||
Income Tax Expense | (4,410) | (3,952) | (559) | (8,102) | (8,102) | (1,147) | |||||||
Loss before Share of Net | (22,270) | (30,855) | (4,368) | (255,646) | (781,577) | (110,625) | |||||||
Share of Net Loss of Equity | (101) | (44) | (6) | (136) | (74) | (10) | |||||||
Net Loss | (22,371) | (30,899) | (4,374) | (255,782) | (781,651) | (110,635) | |||||||
Net Loss attributable to non- | (3,077) | (6,571) | (930) | (5,430) | (14,431) | (2,043) | |||||||
Net loss attributable to | (19,294) | (24,328) | (3,444) | (250,352) | (767,220) | (108,592) | |||||||
Net loss attributable to | (19,294) | (24,328) | (3,444) | (250,352) | (767,220) | (108,592) | |||||||
Summary of Unaudited Condensed Consolidated Balance Sheets | ||||||||
(in thousands) | ||||||||
As of December 31, 2019 | As of June 30, 2020 | |||||||
RMB | RMB | US$ | ||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and Cash Equivalents | 1,994,683 | 2,384,686 | 337,530 | |||||
Restricted Cash | 1,786,832 | 1,625,088 | 230,016 | |||||
Accounts and Notes Receivables | 1,229,083 | 997,130 | 141,136 | |||||
Inventories | 140,006 | 158,718 | 22,465 | |||||
Prepayments and Other Current Assets | 2,750,126 | 2,921,347 | 413,490 | |||||
Short–term Investments | 1,057,598 | 532,500 | 75,370 | |||||
Lease Rental Receivables | 483,363 | 488,841 | 69,191 | |||||
Amounts Due from Related Parties | 246,758 | 187,871 | 26,591 | |||||
Total Current Assets | 9,688,449 | 9,296,181 | 1,315,789 | |||||
Non–current Assets | ||||||||
Property and Equipment, Net | 2,939,379 | 3,548,293 | 502,228 | |||||
Intangible Assets, Net | 121,587 | 112,288 | 15,893 | |||||
Goodwill | 490,986 | 499,433 | 70,690 | |||||
Long–term Investments | 230,855 | 230,781 | 32,665 | |||||
Non–current Deposits | 127,191 | 145,892 | 20,650 | |||||
Other Non–current Assets | 346,645 | 471,378 | 66,719 | |||||
Operating Lease Right-of-use Assets | 4,378,804 | 4,277,966 | 605,507 | |||||
Lease Rental Receivables | 993,260 | 892,626 | 126,343 | |||||
Restricted Cash | 175,700 | 599,622 | 84,871 | |||||
Total non–current Assets | 9,804,407 | 10,778,279 | 1,525,566 | |||||
Total Assets | 19,492,856 | 20,074,460 | 2,841,355 | |||||
Liabilities and Shareholders' Equity | ||||||||
Current Liabilities | ||||||||
Short–term Bank Loans | 2,510,500 | 2,650,059 | 375,092 | |||||
Securitization Debt | 104,899 | 67,947 | 9,617 | |||||
Accounts and Notes Payable | 3,391,383 | 3,232,139 | 457,480 | |||||
Accrued Expenses and Other Liabilities | 2,019,634 | 2,165,136 | 306,455 | |||||
Customer Advances and Deposits and | 1,489,510 | 1,528,563 | 216,354 | |||||
Operating Lease Liabilities | 1,035,252 | 1,114,936 | 157,809 | |||||
Financing Lease Liabilities | 1,363 | 1,003 | 142 | |||||
Amounts Due to Related Parties | 9,769 | 8,316 | 1,177 | |||||
Income Tax Payable | 7,358 | 8,944 | 1,266 | |||||
Total Current Liabilities | 10,569,668 | 10,777,043 | 1,525,392 | |||||
Non-current Liabilities | ||||||||
Convertible senior notes held by related parties | 680,104 | 1,749,900 | 247,682 | |||||
Convertible Senior Notes held by third | 680,104 | 693,456 | 98,152 | |||||
Operating Lease Liabilities | 3,482,634 | 3,323,387 | 470,395 | |||||
Financing Lease Liabilities | 2,072 | 4,539 | 642 | |||||
Deferred Tax Liabilities | 25,806 | 24,502 | 3,468 | |||||
Other Non–current Liabilities | 137,184 | 159,826 | 22,622 | |||||
Long-term Bank Loans | - | 276,955 | 39,200 | |||||
Total Non–current Liabilities | 5,007,904 | 6,232,565 | 882,161 | |||||
Total Liabilities | 15,577,572 | 17,009,608 | 2,407,553 | |||||
Shareholders' Equity | ||||||||
Ordinary Shares | 25,988 | 25,988 | 3,678 | |||||
Treasury Shares | - | (111,164) | (15,734) | |||||
Additional Paid–In Capital | 19,353,400 | 19,431,389 | 2,750,335 | |||||
Statutory reserves | 7,865 | 9,154 | 1,296 | |||||
Accumulated Deficit | (15,629,537) | (16,453,792) | (2,328,883) | |||||
Accumulated Other Comprehensive Income | 163,196 | 183,078 | 25,913 | |||||
BEST Inc. Shareholders' Equity | 3,920,912 | 3,084,653 | 436,605 | |||||
Non-controlling Interests | (5,628) | (19,801) | (2,803) | |||||
Total Shareholders' Equity | 3,915,284 | 3,064,852 | 433,802 | |||||
Total Liability and Shareholders' Equity | 19,492,856 | 20,074,460 | 2,841,355 | |||||
Summary of Unaudited Condensed Consolidated Statements of Cash Flows | ||||||
(In Thousands) | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||
2019 | 2020 | 2019 | 2020 | |||
RMB | RMB | US$ | RMB | RMB | US$ | |
Net Cash Generated from/ | 334,242 | 722,606 | 102,277 | 128,692 | (570,907) | (80,807) |
Net Cash Used in | (638,496) | (283,084) | (40,068) | (827,251) | (169,167) | (23,944) |
Net Cash Generated from | 304,705 | 762,081 | 107,866 | 661,497 | 1,367,066 | 193,496 |
Exchange Rate Effect on Cash, | 27,331 | 1,023 | 145 | (70) | 25,189 | 3,565 |
Net Increase/(Decrease) in | 27,782 | 1,202,626 | 170,220 | (37,132) | 652,181 | 92,310 |
Cash and Cash Equivalents, | 2,934,494 | 3,406,770 | 482,197 | 2,999,408 | 3,957,215 | 560,107 |
Cash and Cash Equivalents, | 2,962,276 | 4,609,396 | 652,417 | 2,962,276 | 4,609,396 | 652,417 |
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES
The table below sets forth a reconciliation of the Company's net loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:
Table 7 – Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
Three Months Ended June 30, 2020 | ||||||||||||||||||
Core logistics and supply chain | ||||||||||||||||||
(In RMB'000) | Express | Freight | Supply Chain | UCargo | Capital | Store+ | Global | Unallocated([10]) | Total | |||||||||
Net Income/(Loss) | 103,938 | 55,219 | (7,966) | (18,336) | 36,524 | (73,566) | (53,899) | (72,813) | (30,899) | |||||||||
Add | ||||||||||||||||||
Depreciation & | 79,308 | 15,135 | 10,936 | 119 | 394 | 3,926 | 4,151 | 7,963 | 121,932 | |||||||||
Interest Expense | - | - | - | - | - | - | - | 41,379 | 41,379 | |||||||||
Income Tax | 1,236 | - | (96) | - | 3,465 | (372) | (281) | - | 3,952 | |||||||||
Subtract | ||||||||||||||||||
Interest Income | - | - | - | - | - | - | - | (18,415) | (18,415) | |||||||||
EBITDA | 184,482 | 70,354 | 2,874 | (18,217) | 40,383 | (70,012) | (50,029) | (41,886) | 117,949 | |||||||||
Add | ||||||||||||||||||
Share-based | 4,399 | 2,721 | 2,835 | 710 | 325 | 2,676 | 2,224 | 23,822 | 39,712 | |||||||||
Adjusted EBITDA | 188,881 | 73,075 | 5,709 | (17,507) | 40,708 | (67,336) | (47,805) | (18,064) | 157,661 | |||||||||
Adjusted EBITDA | ( | ( | ( | - | ||||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||
Core logistics and supply chain | ||||||||||||||||||
(In RMB'000) | Express | Freight | Supply Chain | UCargo | Capital | Store+ | Global | Unallocated[11] | Total | |||||||||
Net Income/(Loss) | 104,531 | 15,552 | (2,524) | 4,477 | 26,916 | (106,720) | (35,871) | (28,732) | (22,371) | |||||||||
Add | ||||||||||||||||||
Depreciation & | 108,057 | 13,449 | 14,251 | 59 | 412 | 3,666 | 2,313 | 9,043 | 151,250 | |||||||||
Interest Expense | - | - | - | - | - | - | - | 14,696 | 14,696 | |||||||||
Income Tax | - | - | 133 | - | 4,981 | (434) | (270) | - | 4,410 | |||||||||
Subtract | ||||||||||||||||||
Interest Income | - | - | - | - | - | - | - | (26,024) | (26,024) | |||||||||
EBITDA | 212,588 | 29,001 | 11,860 | 4,536 | 32,309 | (103,488) | (33,828) | (31,017) | 121,961 | |||||||||
Add | ||||||||||||||||||
Share-based | 3,023 | 1,918 | 2,583 | 592 | 65 | 1,922 | 1,495 | 14,614 | 26,212 | |||||||||
Adjusted EBITDA | 215,611 | 30,919 | 14,443 | 5,128 | 32,374 | (101,566) | (32,333) | (16,403) | 148,173 | |||||||||
Adjusted EBITDA | ( | ( | - | |||||||||||||||
The table below sets forth a reconciliation of the Company's net loss to non-GAAP net income, non-GAAP net income margin for the periods indicated:
Table 8 – Reconciliation of Non-GAAP Net Income and Non-GAAP Net Income Margin
Three Months Ended June 30, 2020 | ||||||||||||||||||
Core logistics and supply chain | ||||||||||||||||||
(In RMB'000) | Express | Freight | Supply Chain | UCargo | Capital | Store+ | Global | Unallocated([12]) | Total | |||||||||
Net Income/(Loss) | 103,938 | 55,219 | (7,966) | (18,336) | 36,524 | (73,566) | (53,899) | (72,813) | (30,899) | |||||||||
Add | ||||||||||||||||||
Share-based | 4,399 | 2,721 | 2,835 | 710 | 325 | 2,676 | 2,224 | 23,822 | 39,712 | |||||||||
Amortization of | - | - | - | - | - | 1,485 | 940 | - | 2,425 | |||||||||
Non-GAAP Net | 108,337 | 57,940 | (5,131) | (17,626) | 36,849 | (69,405) | (50,735) | (48,991) | 11,238 | |||||||||
Non-GAAP Net | ( | ( | ( | ( | - | |||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||
Core logistics and supply chain | ||||||||||||||||||
(In RMB'000) | Express | Freight | Supply Chain | UCargo | Capital | Store+ | Global | Unallocated([13]) | Total | |||||||||
Net Income/(Loss) | 104,531 | 15,552 | (2,524) | 4,477 | 26,916 | (106,720) | (35,871) | (28,732) | (22,371) | |||||||||
Add | ||||||||||||||||||
Share-based | 3,023 | 1,918 | 2,583 | 592 | 65 | 1,922 | 1,495 | 14,614 | 26,212 | |||||||||
Amortization of | - | - | - | - | - | 1,737 | 907 | - | 2,644 | |||||||||
Non-GAAP Net | 107,554 | 17,470 | 59 | 5,069 | 26,981 | (103,061) | (33,469) | (14,118) | 6,485 | |||||||||
Non-GAAP Net | ( | ( | - | |||||||||||||||
The table below sets forth a reconciliation of the Company's diluted EPS to non-GAAP diluted EPS for the periods indicated:
Table 9 – Reconciliation of Diluted EPS and Non-GAAP Diluted EPS
Three Months Ended June 30, | Six Months Ended June 30, | ||||
2020 | 2020 | ||||
(In '000) | RMB | US$ | RMB | US$ | |
Net Loss Attributable to Ordinary | (24,328) | (3,444) | (767,220) | (108,592) | |
Add | |||||
Share-based Compensation Expenses | 39,712 | 5,621 | 75,934 | 10,748 | |
Amortization of Intangible Assets Resulting | 2,425 | 343 | 4,892 | 692 | |
Non-GAAP Net Profit/(Loss) Attributable to | 17,809 | 2,520 | (686,394) | (97,152) | |
Weighted Average Diluted Shares | |||||
Diluted | 389,265,285 | 389,265,285 | 389,510,030 | 389,510,030 | |
Diluted (Non-GAAP) | 391,930,771 | 391,930,771 | 389,510,030 | 389,510,030 | |
Diluted EPS | (0.06) | (0.01) | (1.97) | (0.28) | |
Add | |||||
Non-GAAP adjustment to net loss per | 0.11 | 0.02 | 0.21 | 0.03 | |
Non-GAAP Diluted EPS | 0.05 | 0.01 | (1.76) | (0.25) | |
[1] All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year-over-year comparisons are |
[2] Non-GAAP net income/loss represents net income/loss excluding share-based compensation expenses, amortization o |
[3] See the sections entitled "Use of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Measures to the Nearest |
[4] Diluted earnings per share, or Diluted EPS, is calculated by dividing net profit attributable to ordinary shareholders as adjusted |
[5] Non-GAAP diluted earnings per share, or non-GAAP diluted EPS, represents diluted earnings per share excluding share-based |
[6] EBITDA represents net loss excluding depreciation, amortization, interest expense and income tax expense and minus interest |
[7] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not |
[8] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not |
[9] The total number of shares outstanding excludes shares reserved for future issuances upon exercise or vesting of awards |
[10] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not |
[11] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not |
[12] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not |
[13] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not |
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SOURCE BEST Inc.
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