Luckin Coffee Inc. (“Luckin Coffee” or the “Company”) (NASDAQ: LK),
a pioneer of a technology-driven new retail model to provide coffee
and other products of high quality, high affordability, and high
convenience to customers, today announced its unaudited financial
results for the third quarter ended September 30, 2019.
THIRD QUARTER 2019
HIGHLIGHTS1
- Total net revenues from products in the
quarter were RMB1,493.2 million (US$208.9 million), representing an
increase of 557.6% from RMB227.1 million in the same quarter of
2018.
- Average monthly total items sold in the
quarter were 44.2 million, representing an increase of 470.1% from
7.8 million in the third quarter of 2018.
- Cumulative number of transacting customers
increased to 30.7 million, representing an increase of 413.4% from
6.0 million as of the end of the third quarter of 2018. During the
third quarter of 2019, the Company acquired 7.9 million new
transacting customers.
- Average monthly transacting customers in the
quarter were 9.3 million, representing an increase of 397.5% from
1.9 million in the third quarter of 2018.
- Total number of stores at the end of the
quarter were 3,680 stores, representing an increase of 209.5% from
1,189 stores at the end of the third quarter of
2018.
- Average total net revenues from products per
store in the quarter were RMB449.6 thousand (US$62.9
thousand), representing an increase of 79.5% from RMB250.5 thousand
in the same quarter of 2018.
- Store level operating
profit in the quarter was RMB186.3 million (US$26.1
million), or 12.5% of net revenues from products, compared to a
loss of RMB126.0 million in the third quarter of 2018.1 Please
refer to the section “KEY DEFINITIONS” on Page 5 for detailed
definitions.
“We are very pleased with our results in the third quarter. We
exceeded the high-end of our guidance range, achieved a store level
profit margin of 12.5% and experienced continuous growth across all
key operating metrics. These achievements follow a clear trend: an
increase in volumes, efficiency and, as a result, profitability.
During the quarter, product revenue grew at 557.6%, which was 1.2x,
1.4x and 2.7x the growth rate of average monthly items sold,
average monthly transacting customers, and number of stores,
respectively,” said Ms. Jenny Zhiya Qian, Chief Executive Officer
of Luckin Coffee.
“During the third quarter, sales from freshly-brewed coffee
drinks continued to maintain very strong growth, and we believe we
will reach our goal to become the largest coffee player in China by
the end of this year. With our distinguished value proposition of
high quality, high affordability and high convenience we believe
that Luckin Coffee has become part of more and more Chinese
consumers’ daily lives. China’s coffee market remains highly
underpenetrated so we are very excited about the growth potential
ahead of us,” said Ms. Qian.
Ms. Qian added, “At the same time, we continued to enrich our
product offerings during the quarter. We launched Luckin Tea
products nationwide in July 2019 and experienced strong incremental
demand during the quarter, contributing to an increase in per store
revenue and higher customer retention rate. We also started selling
cups and other merchandise products and entered into a joint
venture agreement with Louis Dreyfus Company to produce and sell
co-branded Not From Concentrate juice products.”
Ms. Qian continued, “We also strategically launched Luckin Tea
as an independent brand and developed our new retail partnership
model. In addition, we are engaged in ongoing discussions with
potential strategic partners to set up joint ventures in markets
outside of China. We consider these initiatives as an evolution of
our current business model and are part of our strategy to serve
more customers.”
“With our disruptive technology-driven new retail model and our
newly-launched retail partnership model, we believe we can rapidly
expand into adjacent markets with limited capital expenditures
while maintaining a high degree of operational control and
efficiency. We are pleased to have taken meaningful steps
accomplishing our goals this quarter and remain extremely excited
about the future of our business,” concluded Ms. Qian.
THIRD QUARTER 2019 UNAUDITED FINANCIAL
RESULTS
Total net revenues were
RMB1,541.6 million (US$215.7 million) in the third quarter,
representing an increase of 540.2% from RMB240.8 million in the
third quarter of 2018. Total net revenues from
products were RMB1,493.2 million (US$208.9 million) in the
third quarter, representing an increase of 557.6% from RMB227.1
million in the third quarter of 2018. Net revenues from products
growth was primarily driven by a significant increase in the number
of transacting customers, an increase in effective selling price,
and an increase in the number of products sold per transacting
customer.
- Net revenues from freshly brewed drinks were
RMB1,145.4 million (US$160.2 million), representing 74.3% of total
net revenues in the third quarter of 2019, compared to RMB192.7
million, or 80.0% of total net revenues, in the third quarter of
2018.
- Net revenues from other products were RMB347.8
million (US$48.7 million), representing 22.6% of total net revenues
in the third quarter of 2019, compared to RMB34.4 million, or 14.3%
of total net revenues, in the third quarter of 2018.
- Other revenues, which mainly include delivery
fees, were RMB48.4 million (US$6.8 million), representing 3.1% of
total net revenues in the third quarter of 2019, compared to
RMB13.7 million, or 5.7% of total net revenues, in the third
quarter of 2018.
Total operating expenses were
RMB2,132.5 million (US$298.3 million), representing an increase of
193.6% from RMB726.4 million in the third quarter of 2018. The
increase in operating expenses was the result of business
expansion. Meanwhile, operating expenses as a percentage of net
revenues decreased to 138.3% in the third quarter of 2019 from
301.7% in the third quarter of 2018, mainly driven by increased
economies of scale and the Company’s technology-driven
operations.
- Cost of materials were RMB721.1 million
(US$100.9 million), representing an increase of 375.5% from
RMB151.6 million in the third quarter of 2018, as a result of the
increase in sales of products. Cost of materials decreased to 48.3%
as a percentage of net revenues from products in the third quarter
of 2019 from 66.8% in the third quarter of 2018.
- Store rental and other operating costs were
RMB477.3 million (US$66.8 million), representing an increase of
176.6% from RMB172.5 million in the third quarter of 2018, mainly
due to increases in the number of stores and headcount. Store
rental and other operating costs decreased to 32.0% as a percentage
of net revenues from products in the third quarter of 2019 from
76.0% in the third quarter of 2018.
- Depreciation expenses were RMB108.5 million
(US$15.2 million), representing an increase of 275.8% from RMB28.9
million in the third quarter of 2018, mainly as the result of
increases in depreciation of leasehold improvements and the
increase in the purchases of equipment for operation due to the
increased number of stores. Depreciation expenses decreased to 7.3%
as a percentage of net revenues from products in the third quarter
of 2019 from 12.7% in the third quarter of 2018.
- Sales and marketing expenses were RMB557.7
million (US$78.0 million), representing an increase of 147.6% from
RMB225.3 million in the third quarter of 2018, mainly due to
increases in advertising expenses as the Company launched new
marketing initiatives, entered into new cities and launched Luckin
Tea as an independent brand. The increase in sales and marketing
expenses reflect strategic investments in branding which,
management believes, will bring long-term benefits to the Company.
All promotions and coupons provided to customers, other than free
product promotion expenses, are reflected in net revenues from
products and therefore not included in sales and marketing
expenses. Sales and marketing expenses decreased to 36.2% as a
percentage of net revenues in the third quarter of 2019 from 93.5%
in the third quarter of 2018.
- General and administrative expenses were
RMB246.1 million (US$34.4 million), representing an increase of
108.0% from RMB118.3 million in the third quarter of 2018. The
increase in general and administrative expenses was mainly driven
by business expansion and share-based compensation to senior
management. General and administrative expenses decreased to 16.0%
as a percentage of net revenues in the third quarter of 2019 from
49.1% in the third quarter of 2018.
- Store preopening and other expenses were
RMB21.8 million (US$3.0 million), representing a decrease of 26.9%
from RMB29.8 million in the third quarter of 2018, mainly due to
decreased rental costs before opening as a result of improved
efficiency for new store openings. Store preopening and other
expenses decreased to 1.4% as a percentage of net revenues in the
third quarter of 2019 from 12.4% in the third quarter of 2018.
Operating loss was RMB590.9
million (US$82.7 million) compared to RMB485.6 million in the third
quarter of 2018. Non-GAAP operating loss was
RMB550.1 million (US$77.0 million), representing 35.7% of total net
revenues, in the third quarter of 2019, compared to RMB485.6
million, or 201.7% of total net revenues, in the third quarter of
2018. For more information on non-GAAP financial measures, please
see the section of “Use of Non-GAAP Financial Measures” and the
table captioned “Reconciliation of Non-GAAP Measures to the Most
Directly Comparable GAAP Measures” set forth at the end of this
press release.
Net loss was RMB531.9 million
(US$74.4 million) compared to RMB484.9 million in the third quarter
of 2018. Non-GAAP net loss was RMB491.1 million
(US$68.7 million), representing 31.9% of total net revenues, in the
third quarter of 2019, compared to RMB483.9 million, or 201.0% of
total net revenues, in the third quarter of 2018.
Basic and diluted net loss per
ADS was RMB2.24 (US$0.32) compared to a loss of RMB3.60 in
the third quarter of 2018. Non-GAAP basic and diluted net
loss per ADS was RMB2.08 (US$0.32) compared to a loss of
RMB3.52 in the third quarter of 2018.
Net cash used in operating
activities was RMB122.8 million (US$17.2 million) compared
to RMB719.6 million in the third quarter of 2018. The decrease was
primarily driven by a reduction of operating loss and a favorable
working capital profile.
Cash and cash equivalents and short-term
investments were RMB5,543.9 million (US$775.6 million) as
of September 30, 2019, compared to RMB1,761.0 million as of
December 31, 2018. The increase was primarily driven by the net
proceeds of US$158.8 million from the issuance of Series B-1
convertible redeemable preferred shares in April 2019 to certain
investors and the net proceeds of US$657.2 million from the IPO and
the concurrent private placement.
KEY OPERATING DATA
|
For the three months ended or as of |
|
Jun 30, 2018 |
Sep 30, 2018 |
Dec 31, 2018 |
|
Mar 31, 2019 |
Jun 30, 2019 |
Sep 30, 2019 |
Total stores |
624 |
1,189 |
2,073 |
|
2,370 |
2,963 |
3,680 |
|
Pick-up stores |
356 |
903 |
1,811 |
|
2,163 |
2,741 |
3,433 |
|
Relax stores |
22 |
45 |
86 |
|
109 |
123 |
138 |
|
Delivery kitchens |
246 |
241 |
176 |
|
98 |
99 |
109 |
|
|
|
|
|
|
|
|
|
|
Cumulative number of transacting customers (in
thousands) |
2,917.8 |
5,984.3 |
12,529.5 |
|
16,872.3 |
22,777.5 |
30,723.7 |
|
Average monthly transacting
customers (in thousands) |
1,207.6 |
1,877.4 |
4,325.9 |
|
4,402.0 |
6,166.0 |
9,339.7 |
|
|
|
|
|
|
|
|
|
|
Average monthly total items sold (in
thousands)1 |
4,001.0 |
7,760.3 |
17,645.1 |
|
16,275.8 |
27,593.0 |
44,244.6 |
|
Freshly brewed drinks |
3,743.7 |
6,220.4 |
13,418.8 |
|
13,077.2 |
21,055.7 |
34,655.4 |
|
Other products |
257.3 |
1,539.9 |
4,226.4 |
|
3,198.6 |
6,537.3 |
9,589.2 |
|
GUIDANCE
For the fourth quarter ending December 31, 2019,
the Company expects net revenues from products to be between RMB2.1
billion and RMB2.2 billion. This forecast excludes any revenue
generated from stores operated under the new retail partnership
model. This forecast reflects the Company’s current and preliminary
views, which are subject to change.
KEY DEFINITIONS
- Net revenues from products. Calculated as the
sum of net revenues from freshly brewed drinks and net revenues
from other products.
- Average total net revenues from products per
store. Calculated by dividing net
revenues from products during the period by the average number of
stores during the period.
- Transacting customers for the period. Refers
to a customer who bought at least one item offered on the Company’s
mobile apps or through third-party platforms in a given period,
regardless of whether the customer paid for the item or merely
ordered through the free product marketing initiative. Each unique
mobile account is treated as a separate customer for purposes of
calculating transacting customer.
- Cumulative number of transacting customers.
The total number of transacting customers since inception.
- Average monthly transacting customers. The
number of average monthly transacting customers in the three months
during the quarter.
- Average monthly total items sold. Calculated
by dividing the total number of items sold during the quarter by
three.
- Store level operating profit (loss).
Calculated by deducting the cost of materials, store rental and
other operating costs, and depreciation expenses from net revenues
from products.
- Store level operating profit (loss) margin.
Calculated by dividing store level operating profit (loss) by net
revenues from products.
- Non-GAAP operating loss. Calculated by
adjusting operating loss for non-cash share-based compensation
expenses.
- Non-GAAP net loss. Calculated by adjusting net
loss for non-cash share-based compensation expenses and change in
the fair value of warrant liability.
- Non-GAAP basic and diluted net loss per share.
Calculated as non-GAAP net loss divided by weighted average number
of basic and diluted share.
- Non-GAAP basic and diluted net loss per ADS.
Calculated as non-GAAP net loss divided by weighted average number
of basic and diluted ADS.
CONFERENCE CALL
A conference call and webcast to discuss Luckin
Coffee’s financial results and guidance will be held at 8:00 a.m.
U.S. Eastern Time on November 13, 2019.
Interested parties may listen to the conference
call by dialing numbers below:
United
States:
+1-845-675-0437
International:
+65-6713-5090
China
Domestic:
400-620-8038
Hong
Kong:
+852-3018-6771
Conference
ID:
5550236
The replay will be accessible through November
21, 2019, by dialing the following numbers:
United
States:
+1-646-254-3697
International:
+61-2-8199-0299
Conference
ID:
5550236
The webcast will be available at
investor.luckincoffee.com and will be archived on the site shortly
after the call has concluded.
A presentation to supplement the call and
webcast will be available on the Company’s IR website at
investor.luckincoffee.com.
USE OF NON-GAAP FINANCIAL
MEASURES
In evaluating the business, the Company
considers and uses non-GAAP measures, such as non-GAAP operating
loss, non-GAAP net loss, non-GAAP basic and diluted net loss per
ADS, as supplemental measures to review and assess operating
performance. 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 accounting principles generally accepted in the United States
of America (“U.S. GAAP”). The Company defines non-GAAP operating
loss as operating loss excluding share-based compensation expenses.
The Company defines non-GAAP net loss as net loss excluding
share-based compensation expenses and change in fair value of
warrant liability. The Company defines non-GAAP basic and diluted
net loss per ADS as non-GAAP net loss divided by weighted average
number of basic and diluted ADS.
The Company presents these non-GAAP financial
measures because they are used by management to evaluate operating
performance and formulate business plans. The Company believes that
the non-GAAP financial measures help identify underlying trends in
its business by excluding the impact of share-based compensation
expenses, which is a non-cash charge. The Company also believes
that the non-GAAP financial measures could provide further
information about the Company’s results of operations, enhance the
overall understanding of the Company’s past performance and future
prospects.
The non-GAAP financial measures are not defined
under U.S. GAAP and are not presented in accordance with U.S. GAAP.
The non-GAAP financial measures have limitations as analytical
tools. The Company’s non-GAAP financial measures do not reflect all
items of income and expense that affect the Company’s operations
and do not represent the residual cash flow available for
discretionary expenditures. Further, these non-GAAP measures may
differ from the non-GAAP information used by other companies,
including peer companies, and therefore their comparability may be
limited. The Company compensates for these limitations by
reconciling the non-GAAP financial measures to the nearest U.S.
GAAP performance measure, all of which should be considered when
evaluating performance. The Company encourages investors to review
the Company’s financial information in its entirety and not rely on
a single financial measure.
For more information on the non-GAAP financial
measures, please see the table captioned “Reconciliation of
Non-GAAP Measures to the Most Directly Comparable GAAP Measures”
set forth at the end of this press release.
EXCHANGE RATE INFORMATION
This announcement contains translations of
certain RMB amounts into U.S. dollars (“US$”) at specified rates
solely for the convenience of the reader. Unless otherwise stated,
all translations from RMB to US$ were made at the rate of RMB7.1477
to US$1.00, the exchange rate on September 30, 2019 set forth in
the H.10 statistical release of the Federal Reserve Board. The
Company makes no representation that the RMB or US$ amounts
referred could be converted into US$ or RMB, as the case may be, at
any particular rate or at all.
SAFE HARBOR STATEMENTS
This announcement contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements
are made under the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These statements can be
identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates," "potential,"
"continue," "ongoing," "targets," "guidance" and similar
statements. The Company 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. Any 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 growth strategies; its
future business development, results of operations and financial
condition; its ability to understand buyer needs and provide
products and services to attract and retain buyers; its ability to
maintain and enhance the recognition and reputation of its brand;
its ability to rely on merchants and third-party logistics service
providers to provide delivery services to buyers; its ability to
maintain and improve quality control policies and measures; its
ability to establish and maintain relationships with merchants;
trends and competition in China’s e-commerce market; changes in its
revenues and certain cost or expense items; the expected growth of
China’s e-commerce market; PRC governmental policies and
regulations relating to the Company’s industry, and general
economic and business conditions globally and in China and
assumptions underlying or related to any of the foregoing. Further
information regarding these and other risks, uncertainties or
factors 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.
STATEMENT REGARDING PRELIMINARY
UNAUDITED FINANCIAL INFORMATION
The unaudited financial information set out in
this earnings release is preliminary and subject to potential
adjustments. Adjustments to the consolidated financial statements
may be identified when audit work has been performed for the
Company’s year-end audit, which could result in significant
differences from this preliminary unaudited financial
information.
ABOUT LUCKIN COFFEE INC.
Luckin Coffee Inc. (NASDAQ: LK) has
pioneered a technology-driven retail network to provide coffee and
other products of high quality, high affordability, and high
convenience to customers. Empowered by big data analytics, AI, and
proprietary technologies, the Company pursues its mission to be
part of everyone’s everyday life, starting with coffee. The Company
was founded in 2017 and is based in China. For more
information, please visit investor.luckincoffee.com.
INVESTOR AND MEDIA CONTACTS
Investor Relations:
Luckin Coffee Inc. IREmail: ir@luckincoffee.comBill Zima /
Fitzhugh TaylorICR, Inc.Phone: 203 682 8200
Media Relations:
Luckin Coffee Inc. PREmail: pr@luckincoffee.comEd
Trissel / Scott Bisang / Jack KelleherJoele
Frank, Wilkinson Brimmer KatcherPhone: 212 355 4449
|
FINANCIAL
STATEMENTS |
LUCKIN
COFFEE INC. |
CONDENSED
CONSOLIDATED BALANCE SHEET |
AS OF
DECEMBER 31, 2018 AND UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEET |
AS OF
SEPTEMBER 30, 2019 |
(Amounts in
thousands of RMB and US$, except for number of
shares) |
|
|
As of |
|
31-Dec-18 |
|
30-Sep-19 |
|
RMB |
|
RMB |
US$ |
ASSETS |
Current assets: |
Cash and cash equivalents |
1,630,983 |
|
4,513,899 |
631,518 |
Restricted cash |
- |
|
21,709 |
3,037 |
Short-term investments |
130,000 |
|
1,030,000 |
144,102 |
Receivables from online payment platforms |
4,609 |
|
11,073 |
1,549 |
Accounts receivables |
- |
|
11,429 |
1,599 |
Inventories |
150,015 |
|
213,225 |
29,831 |
Prepaid expenses and other current assets |
365,510 |
|
553,171 |
77,391 |
Amount due from a related party |
147,559 |
|
- |
- |
Total current assets |
2,428,676 |
|
6,354,506 |
889,027 |
|
Non-current assets: |
Property and equipment, net |
904,992 |
|
1,238,169 |
173,226 |
Restricted cash |
- |
|
2,004 |
280 |
Other non-current assets |
151,408 |
|
434,352 |
60,768 |
Total non-current assets |
1,056,400 |
|
1,674,525 |
234,274 |
TOTAL ASSETS |
3,485,076 |
|
8,029,031 |
1,123,301 |
|
LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS’ (DEFICITS)/ EQUITY
|
Current liabilities: |
Short-term bank borrowings |
8,000 |
|
10,000 |
1,399 |
Current portion of long-term borrowing |
72,787 |
|
226,969 |
31,754 |
Capital lease obligation |
108,664 |
|
29,775 |
4,166 |
Accounts and notes payable |
176,704 |
|
351,627 |
49,194 |
Accrued expenses and other liabilities |
371,017 |
|
864,392 |
120,932 |
Amounts due to related parties |
24,198 |
|
19,306 |
2,701 |
Warrant liability |
19,520 |
|
- |
- |
Total current liabilities |
780,890 |
|
1,502,069 |
210,146 |
|
Non-current
liabilities: |
Long-term borrowing |
226,969 |
|
- |
- |
Deferred revenues |
126,469 |
|
55,293 |
7,736 |
Other non-current liabilities |
- |
|
37,717 |
5,277 |
Total non-current liabilities |
353,438 |
|
93,010 |
13,013 |
Total liabilities |
1,134,328 |
|
1,595,079 |
223,159 |
|
FINANCIAL STATEMENTS
LUCKIN COFFEE INC.
CONDENSED CONSOLIDATED BALANCE
SHEET
AS OF DECEMBER 31, 2018 AND
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
AS OF
SEPTEMBER 30, 2019
(Continued)
(Amounts in thousands of RMB and US$,
except for number of shares)
|
|
|
As of |
|
31-Dec-18 |
|
30-Sep-19 |
|
|
|
|
|
|
RMB |
|
RMB |
US$ |
Mezzanine
equity: |
|
|
|
|
|
|
|
|
|
Series A convertible redeemable
preferred shares2 |
2,113,347 |
|
|
- |
|
- |
|
Series B convertible redeemable
preferred shares2 |
2,164,994 |
|
|
- |
|
- |
|
Total mezzanine
equity |
4,278,341 |
|
|
- |
|
- |
|
|
|
|
|
|
Shareholders’
(deficits)/equity: |
|
|
|
|
Class A ordinary
shares3 |
- |
|
|
5 |
|
1 |
|
Class B ordinary
shares4 |
- |
|
|
16 |
|
2 |
|
Ordinary shares5 |
- |
|
|
- |
|
- |
|
Angel-1 shares6 |
743,376 |
|
|
- |
|
- |
|
Angel-2 shares7 |
512,812 |
|
|
- |
|
- |
|
Additional paid-in
capital |
65,000 |
|
|
11,900,972 |
|
1,665,007 |
|
Accumulated other
comprehensive (loss)/income |
(2,076 |
) |
|
98,748 |
|
13,815 |
|
Accumulated deficits |
(3,246,705 |
) |
|
(5,565,789 |
) |
(778,683 |
) |
Total
shareholders’
(deficits)/equity |
(1,927,593 |
) |
|
6,433,952 |
|
900,142 |
|
|
|
|
|
|
TOTAL LIABILITIES,
MEZZANINE EQUITY AND SHAREHOLDERS’ (DEFICITS)/ EQUITY |
3,485,076 |
|
|
8,029,031 |
|
1,123,301 |
|
|
|
|
|
|
1. US$0.001 par value; 2,000,000 shares and nil
authorized as of December 31, 2018 and September 30, 2019,
respectively; 544,688 and nil issued and outstanding as of December
31, 2018 and September 30, 2019, respectively.2. US$0.001 par
value; 1,000,000 shares and nil authorized as of December 31, 2018
and September 30, 2019, respectively; 272,343 and nil issued and
outstanding as of December 31, 2018 and September 30, 2019,
respectively.3. US$0.000002 par value; nil and 20,000,000,000
shares authorized as of December 31, 2018 and September 30, 2019,
respectively; nil and 334,734,912 issued and outstanding as of
December 31, 2018 and September 30, 2019, respectively.4.
US$0.000002 par value; nil and 5,000,000,000 shares authorized as
of December 31, 2018 and September 30, 2019, respectively; nil and
1,587,886,000 issued and outstanding as of December 31, 2018 and
September 30, 2019, respectively.5. US$0.001 par value; 45,400,000
and nil shares authorized as of December 31, 2018 and September 30,
2019, respectively; 750,000 and nil issued and outstanding as of
December 31, 2018 and September 30, 2019, respectively.6. US$0.001
par value; 1,000,000 shares and nil authorized; 915,750 and nil
issued and outstanding as of December 31, 2018 and September 30,
2019, respectively.7. US$0.001 par value; 600,000 shares and nil
authorized; 513,000 and nil issued and outstanding as of December
31, 2018 and September 30, 2019, respectively (Angel-1 shares and
Angel-2 shares, collectively “Angel Shares”).
FINANCIAL STATEMENTS
LUCKIN COFFEE INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE
LOSS FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 2018
AND SEPTEMBER 30, 2019 AND FOR
THE NINE MONTHS ENDED SEPTEMBER
30, 2018 AND SEPTEMBER
30, 2019
(Amounts in thousands of RMB and US$,
except for number of shares and per share data)
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
|
2018 |
|
2019 |
|
|
2018 |
2019 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
Net revenues: |
|
|
|
|
|
|
|
Freshly brewed drinks |
192,666 |
|
1,145,358 |
|
160,241 |
|
|
302,759 |
|
2,165,614 |
|
302,981 |
|
Other products |
34,397 |
|
347,847 |
|
48,666 |
|
|
44,249 |
|
642,662 |
|
89,912 |
|
Others |
13,736 |
|
48,386 |
|
6,769 |
|
|
28,254 |
|
120,940 |
|
16,920 |
|
Total net revenues |
240,799 |
|
1,541,591 |
|
215,676 |
|
|
375,262 |
|
2,929,216 |
|
409,813 |
|
|
|
|
|
|
|
|
|
Cost of materials |
(151,648 |
) |
(721,129 |
) |
(100,890 |
) |
|
(236,838 |
) |
(1,462,763 |
) |
(204,648 |
) |
Store rental and other operating costs |
(172,547 |
) |
(477,305 |
) |
(66,777 |
) |
|
(292,710 |
) |
(1,131,136 |
) |
(158,252 |
) |
Depreciation expenses |
(28,873 |
) |
(108,515 |
) |
(15,182 |
) |
|
(47,811 |
) |
(280,979 |
) |
(39,310 |
) |
Sales and marketing expenses |
(225,255 |
) |
(557,665 |
) |
(78,020 |
) |
|
(457,728 |
) |
(1,115,872 |
) |
(156,116 |
) |
General and administrative expenses |
(118,298 |
) |
(246,093 |
) |
(34,430 |
) |
|
(232,236 |
) |
(684,836 |
) |
(95,812 |
) |
Store preopening and other expenses |
(29,793 |
) |
(21,773 |
) |
(3,046 |
) |
|
(62,174 |
) |
(61,318 |
) |
(8,579 |
) |
Total operating expenses |
(726,414 |
) |
(2,132,480 |
) |
(298,345 |
) |
|
(1,329,497 |
) |
(4,736,904 |
) |
(662,717 |
) |
Operating loss |
(485,615 |
) |
(590,889 |
) |
(82,669 |
) |
|
(954,235 |
) |
(1,807,688 |
) |
(252,904 |
) |
|
|
|
|
|
|
|
|
Interest income |
3,519 |
|
31,853 |
|
4,456 |
|
|
3,716 |
|
47,538 |
|
6,651 |
|
Interest and financing expenses |
(7,428 |
) |
(7,665 |
) |
(1,072 |
) |
|
(7,982 |
) |
(24,098 |
) |
(3,371 |
) |
Foreign exchange gain, net |
8,392 |
|
32,797 |
|
4,588 |
|
|
15,627 |
|
29,741 |
|
4,161 |
|
Other expenses |
(2,804 |
) |
2,048 |
|
287 |
|
|
(6,288 |
) |
(2,092 |
) |
(293 |
) |
Change in the fair value of warrant liability |
(991 |
) |
- |
|
- |
|
|
(991 |
) |
(8,322 |
) |
(1,164 |
) |
|
|
|
|
|
|
|
|
Net loss before income taxes |
(484,927 |
) |
(531,856 |
) |
(74,410 |
) |
|
(950,153 |
) |
(1,764,921 |
) |
(246,920 |
) |
Income tax expense |
- |
|
- |
|
- |
|
|
- |
|
- |
|
- |
|
Net loss |
(484,927 |
) |
(531,856 |
) |
(74,410 |
) |
|
(950,153 |
) |
(1,764,921 |
) |
(246,920 |
) |
|
|
|
|
|
|
|
|
Add: accretion to redemption value of convertible redeemable
preferred shares |
- |
|
- |
|
- |
|
|
(793,992 |
) |
(552,036 |
) |
(77,233 |
) |
Add: deemed distribution to a certain holder of Series B
convertible redeemable preferred shares |
- |
|
- |
|
- |
|
|
- |
|
(2,127 |
) |
(298 |
) |
Net loss attributable to Ordinary
Shareholders |
(484,927 |
) |
(531,856 |
) |
(74,410 |
) |
|
(1,744,145 |
) |
(2,319,084 |
) |
(324,451 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
STATEMENTS LUCKIN COFFEE INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 2018
AND SEPTEMBER 30, 2019 AND FOR
THE NINE MONTHS ENDED SEPTEMBER
30, 2018 AND SEPTEMBER
30, 2019 (Continued) (Amounts in thousands
of RMB and US$, except for number of shares and per share
data) |
|
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
|
|
2018 |
|
2019 |
|
|
2018 |
|
2019 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
Loss per share3: - Basic and diluted |
(0.45 |
) |
(0.28 |
) |
(0.04 |
) |
|
(2.81 |
) |
(1.54 |
) |
(0.22 |
) |
Loss per ADS (8 Ordinary Shares per
ADS): - Basic and diluted |
(3.60 |
) |
(2.24 |
) |
(0.32 |
) |
|
(22.48 |
) |
(12.32 |
) |
(1.76 |
) |
Weighted average shares outstanding used in calculating
basic and diluted loss per share1:- Basic and diluted |
1,089,375,000 |
|
1,922,620,912 |
|
1,922,620,912 |
|
|
620,975,275 |
|
1,502,999,505 |
|
1,502,999,505 |
|
Other comprehensive (loss)/gain, net of tax of
nil: |
|
|
|
|
|
|
|
Foreign currency translation difference, net of tax of
nil |
(18,974 |
) |
103,121 |
|
14,427 |
|
|
7,732 |
|
100,824 |
|
14,106 |
|
Total comprehensive loss |
(503,901 |
) |
(428,735 |
) |
(59,983 |
) |
|
(1,736,413 |
) |
(2,218,260 |
) |
(310,345 |
) |
1 Loss per share for the three and nine months
ended September 30, 2019 is computed using the weighted-average
number of Ordinary Shares outstanding as of September 30, 2019
included the automatic conversion of all of the Company’s Angel-1
shares, Angel-2 shares, Series A convertible redeemable preferred
shares, Series B convertible redeemable preferred shares and Series
B-1 convertible redeemable preferred shares into Ordinary Shares
immediately prior to the completion of the IPO at the conversion
ratio of 1:1 and after 1:500 share split. Upon the completion of
the IPO, Ordinary Shares included Class A and Class ordinary
shares. Prior to the completion of the IPO, the outstanding
Ordinary Shares consisted of Ordinary shares and Angel-1 and
Angel-2 shares. Basic and diluted loss per share are not
reported separately for different classes of Ordinary Shares as
each class of shares had the same rights to profits and losses.
LUCKIN COFFEE INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2018 AND
SEPTEMBER 30, 2019 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2018
AND SEPTEMBER 30,
2019
(Amounts in thousands of RMB and
US$)
|
For the three months ended September
30, |
|
For the nine months ended September
30, |
|
2018 |
|
2019 |
|
|
2018 |
|
2019 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
Net cash used in operating activities |
(719,647 |
) |
(122,799 |
) |
(17,180 |
) |
|
(1,039,248 |
) |
(1,125,671 |
) |
(157,487 |
) |
Net cash (used in)/provided by investing activities |
(1,297,174 |
) |
682,663 |
|
95,508 |
|
|
(1,609,786 |
) |
(1,605,672 |
) |
(224,642 |
) |
Net cash provided by/(used in) financing activities |
|
|
1,066,846 |
|
(159,710 |
) |
(22,344 |
) |
|
2,558,819 |
|
5,491,826 |
|
768,335 |
|
Effect of foreign exchange rate changes on cash and cash
equivalents |
9,608 |
|
124,994 |
|
17,487 |
|
|
18,885 |
|
122,433 |
|
17,129 |
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents |
(940,367 |
) |
525,148 |
|
73,471 |
|
|
(71,330 |
) |
2,882,916 |
|
403,335 |
|
Cash and cash equivalents at beginning of the
period |
1,088,133 |
|
3,988,751 |
|
558,047 |
|
|
219,096 |
|
1,630,983 |
|
228,183 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the
period |
147,766 |
|
4,513,899 |
|
631,518 |
|
|
147,766 |
|
4,513,899 |
|
631,518 |
|
|
LUCKIN
COFFEE INC. |
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY
COMPARABLE GAAP MEASURES |
(Unaudited,
amounts in thousands of RMB and US$, except for number of shares
and per share data) |
|
|
For the three months ended September 30, |
|
|
|
|
|
|
For the nine months ended September 30, |
|
|
2018 |
|
2019 |
|
|
2018 |
|
2019 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
(Amounts in
thousands of RMB and US$, except for share and per share
data) |
|
A. Non-GAAP operating loss |
|
|
|
|
|
|
|
Operating loss |
(485,615 |
) |
(590,889 |
) |
(82,669 |
) |
|
(954,235 |
) |
(1,807,688 |
) |
(252,904 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Share-based compensation expenses |
- |
|
40,754 |
|
5,702 |
|
|
- |
|
111,210 |
|
15,559 |
|
Non-GAAP operating loss |
(485,615 |
) |
(550,135 |
) |
(76,967 |
) |
|
(954,235 |
) |
(1,696,478 |
) |
(237,345 |
) |
|
|
|
|
|
|
|
|
|
B. Non-GAAP net loss |
|
|
|
|
|
|
|
|
Net
loss |
(484,927 |
) |
(531,856 |
) |
(74,410 |
) |
|
(950,153 |
) |
|
(1,764,921 |
) |
(246,920 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
Share-based compensation expenses |
- |
|
40,754 |
|
5,702 |
|
|
- |
|
|
111,210 |
|
15,559 |
|
Change in the fair value of warrant
liability |
991 |
|
- |
|
- |
|
|
991 |
|
|
8,322 |
|
1,164 |
|
Non-GAAP net loss |
(483,936 |
) |
(491,102 |
) |
(68,708 |
) |
|
(949,162 |
) |
|
(1,645,389 |
) |
(230,197 |
) |
|
|
|
|
|
|
|
|
|
C. Non-GAAP net loss per share – basic and
diluted |
|
|
|
|
|
|
|
|
Net loss attributable to the Company’s Ordinary
Shareholders |
(484,927 |
) |
(531,856 |
) |
(74,410 |
) |
|
(1,744,145 |
) |
|
(2,319,084 |
) |
(324,451 |
) |
Add: |
|
|
|
|
|
|
|
|
Accretion to redemption value of convertible redeemable
preferred shares |
- |
|
- |
|
- |
|
|
793,992 |
|
|
552,036 |
|
77,233 |
|
Share-based compensation expenses |
- |
|
40,754 |
|
5,702 |
|
|
- |
|
|
111,210 |
|
15,559 |
|
Change in the fair value of warrant liability |
991 |
|
- |
|
- |
|
|
991 |
|
|
8,322 |
|
1,164 |
|
Non-GAAP net loss attributable to the Company's
Ordinary Shareholders |
(483,936 |
) |
(491,102 |
) |
(68,708 |
) |
|
(949,162 |
) |
|
(1,647,516 |
) |
(230,495 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of Ordinary Shares in issue-
basic and diluted |
1,089,375,000 |
|
1,922,620,912 |
|
1,922,620,912 |
|
|
620,975,275 |
|
|
1,502,999,505 |
|
1,502,999,505 |
|
Non-GAAP net loss per share – Basic and
diluted |
(0.44 |
) |
(0.26 |
) |
(0.04 |
) |
|
(1.53 |
) |
|
(1.10 |
) |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per ADS – Basic and
diluted |
(3.52 |
) |
(2.08 |
) |
(0.32 |
) |
|
(12.24 |
) |
|
(8.80 |
) |
(1.20 |
) |
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