HANGZHOU, China, Aug. 8, 2018 /PRNewswire/ -- BEST Inc. (NYSE:
BSTI) ("BEST" or the "Company"), a leading smart supply chain and
logistics solutions and services provider in China, today announced its unaudited financial
results for the quarter ended June 30,
2018.
"BEST's second quarter results reflect continued strong progress
on our strategy of delivering strong growth with continuous service
quality improvement, market share gains, increasing operational
efficiency and margin expansion." said Johnny Chou, Chairman and Chief Executive
Officer of BEST. "Our revenue growth continues to outpace industry
peers and we achieved positive EBITDA for the first time this
quarter. We continue to benefit from healthy growth in the Chinese
e-commerce industry and the growing sophistication of our
customers. The deeper penetration of New Retail has made our
integrated supply chain and logistics solutions more essential than
ever."
"We are pleased to report another quarter of strong top line
growth and margin improvement, while holding to our pricing
discipline in a highly competitive environment. Our revenue
increased by 38.6 percent year-over-year, driven by strong growth
across all segments. We achieved a significant increase in gross
margin and a significant decrease in our net loss," said
Alice Guo, BEST's Chief Accounting
Officer and Senior Vice President of Finance. "As our business
grows, we expect to see continuous year-over-year improvement in
profitability by reducing costs and winning more business with
integrated solutions and better quality service."
FINANCIAL HIGHLIGHTS
For the Quarter Ended June 30,
2018:
- Revenue was RMB6,732.3
million (US$1,017.4 million),
an increase of 38.6% year-over-year ("YoY").
- Express Service Revenue increased 35.8% YoY to RMB4,177.2 million (US$631.3 million).
- Freight Service Revenue increased 31.6% YoY to RMB1,029.7 million (US$155.6 million).
- Supply Chain Management Service Revenue increased 32.7% YoY
to RMB498.5 million (US$75.3 million).
- BEST Store+ Service Revenue increased 34.5% YoY
to RMB798.5 million (US$120.7 million).
- Others [1] Service Revenues increased
708.8% YoY to RMB228.5 million
(US$34.5 million).
- Gross Profit was RMB417.6
million (US$63.1 million) and
Gross Profit Margin was 6.2%, compared to gross profit of
RMB133.0 million and gross profit
margin of 2.7% in the same period of 2017. This represents an
increase of 214.0% YoY in gross profit and an improvement of 3.5
percentage points in gross profit margin.
- Net Loss was RMB93.7
million (US$14.2 million) and
Non-GAAP Net Loss[2][3] was RMB55.5 million (US$8.4
million).
- Diluted EPS[4] was negative RMB0.25 (US$0.04)
and Non-GAAP diluted EPS[3][5] was negative
RMB0.15 (US$0.02).
- Adjusted EBITDA[3][6] was RMB41.6 million (US$6.3
million).
- Net Cash Generated From Operating Activities was
RMB432.4 million (US$65.3 million).
BUSINESS HIGHLIGHTS
BEST Express:
Table 1 -
BEST Express Key Operating Metrics
|
|
|
Three Months
Ended
|
%
Change
|
|
June 30,
2017
|
June 30,
2018
|
YoY
|
Parcel Volume (in
'000)
|
917,103
|
1,280,050
|
39.6%
|
BEST Express Market
Share[7] (%)
|
9.4%
|
10.5%
|
1.1ppts
|
Gross Profit per
Parcel (RMB)
|
0.12
|
0.18
|
47.3%
|
Average Revenue Per
Parcel (RMB)
|
3.35
|
3.26
|
(2.7%)
|
Average Weight Per
Parcel (kg)
|
1.20
|
1.19
|
(1.2%)
|
Average Cost Per
Parcel (RMB)
|
3.23
|
3.08
|
(4.6%)
|
Hubs & Sortation
Centers (as of period end)
|
181
|
128
|
(29.3%)
|
- Increased parcel volume by 39.6% YoY, significantly higher than
the industry-wide growth rate of 25.0%[8]; increased
express market share to 10.5%, compared to 9.4% in the same period
of 2017.
- Improved gross profit per parcel by 47.3% YoY to RMB0.18 (US$0.03),
as the reduction in cost per parcel continued to outpace the
decrease in revenue per parcel.
- Focused on improving service quality and enhancing customer
experience. According to the State Post Bureau of the PRC, in the
second quarter of 2018, BEST consistently led major industry
players with low effective complaint ratios. In April, May and
June, the effective number of customer complaints per one million
parcels was 0.35, 0.32 and 0.30, respectively[9].
- Improved operational efficiency by ongoing network
optimization, investment in automation and digitization:
- Reduced total number of hubs and sortation centers by 29.3%
YoY to 128, compared to 181 as of June 30,
2017.
- Continued to invest in and upgrade the automation system in
major hubs and sortation centers, including investment in
high-speed automated sorting lines and dimension & weight
scanning systems.
- Increased digital waybill usage to 98.4% from 89.0% in the
same quarter of 2017.
BEST Freight:
Table 2 - BEST
Freight Key Operating Metrics
|
|
|
Three Months
Ended
|
%
Change
|
|
June 30,
2017
|
June 30,
2018
|
YoY
|
Freight Volume (Tonne
in '000)
|
1,095
|
1,366
|
24.7%
|
Average Revenue per
Tonne (RMB)
|
714.2
|
753.8
|
5.5%
|
Average Weight Per
Order (kg)
|
156.5
|
140.0
|
(10.5%)
|
Average Cost Per
Tonne (RMB)
|
770.2
|
714.4
|
(7.2%)
|
Hubs & Sortation
Centers (as of period end)
|
143
|
127
|
(11.2%)
|
Last-mile Service
Stations (as of period end)
|
6,059
|
11,209
|
85.0%
|
- Grew freight revenue by 31.6% and freight volume by 24.7% YoY,
significantly higher than the industry-wide growth.
- Improved gross profit margin significantly by 13.0 percentage
points YoY to 5.2%, compared to negative 7.8% in the same period of
2017. Focused on growing e-commerce related transactions, which
resulted in an increase in revenue per tonne and a decrease in cost
per tonne.
- Continued to optimize freight network to improve operating
efficiency and reduce costs:
- Reduced total number of hubs and sortation centers by 11.2%
YoY to 127 from 143 as of June 30,
2017. This has resulted in lower transportation, labor,
lease costs and shortened delivery time.
- Expanded service coverage significantly by increasing the total
number of franchisees-operated last-mile service stations by 85.0%
YoY to over 11,000 from over 6,000 as of June 30, 2017.
[1] Others include BEST
Global, BEST Capital, BEST UCargo and other new
initiatives.
|
[2]
Non-GAAP net loss represents net loss excluding share-based
compensation expense and amortization of intangible assets
resulting from business acquisitions.
|
[3]
See the sections entitled "Use of Non-GAAP Financial Measures"
and "Reconciliations of Non-GAAP Measures to the Nearest Comparable
GAAP Measures" for more information about the non-GAAP measures
referred to within this results announcement.
|
[4]
Diluted earnings per share, or Diluted EPS, is calculated by
dividing net profit attributable to ordinary shareholders as
adjusted for the effect of dilutive ordinary equivalent shares, if
any, by the weighted average number of ordinary and dilutive
ordinary equivalent shares outstanding during the
period.
|
[5]
Non-GAAP diluted earnings per share, or non-GAAP diluted EPS,
represents diluted earnings per share excluding share-based
compensation expense and amortization of intangible assets
resulting from business acquisitions.
|
[6]
EBITDA represents net loss excluding depreciation, amortization,
interest expense and income tax expense and minus interest income.
Adjusted EBITDA represents EBITDA excluding share-based
compensation expenses.
|
[7]
Express market share calculated as the Company's parcel volume
as a percentage of aggregate national express delivery parcel
volume for the relevant period, based on data published by State
Post Bureau of the PRC.
|
[8]
Based on data published by State Post Bureau of the
PRC. - For April 2018 data, see State Post Bureau of the
PRC Published Post Industry Operation Statistics for April 2018,
State Post Bureau of the PRC, May 12, 2018, available in Chinese
at
http://www.spb.gov.cn/xw/dtxx_15079/201805/t20180512_1563793.html
- For May 2018 data, see State Post Bureau of the PRC Published
Post Industry Operation Statistics for May 2018, State Post Bureau
of the PRC, June 12, 2018, available in Chinese at
http://www.spb.gov.cn/xw/dtxx_15079/201806/t20180612_1586706.html
- For June 2018 data, see State Post Bureau of the PRC Published
Post Industry Operation Statistics for June 2018, State Post Bureau
of the PRC, July 13, 2018, available in Chinese at
http://www.spb.gov.cn/xw/dtxx_15079/201807/t20180713_1606845.html
|
[9]
Based on data published by State Post Bureau of the PRC.
- For April 2018 data, see State Post Bureau of the PRC
Published Post Industry Consumer Complaint Report for April 2018,
State Post Bureau of the PRC, May 21, 2018, available in Chinese
at
http://www.spb.gov.cn/xw/dtxx_15079/201805/t20180521_1569314.html
- For May 2018 data, see State Post Bureau of the PRC Published
Post Industry Consumer Complaint Report for May 2018, State Post
Bureau of the PRC, June 28, 2018, available in Chinese at
http://www.spb.gov.cn/xw/dtxx_15079/201806/t20180628_1596610.html
-For June 2018 data, see State Post Bureau of the PRC Published
Post Industry Consumer Complaint Report for June 2018, State Post
Bureau of the PRC, July 25, 2018, available in Chinese at
http://www.spb.gov.cn/xw/dtxx_15079/201807/t20180725_1615538.html
|
BEST Supply Chain Management:
- Added 46 new customers in the second quarter of 2018, including
major global brands, and increased the total number of corporate
customer to 561.
- Increased the number of orders fulfilled by Cloud OFCs by 37.7%
YoY to 61.2 million, of which 20.5 million orders were fulfilled by
franchised OFCs, representing an increase of 73.4% YoY.
- Increased the total number of Cloud OFCs to 348 from 305, of
which franchised Cloud OFCs increased to 238 from 215 as of
June 30, 2017; increased gross floor
area ("GFA") of Cloud OFCs to approximately 2.4 million square
meters from 2.1 million square meter as of June 30, 2017, of which 1.0 million square meters
are owned and operated by franchised OFCs.
BEST Store+:
- Continued to invest in and expand Store+ network. As
of June 30, 2018, the number of
membership stores reached 397,289 and the number of branded stores
reached 748.
- Increased the total number of store orders fulfilled by 39.3%
YoY to 870,591, representing over 20,000 SKUs.
Others:
- BEST UCargo
- Increased the number of registered agents to approximately 4,000
as of June 30, 2018 from
approximately 1,700 as of June 30,
2017, and the number of registered trucks to over 222,000 as
of June 30, 2018 from approximately
100,000 as of June 30,
2017.
- Increased the total number of transactions to approximately
96,000 as of June 30, 2018 from
approximately 28,000 as of June 30,
2017, with revenue generated from external customers
increased significantly to RMB150.6
million (US$22.8 million) in
the quarter ended June 30, 2018.
- BEST Global - continued to develop cross border
solutions and broaden service offerings in international markets.
As of June 30, 2018, BEST Global
reached 13 countries and regions outside of Mainland China,
including new coverages in Malaysia, Hong
Kong and Italy through
partners.
- In May 2018, launched
international parcel service from China to the U.S. and Southeast Asia.
- In June 2018, opened a new
fulfillment center in the third U.S. location to serve its
South Central region. The
Dallas facility brings total
warehousing space in the U.S. to approximately 800,000 square
feet.
- BEST Capital - continued to expand its financial
services to support BEST ecosystem. As of June 30, 2018, it had provided financing
solutions to over 5,000 trucks, an increase of over 60.0% compared
to the end of second quarter 2017.
FINANCIAL RESULTS
Revenue
The following table sets forth a breakdown of revenue by
business segment for the periods indicated.
Table 3 -
Breakdown of Revenue by Business Segment
|
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
June 30,
2018
|
|
(In '000, Except
for %)
|
RMB
|
% of
Revenue
|
RMB
|
US$
|
% of
Revenue
|
%
Change YoY
|
Express
|
3,076,175
|
63.4%
|
4,177,173
|
631,269
|
62.0%
|
35.8%
|
Freight
|
782,187
|
16.1%
|
1,029,676
|
155,608
|
15.3%
|
31.6%
|
Supply Chain
Mgmt.
|
375,573
|
7.7%
|
498,521
|
75,338
|
7.4%
|
32.7%
|
Store+
|
593,749
|
12.2%
|
798,480
|
120,669
|
11.9%
|
34.5%
|
Others
|
28,249
|
0.6%
|
228,470
|
34,527
|
3.4%
|
708.8%
|
Revenue
|
4,855,933
|
100.0%
|
6,732,320
|
1,017,411
|
100.0%
|
38.6%
|
- Express Service Revenue increased by 35.8% to RMB4,177.2 million (US$631.3 million) from RMB3,076.2 million, primarily due to 39.6% YoY
increase in parcel volume.
- Freight Service Revenue increased by 31.6% to RMB1,029.7 million (US$155.6 million) from RMB782.2 million, primarily due to 24.7% YoY
increase in freight volume and 5.5% YoY increase in average revenue
per tonne.
- Supply Chain Management Service Revenue increased by 32.7% to
RMB498.5 million (US$75.3 million) from RMB375.6 million, primarily due to an increase in
fulfillment and transportation revenue from both existing and new
customers.
- BEST Store+ Service Revenue increased by 34.5% to
RMB798.5 million (US$120.7 million) from RMB593.7 million, primarily due to an increase in
merchandise sales to membership and branded stores.
- Others Service Revenues increased by 708.8% to RMB228.5 million (US$34.5
million) from RMB28.2 million,
primarily due to increased revenue generated from BEST UCargo's
external customers, BEST Global's expanded operations and BEST
Capital's financing solutions to ecosystem participants.
Costs and Expenses
The following table sets forth a breakdown of cost of revenue by
business segment for the periods indicated.
Table 4 -
Breakdown of Cost of Revenue by Business Segment
|
|
|
Three Months
Ended
|
% of
Revenue
Change
YoY
|
|
June 30,
2017
|
June 30,
2018
|
(in '000, Except
for %)
|
RMB
|
% of
Revenue
|
RMB
|
US$
|
% of
Revenue
|
Express
|
(2,964,845)
|
96.4%
|
(3,948,228)
|
(596,670)
|
94.5%
|
(1.9ppts)
|
Freight
|
(843,486)
|
107.8%
|
(975,846)
|
(147,473)
|
94.8%
|
(13.0ppts)
|
Supply Chain
Mgmt.
|
(340,121)
|
90.6%
|
(460,451)
|
(69,585)
|
92.4%
|
1.8ppts
|
Store+
|
(559,866)
|
94.3%
|
(734,572)
|
(111,011)
|
92.0%
|
(2.3ppts)
|
Others
|
(14,616)
|
51.7%
|
(195,577)
|
(29,556)
|
85.6%
|
33.9ppts
|
Cost of
Revenue
|
(4,722,934)
|
97.3%
|
(6,314,674)
|
(954,295)
|
93.8%
|
(3.5ppts)
|
Cost of Revenue was RMB6,314.7
million (US$954.3 million) or
93.8% of revenue in the quarter ended June
30, 2018, compared to RMB4,722.9
million or 97.3% of revenue in the same quarter of 2017. The
reduction of 3.5 percentage points in cost of revenue as a
percentage of revenue was primarily attributable to significant
operating leverage.
The following table sets forth a breakdown of operating expenses
and adjusted operating expenses by category for the
periods indicated.
Table 5 -
Breakdown of Operating Expenses and Adjusted Operating Expenses by
Category
|
|
|
Three Months
Ended
|
% of
Revenue
Change YoY
|
|
June 30, 2017
|
June 30, 2018
|
(in '000, Except
for %)
|
RMB
|
% of
Revenue
|
RMB
|
US$
|
% of
Revenue
|
Selling
Expenses
|
(160,482)
|
3.3%
|
(205,736)
|
(31,092)
|
3.1%
|
(0.2ppts)
|
including SBC Expenses
|
–
|
–
|
(1,128)
|
(171)
|
0.0%
|
n/m
|
Adjusted Selling
Expenses
|
(160,482)
|
3.3%
|
(204,608)
|
(30,921)
|
3.0%
|
(0.3ppts)
|
General and
Administrative Expenses
|
(160,504)
|
3.3%
|
(271,108)
|
(40,971)
|
4.0%
|
0.7ppts
|
including SBC Expense
|
–
|
–
|
(31,518)
|
(4,763)
|
0.4%
|
n/m
|
Adjusted General and
Administrative Expenses
|
(160,504)
|
3.3%
|
(239,590)
|
(36,208)
|
3.6%
|
0.3ppts
|
Research and
Development Expenses
|
(27,011)
|
0.6%
|
(51,499)
|
(7,783)
|
0.8%
|
0.2ppts
|
including SBC Expense
|
–
|
–
|
(2,204)
|
(333)
|
0.0%
|
n/m
|
Adjusted Research and
Development Expenses
|
(27,011)
|
0.6%
|
(49,295)
|
(7,450)
|
0.7%
|
0.1ppts
|
Selling Expenses was RMB205.7
million (US$31.1 million) or
3.1% of revenue in the quarter ended June
30, 2018, compared to RMB160.5
million or 3.3% of revenue in the same quarter of 2017. The
reduction in selling expenses as a percentage of revenue was
primarily attributable to improved operating efficiencies.
General and Administrative Expenses was RMB271.1 million (US$41.0
million) or 4.0% of revenue in the quarter ended
June 30, 2018, compared to
RMB160.5 million or 3.3% of revenue
in the same quarter of 2017. The increase in general and
administrative expenses as a percentage of revenue was primarily
attributable to investment in the growth of the Company's
operations and the inclusion of share-based compensation ("SBC")
expense.
Research and Development Expenses was RMB51.5 million (US$7.8
million) or 0.8% of revenue in the quarter ended
June 30, 2018, compared to
RMB27.0 million, or 0.6% of revenue
in the same quarter of 2017. The increase in research and
development expenses as a percentage of revenue was primarily
attributable to the hiring of additional R&D professionals.
SBC Expense included in the cost and expense items above
in the quarter ended June 30, 2018
was RMB35.3 million (US$5.3 million), compared to nil in the same
quarter of 2017. Approximately RMB0.4
million (US$0.06 million) was
allocated to cost of revenue, RMB1.1
million (US$0.2 million) was
allocated to selling expenses, RMB31.5
million (US$4.8 million) was
allocated to general and administrative expenses, and RMB2.2 million (US$0.3
million) was allocated to research and development
expenses.
Net Loss and Non-GAAP Net Loss
Net Loss in the quarter ended June 30,
2018 was RMB93.7 million
(US$14.2 million), a decrease of
53.6% compared to RMB 201.8 million
in the same quarter of 2017. Excluding SBC expense and amortization
of intangible assets resulting from business acquisitions, non-GAAP
Net Loss in the quarter ended June 30,
2018 was RMB55.5 million
(US$8.4 million), a decrease of 72.3%
compared to RMB200.4 million in the
same quarter of 2017.
Diluted EPS and non-GAAP diluted EPS
Diluted EPS in the quarter ended June 30,
2018 was negative RMB0.25
(US$0.04) based on a weighted average
of 381.6 million diluted shares outstanding during the quarter.
Excluding SBC expense and amortization of intangible assets
resulting from business acquisitions, non-GAAP diluted EPS in the
quarter ended June 30, 2018 was
negative RMB0.15 (US$0.02). A reconciliation of diluted EPS to
non-GAAP diluted EPS is included at the end of this results
announcement.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA was RMB41.6
million (US$6.3 million),
improved from negative RMB 134.7
million in the quarter ended June 30,
2017. Adjusted EBITDA margin was 0.6%, improved from
negative 2.8% in the quarter ended June 30,
2017. The improvement of RMB176.3
million (US$26.6 million) or
3.4 percentage points was primarily attributable to strong revenue
growth and improved operating efficiency.
Cash and Cash Equivalents, Restricted Cash and Short-term
Investments
As of June 30, 2018, cash and cash
equivalents, restricted cash and short-term investments were
RMB4,349.6 million (US$657.3 million), compared to RMB4,745.8 million as of March 31, 2018. The decrease in cash and cash
equivalents, restricted cash and short-term investments was
primarily due to debt repayment, CAPEX, investment activities, and
partially offset by net cash generated from operating
activities.
Cash Flow from Operating Activities
Cash Generated from Operating Activities was RMB432.4 million (US$65.3
million) in the quarter ended June
30, 2018, an increase of 42.9% compared to RMB302.7 million in the same quarter of 2017.
Capital Expenditures ("CAPEX")
CAPEX was RMB230.3 million
(US$34.8 million), or 3.4% of total
revenue in the quarter ended June 30,
2018, compared to CAPEX of RMB220.1
million, or 4.5% of total revenue, in the same period of
2017.
Shares Outstanding
As of the date of this press release, the Company had
approximately 387.1 million ordinary shares outstanding
[10]. Each ADS represents one Class A ordinary
share.
[10] The total number of shares
outstanding excludes shares reserved for future issuances upon
exercise or vesting of awards granted under the Company's share
incentive plans.
|
FINANCIAL GUIDANCE
Based on current market conditions and current operations,
revenue for the third quarter of 2018 is expected to be in the
range of RMB7.0 billion to
RMB7.2 billion; and revenue for full
fiscal year 2018 is expected to be in the range of RMB26.6 billion to RMB27.0
billion. This represents management's current and
preliminary expectation, which is subject to change.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company will hold a conference call at 7:30 am U.S. Eastern Time on August 8, 2018 (7:30
pm Beijing Time, the same day), to discuss its financial
results and operating performance for the second quarter of
2018.
Participants may access the call by dialing the following
numbers:
United
States:
|
+1-888-317-6003
|
Hong Kong:
|
800-963976 or
+852-5808-1995
|
China:
|
4001-206115
|
International:
|
+1-412-317-6061
|
Participant Elite
Entry Number:
|
2677868
|
A replay of the conference call will be accessible through
August 15, 2018 by dialing the
following numbers:
United
States:
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Replay Access
Code:
|
10122853
|
Please visit the Company's investor relations website
http://ir.best-inc.com/ on August 8,
2018 to view the earnings release prior to the conference
call. A live and archived webcast of the conference call and an
accompanying slide presentation will be available at the
same site.
ABOUT BEST INC.
BEST Inc. is a leading smart supply chain and logistics
solutions and services provider. BEST's mission is to empower
businesses and enrich the lives of consumers 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/.
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;
and fluctuations in general economic and business conditions in
China 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, non-GAAP net loss 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.
BEST
INC.
|
Summary of
Unaudited Consolidated Income Statements
|
(In
Thousands)
|
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2017
|
2018
|
2017
|
2018
|
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Revenue
|
|
|
|
|
|
|
Express
|
3,076,175
|
4,177,173
|
631,269
|
5,173,106
|
7,401,961
|
1,118,611
|
Freight
|
782,187
|
1,029,676
|
155,608
|
1,340,026
|
1,792,697
|
270,919
|
Supply Chain
Management
|
375,573
|
498,521
|
75,338
|
685,190
|
897,029
|
135,562
|
Store+
|
593,749
|
798,480
|
120,669
|
866,388
|
1,343,918
|
203,098
|
Others
|
28,249
|
228,470
|
34,527
|
39,436
|
300,490
|
45,411
|
Total
Revenue
|
4,855,933
|
6,732,320
|
1,017,411
|
8,104,146
|
11,736,095
|
1,773,601
|
Cost of
Revenue
|
|
|
|
|
|
|
Express
|
(2,964,845)
|
(3,948,228)
|
(596,670)
|
(5,142,846)
|
(7,143,725)
|
(1,079,585)
|
Freight
|
(843,486)
|
(975,846)
|
(147,473)
|
(1,479,526)
|
(1,755,874)
|
(265,354)
|
Supply Chain
Management
|
(340,121)
|
(460,451)
|
(69,585)
|
(631,805)
|
(838,976)
|
(126,789)
|
Store+
|
(559,866)
|
(734,572)
|
(111,011)
|
(831,716)
|
(1,224,656)
|
(185,074)
|
Others
|
(14,616)
|
(195,577)
|
(29,556)
|
(22,736)
|
(245,704)
|
(37,132)
|
Total Cost of
Revenue
|
(4,722,934)
|
(6,314,674)
|
(954,295)
|
(8,108,629)
|
(11,208,935)
|
(1,693,934)
|
Gross
Profit/(Loss)
|
132,999
|
417,646
|
63,116
|
(4,483)
|
527,160
|
79,667
|
Selling
Expenses
|
(160,482)
|
(205,736)
|
(31,092)
|
(273,692)
|
(420,094)
|
(63,486)
|
General and
Administrative
Expenses
|
(160,504)
|
(271,108)
|
(40,971)
|
(311,171)
|
(482,397)
|
(72,902)
|
Research and
Development Expenses
|
(27,011)
|
(51,499)
|
(7,783)
|
(53,898)
|
(83,514)
|
(12,621)
|
Total Operating
Expenses
|
(347,997)
|
(528,343)
|
(79,846)
|
(638,761)
|
(986,005)
|
(149,009)
|
Loss from
Operations
|
(214,998)
|
(110,697)
|
(16,730)
|
(643,244)
|
(458,845)
|
(69,342)
|
Interest
Income
|
26,626
|
31,675
|
4,787
|
34,058
|
48,690
|
7,358
|
Interest
Expense
|
(10,146)
|
(21,836)
|
(3,300)
|
(20,721)
|
(34,799)
|
(5,259)
|
Foreign Exchange
Loss
|
(4,430)
|
(4,318)
|
(653)
|
(4,479)
|
(7,232)
|
(1,093)
|
Other
Income
|
11,828
|
17,650
|
2,667
|
22,342
|
31,422
|
4,749
|
Other
Expense
|
(8,213)
|
(2,681)
|
(405)
|
(10,046)
|
(8,296)
|
(1,254)
|
Loss before Income
Tax
and Share of Net Loss of
Equity Investees
|
(199,333)
|
(90,207)
|
(13,634)
|
(622,090)
|
(429,060)
|
(64,841)
|
Income Tax
Expense
|
(2,487)
|
(3,440)
|
(520)
|
(2,487)
|
(4,000)
|
(604)
|
Loss before Share
of Net
Loss of Equity Investees
|
(201,820)
|
(93,647)
|
(14,154)
|
(624,577)
|
(433,060)
|
(65,445)
|
Share of Net Loss of
Equity
Investees
|
(7)
|
(101)
|
(15)
|
–
|
(290)
|
(44)
|
Net
Loss
|
(201,827)
|
(93,748)
|
(14,169)
|
(624,577)
|
(433,350)
|
(65,489)
|
Summary of
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
(Audited)
|
(Unaudited)
|
|
As of
December 31, 2017
|
As of June 30,
2018
|
|
RMB
|
RMB
|
US$
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
Cash and Cash
Equivalents
|
1,240,431
|
1,770,238
|
267,525
|
Restricted
Cash
|
1,652,653
|
1,314,505
|
198,653
|
Accounts and Notes
Receivables
|
734,252
|
772,044
|
116,674
|
Inventories
|
156,974
|
179,580
|
27,139
|
Prepayments and Other
Current Assets
|
1,459,755
|
1,677,633
|
253,530
|
Short‑term
Investments
|
2,353,663
|
1,197,342
|
180,947
|
Amounts Due from
Related Parties
|
164,894
|
117,470
|
17,752
|
Lease Rental
Receivables
|
193,703
|
270,745
|
40,916
|
Total Current
Assets
|
7,956,325
|
7,299,557
|
1,103,136
|
Non‑current
Assets
|
|
|
|
Property and
Equipment, Net
|
1,307,470
|
1,544,692
|
233,439
|
Intangible Assets,
Net
|
158,556
|
145,196
|
21,943
|
Long‑term
Investments
|
37,167
|
144,877
|
21,894
|
Goodwill
|
448,584
|
457,514
|
69,141
|
Non‑current
Deposits
|
69,125
|
68,131
|
10,296
|
Other Non‑current
Assets
|
62,314
|
59,715
|
9,024
|
Restricted
Cash
|
89,745
|
67,520
|
10,204
|
Lease Rental
Receivable
|
749,243
|
950,379
|
143,625
|
Total non‑current
Assets
|
2,922,204
|
3,438,024
|
519,566
|
Total
Assets
|
10,878,529
|
10,737,581
|
1,622,702
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
Short‑term Bank
Loans
|
1,216,384
|
1,297,000
|
196,007
|
Accounts and Notes
Payable
|
2,388,393
|
2,248,970
|
339,872
|
Income Tax
Payable
|
629
|
1,728
|
261
|
Customer Advances and
Deposits
|
910,383
|
1,091,020
|
164,879
|
Accrued Expenses and
Other Liabilities
|
1,841,273
|
1,916,563
|
289,640
|
Capital Lease
Obligation
|
7,227
|
2,851
|
431
|
Amounts Due to
Related Parties
|
12,902
|
10,511
|
1,588
|
Total Current
Liabilities
|
6,377,191
|
6,568,643
|
992,678
|
Non-current
Liabilities
|
|
|
|
Capital Lease
Obligation
|
1,828
|
3,070
|
464
|
Deferred Tax
Liabilities
|
31,688
|
30,136
|
4,554
|
Other Non‑current
Liabilities
|
75,327
|
79,126
|
11,958
|
Total Non‑current
Liabilities
|
108,843
|
112,332
|
16,976
|
Summary of
Consolidated Balance Sheets (Cont'd)
|
(In
Thousands)
|
|
|
(Audited)
|
(Unaudited)
|
|
As of
December 31, 2017
|
As of June 30,
2018
|
|
RMB
|
RMB
|
US$
|
Total
Liabilities
|
6,486,034
|
6,680,975
|
1,009,654
|
Shareholders'
Equity
|
|
|
|
Ordinary
Shares
|
24,786
|
25,851
|
3,907
|
Additional Paid‑In
Capital
|
19,240,912
|
19,353,761
|
2,924,810
|
Accumulated
Deficit
|
(14,886,214)
|
(15,344,617)[11]
|
(2,318,934)
|
Accumulated other
Comprehensive Income
|
12,333
|
21,611
|
3,265
|
BEST Inc.
Shareholders' Equity
|
4,391,817
|
4,056,606
|
613,048
|
Non-controlling
Interests
|
678
|
–
|
–
|
Total
Shareholders' Equity
|
4,392,495
|
4,056,606
|
613,048
|
Total Liabilities
and
Shareholders' Equity
|
10,878,529
|
10,737,581
|
1,622,702
|
[11] Including accumulated
accretion to redemption value and deemed dividend in relation to
redeemable convertible preferred shares of RMB9,493,807 and
accumulated loss from operations of RMB5,850,810.
|
Summary of
Unaudited Condensed Consolidated Statements of Cash
Flows
|
(In
Thousands)
|
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2017
|
2018
|
2017
|
2018
|
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Net Cash Generated
from
/(Used in)
Operating Activities
|
302,682
|
432,412
|
65,348
|
1,956
|
(178,094)
|
(26,914)
|
Net Cash
(Used in)/Generated from
Investing Activities
|
(1,263,019)
|
(369,276)
|
(55,806)
|
(1,727,420)
|
266,714
|
40,307
|
Net Cash (Used in)
/
Generated from
Financing Activities
|
(79,667)
|
(331,583)
|
(50,110)
|
483,385
|
79,552
|
12,022
|
Exchange Rate Effect
on
Cash, Cash Equivalents, and
Restricted Cash
|
(41,242)
|
75,231
|
11,369
|
(56,128)
|
1,262
|
191
|
Net
(Decrease)/Increase in
Cash and Cash Equivalents,
and Restricted Cash
|
(1,081,246)
|
(193,216)
|
(29,199)
|
(1,298,207)
|
169,434
|
25,606
|
Cash and Cash
Equivalents,
and Restricted Cash at
Beginning of Period
|
3,163,571
|
3,345,479
|
505,581
|
3,380,532
|
2,982,829
|
450,776
|
Cash and Cash
Equivalents,
and Restricted Cash at End
of Period
|
2,082,325
|
3,152,263
|
476,382
|
2,082,325
|
3,152,263
|
476,382
|
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 6
- Reconciliation of EBITDA, Adjusted EBITDA and Adjusted
EBITDA Margin
|
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2017
|
2018
|
2017
|
2018
|
(In
'000)
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Net
loss
|
(201,827)
|
(93,748)
|
(14,169)
|
(624,577)
|
(433,350)
|
(65,489)
|
Add
|
|
|
|
|
|
|
Depreciation &
Amortization
|
81,129
|
106,515
|
16,097
|
161,793
|
216,907
|
32,780
|
Interest
Expense
|
10,146
|
21,836
|
3,300
|
20,721
|
34,799
|
5,259
|
Income Tax
Expense
|
2,487
|
3,440
|
520
|
2,487
|
4,000
|
604
|
Subtract
|
|
|
|
|
|
|
Interest
Income
|
(26,626)
|
(31,675)
|
(4,787)
|
(34,058)
|
(48,690)
|
(7,358)
|
EBITDA
|
(134,691)
|
6,368
|
961
|
(473,634)
|
(226,334)
|
(34,204)
|
Add
|
|
|
|
|
|
|
Share-based
Compensation Expense
|
–
|
35,251
|
5,327
|
–
|
56,742
|
8,575
|
Adjusted
EBITDA
|
(134,691)
|
41,619
|
6,288
|
(473,634)
|
(169,592)
|
(25,629)
|
Adjusted EBITDA
Margin
|
(2.8%)
|
0.6%
|
0.6%
|
(5.8%)
|
(1.4%)
|
(1.4%)
|
The table below sets forth a reconciliation of the Company's net
loss to non-GAAP net loss, non-GAAP net loss margin for the periods
indicated:
Table 7 -
Reconciliation of non-GAAP Net Loss and Non-GAAP Net Loss
Margin
|
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2017
|
2018
|
2017
|
2018
|
(In
'000)
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Net
loss
|
(201,827)
|
(93,748)
|
(14,169)
|
(624,577)
|
(433,350)
|
(65,489)
|
Share-based
|
–
|
35,251
|
5,327
|
–
|
56,742
|
8,575
|
Compensation
Expense
|
|
|
|
|
|
|
Amortization of
Intangible
|
|
|
|
|
|
|
Assets Resulting
from
|
|
|
|
|
|
|
Business
Acquisitions
|
1,421
|
2,981
|
450
|
1,421
|
5,951
|
899
|
Non-GAAP Net
Loss
|
(200,406)
|
(55,516)
|
(8,392)
|
(623,156)
|
(370,657)
|
(56,015)
|
Non-GAAP Net
Loss Margin
|
(4.1%)
|
(0.8%)
|
(0.8%)
|
(7.7%)
|
(3.2%)
|
(3.2%)
|
The table below sets forth a reconciliation of the Company's
diluted EPS to non-GAAP diluted EPS for the periods indicated:
Table 8 -
Reconciliation of Diluted EPS and Non-GAAP Diluted
EPS
|
|
|
Three Months Ended
June 30,
|
|
2018
|
(In
'000)
|
RMB
|
US$
|
Net loss attributable
to ordinary shareholders
|
(93,748)
|
(14,169)
|
Add
|
|
|
Non-GAAP adjustments
to net loss
|
38,232
|
5,777
|
Non-GAAP net loss
attributable to ordinary
shareholders for computing non-GAAP diluted EPS
|
(55,516)
|
(8,392)
|
Weighted average
diluted shares outstanding during
the quarter
|
381,565,866
|
381,565,866
|
Diluted
EPS
|
(0.25)
|
(0.04)
|
Add
|
|
|
Share-based
Compensation Expense
|
0.09
|
0.02
|
Amortization of
Intangible Assets Resulting
from Business
Acquisitions
|
0.01
|
0.00
|
Non-GAAP Diluted
EPS
|
(0.15)
|
(0.02)
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/best-inc-announces-unaudited-second-quarter-2018-financial-results-300693854.html
SOURCE BEST Inc