HANGZHOU, China, Aug. 17, 2021 /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,
2021.
Johnny Chou, Founder, Chairman
and Chief Executive Officer of BEST, commented, "In the second
quarter we continued to press forward with our strategic refocusing
plan and build on the encouraging signs we are seeing in network
stability, service quality, and cost reduction, while adapting to
the competitive industry landscape. In particular, our Express
continued to make progress in unit cost reduction and witnessed
significant network improvement with enhanced service quality. For
Freight business, it continued its industry leading
position and registered a net profit for the quarter with
emphasis on our e-commerce capability. Supply Chain Management
achieved profitability by serving high-margin customers and
expanding cloud OFCs network supported by smart logistic management
for better operating efficiency. Our Global business continued its
growth momentum with parcel volume in Southeast Asia increasing 140.7%
year-over-year despite a resurgence of the COVID-19 pandemic in the
region."
"Given the supportive industry regulatory environment and
continued strong e-commerce growth, we are optimistic that our
strategic refocusing plan will position us to deliver improved
operating and financial results in the coming quarters."
Gloria Fan, BEST's Chief
Financial Officer, commented, "In the second quarter of 2021, our
revenue reached RMB7.4 billion. The
slight revenue decline compared with the second quarter of 2020 was
driven by lower average selling price in Express and Freight,
partially offset by higher volume in both business units. Our net
loss narrowed down to RMB467.5
million compared to the first quarter of 2021, benefitting
from our effective cost control across business units. As part
of our refocusing plan, we continued to improve our balance sheet
and streamline our asset base. From beginning of the year to the
date of this press release, we have completed approximately
RMB1.0 billion of financing and asset
conversion. In addition, we are working on a pipeline of financing
and strategic initiatives to further strengthen our balance sheet.
Our balance of cash and cash equivalents, restricted cash and
short-term investments were RMB3.4 billion at the end of the
second quarter of 2021. Our strategic refocusing plan charts a
clear path for us to achieve sustainable growth and profitability
in the long run."
FINANCIAL HIGHLIGHTS([1])
For the Quarter Ended June 30,
2021:
- Revenue was RMB7,374.7
million (US$1,142.2 million),
a decrease of 5.0% year-over-year ("YoY"). The decrease was
primarily due to a decrease in average selling price ("ASP") in
Express and Freight business segments, partially offset by an
increase in Express and Freight volume.
- Gross Loss was RMB144.6
million (US$22.4 million),
compared to gross profit of RMB484.5
million in the same period of 2020. Gross Loss Margin
was 2.0%, decreased by 8.2 percentage points ("ppts") YoY.
- Net Loss was RMB467.5
million (US$72.4 million),
compared to a net profit of RMB42.7
million in the same period of 2020. Non-GAAP Net
Loss([2])([3]) was RMB435.8
million (US$67.5 million),
compared to non-GAAP net income of RMB80.6
million in the same period of 2020.
- Diluted EPS([4]) was negative RMB1.19 (US$0.18),
compared to positive RMB0.13 in the
same period of 2020. Non-GAAP Diluted EPS(3)(4)
was negative RMB1.11 (US$0.17), compared to positive RMB0.22 in the same period of 2020.
- EBITDA([5]) was negative RMB284.8 million (US$44.1
million), compared to positive RMB188.0 million in the same period of 2020.
Adjusted EBITDA(3)(5) was negative RMB253.1 million (US$39.2
million), compared to positive RMB225.0 million in the same period of 2020.
BUSINESS HIGHLIGHTS([6])
BEST Express – The Company remained committed to
executing its refocusing strategy to optimize product and cost
structure, improve network stability, as well as enhance service
quality during the second quarter. The Company believes these
initiatives played positive roles in upgrading its network and
expects this will be reflected in its financial metrics later this
year.
In the second quarter of 2021, parcel volume increased by 1.2%
YoY to 2.3 billion. Gross margin decreased by 11.0 ppts primarily
due to a decline in ASP per parcel of 18.0% YoY, partially offset
by a decrease in average cost per parcel of 8.5% YoY.
([1]) All numbers
presented have been rounded to the nearest integer, tenth, or
hundredth, and year-over-year comparisons are based on figures
before
rounding.
([2]) Non-GAAP net
income/loss represents net income/loss excluding share-based
compensation expenses, amortization of intangible assets resulting
from business acquisitions, and fair value change of equity
investments (if any).
([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
income/loss 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]) 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 and fair value change of equity investments (if
any).
([6]) All numbers
presented have been rounded to the nearest integer, tenth, or
hundredth, and year-over-year comparisons are based on figures
before
rounding.
|
BEST Freight – Freight continued to strengthen its
industry leadership through continued operating efficiency,
networking expansion and enhanced service quality.
Freight returned to profitability at the bottom line in the
second quarter of 2021. The average cost per tonne remained
relatively steady YoY despite higher oil prices in the second
quarter of 2021 and the absence of highway toll subsidy in the
second quarter of 2021 as compared with the same period in 2020.
Freight volume for this quarter increased 9.3% YoY, with e-commerce
volume growth of 23.1% YoY, contributing to 19.2% of total
volume.
BEST Supply Chain Management – In the second quarter of
2021, the Company continued to focus on high-margin customers,
expanding its cloud OFCs network
and enhancing operating efficiency. The total number of orders
fulfilled by Cloud OFCs increased by 8.2% YoY to 120.5 million in
the second quarter and the total number of orders fulfilled by
franchised Cloud OFCs increased by 36.3% YoY to 73.1 million. The
number of franchised OFCs increased by 5.8% YoY to 345 in the
second quarter of 2021. Gross margin for Supply Chain Management
improved to 9.0% from the 5.4% in the first quarter of 2021.
BEST Global – Global continued its fast growth momentum
in Southeast Asia and has made
significant margin improvement. In the second quarter of 2021,
parcel volume in Southeast Asia
increased by 140.7% YoY to 38.8 million, driven by 80.0% and 195.5%
YoY growth in Thailand and
Vietnam, respectively. Global's
gross margin improved significantly by 7.0 ppts year-over-year,
benefiting from economies of scale fueled by increased market share
and network expansion in the region, as well as utilization of our
strong supply chain management capabilities and cross-border
logistics solutions by leveraging our Express, Freight and Supply
Chain Management expertise.
Others – For UCargo, as of June 30, 2021, the number of registered drivers
on the UCargo mobile app increased by 53.9% YoY to 375,802. In the
second quarter of 2021, the total number of transactions on the
trucking brokerage platform increased by 55.1% YoY to 212,941.
Key Operational Metrics
|
Three Months
Ended
|
% Change
YoY
|
Express Parcel Volume
(in '000)
|
June 30 ,
2019
|
|
June
30,
2020
|
|
June
30,
2021
|
|
2020 vs
2019
|
|
2021 vs
2020
|
1,906,863
|
2,274,585
|
2,300,851
|
19.3%
|
1.2%
|
Freight Volume (Tonne
in '000)
|
1,730
|
2,230
|
2,438
|
|
28.9%
|
9.3%
|
Supply Chain
Management
Orders Fulfilled (in '000)
|
86,663
|
111,332
|
120,471
|
|
28.5%
|
8.2%
|
Global Parcel Volume
in
Southeast Asia (in '000)
|
783
|
|
16,100
|
|
38,761
|
|
1,955%
|
|
140.7%
|
UCargo Number of
Transactions (in '000)
|
115
|
137
|
|
213
|
|
19.8%
|
|
55.1%
|
FINANCIAL RESULTS
For the Quarter Ended June 30,
2021:
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,
2020
|
|
June 30,
2021
|
|
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
%
Change YoY
|
Express
|
5,165,696
|
66.5%
|
|
4,281,367
|
663,099
|
58.0%
|
|
(17.1%)
|
Freight
|
1,370,862
|
17.7%
|
|
1,398,561
|
216,610
|
19.0%
|
|
2.0%
|
Supply Chain
Management
|
509,708
|
6.6%
|
|
479,555
|
74,274
|
6.5%
|
|
(5.9%)
|
Global
|
192,500
|
2.5%
|
|
314,602
|
48,726
|
4.3%
|
|
63.4%
|
Others([7])
|
522,144
|
6.7%
|
|
900,613
|
139,487
|
12.2%
|
|
72.5%
|
Total
Revenue
|
7,760,910
|
100.0%
|
|
7,374,698
|
1,142,196
|
100.0%
|
|
(5.0%)
|
- Express Service Revenue decreased by 17.1% YoY to RMB4,281.4 million (US$663.1 million) from RMB5,165.7 million, primarily due to an 18.0% YoY
decrease in ASP per parcel, partially offset by a 1.2% YoY increase
in parcel volume. The decrease in ASP per parcel was primarily
attributable to competitive market dynamics.
- Freight Service Revenue increased by 2.0% YoY to RMB1,398.6 million (US$216.6 million) from RMB1,370.9 million, primarily due to a 9.3% YoY
increase in freight volume, partially offset by a 6.5% YoY decrease
in ASP per tonne.
- Supply Chain Management Service Revenue decreased by 5.9% YoY
to RMB479.6 million (US$74.3 million) from RMB509.7 million, primarily due to
discontinuation of service to certain low-margin legacy customers,
partially offset by an 8.2% YoY increase in the total number of
orders fulfilled by Cloud OFCs.
- Global Service Revenue increased by 63.4% YoY to RMB314.6 million (US$48.7
million) from RMB192.5
million, primarily due to strong growth in parcel volumes in
Southeast Asia.
- Others Services Revenue increased by 72.5% YoY to RMB900.6 million (US$139.5
million) from RMB522.1
million, primarily due to a strong increase in total number
of transactions of UCargo business.
([7]) "Others"
Segment represents UCargo and Capital business
units.
|
Cost of Revenue
The following table sets forth a breakdown of cost of revenue by
business segment for the periods indicated.
Table 2 –
Breakdown of Cost of Revenue by Business Segment
|
|
|
Three Months
Ended
|
|
% of
Revenue
Change
YoY
|
|
June 30,
2020
|
|
June 30,
2021
|
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
Express
|
(4,874,191)
|
94.4%
|
|
(4,512,211)
|
(698,852)
|
105.4%
|
|
11.0ppts
|
Freight
|
(1,242,847)
|
90.7%
|
|
(1,365,578)
|
(211,501)
|
97.6%
|
|
6.9ppts
|
Supply Chain
Management
|
(460,298)
|
90.3%
|
|
(436,530)
|
(67,610)
|
91.0%
|
|
0.7ppts
|
Global
|
(214,540)
|
111.4%
|
|
(328,597)
|
(50,893)
|
104.4%
|
|
(7.0ppts)
|
Others
|
(484,491)
|
92.8%
|
|
(876,401)
|
(135,737)
|
97.3%
|
|
4.5ppts
|
Total Cost of
Revenue
|
(7,276,367)
|
93.8%
|
|
(7,519,317)
|
(1,164,593)
|
102.0%
|
|
8.2ppts
|
Cost of Revenue was RMB7,519.3
million (US$1,164.6 million)
or 102.0% of revenue in the second quarter of 2021, compared to
RMB7,276.4 million or 93.8% of
revenue in the same quarter of 2020. The increase of 8.2 ppts in
cost of revenue as a percentage of revenue was primarily
attributable to a steeper decrease in ASP than unit cost for
Express and Freight business units.
Table 3 –
Breakdown of Average Cost Per Parcel and Average Cost Per
Tonne
|
|
|
|
|
|
Three Months
Ended
|
|
%
Change
|
(in RMB)
|
June 30,
2020
|
June 30,
2021
|
|
YoY
|
Express:
|
|
|
|
|
Average Cost Per
Parcel
|
2.14
|
1.96
|
|
(8.5%)
|
Average Transportation
Cost Per Parcel
|
0.57
|
0.54
|
|
(5.3%)
|
Average Labor Cost Per
Parcel
|
0.21
|
0.19
|
|
(9.5%)
|
Average Lease Cost Per
Parcel
|
0.08
|
0.10
|
|
25.0%
|
Average Other Cost Per
Parcel
|
0.08
|
0.06
|
|
(25.0%)
|
Average Last-mile Cost
Per Parcel
|
1.20
|
1.07
|
|
(10.8%)
|
Freight:
|
|
|
|
|
Average Cost Per
Tonne
|
557.4
|
560.1
|
|
0.5%
|
Gross Loss was RMB144.6
million (US$22.4 million) in
the second quarter of 2021, compared to gross profit of
RMB484.5 million in the same period
of 2020. Gross Loss Margin was 2.0%.
Operating Expenses
The following table sets forth a breakdown of operating expenses
and adjusted operating expenses by category for the
periods indicated.
Table 4 –
Breakdown of Operating Expenses and Adjusted Operating Expenses by
Category
|
|
|
Three Months
Ended
|
|
|
June 30,
2020
|
|
June 30,
2021
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
% of Revenue
Change
YoY
|
Selling, General
and
Administrative Expenses
|
(403,848)
|
5.2%
|
|
(458,650)
|
(71,036)
|
6.2%
|
|
1.0ppts
|
Adjusted
for
SBC Expenses
|
(33,865)
|
0.4%
|
|
(29,309)
|
(4,539)
|
0.4%
|
|
0.0ppts
|
Adjusted Selling,
General
and
Administrative Expenses
|
(369,983)
|
4.8%
|
|
(429,341)
|
(66,497)
|
5.8%
|
|
1.0ppts
|
Research and
Development Expenses
|
(42,002)
|
0.5%
|
|
(60,952)
|
(9,440)
|
0.8%
|
|
0.3ppts
|
Adjusted for
SBC Expenses
|
(2,489)
|
0.0%
|
|
(2,167)
|
(336)
|
0.0%
|
|
0.0ppts
|
Adjusted Research
and
Development Expenses
|
(39,513)
|
0.5%
|
|
(58,785)
|
(9,104)
|
0.8%
|
|
0.3ppts
|
Total Operating
Expenses
|
(445,850)
|
5.7%
|
|
(519,602)
|
(80,476)
|
7.0%
|
|
1.3ppts
|
Adjusted
for
SBC Expenses
|
(36,354)
|
0.4%
|
|
(31,476)
|
(4,875)
|
0.4%
|
|
0.0ppts
|
Adjusted Total
Operating Expenses
|
(409,496)
|
5.3%
|
|
(488,126)
|
(75,601)
|
6.6%
|
|
1.3ppts
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative ("SG&A") Expenses
were RMB458.7 million (US$71.0 million) or 6.2% of revenue in the second
quarter of 2021, compared to RMB403.8
million or 5.2% of revenue in the same quarter of 2020. The
increase in SG&A expenses was primarily attributable to
additional bad debt provision resulted from the pandemic and
absence of certain COVID-19 pandemic related subsidies that were available in
2020.
Research and Development ("R&D") Expenses were
RMB61.0 million (US$9.4 million) or 0.8% of revenue in the second
quarter of 2021, compared to RMB42.0
million, or 0.5% of revenue in the same quarter of 2020.
Share-based Compensation ("SBC") Expenses included in the
cost and expense items above in the second quarter of 2021 were
RMB31.7 million (US$4.9 million), compared to RMB37.0 million in the same quarter of 2020. In
the second quarter of 2021, RMB0.2
million (US$0.04 million) was
allocated to cost of revenue, RMB1.6
million (US$0.2 million) was
allocated to selling expenses, RMB27.7
million (US$4.3 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 second quarter of 2021 was RMB467.5 million (US$72.4
million), compared to a net income of RMB42.7 million in the same period of 2020.
Excluding SBC expenses, amortization of intangible assets resulting
from business acquisitions and gain from appreciation of investment
(if any for a given period), Non-GAAP Net Loss in the second
quarter of 2021 was RMB435.8 million
(US$67.5 million), compared to
non-GAAP net income of RMB80.6
million in the same period of 2020.
The following table sets forth a breakdown of non-GAAP net
(loss)/income for the three months ended June 30, 2021 by segment.
Table
5 – Breakdown of non-GAAP Net (Loss)/Income
by Segment
|
|
|
|
|
Three Months Ended
June 30, 2021
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([8])
|
Total
|
|
Non-GAAP Net
(Loss)/Income
|
(325,971)
|
18,922
|
12,355
|
(52,951)
|
(9,486)
|
(78,628)
|
(435,759)
|
|
Diluted EPS and Non-GAAP Diluted EPS
Diluted EPS in the second quarter of 2021 was negative
RMB1.19 (US$0.18), based on a weighted average of 388.1
million diluted shares outstanding during the quarter. This is
compared to positive RMB0.13 on a
weighted average of 389.3 million diluted shares outstanding in the
same period of 2020. Excluding SBC expenses, amortization of
intangible assets resulting from business acquisitions and gain
from appreciation of investment (if any for a given period),
Non-GAAP Diluted EPS in the second quarter of 2021 was
negative RMB1.11 (US$0.17), compared to positive RMB0.22 in the same period of 2020. A
reconciliation of non-GAAP diluted EPS to diluted EPS is included
at the end of this results announcement.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA in the second quarter of 2021 was
negative RMB253.1 million
(US$39.2 million), compared to
positive RMB225.0 million in same
quarter of 2020. Adjusted EBITDA Margin was negative 3.4% in
the second quarter of 2021, compared to positive 2.9% in the same
quarter of 2020.
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, 2021 by segment.
Table
6 – Breakdown of Adjusted EBITDA and Adjusted
EBITDA Margin by Segment
|
|
|
|
Three Months Ended
June 30, 2021
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([9])
|
Total
|
Adjusted
EBITDA
|
(215,641)
|
36,631
|
22,382
|
(47,275)
|
(8,339)
|
(40,813)
|
(253,055)
|
Adjusted
EBITDA
Margin
|
(5.0%)
|
2.6%
|
4.7%
|
(15.0%)
|
(0.9%)
|
-
|
(3.4%)
|
([8]) Unallocated
expenses are primarily related to corporate administrative expenses
and other miscellaneous items that are not allocated to individual
segments.
([9]) Unallocated
expenses are primarily related to corporate administrative expenses
and other miscellaneous items that are not allocated to individual
segments.
|
Cash and Cash Equivalents, Restricted Cash and Short-term
Investments
As of June 30, 2021, cash and cash
equivalents, restricted cash and short-term investments were
RMB3,413.3 million (US$528.6 million), compared to RMB3,976.8 million as of March 31, 2021. The decrease in cash and cash
equivalents, restricted cash and short-term investments was
primarily due to net cash used in financing activities.
Net Cash Used in Operating Activities
Net cash used in continuing operating activities was
RMB127.5 million (US$19.7 million), compared to net cash generated
from continuing operating activities of RMB754.3 million in the same period of 2020,
mainly due to decreased ASP for Express and Freight business
segments.
Capital Expenditures ("CAPEX")
CAPEX was RMB174.5 million
(US$27.0 million), or 2.4% of total
revenue in the second quarter ended June 30,
2021, compared to CAPEX of RMB424.1
million, or 5.5% of total revenue, in the same period of
2020.
SHARES OUTSTANDING
As of the date of this press release, the Company had
approximately 388.6 million ordinary shares
outstanding([10]). Each American Depositary Share
represents one Class A ordinary share.
FINANCIAL GUIDANCE
Based on current market conditions and operations, the Company
expects its revenue for the full fiscal year of 2021 to be between
RMB28 billion and RMB32 billion. This forecast reflects
management's current and preliminary expectation, which is subject
to change.
([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.
|
WEBCAST AND CONFERENCE CALL INFORMATION
The Company will hold a conference call at 9:00 pm U.S. Eastern Time on August 17, 2021 (9:00
am Beijing Time on August 18,
2021), to discuss its financial results and operating
performance for the second quarter of 2021.
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
|
:
3907495
|
A replay of the conference call will be accessible through
August 24, 2021 by dialing the
following numbers:
United
States
|
:
+1-877-344-7529
|
International
|
:
+1-412-317-0088
|
Replay Access
Code
|
:
10159351
|
Please visit the Company's investor relations website, located
at http://ir.best-inc.com/, 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/.
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
compete effectively; 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/income 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,
|
|
2020
|
2021
|
2020
|
2021
|
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Revenue
|
|
|
|
|
|
|
Express
|
5,165,696
|
4,281,367
|
663,099
|
8,541,308
|
7,994,447
|
1,238,182
|
Freight
|
1,370,862
|
1,398,561
|
216,610
|
2,058,109
|
2,573,054
|
398,515
|
Supply Chain
Management
|
509,708
|
479,555
|
74,274
|
917,300
|
927,216
|
143,607
|
Global
|
192,500
|
314,602
|
48,726
|
308,288
|
565,024
|
87,511
|
Others
|
522,144
|
900,613
|
139,487
|
938,526
|
1,811,596
|
280,580
|
Total
Revenue
|
7,760,910
|
7,374,698
|
1,142,196
|
12,763,531
|
13,871,337
|
2,148,395
|
Cost of
Revenue
|
|
|
|
|
|
|
Express
|
(4,874,191)
|
(4,512,211)
|
(698,852)
|
(8,365,512)
|
(8,470,338)
|
(1,311,888)
|
Freight
|
(1,242,847)
|
(1,365,578)
|
(211,501)
|
(2,059,282)
|
(2,539,508)
|
(393,320)
|
Supply Chain
Management
|
(460,298)
|
(436,530)
|
(67,610)
|
(864,744)
|
(860,036)
|
(133,203)
|
Global
|
(214,540)
|
(328,597)
|
(50,893)
|
(362,858)
|
(593,699)
|
(91,952)
|
Others
|
(484,491)
|
(876,401)
|
(135,737)
|
(864,587)
|
(1,745,730)
|
(270,379)
|
Total Cost of
Revenue
|
(7,276,367)
|
(7,519,317)
|
(1,164,593)
|
(12,516,983)
|
(14,209,311)
|
(2,200,742)
|
Gross
Profit/(Loss)
|
484,543
|
(144,619)
|
(22,397)
|
246,548
|
(337,974)
|
(52,347)
|
Selling
Expenses
|
(114,037)
|
(114,242)
|
(17,694)
|
(232,152)
|
(221,447)
|
(34,298)
|
General and
Administrative
Expenses
|
(289,811)
|
(344,408)
|
(53,342)
|
(555,803)
|
(653,638)
|
(101,236)
|
Research and
Development
Expenses
|
(42,002)
|
(60,952)
|
(9,440)
|
(92,694)
|
(114,639)
|
(17,755)
|
Total Operating
Expenses
|
(445,850)
|
(519,602)
|
(80,476)
|
(880,649)
|
(989,724)
|
(153,289)
|
Income/(Loss)
from
Operations
|
38,693
|
(664,221)
|
(102,873)
|
(634,101)
|
(1,327,698)
|
(205,636)
|
Interest
Income
|
18,415
|
16,670
|
2,582
|
40,000
|
33,548
|
5,196
|
Interest
Expense
|
(41,379)
|
(48,165)
|
(7,460)
|
(74,551)
|
(94,172)
|
(14,585)
|
Foreign Exchange
(Loss)/Gain
|
(148)
|
(1,228)
|
(190)
|
242
|
(428)
|
(66)
|
Other
Income
|
36,426
|
237,107
|
36,723
|
69,219
|
346,551
|
53,674
|
Other
Expense
|
(4,972)
|
(10,258)
|
(1,589)
|
(16,082)
|
(28,075)
|
(4,348)
|
Income/(Loss)
before
Income Tax and Share
of Net Loss of Equity
Investees
|
47,035
|
(470,095)
|
(72,807)
|
(615,273)
|
(1,070,274)
|
(165,765)
|
Income Tax
Expense
|
(4,324)
|
2,643
|
409
|
(8,859)
|
(1,647)
|
(255)
|
Income/(Loss)
before
Share of Net loss of
Equity Investees
|
42,711
|
(467,452)
|
(72,398)
|
(624,132)
|
(1,071,921)
|
(166,020)
|
Share of Net Loss of
Equity
Investees
|
(44)
|
(42)
|
(7)
|
(74)
|
(42)
|
(7)
|
Net Income/(Loss)
from
continuing operations
|
42,667
|
(467,494)
|
(72,405)
|
(624,206)
|
(1,071,963)
|
(166,027)
|
Net (loss)/income
from
discontinued operations
|
(73,566)
|
1,007
|
157
|
(157,445)
|
(12,829)
|
(1,987)
|
Net
Loss
|
(30,899)
|
(466,487)
|
(72,248)
|
(781,651)
|
(1,084,792)
|
(168,014)
|
Net Loss from
continuing
operations attributable to
non-controlling interests
|
(6,571)
|
(5,519)
|
(855)
|
(14,431)
|
(10,929)
|
(1,693)
|
Net Loss
attributable to
BEST Inc.
|
(24,328)
|
(460,968)
|
(71,393)
|
(767,220)
|
(1,073,863)
|
(166,321)
|
Summary of
Unaudited Condensed Consolidated Balance Sheets
(In Thousands)
|
|
|
|
|
|
As of December 31,
2020
|
|
As of June 30,
2021
|
|
RMB
|
|
RMB
|
US$
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and Cash
Equivalents
|
1,383,317
|
|
908,434
|
140,699
|
Restricted
Cash
|
2,102,426
|
|
1,999,204
|
309,637
|
Accounts and Notes
Receivables
|
983,601
|
|
967,940
|
149,915
|
Inventories
|
44,133
|
|
39,182
|
6,069
|
Prepayments and Other
Current Assets
|
3,304,670
|
|
3,306,158
|
512,058
|
Short–term
Investments
|
268,647
|
|
739
|
114
|
Amounts Due from
Related Parties
|
274,395
|
|
183,132
|
28,364
|
Lease Rental
Receivables
|
497,127
|
|
492,639
|
76,300
|
Assets held for
sale
|
509,395
|
|
483,011
|
74,809
|
Total Current
Assets
|
9,367,711
|
|
8,380,439
|
1,297,965
|
Non–current
Assets
|
|
|
|
|
Property and
Equipment, Net
|
4,079,235
|
|
4,442,944
|
688,124
|
Intangible Assets,
Net
|
12,198
|
|
12,203
|
1,890
|
Long–term
Investments
|
221,426
|
|
202,603
|
31,379
|
Goodwill
|
295,758
|
|
295,758
|
45,807
|
Non–current
Deposits
|
129,645
|
|
120,548
|
18,671
|
Other Non–current
Assets
|
543,949
|
|
307,778
|
47,669
|
Restricted
Cash
|
709,848
|
|
504,895
|
78,198
|
Lease Rental
Receivables
|
647,678
|
|
457,668
|
70,884
|
Operating Lease
Right-of-use Assets
|
3,863,375
|
|
3,661,110
|
567,034
|
Total non–current
Assets
|
10,503,112
|
|
10,005,507
|
1,549,656
|
Total
Assets
|
19,870,823
|
|
18,385,946
|
2,847,621
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Securitization
Debt
|
95,149
|
|
281,516
|
43,601
|
Short–term Bank
Loans
|
3,082,537
|
|
2,302,392
|
356,595
|
Accounts and Notes
Payable
|
4,144,948
|
|
4,219,851
|
653,572
|
Income Tax
Payable
|
14,550
|
|
1,806
|
280
|
Customer Advances and
Deposits and
Deferred Revenue
|
1,526,051
|
|
1,349,832
|
209,062
|
Accrued Expenses and
Other Liabilities
|
2,507,917
|
|
2,680,687
|
415,185
|
Financing Lease
Liabilities
|
1,581
|
|
1,368
|
212
|
Operating Lease
Liabilities
|
1,032,461
|
|
1,125,800
|
174,364
|
Amounts Due to
Related Parties
|
35,623
|
|
6,525
|
1,011
|
Liabilities held for
sale
|
193,432
|
|
187,818
|
29,089
|
Total Current
Liabilities
|
12,634,249
|
|
12,157,595
|
1,882,971
|
Summary of
Unaudited Condensed Consolidated Balance Sheets (Cont'd)
(In Thousands)
|
|
|
|
|
As of December 31,
2020
|
|
As of June 30,
2021
|
|
|
RMB
|
|
RMB
|
US$
|
|
Non-current
Liabilities
|
|
|
|
|
|
Convertible senior
notes held by
related parties
|
1,617,846
|
|
1,605,562
|
248,670
|
|
Secured
Borrowings
|
-
|
|
106,450
|
16,487
|
|
Convertible Senior
Notes held by third
parties
|
642,121
|
|
638,794
|
98,937
|
|
Operating Lease
Liabilities
|
2,995,173
|
|
2,781,791
|
430,845
|
|
Financing Lease
Liabilities
|
2,698
|
|
2,050
|
318
|
|
Other Non–current
Liabilities
|
175,584
|
|
136,916
|
21,206
|
|
Long-term Bank
Loans
|
78,548
|
|
76,456
|
11,842
|
|
Total Non–current
Liabilities
|
5,511,970
|
|
5,348,019
|
828,305
|
|
Total
Liabilities
|
18,146,219
|
|
17,505,614
|
2,711,276
|
|
Mezzanine
Equity:
|
|
|
|
|
|
Convertible
Non-controlling Interests
|
-
|
|
191,865
|
29,716
|
|
Total mezzanine
equity
|
-
|
|
191,865
|
29,716
|
|
Shareholders'
Equity
|
|
|
|
|
|
Ordinary
Shares
|
25,988
|
|
25,988
|
4,025
|
Treasury
Shares
|
(211,352)
|
|
(139,460)
|
(21,600)
|
Additional Paid–In
Capital
|
19,487,232
|
|
19,473,666
|
3,016,087
|
Statutory
reserves
|
8,038
|
|
6,982
|
1,081
|
Accumulated
Deficit
|
(17,710,964)
|
|
(18,783,771)
([11])
|
(2,909,236)
|
Accumulated Other
Comprehensive Income
|
151,677
|
|
140,744
|
21,798
|
BEST Inc.
Shareholders' Equity
|
1,750,619
|
|
724,149
|
112,155
|
Non-controlling
Interests
|
(26,015)
|
|
(35,682)
|
(5,526)
|
Total
Shareholders' Equity
|
1,724,604
|
|
688,467
|
106,629
|
Total Liabilities,
Mezzanine Equity
and
Shareholders' Equity
|
19,870,823
|
|
18,385,946
|
2,847,621
|
([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
RMB9,289,964
|
Summary of
Unaudited Condensed Consolidated Statements of Cash Flows
(In Thousands)
|
|
|
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2020
|
2021
|
2020
|
2021
|
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Net cash generated
from/(used in)
continuing operating activities
|
754,261
|
(127,506)
|
(19,748)
|
(476,664)
|
(691,154)
|
(107,047)
|
Net cash (used
in)/generated from
discontinued operating activities
|
(31,655)
|
35,914
|
5,562
|
(94,243)
|
(58,389)
|
(9,043)
|
Net cash generated
from/(used in)
operating activities
|
722,606
|
(91,592)
|
(14,186)
|
(570,907)
|
(749,543)
|
(116,090)
|
Net cash (used
in)/generated from
continuing investing activities
|
(282,923)
|
325,541
|
50,420
|
(168,766)
|
348,370
|
53,956
|
Net cash used in
discontinued
Investing activities
|
(161)
|
(184)
|
(28)
|
(401)
|
(217)
|
(34)
|
Net cash (used in) /generated
from investing activities
|
(283,084)
|
325,357
|
50,392
|
(169,167)
|
348,153
|
53,922
|
Net cash generated
from/(used in)
continuing financing activities
|
757,081
|
(271,861)
|
(42,106)
|
1,512,066
|
(77,914)
|
(12,067)
|
Net cash generated
from/(used in)
discontinued financing activities
|
5,000
|
(187,500)
|
(29,040)
|
(145,000)
|
(280,000)
|
(43,366)
|
Net cash generated
from (used
in) financing activities
|
762,081
|
(459,361)
|
(71,146)
|
1,367,066
|
(357,914)
|
(55,433)
|
Exchange Rate Effect
on Cash,
Cash Equivalents, and Restricted
Cash
|
1,023
|
(37,131)
|
(5,751)
|
25,189
|
(30,415)
|
(4,711)
|
Net
Increase/(decrease) in Cash
and Cash Equivalents, and
Restricted Cash
|
1,202,626
|
(262,727)
|
(40,691)
|
652,181
|
(789,719)
|
(122,312)
|
Cash and Cash
Equivalents, and
Restricted Cash at Beginning of
Period
|
3,406,770
|
3,682,129
|
570,289
|
3,957,215
|
4,209,121
|
651,910
|
Cash and Cash
Equivalents, and
Restricted Cash at End of
Period
|
4,609,396
|
3,419,402
|
529,598
|
4,609,396
|
3,419,402
|
529,598
|
Less: Cash and Cash
Equivalents,
and Restricted Cash held for
sales at end of the Period
|
12,658
|
6,869
|
1,064
|
12,658
|
6,869
|
1,064
|
Cash and Cash
Equivalents, and
Restricted Cash from
continuing operations at End of
Period
|
4,596,738
|
3,412,533
|
528,534
|
4,596,738
|
3,412,533
|
528,534
|
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
The table below sets forth a reconciliation of the Company's net
(loss)/income 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, 2021
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
|
Unallocated([12])
|
Total
|
|
Net
(Loss)/Income
|
(327,713)
|
15,910
|
10,027
|
(55,271)
|
(10,153)
|
|
(100,294)
|
(467,494)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation &
Amortization
|
110,330
|
17,709
|
9,812
|
5,655
|
4,021
|
|
6,325
|
153,852
|
|
Interest
Expense
|
-
|
-
|
-
|
-
|
-
|
|
48,165
|
48,165
|
|
Income Tax
Expense/(Benefit)
|
-
|
-
|
215
|
21
|
(2,874)
|
|
(5)
|
(2,643)
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
-
|
-
|
-
|
-
|
-
|
|
(16,670)
|
(16,670)
|
|
EBITDA
|
(217,383)
|
33,619
|
20,054
|
(49,595)
|
(9,006)
|
|
(62,479)
|
(284,790)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
1,742
|
3,012
|
2,328
|
2,320
|
667
|
|
21,666
|
31,735
|
|
Adjusted
EBITDA
|
(215,641)
|
36,631
|
22,382
|
(47,275)
|
(8,339)
|
|
(40,813)
|
(253,055)
|
|
Adjusted
EBITDA
Margin
|
(5.0%)
|
2.6%
|
4.7%
|
(15.0%)
|
(0.9%)
|
-
|
-
|
(3.4%)
|
|
|
Three Months
Ended June 30, 2020
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
|
Unallocated([13])
|
Total
|
|
Net
Income/(Loss)
|
127,416
|
63,866
|
(7,966)
|
(53,899)
|
(13,937)
|
|
(72,813)
|
42,667
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation &
Amortization
|
79,308
|
15,135
|
10,936
|
4,151
|
513
|
|
7,963
|
118,006
|
|
Interest
Expense
|
-
|
-
|
-
|
-
|
-
|
|
41,379
|
41,379
|
|
Income Tax
Expense/(Benefit)
|
1,236
|
-
|
(96)
|
(281)
|
3,465
|
|
-
|
4,324
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
-
|
-
|
-
|
-
|
-
|
|
(18,415)
|
(18,415)
|
|
EBITDA
|
207,960
|
79,001
|
2,874
|
(50,029)
|
(9,959)
|
|
(41,886)
|
187,961
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
4,399
|
2,721
|
2,835
|
2,224
|
1,035
|
|
23,822
|
37,036
|
|
Adjusted
EBITDA
|
212,359
|
81,722
|
5,709
|
(47,805)
|
(8,924)
|
|
(18,064)
|
224,997
|
|
Adjusted
EBITDA
Margin
|
4.1%
|
6.0%
|
1.1%
|
(24.8%)
|
(1.7%)
|
|
-
|
2.9%
|
|
([12]) Unallocated
expenses are primarily related to corporate administrative expenses
and other miscellaneous items that are not allocated to individual
segments.
([13]) Unallocated
expenses are primarily related to corporate administrative expenses
and other miscellaneous items that are not allocated to individual
segments.
|
The table below sets forth a reconciliation of the Company's net
(loss)/income to non-GAAP net (loss)/income, non-GAAP net
(loss)/income margin for the periods indicated:
Table 8 –
Reconciliation of Non-GAAP Net (Loss)/Income and Non-GAAP Net
(Loss)/Income Margin
|
|
|
Three Months Ended
June 30, 2021
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
|
Unallocated([14])
|
Total
|
|
Net
(Loss)/Income
|
(327,713)
|
15,910
|
10,027
|
(55,271)
|
(10,153)
|
|
(100,294)
|
(467,494)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
1,742
|
3,012
|
2,328
|
2,320
|
667
|
|
21,666
|
31,735
|
|
Non-GAAP
Net
(Loss)/Income
|
(325,971)
|
18,922
|
12,355
|
(52,951)
|
(9,486)
|
|
(78,628)
|
(435,759)
|
|
Non-GAAP
Net
(Loss)/Income
Margin
|
(7.6%)
|
1.4%
|
2.6%
|
(16.8%)
|
(1.1%)
|
|
-
|
(5.9%)
|
|
|
Three Months Ended
June 30, 2020
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
|
Unallocated([15])
|
Total
|
|
Net
Income/(Loss)
|
127,416
|
63,866
|
(7,966)
|
(53,899)
|
(13,937)
|
|
(72,813)
|
42,667
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
4,399
|
2,721
|
2,835
|
2,224
|
1,035
|
|
23,822
|
37,036
|
|
Amortization of
Intangible Assets
Resulting from
Business
|
-
|
-
|
-
|
940
|
-
|
|
-
|
940
|
|
Non-GAAP Net
Income/(Loss)
|
131,815
|
66,587
|
(5,131)
|
(50,735)
|
(12,902)
|
|
(48,991)
|
80,643
|
|
Non-GAAP Net
Income/(Loss)
Margin
|
2.6%
|
4.9%
|
(1.0%)
|
(26.4%)
|
(2.5%)
|
-
|
-
|
1.0%
|
|
([14]) Unallocated
expenses are primarily related to corporate administrative expenses
and other miscellaneous items that are not allocated to individual
segments.
([15]) Unallocated
expenses are primarily related to corporate administrative expenses
and other miscellaneous items that are not allocated to individual
segments.
|
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,
|
|
2021
|
2021
|
(In
'000)
|
RMB
|
US$
|
|
RMB
|
US$
|
Net Loss
Attributable to Ordinary
Shareholders
|
(461,975)
|
(71,550)
|
|
(1,061,034)
|
(164,334)
|
Add:
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
31,735
|
4,916
|
|
60,700
|
9,402
|
Subtract:
|
|
|
|
|
|
Gain from appreciation
of
investments
|
-
|
-
|
|
(5,562)
|
(861)
|
Non-GAAP Net Loss
Attributable to
Ordinary Shareholders for
Computing Non-GAAP Diluted EPS
|
(430,240)
|
(66,634)
|
|
(1,005,896)
|
(155,793)
|
Weighted Average
Diluted Shares
Outstanding During the Period
|
|
|
|
|
|
Diluted
|
388,060,785
|
388,060,785
|
|
387,438,822
|
387,438,822
|
Diluted
(Non-GAAP)
|
388,060,785
|
388,060,785
|
|
387,438,822
|
387,438,822
|
Diluted
EPS
|
(1.19)
|
(0.18)
|
|
(2.74)
|
(0.42)
|
Add:
|
|
|
|
|
|
Non-GAAP adjustment to
net loss per share
|
0.08
|
0.01
|
|
0.14
|
0.02
|
Non-GAAP Diluted
EPS
|
(1.11)
|
(0.17)
|
|
(2.60)
|
(0.40)
|
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SOURCE BEST Inc.